Regional Innovation Initiatives Spring Into Motion

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This month, the National Science Foundation’s new Regional Innovation Engines program issued its first development grants and the Economic Development Administration opened its first call for applications to its new Regional Technology and Innovation Hubs program.

A Montana State University graduate student works with a specialty microscope at the MonArk Quantum Foundry

A Montana State University graduate student works with a specialty microscope at the MonArk Quantum Foundry, which the university co-hosts with the University of Arkansas. Montana State recently received a grant from the National Science Foundation to develop a proposal for a complementary multi-institution project that would be funded through the agency’s Regional Innovation Engines program. (Image credit – Adrian Sanchez-Gonzalez / Montana State University)

On May 11, the National Science Foundation announced 44 grants that will support planning for projects to build up regional economic capacity by leveraging R&D. Totaling $43 million, these “development” grants are the first awards NSF has made through its new Regional Innovation Engines program. The program is currently evaluating proposals it has received for full-scale projects and anticipates making its first awards in that category this fall.

Meanwhile, the Commerce Department’s Economic Development Administration opened the first call for applications to its Regional Technology and Innovation Hubs Program on May 12. Some applicants will seek immediate designation as a “Tech Hub,” which will confer eligibility to apply for full-scale grants in a competition expected to open this fall. Either in lieu of or in addition to a designation application, applicants can also seek development grants that would aid preparations to apply for Tech Hub designation at a later date.

Congress authorized both the NSF Engines program and the EDA Tech Hubs program last year through the CHIPS and Science Act as part of that law’s focus on reinforcing U.S. economic competitiveness. However, with political winds now shifting in favor of budgetary restraint, neither program is on track to grow to the full scope the law envisioned.  

NSF grantees charting pathways to ‘Engine’ status

NSF’s initial round of applications for the Engines program drew 488 proposals for development grants, which are each worth up to $1 million and cover a period of up to two years. The agency expects to fund five of the 191 proposals it has already received for its full-scale, or “Engine,” grants, which will each provide up to $160 million across a period of up to 10 years.

In line with the CHIPS and Science Act, each of the development grants is associated with a particular focus area chosen from a list of 10 technology areas and six “challenge” areas. Sustainable energy and advanced agriculture are together the focus of more than a quarter of the grants, respectively accounting for seven and five of the 44 awarded.

Teams receiving the awards vary in their existing capabilities in their focus area. For example, one of two optics-focused awards is going to a team led by the University of Rochester, a major center for optics research in a region of New York state with extensive roots in the optics industry. The team’s proposal cites that strength as a basis for building the region into a center for laser manufacturing, which it notes is increasingly taking place outside the U.S. “Despite [its] potential, Rochester remains a region in need of economic revitalization, with deep needs for education and access to technical jobs,” it states.

Other grants propose to develop new capabilities, such as one awarded to a team led by the Southern California Tribal Chairmen’s Association to lay the groundwork for a “Tribal Energy Innovation Accelerator.” The team’s proposal states the accelerator would facilitate a mix of technical and non-technical collaborations to encourage the creation of new clean-energy equipment products and Tribal businesses, more resilient energy-producing systems, and workforce-training services. If implemented, the project would complement various Tribal energy activities funded through the Inflation Reduction Act and significantly exceed the scope of projects typically supported by the Department of Energy’s Office of Indian Energy Policy and Programs.

Some grants build on existing NSF initiatives, such as one going to a team led by Montana State University, which is already co-hosting a “quantum foundry” funded by a $20 million grant from the agency. The new grant is one of two focused on quantum technology and will support planning for an initiative to promote “use-inspired” R&D at several regional universities and to foster collaborations with companies to help establish performance requirements and ease translation into applications.

While the development grants are aimed at paving the way for Engine grants, some program participants have opted to vie for the full-scale grants immediately. In quantum technology, for instance, these include proposals from teams led by Harvard University, the University of Maryland, and the Chicago Quantum Exchange collaboration, which have all already won major NSF quantum science grants, as well as another proposal from a team led by California State University Northridge.

How many Engine grants NSF ultimately awards will depend on funding availability. The CHIPS and Science Act envisioned the program would split a five-year, $6.5 billion budget with another NSF effort aimed at accelerating the translation of research into applications. That implies an annual funding target of $650 million, assuming an even split. However, NSF allocated $200 million to the program in its first year and is only requesting $300 million for its second.

Given that Republicans are currently using their control of the House to negotiate tight constraints on non-defense spending, it is possible NSF’s budget will not rise much and could even be cut. That would leave limited funding for Engines unless the agency diverts money from other programs.

At least 20 ‘Hubs’ will be eligible to compete for funding

Funding for EDA’s Tech Hubs program is in a potentially even more tenuous position. The CHIPS and Science Act envisioned the program would receive $10 billion over five years, but Congress only provided $500 million for its first year, and did so through a special supplement rather than as part of EDA’s ordinary appropriation. Now, the Biden administration is seeking a special multiyear appropriation of $4 billion to continue the program, but Republicans have given no sign they will entertain any new funding on top of Congress’ ordinary annual appropriation.

EDA is not presuming it will receive additional funding in its current plans. It intends to award a total of about $15 million in development grants through its current solicitation, each worth between about $400,000 and $500,000. It also plans to designate at least 20 Tech Hubs. Only these designees will be eligible to participate in the upcoming competition for full-scale grants, through which EDA expects to make at least five awards, each on average worth about $65 million.

Whereas teams applying to the NSF Engines program can be spread across multiple states, the Tech Hubs program is intended to benefit more localized geographies, on the scale of a Metropolitan Statistical Area. The Tech Hubs will share with NSF a focus on 10 technology areas listed in the CHIPS and Science Act, but the Hub grants will be targeted at leveraging nearly mature technologies for economic development instead of at R&D and technology commercialization.

EDA states that designation as a Tech Hub is intended as a “strong signal” that a region is prepared, with five years of support, to emerge as a “self-sustainable, globally competitive region” in its technology area over the next 10 years. The agency emphasizes that each team should include at least two companies, noting it will evaluate the “quality” of those companies’ participation rather than how many of them there are.

Examples of supportable activities EDA lists in its solicitation include constructing a “first-of-its-kind” demonstration facility, repurposing an industrial facility to advance a key technology, creating a technology supply-chain program, and implementing a strategy to recruit entrepreneurial researchers. Development grants are expected to support efforts such as conducting assessment and planning activities, identifying promising partnerships and needed changes to policies and regulations, and hiring a “regional innovation officer” to administer the proposed initiative.

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