New awards signal the expansion of the place-based federal investment era

Four years since the passage of the CHIPS and Science Act, the era of place-based federal investment that legislation established continues.

Last week, the National Science Foundation (NSF) announced 12 new Regional Innovation Engines awards, which could bring up $160 million to each of the selected coalitions over the next 10 years. This announcement comes after NSF extended awards to eight inaugural Engines this past May, and brings the program’s total number of supported regions to 20—representing over $3 billion in potential funding over 10 years.

Additionally, on July 20, the U.S. Economic Development Administration (EDA) announced six new implementation awards for its own Regional Technology and Innovation Hubs (Tech Hubs) program, bringing their portfolio to 18 regions.

With this latest round of investments, the United States has assembled something genuinely new: a truly national place-based innovation strategy that is investing significant funding in regions on the cusp of competitiveness in emerging technologies, with the goals of accelerating commercialization of new products and achieving robust economic growth.

Now, the question is no longer whether the U.S. place-based economic experiment will continue, but whether it can be implemented effectively. And so, as new Engines and Tech Hubs come online over the next several months, they have the benefit of not being the first regions responsible for implementing this broader national mission. In this piece, we update our previous assessment of the nation’s place-based innovation portfolio and forecast what the early years of implementation may look like for new awardees.

A national portfolio takes shape

Across the Engines and Tech Hubs programs, July’s announcements add 18 new coalitions to the broader map of place-based innovation investments, representing a diversity of emerging technologies. The selections clearly reflect each program’s focus on building regional innovation clusters that can advance critical U.S. economic and security interests, including biosciences and biomanufacturing in Indiana, Missouri, and Virginia; quantum computing in Connecticut and Illinois, Indiana, and Wisconsin; and several technologies anchoring the electro-industrial economy, from critical minerals in Alaska and Missouri to grid resilience in West Virginia and Western Pennsylvania to nuclear energy in Idaho and Wyoming.

Taken together, the Engines and Tech Hubs awards suggest the maturing of an investment approach that seeks to broaden the map of innovation hubs by finding historically overlooked places with a baseline of innovation capacity and commercialization potential. As Figure 2 shows, the latest round of awards leans toward regions with higher levels of innovation capacity, but includes a meaningful share of regions with a demonstrated economic need as well. While the programs differ in their funding models and objectives, both reflect a common strategy: advancing national competitiveness and prosperity by enabling more regions to become centers of innovation.

The expansion of awards will also increase the importance of coordination across the federal government. In several cases, NSF and EDA are now making complementary or adjacent investments in similar regions in the same general technology areas (e.g., semiconductors and photonics in Upstate New York; energy infrastructure modernization in South Carolina; critical minerals in Missouri; advanced materials in Northeast Ohio). Where appropriate, EDA and NSF can improve the effectiveness of their awards—and the experience of grantees—through deep coordination in the grant management process, including flexibility on project changes to reflect new funding, allowing unified leadership across funding streams and potentially even alignment of reporting or storytelling elements.

Lessons learned from prior Engines cohorts

The ongoing process of implementation is beginning to surface important lessons for future buildout. As Engines and Tech Hubs coalitions turn from planning to implementation, they will experience many of the same early implementation issues that Brookings documented in an earlier analysis of a similar place-based program. Each of the 12 new Engines will receive $15 million in federal funding over their first two years. Early implementation by four inaugural Engines suggests that—not dissimilar to an early-stage startup—these first two years will be a challenging mix of design and demonstration, with the need to showcase progress to attract future NSF investment. While EDA funds Tech Hubs differently, many of these early observations apply to their context as well. Three lessons stand out:

Building the team is foundational

One of the biggest early indicators of implementation progress is establishing Engine leadership and organizing the talent required to deliver on the Engine mission. Approaches to building these teams varied among the inaugural class. The Textile Innovation Engine of North Carolina recruited a nationally recognized apparel executive, while the Future Use of Energy in Louisiana (FUEL) Engine built an entirely new management team, including hiring the leader of another Engine finalist as its CEO. FUEL’s successful incubation within a large research university while demonstrating an independent brand and identity is a particularly relevant model for the 12 new Engines, which are all university-led.

As each Engine makes its own pivot from application to execution, they will need to evolve to organize a much broader set of implementing organizations across their ecosystems. Successful Engines must quickly bring dozens of partners—from universities and companies to workforce organizations and local governments—into a shared operating model, including many that have been less involved in proposal development and that need to understand both the Engine’s long-term vision and their role in achieving it. To accomplish this, the lead organizations of the ASCEND (Advanced Sensing and Computation for Environmental Decision-making) Engine in Colorado and Wyoming (Innosphere) and the Great Lakes RENEW (Recovery of Energy, Nutrients, critical Elements, and Water) Engine (Current) effectively reoriented much of their enterprise around the Engine, underscoring that evolving existing institutions may be required to implement at this scale.

Strategic refinement yields a more precise technological North Star

Each Engine received implementation funding because they had a compelling strategic hypothesis for how they could solve a globally significant problem with emerging technologies. The first two years of operation are about testing and refining that hypothesis and finding the technological use cases that will ultimately determine whether commercialization occurs in the region.

Colorado and Wyoming’s ASCEND Engine, for example, recognized it had advanced research and innovation assets in sensing and prediction technologies that could mitigate environmental disasters such as the Marshall Fire, which devastated 6,000 acres in Colorado’s Front Range in 2021. But it was only after the Engine brought together national labs, universities, and tech companies did they prioritize their specific use cases in fire prevention, soil health, and extreme weather. With that more specific technical North Star, ASCEND is now deploying its next three years of funding toward two accelerators that help startups improve soil health and collect and analyze data to prevent, respond to, and recover from wildfires.

Smartly designed pilots allow for learning while delivering

A final lesson learned from our observations is that Engines that treat implementation as a disciplined learning process rather than simply an exercise in obligating funds and service delivery will be better positioned for long-term success. After two years, Engines not only need refined clarity on their technical North Star (the more precise “what” of their strategy), but also must begin designing projects and programs to deploy their initial $15 million NSF investment (the tactical “how” of their strategy).

In Louisiana, the FUEL Engine’s approach to workforce development exemplifies this way of working. Through six “seed” and seven “scale” subawards, which were selected in a competitive request-for-proposals (RFP) process, FUEL tested programs with a wide range of recipients, including industry partners, nonprofit service providers, K-8 school districts, and community and technical colleges. This got them early wins from program delivery, broadened their network of partners, and surfaced lessons about where demand is and where capacity is needed. One result of their new strategic implementation plan is launching a new competitive RFP specifically for curriculum enhancement with community and technical college partners, alongside a new stipend fund for energy programs to ensure potential trainees aren’t turned away for costs.

From federal programs to a national portfolio

July’s new awards represent a third wave of ambitious place-based, tech-led economic development, following 2022’s Build Back Better Regional Challenge grants and the inaugural class of Engines and Tech Hubs in 2024. Across these three programs, there are now over 50 U.S. regions responsible for delivering on the national place-based innovation experiment.

This growing portfolio presents an opportunity to synthesize the implementation experience across both programs and places. It is one of the richest learning environments in modern economic development policy. In the coming months, Brookings will continue to analyze implementation across the portfolio; distill lessons for regional, state, and federal leaders; and create environments where leaders can share what they’ve learned. The more effectively implementation expertise can travel across this regional portfolio, the more likely the U.S. can deliver on the national objective of building clusters of innovation and prosperity across the country.