On Aug, 15, the first US Economic Development Administration Tech Hubs application deadline hit, ending Phase 1 of one of the United States’ biggest tech-focused economic development initiatives in decades.
Phase 1, as it turns out, is much more exploratory than it may have seemed when the announcement and call for applications came from the U.S. Economic Development Administration in May. Since then, it’s been compared to the frenzied call for proposals for Amazon HQ2 back in 2018, when cities pitched themselves as the ideal place for the Big Tech company’s second home, complete with offers of tax breaks and other perks offered.
But the Tech Hubs program is not that. Instead, it’s an effort by the federal government to help regions beyond Silicon Valley and Boston become global competitors as the U.S. expands into high-tech manufacturing.
In Phase 1, it’s all about identifying existing and potential hubs of innovation. About 20 regions will be officially designated as Tech Hubs and eligible to apply for strategy implementation funding — between $50 million and $75 million from the CHIPS and Science Act — in Phase 2, starting this fall.
Separately, a number of other regions applying through Phase 1 will receive a strategy development grant from a $15 million pool to advance their development as “future tech hubs.” (These regions won’t be eligible for Phase 2 funding.)
Yes, the U.S. Economic Development Administration wants to know what regions have to offer, but it also wants to know weaknesses. It wants to know about economically disadvantaged areas. There is a special focus on rural areas. Consortiums comprising at least five entities, including higher education, government departments and economic development orgs, align themselves with one of 10 key technology focus areas for their application — say, life sciences or robotics or AI. Then, those entities can also choose to align with other organizations to apply for designation in a different sector.
The point isn’t just for regions to tell the U.S. Economic Development Administration why they deserve to be considered a hub of life sciences or robotics or AI. It’s to show the U.S. Economic Development Administration what different consortiums in a region have, and what they need.
Ultimately, the goal for the Phase 2 federal grant recipients is to put them on the map as international technology innovation and manufacturing centers, up there with Taipei, Taiwan and Yongin City, South Korea, bringing along a significant number of new, well-paying jobs and workforce development programs.
There will be investment in sectors that support the semiconductor industry as well as some that may not, but still generate jobs on a similar scale. That’s the reason rural areas and economically disadvantaged areas are a focus.
Which may put Delaware in an interesting position.
Two big questions have been circling in Delaware, which, at least from the outside, is not often thought of as a particularly tech-forward state: How will Delaware and its entities align with the Tech Hubs program? Will they go forward alone (as with Amazon HQ2), or join forces with Philadelphia?
They’re good questions, but they also simplify the situation into a binary that doesn’t exist. It’s not a matter of Delaware choosing Greater Philly or choosing to be an island, not least of all because Philly isn’t the only region Delaware’s three counties belong to. Writing off Kent and Sussex counties to stick with Delaware’s northern neighbor isn’t necessarily the best idea, considering the U.S. Economic Development Administration’s focus on rural communities.
Delaware — or, more accurately, Delaware entities like universities and economic development groups — won’t need to choose one or the other. More to the point, Delaware entities are involved in consortiums with various geographic configurations.
Technical.ly spoke to several people involved with technology in Delaware, including some directly involved with U.S. Economic Development Administration Tech Hub consortiums and some involved tangentially, to get an idea of how the state fits in this massive federal project.
‘It’s all about regional collaboration’
Noah Olson, director of innovation for the Delaware Prosperity Partnership (DPP), believes Delaware can bring a lot to any Tech Hubs consortium.
“I think an entity within Delaware like the University of Delaware could be a lead entity on a consortium,” said Olsen, whose organization is the state’s nonprofit economic development agency. “I think that it would be counterproductive to go it alone, though, because different entities in Delaware can participate on proposals that are led by an entity from Philadelphia, from Southern New Jersey or from Northeastern Maryland.
“Look at any parking lot in Wilmington, and you’re going to see cars from Pennsylvania, New Jersey, Maryland,” he said. “When it comes to being a tech hub, I think it’s all about regional collaboration.”
Olson and the DPP team have served as connectors for entities in Delaware looking to get a seat at the table at one of the Tech Hubs consortiums led by Greater Philadelphia entities, such as the University City Science Center and Ben Franklin Technology Partners.
What Olson doesn’t see is Delaware taking on a Philadelphia identity.
“We’re proud to be the First State and the ‘independent lower three counties’ under Pennsylvania,” he said. “But when it comes to real innovation, I think it’s important for us to take advantage of everything that’s around us as well. Ecosystem growth doesn’t happen in a vacuum.”
‘We need an assessment’
Zakiyyah Ali, executive director of the Tech Council of Delaware, has been observing the early stages of the Tech Hubs process with interest.
“I think in some ways, I almost liken [the U.S. Economic Development Administration’s] approach to a research project,” Ali said. “America is certainly trying to either compete with or exceed what China is doing. We need to have an assessment done of where we’re at in this country, find hubs that we can invest in that, maybe, we’ve been overlooking. With any large dollar investments are going to come the opportunity for more jobs, and certainly they want those jobs to go to residents that often get overlooked for those opportunities.”
Delaware’s tech community, Ali said frankly, lacks the unity it would need to be successful as a Tech Hub on its own.
“I know a lot of people don’t want to put that out there,” she said. “If we were much more connected, much more aligned, much more integrated, and much more in a symbiotic relationship with each other, we probably could stand alone” — at least in biotech and life sciences.
‘Creating more opportunity for growth’
Kelvin Lee, who is the Gore Professor of Chemical and Biomolecular Engineering at UD and director of the Manufacturing USA National Institute for Innovation in Manufacturing Biopharmaceuticals, is having firsthand conversations about U.S. Economic Development Administration Tech Hubs and how to strategically include the state in one or more regions. UD, for one, is involved in a “handful” of applications.
“New Castle County is part of the Greater Philadelphia Metropolitan Statistical Area [MSA], and then Kent County and Dover is a separate statistical area, and then Salisbury, Maryland and Sussex are a separate area,” Lee said. “Part of the strategy and thinking is, you can be focused on one MSA, but to what extent do you bring in some of the adjacent MSAs — that’s the question for Delaware.”
There’s no question that New Castle County would have to include Greater Philadelphia in Tech Hubs applications, he said. That’s the easy part.
“The question is really, how do you think about linking Kent County? How do you think about Sussex County? And the southern part of the Delmarva Peninsula, I think there can be a strong case made that by including them, you’re actually creating more opportunity for growth,” Lee said.
‘Together, you could actually do more’
Dora Cheatham, executive director of the Delaware Sustainable Chemistry Alliance, is on the board of a different hub: MACH2, helping to develop the Mid-Atlantic Clean Hydrogen Hub, a coalition of the state of Delaware, Southern New Jersey and Southeastern Pennsylvania.
When that hub was being developed, she said, they decided embracing the region was the only way to go.
“We purposely made the decision that Delaware can’t stand on its own for [the Hydrogen Hub],” Cheatham said. “Because, as we looked at the funding that was coming in and the funding that was being offered, it was the goal of these funds to build regional coalitions and to kind of get people out of their silos.
“When we were doing the preliminary work in Delaware, what we realized was that everybody’s working on hydrogen — companies, nonprofits, universities, colleges — but they were all working in little silos,” she said. “Initially everyone’s kind of tentative to share what they’re doing. But the realization that together, you could actually do more made people open up a lot more and it became more effective.”
‘They know there are really smart people out there’
As Phase 1 nears a close, and it seems that the U.S. Economic Development Administration is going to be inundated with many, many applications, the experimental nature of Phase 1 is apparent. No one knows what will come next. There’s a good chance the U.S. Economic Development Administration itself doesn’t know yet what it wants.
“I’m thinking back on a famous Steve Jobs quote, when he was asked why they never used focus groups at Apple,” said Eric Wommack, senior associate VP for research at UD and a professor of environmental microbiology. “He said it’s because people don’t know what they want. And because they’re not in a position of somebody who’s technically involved in the area. I think part of the challenge of the sponsor is to write something that’s going to bring in those great ideas that they’re going to get excited about, and they’re not really exactly sure what they want, but they know there are really smart people out there that are going to tell them what they should want, which is just part of grantsmanship.”
What the U.S. Economic Development Administration may find that it doesn’t expect are “new” hubs whose borders are not based on things like MSA, but on people collaborating regionally, outside of the lines. The U.S. Economic Development Administration’s focus on rural areas makes that almost inevitable.
“I’m from Atlanta, from Georgia, a large state for the East Coast, and I think it’s laughable when people consider Sussex County as being far away from Philadelphia,” Wommack said. “I mean, it just really isn’t for most of the rest of the country. I don’t see [Delaware having] that much of a geographic impediment, honestly.”