Supreme Court justices argue over “originalism.” What did the founders mean when they wrote such-and-such into the Constitution? Or can that meaning change over time? We will not settle that question today. In fact, we won’t even take it up. But I raise the concept as an entry point into the second part of my two-part examination of the prospects of Southwest Virginia making a bid for one of the 20 regional technology hubs that the federal government intends to designate – and then reward with lots of cash.
As I’ve pointed out in previous columns, there are conflicting interests among some of those in the region. Virginia Tech wanted to lead a bid based on transportation technology, for instance. U.S. Sen. Mark Warner, D-Virginia, doesn’t think transportation is a strong pitch — and he was co-sponsor of the legislation, so he ought to know. Others don’t necessarily want Virginia Tech leading any bid; they fear it would be based too much on academic research, and not on creating jobs in the community. Warner has effectively sided with those: The point of the legislation isn’t to raise Virginia Tech’s standing as a research university, it’s to grow additional technology hubs around the country. With that in mind, let’s look at the law in light of some of the questions surrounding Southwest Virginia’s possible bid.
We need a group to make a bid
The law says that “eligible consortia” may apply (more on what makes a group eligible to come below). The law says that one of the purposes of the legislation is to “encourage new and constructive collaborations among local, State, Tribal, and Federal government entities, institutions of higher education, the private sector, economic development organizations, labor organizations, nonprofit organizations, and community organizations that promote broad-based regional innovation initiatives.” The clear meaning seems to be that no one group can or should “go it alone.” The law wants to see wide-ranging alliances.
It’s hard to imagine a winning proposal without Virginia Tech.
The law says that a consortium must include at least one of the following (and I’m abbreviating here) five entities:
1. An “institution of higher education.”
2. State or local governments, or some other configuration of government entities.
3. “Industry or firms in relevant technology, innovation or manufacturing sectors.”
4. “Economic development organizations or similar entities that are focused primarily on improving science, technology, innovation, entrepreneurship, or access to capital.”
5. “Labor organizations or workforce training organizations.”
My read on this: While a consortium only needs one of these things to be eligible, it’s probably safe to assume that a bid would be stronger if it included more than one. Given Virginia Tech’s prominence in the region, it’s hard to imagine a bid without Virginia Tech being involved. If I were a Commerce Department official looking at a bid from Southwest Virginia and Virginia Tech wasn’t involved, I’d sure want to know why.
We’d be better off if a bid included a lot of very specific partners
The law also lists 13 other things that a bid “may” include:
1. Economic development organizations “with relevant expertise.”
2. “Organizations that contribute to increasing the participation of underserved populations in science, technology, innovation and entrepreneurship.”
3. “Venture development organizations.”
4. “Organizations that promote local economic stability, high-wage domestic jobs, and broad-based economic opportunities, such as employee ownership membership associations or state or local employee ownerships and cooperative development centers, financial institutions and investment funds.”
5. Elementary schools and secondary schools, including career and technical education schools.
6. Any of the Energy Department’s 17 national laboratories.
7. Federal laboratories.
8. Manufacturing extension centers.
9. Manufacturing USA institutes.
10. Transportation planning organizations.
11. Cooperative extension services.
12. “Organizations that represent the perspective of underserved communities in economic development initiatives.”
13. Institutions receiving awards under the CHIPS and Science Act.
Now, the operative word here is “may.” There’s no requirement that any of these 13 entities be partners. However, I have to wonder if this is akin to your spouse asking you to take out the trash. It may be phrased as a question but it’s not really a question. If I were giving advice here — which I suppose I am — I’d be looking for some partners that fit some of these categories. Some we don’t have (national energy labs, for instance). Others are easy (cooperative extension services). Without treading too far into politics, I’d just point out item 12 — organizations that represent “underserved communities.” We’re dealing here with a Democratic administration; this may not be boilerplate language but something we ought to take seriously. To some extent, all of Southwest Virginia is an underserved community but that may be a broad definition that Washington won’t buy. So who in Southwest Virginia fits that criteria — and are they on board?
We need a bid to fit one of 10 technology sectors
The law also lists 10 “key technology focus areas” that tech hubs are intended to promote. They are (and these definitions are taken straight from the text of the law):
- Artificial intelligence, machine learning, autonomy, and related advances.
- High performance computing, semiconductors, and advanced computer hardware and software.
- Quantum information science and technology.
- Robotics, automation, and advanced manufacturing.
- Natural and anthropogenic disaster prevention or mitigation.
- Advanced communications technology and immersive technology.
- Biotechnology, medical technology, genomics, and synthetic biology.
- Data storage, data management, distributed ledger technologies, and cybersecurity, including biometrics.
- Advanced energy and industrial efficiency technologies, such as batteries and advanced nuclear technologies, including but not limited to for the purposes of electric generation (consistent with section 15 of the National Science Foundation Act of 1950 (42 U.S.C. 1874).
- Advanced materials science, including composites 2D materials, other next-generation materials, and related manufacturing technologies.
This is likely why Warner didn’t think Virginia Tech’s transportation pitch would be a good bid; transportation isn’t one of these 10 areas. Maybe things under that transportation umbrella would fit — batteries under advanced energy, or the robotics, automation and advanced manufacturing section — but transportation itself isn’t part of this bill. Pulaski County has been pushing controlled-environment agriculture, i.e., indoor agriculture, but agriculture isn’t listed either. As with transportion, you’d have to fit that under another heading; would that really work for this?
So what do we have that fits? We certainly have biotech companies in the Roanoke and New River valley but Warner seems to think a bid from a less affluent area would do best. We have nuclear technology in Lynchburg. We have coal country looking at a wide range of energy options — including nuclear. No wonder that the delegation from InvestSWVA felt their energy-focused interest would be the strongest bid.
Those are the original sources. The next best thing is to see what the people actually administering the program have to say. For that, we have at least three clues:
The Commerce Department wants to see ‘rapid, self-sustaining growth.’
The department hasn’t released the formal rules for bids yet – that is expected this summer – but it did recently put out a one-page sheet describing the program. It’s hard to tell if those words mean anything or not. Again, let’s err on the side of caution and assume they do. The department says: “The program seeks to propel high-potential regions throughout the U.S. into rapid, self-sustaining growth.” Here’s a reality check for any proposal: Is the region “high potential”? And will the proposal lead to “rapid, self-sustaining growth”?
Commerce Department also talks about metro areas, not rural areas.
A separate one-page fact sheet from the Commerce Department emphasizes once that again “only consortia are eligible” but then goes on to say “For the Tech Hubs Program, EDA defines a Hub’s geography as a single Metropolitan Statistical Area (MSA). Consortia may include assets or members outside that MSA — e.g., in nonmetro rural areas or distant but tightly integrated organizations — that support the consortia’s strategy and benefit the Hub.”
So does this mean an application must include an MSA? Or could a application be put together entirely by a rural area that included no MSA? I’ve asked the Economic Development Administration for a clarification but the response back didn’t answer the question; a spokesman just said that the final rules would be published sometine in May. These questions seem important. If the application must include an MSA, then we’re talking either Roanoke, Lynchburg, the New River Valley or Bristol-Kingsport. Three of those four are over the 250,000 population cap for the small community category so that would put us into competition with Buffalo and such. The only one lower is the New River Valley, and Warner is concerned that its relative affluence would not help a bid. On the other hand . . .
‘Distressed communities’ aren’t good candidates for a tech hub
I found a potentially telling interview that Alejandra Castillo, the assistant Secretary of Commerce for economic development, gave recently to the Federal News Network. She had some things to say that might be sobering for some of those in Southwest and Southside. She seemed to make it clear that the Commerce Department isn’t looking to grow tech hubs from scratch, it’s looking to accelerate the growth of what’s already there. “We’re looking at regions that have an array of assets that can actually be, in some ways, futuristic, if you will,” she said. “Because these are industries that are still in a phase that with a certain level of infusion of resources and capital, they can get to that next level of growth and scalability.”
Interviewer Tom Temin described parts of the country that sound a lot like parts of this side of Virginia. “There are areas of the country that once had hubs, maybe not Tech Hubs, but maybe it was textiles, maybe it was shoe manufacturing. All of these industries that are pretty much gone for the most part. And yet, you have an area and you still have people, but you don’t have those Tech Hub, maybe ingredients. There’s no famous engineering school nearby. Is it the sense of commerce? Your sense that investments can be made for where there is only the willingness and the workforce. But yet, somehow, spawn the other ingredients needed to have a really vibrant hub that has sustainability.”
The question there is more implied than actual: Can one of those communities that once were a hub for a particular industry but don’t have “a famous engineering school” nearby be considered for a tech hub?
Castillo, in her answer, turns the conversation to a different program the Commerce Department is administering, the Recompete Act, that would direct funds to such communities. They’d be better suited for those funds than putting in a bid for a tech hub. “It’s important to note we’re working on Tech Hubs where there may be some ingredients, some assets, some elements that can actually spring up a technology of the future,” Castillo said. “It would be irrational to think that a community that has been distressed for 30, 40 years is all of a sudden going to become a Tech Hub.”
So . . . what does that mean for those pushing Virginia’s coal country? Are they wrong? Is Warner wrong when he suggests that a Southwest Virginia bid shouldn’t be anchored in Montgomery County because it’s already gifted with Virginia Tech? What would Castillo think? Would she see coal country as “a community that has been distressed for 30, 40 years” or a community that has “some ingredients, some assets, some elements that can actually spring up a technology of the future”? Or would she see the New River Valley as more likely to have what it takes to have “rapid, self-sustaining growth”? Or does it matter what she thinks if Virginia has one of the co-authors of the bill lobbying for a particular community? These are questions we need to think through carefully.
Also of note, Warner pointed out in his interview with me that the legislation was meant to spread the nation’s technology sector around the country. “I think there would be appropriate howls of protest if Northern Virginia got a tech hub or Cambridge [Massachusetts] got a tech hub or Palo Alto [California] got a tech hub,” he said. However, Castillo, the assistant secretary, recently gave an interview in which she said Washington, D.C. metro — sometimes called DMV for District, Maryland and Virginia — might make a good tech hub. In an interview with Technical.ly, she was asked specifically about that. She said: “When we look at the DMV area, you could see how potentially the DMV area could have those economic drivers to come together and maybe go after a tech hub designation and funding,” Castillo said. This is in direct contradiction to what Warner said — and, it would seem, the spirit of the law. So whose view will prevail here?
Can Khanna help?
Nearly a year ago, the congressman from Silicon Valley — Rep. Ro Khanna, D-California — spoke in Blacksburg as the inaugural speaker in our Cardinal News Speakers Series. He spoke about the importance of spreading the nation’s tech sector across the country.
Last fall, he was in Chattanooga, where he praised that city’s efforts. “Chattanooga regionally could be a big contender to be one of these regional hubs,” Khanna told the Chattanooga Times Free Press.
Khanna was instrumental with this legislation on the House side. If Southwest Virginia is serious about a tech hub bid, maybe some of those community leaders who met with Khanna in Blacksburg last summer should renew that acquaintance and seek his help, as well? It sounds as if Chattanooga might be doing just that.
In the course of researching these last two columns, I came across examples of other communities prepping themselves to bid for tech hubs. Fortunately, from our point of view, some of these are outside our EDA zone so they’re not direct competitors, but we might still learn something from them.
In Buffalo, which would be one of our competitors because it’s in the same Economic Development Administration zone, the head of the city’s economic development agency says “we’re prepared to submit an application as soon as we know what we’re applying for.”
In Chattanooga, the mayor seems to be leading the bid – at least he’s one quoted most prominently in the local news media about the subject.
In Cincinnati, the city’s economic development agencies seem to be leading the process.
In Montana, U.S. Sen. Jon Tester convened a roundtable in February to talk about ways that Missoula — home to the University of Montana — could make a bid. He followed up with a letter to the Secretary of Commerce urging that Montana be selected.
Here’s my takeaway: In all four places, it’s clear who’s in charge. That’s not the case in Southwest Virginia — at least not yet. We thought it was (Virginia Tech) but that got swatted down. So if it’s not Virginia Tech, who has the convening power to get the right parties at the table? Is it some configuration of state legislators? Is it U.S. Rep. Morgan Griffith? Is it Governor Glenn Youngkin? Or does Warner need to take an even stronger hand than what he’s done so far (which felt pretty strong-handed to some in that initial meeting)?
My original column after Warner’s meeting concluded with “the clock is ticking.” It still is.