This is the second post in a two-part series on the significant federal recovery funding coming to communities. See the first piece combing the Treasury’s guidance on the American Rescue Plan here.
By Brad Whitehead
The Hits Keep Coming
With over $1.8 billion to flow directly to local governments in Northeast Ohio over the next two years as part of the American Rescue Plan (ARP), it is tempting to focus exclusively on getting that spending right. That would be a mistake.
Yes, we must spend the ARP money strategically, but if we are to truly “Build Back Better” from the recession, we need to walk and chew gum at the same time. We must organize aggressively and effectively around not just ARP, but also numerous other current and proposed pieces of legislation. ARP was just the opening gambit in what could be one of the most significant infusions of federal investment since the New Deal. Next up is the Endless Frontiers Act (EFA), which cleared the Senate Commerce Committee on a 24-4 vote on May 12 and the full Senate on May 17 in an 86-11 vote. It promises to be the most significant bipartisan piece of legislation in this Congress.
What is the Endless Frontiers Act?
The EFA is an idea that has percolated for some time but has gained significant momentum since the election. It is a comprehensive $110 billion program to reestablish American global leadership in emerging technology arenas through investments in advanced research, workforce, commercialization, and entrepreneurship. Ohio Republican Senator Rob Portman is one of the bill’s sponsors, and the EFA is championed by Democratic Majority Leader Senator Chuck Schumer with strong backing from the President. Even though the EFA is now caught up in political wrangling related to the looming American Jobs Plan infrastructure bill, most Washington insiders still believe the EFA has a good chance at passage, even if some parts are watered down or eliminated. This is because there exists a strong bi-partisan desire to respond to China’s actions in multiple technology fields and a recognition that the United States needs to increase its innovation capacity. With the Senate approval, the EFA has folded in with other China-focused initiatives and is now called the U.S. Innovation and Competition Act of 2021. Several more amendments and other changes are expected in the coming weeks. Full congressional approval is expected as early as June.
Most of the proposed EFA money will be distributed competitively on a national basis through a renamed National Science Foundation. For instance, as much as $9.6 billion may be available to university technology centers. We must find ways as a community to support Northeast Ohio’s universities, research institutions and companies in their funding applications.
Regional Technology Hubs
One especially exciting element of the EFA—and most foundational for those driving inclusive economic development in Northeast Ohio—is the proposed designation of Regional Technology Hubs.
For some time, Mark Muro of The Brookings Institution has advocated the idea of encouraging more innovation away from the coasts and into the heartland. He suggests that doing so will make the country stronger economically, and will help bind us together politically. Fortunately, policy makers took notice, and the result is the EFA’s proposed 18 Regional Technology Hubs. One third of these must be in rural areas, and one third must be in states with low levels of research spending. The specifics of this component of the EFA continue to evolve (it was originally proposed as 10 hubs) but overall, this is a major development.
Hubs will be expected to form consortiums of entities, including universities, government agencies, research institutions, labor unions, companies and nonprofits, working to advance research, train workers, commercialize technologies, and create family-sustaining jobs. Consortiums are expected to focus on critical technology areas in which the U.S. seeks global leadership, including AI/machine learning, robotics/advanced manufacturing, materials sciences, quantum computing, advanced energy, and biotechnology, among others. Many of these priorities align well with our regional capabilities. Roughly $500 million will be available in planning grants, and $7.5 billion will be available for implementation over five years.
So How Do We Get A Hub?
What a boost it would be if Northeast Ohio was designated such a hub! Such a designation would be highly complementary to efforts already under way, whether that be the JobsOhio-funded Cleveland Innovation District, the America Makes – National Additive Manufacturing Innovation Institute in the Mahoning Valley, or the polymer cluster in Greater Akron.
Competition will be intense, though. (Really intense.) The winners will be those communities that organize early and effectively and bring great assets to the table. The current legislation calls for three hubs per Economic Development Administration region. We are part of the Chicago region, so we will be in the mix with Illinois, Minnesota, Michigan, Wisconsin, and Indiana along with the rest of Ohio. In short: We will need to bring our “A” game.
Let’s Get Going Now – We Have the Starting Points
As I see it, we had better start getting organized now. The competition will kick off within 180 days of passage. Six months is not as much time as it may seem when we consider just how much work must be done to convene and organize, and we have been caught flat-footed as a region before.
Four steps undertaken in the immediate future would move us forward:
- Encourage a supportive environment. JobsOhio should develop a process as soon as possible to determine how it can best support applications from Ohio. With its large and dedicated funding stream from state liquor sales, JobsOhio will be a critical partner in any application. It is certainly logical for multiple applications to come from Ohio, and opportunities may exist to coordinate across different parts of the state; however, multiple applications from within one metro area would likely be counterproductive. JobsOhio can help ensure a strategic and competitive response and it should communicate to metro areas what it expects to see in an application to get its full endorsement.
- Leverage metro-level innovation partnerships to identify the most promising concepts. While every American athlete would like to compete in the Olympics, it is up to the United States Olympic Committee (USOC) to establish a fair and orderly process to ensure that the best athletes go to Tokyo this summer. We need our own version of the USOC to determine what applications should come forward from our metros. Fortunately, we have cross-sector economic collaborations in many of our region’s corners, including the Cleveland Innovation Project, Elevate Greater Akron and Strengthening Stark. These are the natural groups to coordinate metro-level responses and they should begin to convene relevant stakeholders now to determine what technology areas are most fruitful to pursue and who should be on the team. Each of these collaborations already has the participation of most of the key stakeholders desired, but they each need to selectively add labor, government, or others to meet the federal requirements and create the best possible proposal. The Mahoning Valley needs to move expeditiously to determine how best to proceed.
- Begin sketching out what success looks like and what assets will differentiate us. One of the more challenging tasks will be to sort out how broad any coalition should be and how it will coordinate its actions. Groups like the Cleveland Innovation Project, Elevate Greater Akron and Strengthening Stark have already established high-level goals for growth and innovation. They have also mapped economic assets. They can now move for greater specificity around an EFA proposal.
- Design for economic inclusion. While the current version of the EFA is silent with respect to inclusion, we in Northeast Ohio know that we will be successful only when our economy works for everyone, regardless of race or place. Each of our collaboratives across the region has inclusion as a stated value and embedded into strategies, which include hard metrics for success. We need to make sure that any application builds in inclusion as well.
The recovery we achieve through carefully considered use of American Rescue Plan funds will get us only so far. We have worked mightily for decades as a region to fill the economic void left by offshoring, technological disruption and aging infrastructure. We have learned much in the process, but we are far from where we aspire to be. In The Two Tomorrows, the Fund for Our Economic Future called for the region to increase its investments in economic cluster building and to do it inclusively. Achieving the “better” in “Build Back Better” will require civic leaders to apply our hard-won lessons to the EFA, and to show that we are rich with potential and clear-eyed in pursuit of the innovation that will deliver long-term prosperity to our region and to the nation.