Clustering for Innovation

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This commentary is part of a report from the CSIS Economic Security and Technology Department, titled Staying Ahead in the Global Technology Race. The report features a set of essays outlining key issues on economic security for the next administration, including global technology competition, industrialization policies, economic partnerships, and global governance.

Last month, the Elevate Quantum Tech Hub broke ground on the new Quantum Tech Park in Arvada, Colorado. It is one of 31 Tech Hubs designated by the U.S. Department of Commerce to stimulate innovation-based regional economic growth. This initiative is one part of a larger effort across the federal government to expand and connect innovation networks across the nation.

The Push from the CHIPS and Science Act

The CHIPS and Science Act of 2022 established a suite of grant programs designed to catalyze technology cluster development, including the Tech Hubs Program through the Economic Development Administration at the Department of Commerce, the Microelectronics Commons Hubs through the Department of Defense (DOD), and the Innovation Engines through the National Science Foundation (NSF):

  • The Department of Commerce’s Tech Hubs envisions 31 regional consortia that focus on specific emerging technologies. Starting in July 2024, 12 hubs have each received “implementation funding” between $19 million and $51 million for workforce development and manufacturing initiatives.
  • The DOD’s Microelectronics Commons Hubs consists of eight networks that aim to close the “lab-to-fab” gap in microelectronics for commercial and defense applications, each receiving between $15 million and $40 million.
  • The NSF’s Innovation Engines include 10 regions that each have received an initial $15 million in grants covering multiple technology domains, such as robotics, advanced materials, and artificial intelligence.
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The largest awards, at $51 million each, went to four of the Department of Commerce’s Tech Hubs: Heartland Bioworks in Indianapolis, Indiana; iFAB TechHub in Champaign-Urbana, Illinois; Sustainable Polymers Tech Hub in Akron, Ohio; and Tulsa Hub for Equitable and Trustworthy Autonomy in Tulsa, Oklahoma.

Drawing in Additional Investments

These federal awards are expected to induce investment from the private sector and local governments, and in some cases already have. In addition to their $40.5 million implementation grant from the Department of Commerce, Elevate Quantum received $77 million from the state of Colorado and $10 million from New Mexico, including a portion dedicated to a loan guarantee program. Additionally, Elevate Quantum has attracted over $1 billion in private and venture capital investment. These stacked investments facilitate the creation and expansion of innovation and industrial networks that connect researchers, designers, manufacturers, equipment suppliers, materials suppliers, and end users.

Fostering Workforce Training and Development

Next, by centering workforce development and training, these hubs also help meet the high demand for a skilled technical workforce while ensuring that regional and local communities benefit from their activities. With a sustained focus on education, including vocational training at community colleges, as well as the development of pathways to high-quality jobs, these investments are needed to sustain more inclusive growth within local and regional ecosystems. The new National Science and Technology Council Workforce Center of Excellence, supported by a $250 million investment from the U.S. Department of Commerce, plays a similar role in prioritizing workforce development.

Connecting Resources

Finally, these grant programs actively connect existing and new public and private resources. Some programs span several consortia, allowing for synergies to form across firms, universities, and research organizations engaged in a variety of emerging technologies. For example, the Elevate Quantum Tech Hub is just down the road from the Rocky Mountain Innovation Engine, easing potential collaboration across teams working on quantum, AI, renewable energy, and robotics. Likewise, both the Southwest Advanced Prototyping Microelectronics Commons Hub and Southwest Sustainability Innovation Engine will be hosted by Arizona State University, accelerating mutual advances in fields including advanced manufacturing, 5G/6G, disaster mitigation, and products for end users.

Going Beyond Proximity

This all-of-government strategy to develop a network of connected regional innovation ecosystems recognizes that economically dynamic innovation clusters are an outcome of active and interlinked networks of cooperation among entrepreneurs, investors, educational and research organizations, small and large firms, public agencies, and philanthropies. While successful technology clusters are one outcome of networking, collaboration requires more than simply locating assets in proximity to one another. Multiple actors spread across different organizations need incentives to work together in complex ways to fund, research, develop, scale up, and bring new products and services to the marketplace.

A suite of public-private partnerships that address the specific challenges of cooperation provides this alignment. The programs discussed above will need to work in complement with other federal and state programs—including partnerships such as the Small Business Innovation Research program, the Manufacturing USA centers, and the Manufacturing Extension Partnership—to grow connective tissue across the innovation ecosystem.

Need for Continuity

By fostering the growth of thick regional ecosystems, partnerships encourage more Americans to connect to and have a stake in the nation’s economic future—securing the nation from within. They are also essential to drive the nation’s technological competitiveness in global markets and ensure security from external threats.

To be successful, partnerships must address the challenges of collaboration across multiple actors, operate at sufficient scale, and be seen as dependable and durable. This means that partnerships need to be evaluated and recalibrated regularly to ensure that they are well focused operationally. It is also important to recognize that innovation partnership programs work in complement with each other, forming mutually reinforcing networks of institutions that solve diverse problems requiring collective action. Moreover, if partnerships are to grow this connective tissue of collaboration, it requires policy patience. Long-term, sustained investments are needed for connections to take root. In this regard, policymakers need to recognize that the CHIPS and Science Act is not a one-and-done deal. Especially in this era of intense innovation-based competition for markets and national power, securing technological leadership must be a substantial and sustained bipartisan effort.

Sujai Shivakumar is the director and a senior fellow of Renewing American Innovation at the Center for Strategic and International Studies in Washington, D.C.