President Biden has announced the creation of 31 new regional tech hubs aimed at advancing technologies critical to economic growth, national security and job creation. The growth of these designated areas is expected to support local development across several states, expanding regional economies and bringing in new jobs. Further, the move is expected to attract high levels of private investment in innovative new technologies supporting the green transition.
For the last two years, President Biden has been driving forward his Made in America strategy, aimed at boosting U.S. manufacturing capabilities and strengthening regional supply chains to enhance security. Since he took office in 2021, there has been over half a trillion dollars in funding for clean energy and manufacturing from the private sector, including $230 billion in semiconductor manufacturing and almost $140 billion in electric vehicle and battery manufacturing.
In October, Biden and Secretary of Commerce Gina Raimondo announced plans to designate 31 communities across the U.S. as Regional Innovation and Technology Hubs (Tech Hubs) through the Department of Commerce Economic Development Administration. These areas are expected to become major innovation hubs, helping to boost the competitiveness of several U.S.-developed technologies. The Tech Hubs programme was created under the CHIPS and Science Act, forming part of the government’s aim to develop the U.S. economy from the middle out and bottom up.
The designated areas will focus on the development of innovative new technologies, many of which support the clean energy sector as well as the government target of a green transition. They will be eligible to compete for between $40 million to $75 million each in grants, out of a total of $500 million in federal funding. Some of the principal industries benefitting from these hubs include semiconductors, clean energy, critical minerals, biotechnology, precision medicine, artificial intelligence and quantum computing. The move is expected to encourage greater cooperation between private industry, state and local governments, higher education institutions, labour unions, Tribal communities and non-profit organisations.
Establishing many previously overlooked areas as Tech Hubs is expected to help expand the tech and energy industries beyond traditional regions, encouraging greater investment in the local economies of several different regions and boosting jobs in the area. There were over 370 applications from communities in 49 states and four territories to be awarded Tech Hub status, and the White House says that those chosen “represent the full diversity of America”. It stated that three-quarters of the hubs will significantly benefit small and rural areas, and more than three-quarters will directly support historically underserved communities.
President Biden said at a White House event, “The U.S. will lead the world again in innovation across the board.” Meanwhile, Gina Raimond explained that the introduction of these hubs would support the diversification of industrial regions. Raimond stated, “Those tech ecosystems are concentrated in just a few places around the country… They don't reflect the full potential of our country. ... They don't corner the market on great ideas.” She added, “People shouldn't have to move to get a good job.”
There has been significantly more interest and investment in domestic manufacturing and green tech development in recent years, largely spurred by the U.S. government’s favourable policy moves. The launch of Biden’s Inflation Reduction Act (IRA) in 2022, America’s most far-reaching climate policy to date, has provided significant financial incentives and grants to companies supporting the green transition. And it has attracted even greater levels of private investment to the sector. As several other regions of the world, such as the U.K. and Europe, appear to be lagging behind when it comes to climate policy, the U.S. is attracting greater numbers of foreign investors to its manufacturing and tech markets.
The U.S. manufacturing industry has gradually declined in recent decades as many companies shifted operations to the Global South, seeking to establish low-cost operations. However, the negative impact on global supply chains seen in the Covid pandemic and again following the Russian invasion of Ukraine last year are encouraging a shift back to regional manufacturing. New factories are rapidly springing up across the U.S., supported by hundreds of billions of dollars from the IRA and the Bipartisan Infrastructure Bill. A range of different companies are supporting this development, from long-established manufacturing giants to innovative startups.
More states are showing interest in developing operations in green energy and related technologies. Many areas that previously opposed the development of manufacturing facilities are now looking to support a nationwide green transition and opening their doors to new factories. This is helping the U.S. to gradually regain its former manufacturing powerhouse status, as well as decarbonise the economy in line with Biden’s climate pledges and Paris Agreement targets.
By Felicity Bradstock for Oilprice.com
ADVERTISEMENT
More Top Reads From Oilprice.com:
- Why Wall Street Financiers Are Flocking To Saudi Arabia
- Gold And Silver Shine As Global Safe Havens
- Belt And Road Bailouts Are Soaring As Partners Struggle
