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Senate approves new $10 billion program for regional technology hubs

June 10, 2021
By: Jason Rittenberg

This week, the Senate passed the U.S. Innovation and Competition Act, a legislative package that includes the Endless Frontier Act. The tech-based economic development community should be excited about many initiatives authorized in the bill, including $10 billion for regional technology hubs, $100 billion in new R&D-related activities, and an expansion of the Manufacturing Extension Partnership program. The bill also provides $50 billion in appropriations for semiconductor research, and includes multiple R&D policy bills. SSTI worked with Sen. Chuck Schumer, the legislation’s lead sponsor, and other Senate offices to strengthen the proposals, The Senate action is just the first step in the legislative process, as the House is beginning to work through its own proposals.

Regional Technology Hubs

The Senate bill would authorize the Department of Commerce to designate at least three new “regional technology hubs” in each of the Economic Development Administration’s (EDA) six regions. These hubs would be proposed by consortia including state and local governments, institutions of higher education, labor and industry representatives, venture development organizations and others. Each hub would focus on advancing its regional capacity to support research, commercialization and competitiveness related to a key technology area.

The proposal includes two types of funding to support regions:

  • Strategy development grants could be awarded to any consortia in order to help build a regional innovation strategy. The bill authorizes $575 million for this program over five years.
  • Strategy implementation grants are available only to approved regional technology hubs and could be used for a broad array of activities, from addressing capital access to workforce development. The bill authorizes $9.4 billion for this program over five years.

New R&D-related Authority

The act authorizes approximately $109 billion for R&D-related activities from FY 2022-2026. This includes $81 billion for the National Science Foundation (NSF), $6.9 billion for R&D at the Department of Energy, $2.4 billion for Manufacturing USA institutes, and $17.5 billion for the Defense Advanced Research Projects Agency (DARPA). Much of the funding authorized to NSF and Energy would have a 20 percent set-aside for EPSCoR jurisdictions.

NSF would see the most substantial new authorities, as the bill authorizes a new Directorate of Technology and Innovation. The directorate would largely focus on expanding the nation’s capacity to engage in development and commercialization activities within key technology areas. These activities could include funding research “test beds” and “innovation centers” to focus on demonstrating tech deployment, and “innovation institutes” to fund consortia to advance tech commercialization.

The NSF authorization also includes a suite of STEM outreach activities, with a strong emphasis on improving participation in STEM programs and careers among underrepresented populations.

Additional Provisions

The U.S. Innovation and Competition Act includes numerous other authorities, including the following:

  • $50 billion to fund the semiconductor research centers and other elements of the CHIPS Act that passed Congress during last year’s defense authorization process — unlike most other sections of the bill, this would be actual funding;
  • Tripling the authorization level for the Manufacturing Extension Partnership program;
  • A suite of new policies overseeing research partnerships or funding arrangements between China and U.S. institutions and individuals;
  • Complete reauthorization for NASA;
  • The Research Investment to Spark the Economy (RISE) Act, which authorizes funding to offset disruptions to university research caused by the pandemic;
  • A new supply chain resiliency program within EDA to develop domestic capacity for the production of critical goods;
  • New biosciences R&D policy that would require the White House to play a greater role in coordinating biosciences investment across federal research agencies; and,
  • A foundation to support innovation at the Department of Energy, primarily by facilitating industry partnerships around federal R&D.

Next Steps

The U.S. Innovation and Competition Act has passed the Senate, but there is no direct companion in the House. Instead, the House is working through a series of bills — including reauthorizations for the NSF, Department of Energy Office of Science, and the National Institute of Standards and Technology — that will form a relevant package for a possible conference committee later in the year. To this end, SSTI president and CEO Dan Berglund testified before the House science committee about regional innovation economies earlier this week.

If or when Congress approves a final version of the bill, the next step will be to approve funding for these authorizations. The timing may provide difficult to provide for appropriations in the FY 2022 discretionary budget. Regardless of the timing, the annual discretionary budget does not often expand quickly to accommodate new 12-figure proposals, and so a more appropriate funding vehicle may be an infrastructure or jobs spending package later in the year.

legislation, policy, nsf, eda, doc