Before any team takes the field, the court, the ice, whatever the sport, it needs at least two things: It needs a game plan and it needs a scouting report on the other side.
In that spirit, let’s review what we know about Southwest Virginia’s quest to be designated by the U.S. Commerce Department as one of at least 20 “regional technology hubs” that will be showered with federal largesse – part of a broader goal to spread the nation’s booming technology sector behind a relative handful of “superstar metros” on the coasts. As I’ve pointed out before, our competition isn’t on the other side of the country, it’s between Virginia and Maine. The legislation requires that at least three hubs be awarded to each of the nation’s six Economic Development Administration zones; that’s the one we’re in. That probably means two EDA zones will wind up with four, but we shouldn’t count on ours being one of them. Safer that way.
Earlier this month, U.S. Sen. Mark Warner, D-Virginia, met privately in Blacksburg with about two dozen people from Lynchburg to coal country, all of whom had some interest in pitching some part of the region for a tech hub. You can read my earlier column about that for more detail, but here are the highlights:
- Warner made it clear that, as the co-author of the legislation creating these tech hubs, he wants to win one for Virginia.
- Northern Virginia need not to apply. Warner underscored that the purpose of the legislation is to spread the digital wealth around, not make existing tech hubs bigger.
- The only places in Virginia that have expressed any formal interest in the tech hubs are on the western side of the state, Warner said.
- He emphasized, in no uncertain terms, that we’d be better off if there were a single proposal and not competing ones.
- He didn’t think much of Virginia Tech’s proposal centered on transportation technology and strongly suggested that a proposal anchored in a less prosperous area would likely fare better than one based in Montgomery County. In effect, he intimated that Montgomery County already has a tech hub – it’s called Virginia Tech.
- There was also unhappiness from some in the room that Virginia Tech shouldn’t be the one leading a tech hub proposal for fear that it would be too focused on academic research. Warner himself emphasized that the purpose of these tech hubs is to create jobs and suggested that Tech’s best role is to support others who are making an economic development pitch.
Add all that up and it means somebody needs to lead this effort – and if it’s not going to be Virginia Tech, then who? That seems still unclear. I wasn’t in the room but I’ve talked to a lot of people who were and none of them seemed to have a clear sense of what would happen next or who would be doing what. Maybe that will change but for now that doesn’t seem like much of a game plan. Different regions were pushing different things: The coalfields were pitching an energy hub, Pulaski County was pitching indoor-grow agriculture, Lynchburg was pitching nuclear energy. Maybe some of those can fit together, maybe they can’t. Time is tight, though, for the region – whatever that region is – to get its act together. The Commerce Department is expected to open bidding this summer and some of our potential competitors appear to be more clear-minded than we are about what they’re proposing.
There’s always a danger in overestimating the competition, of course, but no one was ever served by underestimating it, either. Better to be over-prepared than under-prepared. In that spirit, what is the competition doing?
I can’t claim this is a comprehensive account because I’ve been around long enough to know that there are always lots of things going on behind the scenes, especially where government is concerned. But here’s what I have been able to find:
Buffalo: Senate Majority Leader Chuck Schumer, D-New York, has long been pushing Buffalo and all of western New York as a possible tech hub. Politically, I think that makes Buffalo a front-runner for one of the three spots in this EDA zone. The awards will be made by a Democratic administration and Schumer is the top Democrat in the Senate; I have to assume that gives him some clout and that the administration would not want to make their party’s Senate leader unhappy. Last summer, not long after the CHIPS Act that created these hubs passed, Schumer told the Buffalo News he had already spoken to Commerce Secretary Gina Raimondo “repeatedly” about awarding a tech hub to Buffalo.
One caveat: Buffalo last year won another federal competition for economic development. It was one of 21 places awarded Build Back Better grants. (Virginia Tech led a transportation proposal for those same grants but came up short.) Since Buffalo has already received $25 million, will that make it less likely to receive more millions for a regional tech hub?
Pennsylvania: On April 14. U.S. Sen. Bob Casey, D-Pennsylvania, sent a letter to Raimondo urging “swift implementation” of the tech hubs program and pitching three parts of his state as contenders – southeastern Pennsylvania for life sciences, central Pennsylvania for “agricultural innovation,” and southwestern Pennsylvania for robotics, space technology and additive manufacturing. It’s hard to tell from a distance how much of this is simply performative. Casey is up for re-election next year so naturally wants to be seen doing something. On the other hand, I’m not unmindful that politics might play a role in these awards. (Yes, I know you’re shocked.) This is a seat Democrats will want to hold. If Casey can talk up his ability to win a multimillion-dollar tech hub for his state, well, that’s a lot better than not being able to talk that up. I haven’t been able to determine whether any of these regions are doing the legwork to put together bids, but it’s safest to assume that they are. In fact, Casey, in his letter, says they are: “My team and I have engaged with stakeholders throughout Pennsylvania; they are ready to compete, both for this opportunity as soon as it is available and with the global economy.”
* New England: I have been unable to find any public record of action on a tech hub in New England. Instead, these states seem focused on winning a designation for a different pot of federal money: The infrastructure bill passed in 2021 gave the Energy Department $8 billion to create “regional clean hydrogen hubs” across the country. Every state from New Jersey to Maine – with the exception of New Hampshire – has joined in a pitch for one of those. (Virginia Tech is part of a larger bid through the National Capital Hydrogen Center based in D.C.)
* West Virginia, Maryland, Delaware: Likewise, I have been unable to find any action toward a regional tech hub in these states. That’s not to say there isn’t interest, or action, just that I haven’t been able to find it.
We shouldn’t assume that the governors of those three states, and every economic development official there, is blissfully unaware of the opportunity – or content with what they have. Maybe they’re working quietly. Or maybe the local news media in those places is so hollowed out that there are no journalists left to cover such things. (We’re only able to cover these issues because of generous readers who have made Cardinal News possible, which is my not-so-subtle pitch to encourage you to donate so we can offer more reporting on what’s happening, or not happening, in this part of the state.)
Still, this apparent absence of action south of the Mason-Dixon Line (except in Southwest Virginia) seems encouraging to me because I’ve always felt that, for political reasons, the Commerce Department would award the three tech hubs hubs to this EDA zone on a regional basis – with one further north, one in the middle, and one toward the southern end. Politically, it wouldn’t make sense to cluster them too close together. Furthermore, the law says that no fewer than one-third of the hubs must “significantly benefit a small or rural community,” which it defines as “a noncore area, a micropolitan area, or a small metropolitan statistical area with a population of not more than 250,000.”
Now, there’s no requirement that these small-population tech hubs be equally distributed. They could all be in low-population Western states, for instance. But my political take is that Southwest Virginia would be wise to aim for this category because the competition may be lighter. If we put together a region that blows past that 250,000-population threshold, then, yes, we really are competing with Buffalo and those sites in Pennsylvania that Casey is pushing. It’s impossible to know exactly what he means in terms of precise locations so it’s possible that whatever constitutes “central Pennsylvania” would fall under 250,000. The Harrisburg metropolitan statistical area is larger than that, but Altoona, Chambersburg, Gettysburg and Johnstown are smaller.
Unfortunately, if we aim to stay under 250,000, that means leaving out the Roanoke (314,496) and Lynchburg (262,258) metro areas. The New River metro area would be under 250,000 but if Warner doesn’t think a bid that includes Montgomery County would be politically desirable because Montgomery County is too affluent, then where are we supposed to look? The Bristol area gets tricky because it’s part of an MSA that includes Kingsport, Tennessee, which, at 308,661, is also bigger than our 250,000 cap. Can someone put together a winning bid focused on, say, the coal counties? Or, the Pulaski County-Wythe County area? If so, that means some other regions must stand down – or ignore Warner’s advice that the strongest bid would be a single bid. Or should we just say, forget about staying under 250,000 population cap, let’s compete in the bigger size classification and see what happens? And, once again, who’s going to take the lead to figure all this out?
Tomorrow I’ll take a deeper look at what the law requires and what the Commerce Department has said about it.