With its winners announced, the Regional Innovation Engines program moves to expand place-based R&D

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Last week, National Economic Council Director Lael Brainard traveled to Brookings to articulate the nation’s new embrace of “place-based” policy—an economic agenda that pursues national goals through geographically targeted investments. This week, the nation’s top driver of scientific progress—the National Science Foundation (NSF)—provided an example of what such policy can look like.

On Monday, the NSF announced the winners of its Regional Innovation Engines program. Authorized by the bipartisan CHIPS and Science Act of 2022, the program aims to expand the nation’s innovation map by seeding new innovation clusters in 10 places.

The Engines program exemplifies the logic of place-based policy. For most of the last 60 years, federal investment in research and development has not just declined, but also become deeply imbalanced—with nearly half of all federal R&D spending flowing to just six states, and often concentrating in a small number of metropolitan areas. As a result, the nation’s high-productivity, high-pay innovation economy has become hyper-concentrated in just a handful of “superstar” cities, with most other places falling far behind.

To counter that, the NSF’s Engines will build on their region’s emerging scientific and technological strengths to grow new industries and workforces in places that have been left out of the tech boom of the last 15 years. As such, the Engines will draw together private companies, venture capital, state and local governments, higher education institutions, labor unions, tribal governments, and nonprofits into bottom-up efforts to transform the local innovation scene and strengthen the national economy.

For now, the 10 Engines will receive $15 million each to launch their efforts. And over the next decade, the group will be eligible to receive upward of $2 billion if Congress follows through with the program’s approved funding levels.

With the winners declared, this funding will now flow to such unsung spots as Fargo, N.D., which aims to build an agricultural technology cluster; and Winston-Salem, N.C., which hopes to accelerate regenerative medicine innovation. Other awards seek to advance technologies and solutions around the energy transition (Baton Rouge, La.); extreme dryness and heat (Phoenix); and the defense, space, and aerospace supply chain (El Paso, Texas). This regional activity will link into numerous actors in more than a dozen states and scores of counties. And in addition to the 10 winners, 15 other local consortia have been invited to pursue NSF “development awards” to help them lay the groundwork for submitting a future proposal—adding to the 44 other such awards announced in May 2023.

Altogether, the Engines program has touched some 70 regions that lay off the beaten path of the U.S. innovation network, either with a full-scale award, a development award, or an invitation to apply for future awards. If fully funded in future years, these engagements could represent one of the most significant diffusions of place-based research and development in the nation’s history. At last, then, the U.S. has begun the work of widening the reach of technology-based development into new and different regions.

Yet with that said, the program’s investment pool and award levels remain insufficient given the task at hand. Not only have appropriations levels come in far short of their original approved levels, but the path forward for funding appears deeply uncertain given congressional gridlock. To be sure, the NSF’s original solicitation for the program called for “an intentional focus on long-term sustainability,” with a key success factor being an Engine’s “ability to secure and sustain capital inflow to its region of service.” But even so, future funding shortfalls could very well stall the Engines, given that funding is only in hand for two years of a program that speaks of a 10-year path of grant support.

In any event, it remains critically important that the U.S. is making geographical inclusion part of its innovation mandate. As such, the NSF’s Regional Innovation Engines program represents a compelling model for how “place-based” economic policy can promote R&D-based commercial growth—and prosperity more widely—in more of the country’s left-behind places. It’s incumbent on Congress to ensure that this program becomes more than just an unfinished prototype.