The bipartisan FY25 National Defense Authorization Act passed by Congress and signed into law by President Biden made this funding possible.
Tech hubs are an important part of a state’s business ecosystem as they foster innovation, collaboration, and entrepreneurship in the technology sector. These hubs, often located in cities or regions with a strong focus on tech development, bringing together startups, investors, academic institutions, and industry leaders to drive growth and create new solutions for the economy of tomorrow.
One of the key factors in the growth and sustainability of tech hubs is access to funding, which is where grants play a vital role in building the American economy. Grants are financial awards given to organizations or individuals to support specific projects, research, or development efforts that do not have to be repaid.
Today, the Biden Administration announced additional support for tech hubs, naming six recipients of $210 million in implementation funding grants ranging from $22 million to $48 million as part of a new round of Congressional funding supporting worldwide American competitiveness.
These new awardees, all designated Tech Hubs, have not received prior Tech Hub implementation funds. Their selection for initial grants was based on target investments that will advance critical technology important to American economic and national security.
These Tech Hub Designees, their state locations, approximate funding amounts for their emergent technology sectors are as follows:
- American Aerospace Materials Manufacturing Tech Hub (Washington, Idaho)
Lead Agency: American Aerospace Materials Manufacturing Center
Technology Focus: aerospace materials manufacturing
Estimated Award Amount: $48 million - Birmingham Biotechnology Hub (Alabama)
Lead Agency: Southern Research Institute
Technology Focus: equitable AI-driven biotechnology
Estimated Award Amount: $44 million - Corvallis Microfluidics Tech Hub (Oregon)
Lead Agency: Oregon State University
Technology Focus: microfluidics
Estimated Award Amount: $45 million - Critical Minerals and Materials for Advanced Energy (CM2AE) Tech Hub (Missouri)
Lead Agency: University of Missouri System
Technology Focus: critical mineral processing
Estimated Award Amount: $29 million - Forest Bioproducts Advanced Manufacturing Tech Hub (Maine)
Lead Agency: Maine Technology Institute
Technology Focus: sustainable wood biomass polymers
Estimated Award Amount: $22 million - Vermont Gallium Nitride Tech Hub (Vermont)
Lead Agency: University of Vermont
Technology Focus: gallium nitride-based semiconductors
Estimated Award Amount: $23 million
These six latest hubs are part of the 31 Tech Hubs designated in October 2023 by President Biden. This initiative advances the production of critical technologies that help create jobs in innovative industries and strengthen U.S. economic competitiveness and national security. These are growth industries of the future being built in regions across the United States building the innovation economy.
“To out-innovate and out-build the rest of the world, we need to ensure we’re investing in America’s talent and workforce to succeed in a 21st century economy – that’s how America maintains its competitive edge,” said U.S. Secretary of Commerce Gina Raimondo. “The Tech Hubs Program and this latest allocation of funds are the result of bipartisan cooperation in Congress – I hope that good-faith work will endure so we can continue to invest in these centers of excellence across the nation, which in return, are providing good-paying jobs in industries of the future and helping to strengthen U.S. economic and national security.”
This new round of awards is funded by new appropriations from the Fiscal Year (FY) 2025 National Defense Authorization Act (NDAA). NDAA provisions allow for additional funding of up to $280 million for the Tech Hubs Program in the coming years.
EDA also plans to provide additional funding to the Builder Platform, a post-award support model providing tailored resources and a high level of personalized engagement to National Science Foundation NSF Regional Innovation Engines (NSF Engines). The Builder Platform serves to drive NSF Engines through support networks and curated entry points for corporations, philanthropists, investors, and other potential partners energizing innovation ecosystems.
Tech Hub Funding Background
In July 2024, the Economic Development Administration (EDA) awarded 12 Tech Hubs Designees with implementation grants that ranged between $19 million and $51 million, totaling $504 million. Those not receiving implementation grants were awarded $500,000 Consortium Accelerator Awards for further implementation of their strategies including the pursuit of additional capital.
Prior to the NDAA legislation, EDA’s Tech Hubs Program was appropriated a total of $541 million—a fraction of the $10 billion authorized by the CHIPS and Science Act of 2022, a bipartisan initiative that created the program.
The approximate $500 million in total to be appropriated for the Tech Hubs Program comes from the proceeds of a spectrum auction run by the Federal Communications Commission. Of that amount, the Department of Commerce may currently access up to $220 million, and up to $280 million may become available in the future depending on the total spectrum auction proceeds.
Conclusion:
The grant-recipient tech hubs support early-stage startups by assisting them to overcome financial barriers as they scale their innovative technologies. They use the grants to establish infrastructure, educational programs, and collaborative initiatives that enhance the local tech ecosystem for domestic job creation. Not only do grants contribute to economic growth and that of individual businesses, but they also help strengthen the country’s economic security by nurturing thriving tech communities.
