US backing for university-led regional technology hubs ‘notable’

Calls to use US federal research spending in universities to boost heartland regions gain political traction

June 28, 2021
Madison, Wisconsin

Bipartisan support in the US Senate for using federal research spending to spread the benefits of innovation to heartland America by creating regional technology hubs based around universities has been seen as heralding a “notable moment” of potential change.

The $250 billion (£180 billion) US Innovation and Competition Act, passed with Democrat and Republican votes in the Senate this month, aims to power up US science and industry to compete with China, including by stepping up domestic production of semiconductors integral to electronic devices.

The act also contains a provision of $10 billion to transform at least 18 US cities into “regional technology hubs”, with funding awarded through a national competition based on bids from consortia involving local governments and universities.

But that is not the only legislative proposal to use federal research spending to spread the benefits of innovation beyond the coastal giants of Boston, San Francisco, San Jose, Seattle and San Diego – whose dominance in innovation is seen as accelerating regional inequality, with resulting deepening of economic, social and political divides.

A bigger $80 billion plan is envisaged in the Innovation Centers Acceleration Act, proposed by Democrats in the Senate and House of Representatives, including Senator Chris Coons, a close ally of US president Joe Biden.

It remains to be seen whether the House will adopt the Innovation and Competition Act passed in the Senate, or opt to support the bigger plan.

The two plans follow proposals to identify and fund R&D-led regional growth centres in a 2019 report by the Brookings Institution thinktank and Information Technology and Innovation Foundation, as well as by two Massachusetts Institute of Technology economists in the 2019 book, Jump-Starting America: How Breakthrough Science Can Revive Economic Growth and the American Dream.

“We do think this is a notable moment, first for much broader bipartisan embrace of industrial policy, but even more so, regional policy. The United States has really been quite timid and limited in its efforts to address the geography of innovation,” said Mark Muro, senior fellow and policy director at the Brookings Institution’s metropolitan policy programme and a co-author of its report.

The Brookings Institution report identified potential heartland growth centres (based on metrics such as innovation jobs growth, numbers of patents filed and proportion of the population with degrees), a list topped by Madison, home to the University of Wisconsin-Madison, followed by Minneapolis-St Paul, home to the University of Minnesota. It called for a national competition to select 10 such centres, which would together receive $100 billion over 10 years.

The smaller budget in the Senate Act is aimed at creating relatively small hubs in states “without deep R&D histories”, said Mr Muro. While he called that a “good start that acknowledges the disparities and tensions of an overly concentrated, hyper-concentrated R&D map”, he hoped “room will be left for various kinds of proposals”, including for larger innovation hubs.

Mr Muro said of the reasons for lawmakers to back using research spending to boost the heartland: “One of the things we know most from the US innovation model is that high-value, high-level research conducted in universities develops spillovers of one sort or another to the regional economy. There are few other mechanisms that have proven more reliable.”

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