Less noticeable in the bipartisan CHIPS semiconductor bill, which President Biden signed into law earlier this month, are funds aimed at transforming where innovation happens in the US, rather than funneling money to traditional tech hubs like Silicon Valley in Northern California, Seattle or Boston, the law will create. technology centers in many countries, including small and rural countries.

More importantly, the bipartisan $54.2 billion bill passed by Congress last month contains $39.4 billion in subsidies to try to restore the nation’s position in the production of chips – which are used in everything from automobiles to washing machines – encouraging companies to manufacture them in the U.S. The law has bolstered the hopes of cities across the countrylike Lafayette, Indiana and Columbus, Ohio – because it will create jobs in their communities.

But also significant, said Mark Muro, a senior fellow at Brookings Metro, is that the bill provides $10 billion over five years to create 20 regional technology and innovation hubs. And, he says, they can’t be in places “that are now major technology centers.”

Instead, the law requires the Commerce Department to “ensure geographic and demographic diversity” by establishing at least three centers in each of the US Economic Development Administration’s six regional offices.

At least one-third of the centers would have to “significantly benefit a small and rural community, which the law defines as a metropolitan area of ​​no more than 250,000 people. Additionally, at least one of the 20 centers must be in a low-population state that does not have an urbanized area of ​​at least 250,000 people.

The requirements are intended to reverse a trend in the country in which innovation-based jobs are consolidating in some areas, Muro wrote in a recent report.

A separate Brookings Metro 2019 report found that because industries tend to cluster together, between 2005 and 2017, 90% of job growth in industries that rely on innovation occurred in just five “superstar” metropolitan areas— Boston, San Francisco, San Jose, Seattle and San Diego.

As a result, one-third of innovation jobs are consolidated in just 16 of the nation’s 3,006 counties—and more than half of jobs are in just 41 counties. Meanwhile, the weight of these jobs has fallen in 343 metropolitan areas.

“Instead of growing together, the country’s regions, metropolitan areas and cities are drifting apart,” the 2019 report said.

“Over time we can see that it has led to great inequality,” Muro said in an interview. In the fields that are left out, “the best and brightest students are expected to go on to superstardom [areas]leading to countries with declining talent.”

This trend has already led to the creation of “very prosperous dynamic nodes, often coastal,” he said.

“No one wants to dismantle the incredible power of these coastal centers, but we think more of this activity could spread,” he said, speaking on behalf of the Brookings researchers.

Additionally, Muro noted that the CHIPS Act also includes $1 billion in block grants for economic development in persistently struggling communities through the creation of a new RECOMPETE pilot program.

The money can support workforce development to implement regional semiconductor innovation strategies, such as programs at community colleges and those offered by other educational organizations that partner with local businesses. It can also be used to reach out to workers in lower-income neighborhoods and create training and job placement services in places like churches, housing projects and community advocacy programs, and to support entrepreneurs.

Meanwhile, the CHIPS Act requires networks of institutions and groups in a region to come together to figure out what they would do if they became a semiconductor research center. Involvement with: higher education institutions is required; state, local or tribal governments; technology or manufacturing companies; economic development organizations; and workforce or job training organizations.

To become a hub, the region will have to use its “best assets,” Muro said Fifty Street. If they were successful, they would get “a significant increase in research money” as well as funding for facilities to research and produce new forms of semiconductors, he said.

Thomas Sonderman, president and CEO of SkyWater Technology, said in an interview that he could see the company being part of a center that houses research and development in the same facilities as its manufacturing plants.

SkyWater announced in July that it is spending $1.8 billion to build a semiconductor plant near Purdue University in West Lafayette, Indiana. Sonderman said he could envision being part of research centers in Minnesota and Osceola County, Florida, where he is planning operations.

Integrating research with manufacturing, he said, would help the industry bring new products to market faster and compete with companies in Taiwan.

What they could produce could be groundbreaking, he said, noting that smartphones didn’t exist a generation ago. “Technology advances at such a rapid pace,” he said.

Localities win big

Local officials and economic development experts said the research centers could be a step in diversifying economies in areas like the Midwest that have only recently begun to see the impacts of new technology on their communities.

In West Lafayette, the city’s mayor, John Dennis, said the SkyWater plants will change the region’s economy. “The industry was all heavy smoke and black smoke. The concept has completely changed when you look at the technology,” he said.

The factories, he said, will go on a 400-acre site near Purdue University, the city annexed to be an industrial and research area. SkyWater’s facilities will be joined by a manufacturing and research facility announced by Swedish aerospace company Saab last year.

“It’s definitely a boom for our town,” Dennis said of the semiconductor plant. The project is expected to eventually double the city’s revenue. “It’s more investment and more jobs. More money for schools, more money for our commercial entities, for our city’s infrastructure, police and fire departments,” he said, as well as to serve the city’s underserved communities.

Meanwhile, in Licking County, just outside Columbus, Ohio, Intel announced in January that it will spend $20 billion to build two semiconductor companies. The project is expected to create 7,000 construction jobs for the plant construction and 3,000 permanent jobs at Intel.

Intel had said it could invest $100 billion over time to build up to eight factories in the country.

Kenny McDonald, president and CEO of the Columbus Partnership, made up of major businesses in the area, said the $39.4 billion in semiconductor bill subsidies will make it more likely that Intel will invest as much as it says it will.

“This really makes it possible,” he said.

The project is another step to help the region recover from the collapse of the housing market and banking industries during the mortgage crisis of the early 2000s, he said. The region is diversifying, attracting a Google data center and $1 billion in venture capital investment last year for autonomous robotic healthcare technology companies.

By admin

Leave a Reply

Your email address will not be published. Required fields are marked *