Newsletter
In the current economic climate, technology companies are predominantly based in states like California, which are nearing a saturation point due to hosting a high concentration of these firms. Now, in an effort to solve this issue, the Biden Administration, along with the Commerce Department, has announced a plan to designate 31 areas spanning 32 states and Puerto Rico as tech hubs, with the primary goal to drive private sector investment and job creation within these regions.
This initiative, a part of the CHIPS and Science Act, will allocate a portion of the $500 million in funding to these tech hubs to lure companies into establishing their operations in these designated areas, thus reducing the reliance on traditional tech hubs like San Francisco, New York, Boston, and Austin.
“Over the past few decades, these communities have lost more than jobs. They lost their sense of dignity, of opportunity, their sense of pride. We’re going to change all that. Tech hubs are going to bring this work to where people live in communities all across America,” said President Biden.
What businesses will these tech hubs foster?
As the name suggests, the primary aim of these tech hubs is to nurture businesses in the technology sector, spanning from artificial intelligence, biotechnology, and clean energy to semiconductors and quantum computing. However, it is important to note that specific areas will cater to different types of businesses and research. For example, a hub in Washington state will focus on developing new materials for next-generation, fuel-efficient aircraft, while another in New York will concentrate on research in the latest battery technologies.
Although the formation of tech hubs represents a significant step forward since nearly 75% of them are located in small communities and rural areas, securing the designation does not guarantee immediate federal funding. This is because the Commerce Department will closely monitor each program over the next year before disbursing funds. Additionally, it is important to note that not all hubs will receive grants, as there is only a total of $500 million available for the entire program, with each hub eligible for up to $75 million in funding.
“These tech hubs will be transformational, and they’re part of a long line of transformational investments we’ve made since I took office,” said President Biden.