Michele Chang, deputy assistant secretary for policy, U.S. Economic Development Administration, leads a panel discussion on the transportation cluster, held at the Volvo plant in Pulaski County. Photo courtesy of Virginia Tech.

Well, that’s a bummer.

A coalition led by Virginia Tech had been in the running for up to $100 million in federal funding to help accelerate growth of regional economic hubs around the country.

Alas, we didn’t make it.

The Biden administration on Friday announced 21 winners in the Build Back Better Regional Challenge, and the Tech-led group wasn’t among them.

Oh well, nothing ventured, nothing gained.

Still, before we move on, some points ought to be made so I’ll make them:

  1. This doesn’t change anything: The Tech-led proposal was focused on building up Southwest (and Southside) Virginia as a center for transportation technology companies – think electric vehicles, autonomous vehicles, drones, all that. Losing out on the bid doesn’t change the facts on the ground, that the region is already a center for those companies – we just missed out on a big infusion of federal funding that would have made the region a bigger one. The proposal Tech put together pointed out that there are already 79,000 people between Brunswick County and Southwest Virginia employed in the automotive sector. We don’t usually think of ourselves as an automotive hub but we are: Think the Volvo truck plant in Pulaski County and all of its related suppliers, companies such as the Eldor auto parts plant in Botetourt County and Torc Robotics in Montgomery County, the Virginia Tech Transportation Institute (the second biggest university-affiliated transportation institute in the country), plus the drone research that Google’s Wing is doing in Christiansburg. If and when the Southern Virginia Mega Site in Pittsylvania lands a big employer, there’s a good chance it will be related to a company making batteries or other parts for electric vehicles. I say all this not to be a cheerleader – trust me, you wouldn’t want to see that – but to point out facts that existed before this bid was made and will exist after it was passed over.
  2. This is different from other hub-related funding that the region might yet win. Whatever you think of President Joe Biden politically, this has to be said: His administration has been very focused on making sure economic growth isn’t concentrated in a relative handful of coastal cities. Donald Trump called much-needed attention to how much of the country’s heartland has been hollowed out economically by globalization and deindustrialization; Biden has moved to do something about that in a systematic way. There’s this Build Back Better Regional Challenge, which invests federal research dollars in 21 communities, all of them outside the usual list of go-go cities. The infrastructure bill includes $11.3 billion for cleaning up abandoned mine sites, which will help prepare them for other uses. The CHIPS-Plus bill includes $10 billion to create “at least 20” regional technology hubs across the country. It sets aside another $1 billion for 10 economically distressed communities that will be picked for pilot programs for 10 years’ worth of federal investment in economic development programs. The so-called Inflation Reduction Act – also sometimes called “the climate bill” – contains $4 billion for tax credits for clean energy companies that locate in “energy communities” – for our purposes, coal country (or any place that recently was home to a coal-fired power plant, such as Buckingham, Giles and Halifax counties).

    That’s a lot of federal dollars going into mostly rural areas that haven’t been graced with such attention in a long time, if ever. (It’s also a lot of money from Democratic initiatives going into communities that, to paraphrase the great philosopher Taylor Swift, will never ever be getting back together with Democrats.) Virginia’s coal counties stand to pick up a lot of that abandoned mine cleanup money. Groups in Southwest and Southside are already said to be angling to make bids for one of those tech hubs (and I’ve written before about how I think either the New River Valley or the coal counties have a good chance at landing one of those). I’ve heard from at least one local official in Southwest Virginia about applying to be one of those 10 pilot sites for federal investment. And I’ve also suggested that Southwest Virginia organize a national summit on clean energy as a way to position the region for those clean energy companies looking to cash in on those tax credits.

It’s possible that losing out on this proposal actually helps some of these others. I’m putting on my political analyst’s hat here, but if the Biden administration’s goal is to spread economic growth more broadly across the country, it’s not going to give all these grants to the same place. It will want to spread them around. Yes, it would have been great to get this grant, but maybe this helps position the region for winning one of those coveted tech hubs? After all, if Southwest had won this grant, it probably wouldn’t be able to double dip for a tech hub as well. In fact, maybe these grants actually eliminated some potential competitors in that category. Guess we’ll see, eh?

So, just who did win and what sort of projects won?

The 21 projects come from 19 states: Alaska, California, Florida, Georgia, Kansas, Louisiana, Michigan, Missouri, Nebraska, New Hampshire, New York (twice), North Carolina, Oklahoma (twice), Oregon, Pennsylvania, South Dakota, Texas, Virginia and West Virginia. I’ll confess the first thing I looked at was the politics of the states involved. Did a Democratic administration reward Democratic states? Not really. I’m sure Biden will want to talk up the money that went to swing states such as Georgia, Michigan and New Hampshire. But I’m also struck by how many of these states are ones that are very Republican – including one of just two states that won two awards, Oklahoma. I’m sure leaders there will appreciate the Biden administration’s money but won’t vote for Biden, or any other Democrat, in 2024.

Dollar-wise, these awards range from $25 million to $65.1 million, so while the administration touted these as “up to $100 million” each, nobody got close to that amount.

The fields involved also paint a good picture of where the economy is headed. Florida got $50.8 million to help build up a semiconductor sector in Osceola County, just south of Orlando. Georgia got $65 million “to accelerate the adoption of artificial intelligence across the state’s legacy industrial sectors.”

Energy research was big. Louisiana got $50 million to “to transition the regional hydrogen energy sector by closing the cost gap between green hydrogen, produced from renewable energy sources, and other forms of hydrogen used today, which rely on fossil fuels.” West Virginia got $62.8 million “to spur job growth in 21 economically distressed and coal-impacted counties in southern West Virginia by creating a hub of clean energy and green economy jobs.” New York got $63.7 million to “to accelerate innovation in battery technology and to transform New York’s Southern Tier into a global hub of energy storage manufacturing.” (I will be a little cynical here. I see where the home state of Senate Majority Leader Chuck Schumer won two awards and he’s also been pushing Buffalo for one of those tech hubs. It’s good to be the home state of the Senate majority leader, especially when that Senate majority leader is in the same party as the president.)

Biotech and life sciences were big winners (I’m not sure I can define the difference). North Carolina got $25 million to expand its “life sciences manufacturing cluster.” One of Oklahoma’s two grants was $35 million for Oklahoma City to “expand its biotechnology cluster.” New Hampshire got $44 million “to establish Southern New Hampshire as the global epicenter for the production and distribution of regenerative tissues and organs.” Virginia got $52.9 million “to expand the domestic supply chain for essential medicines and critical active pharmaceutical ingredients.” That proposal was led by the Virginia Biotechnology Research Partnership Authority and is focused on the Richmond-Petersburg area.

Advanced manufacturing is a theme that runs through many of the awards. New York got $25 million for advanced manufacturing in and around Buffalo. Nebraska got $25 million for robotics (and advanced manufacturing). Pennsylvania got $62.7 million for the southwestern part of the state to “supercharge [the region’s] globally recognized robotics and autonomy cluster and ensure that its economic benefits equitably reach rural and coal-impacted communities in the 11-county region” And then there was Missouri, which got $25 million for St. Louis “to converge the region’s three leading industry clusters of biosciences, geospatial, and advanced manufacturing” – so there we have biosciences and advanced manufacturing in the same proposal. This suggests that other communities that are big on pushing advanced manufacturing – such as Danville – are on the right track. 

(A few other awards were very regionally specific. Oregon got $41.4 million to develop more wood-based products. Alaska got $45 million to develop a mariculture industry – shellfish and seaweed. South Dakota’s $45 million is actually directed to four states – Montana, North Dakota, South Dakota and Wyoming – to provide more lending to Native American communities.)

My reading from afar: The Southwest Virginia proposal probably got squeezed out geographically between the awards for pharmaceuticals in Richmond-Petersburg and clean energy work in West Virginia. Maybe transportation technology also wasn’t sexy enough compared to some of these other proposals. Realistically, it’s tough to beat a proposal for creating clean energy jobs in West Virginia’s coal country (another reason why I think Southwest Virginia should be moving quickly to capitalize on those tax credits for clean energy companies in the Inflation Reduction Act – this is our moment; we should seize it). I wonder, too, whether either of those two grants might have some spinoff benefits for us. Will the growth of a pharmaceutical industry in Petersburg spill out into parts of Southside? Are there ways for Southwest Virginia to benefit from whatever clean energy work takes root in southern West Virginia? The economy doesn’t stop at city limits or state lines.

This is the second time this year we’ve missed out on something big. In May, Hyundai picked a site in Georgia for an 8,100-job electric vehicle battery plant over the Southern Virginia Mega Site in Pittsylvania County. Now this. It’s always discouraging to lose, but it can be informative, too. Now maybe we know more about how to position ourselves for the next big thing. There sure seem to be other opportunities out there.

Dwayne Yancey

Yancey is editor of Cardinal News. His opinions are his own. You can reach him at dwayne@cardinalnews.org.