Here’s one kind of scouting report:
Virginia Tech football opens Sept. 2 at home against Old Dominion University, which is always pesky but coming off a down year. ODU teams always like to throw a lot, but they’ll be starting an unproven quarterback. On defense, keep your eye on ODU linebacker Jason Henderson, a possible contender for the Lombardi Award given to the nation’s top defensive lineman or linebacker.
Liberty opens Sept. 2 as well, hosting Bowling Green. The Falcons have a beefy offensive line, and will look to run the football — a lot. The defense is spotty but last year the team had a knack for getting into the opponent’s backfield and forcing fumbles and interceptions.
Because of a late change to the federal rules, our three contenders for either a federally designated regional technology hub or planning grants to work toward that goal — a Lynchburg/Southwest bid on nuclear energy, a Lynchburg/New River Valley/Southwest bid on nuclear energy, and a New River Valley/Danville bid on additive manufacturing and advanced materials — now potentially find themselves in competition with much bigger metros than we originally thought they would face. That may not be helpful to either.
A brief recap for those joining this game in progress: Over the years, as the nation’s economy has evolved from the industrial age to what some call a post-industrial age, there’s been growing concern that the economic sector powering that transition — the technology sector — is so concentrated in just a relative handful of metro areas on the two coasts. To address that imbalance, last year’s CHIPS and Science Act directed the Commerce Department to designate “at least 20” regional technology hubs around the country that would be showered with federal research dollars that would presumably grow mini-Silicon Valleys across the nation’s heartland.
The rules — there are always rules — call for at least three hubs in each of the six administrative zones of the Economic Development Administration (since three times six is still 18, that means two zones will get a fourth hub or maybe even one gets a fifth). The rules also require that at least one-third of those awards go to “small and rural communities,” originally defined as population 250,000 or less, which would create a special opening for entries from Southwest and Southside (among other places). Pay attention to that key word “originally.”
There are also two different things that groups can apply for – either a formal tech hub designation, or a planning grant, or both. The EDA says it doesn’t matter which a locality applies for, although some in the economic development world think it might – that an application for a planning grant signifies an admission of weakness. On the other hand, that might also be easier to win, so who knows? EDA says the planning grant applicants and the designation applicants will be evaluated separately but in the end the selection of “at least 20” sites may be a mix of both designation applicants and planning applicants, so it sounds to me as if they’ll eventually all be in competition.
The deadline for applications was last week. The EDA says it may be weeks before it’s able to release a full list of who has applied. Nonetheless, this is of such potential importance to Southwest and Southside that I have set out to compile an unofficial list of our competitors — a scouting report, if you will.
One big caveat: It’s entirely possible, perhaps even likely, that I have missed some. I can only rely on what others have reported and, as we well know, local news media have been hollowed out. There could well be tech hub bids from places in our EDA zone (which runs from Virginia to Maine) that simply haven’t been reported because the local news media is stretched too thin to report them — or because the applicants have chosen to keep a low profile.
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Now onto the business: I’ve been able to find 12 tech hub bids in our EDA zone:
1. Lynchburg/Southwest Virginia (nuclear energy)
2. Lynchburg/New River Valley/Southwest Virginia (nuclear energy)
3. New River Valley/Danville (additive manufacturing)
4. Richmond (artificial intelligence)
5. Richmond (pharmaceuticals)
6. Hampton Roads (uncrewed air systems)
7. Baltimore (artificial intelligence as it relates to health data for drug development))
8. Philadelphia (precision medicine)
9. Philadelphia/Camden, New Jersey/Wilmington, Delaware (biopharmaceutical manufacturing)
10. Pittsburgh (biomedical research, combined with artificial intelligence, advanced manufacturing and robotics for biomanufacturing)
11. Lehigh Valley, Pennsylvania (semiconductors)
12. Buffalo-Rochester-Syracuse (semiconductors)
I haven’t been able to determine which category many of these bids are for – the smaller planning grants or the bigger designation award, or both. I can only draw those distinctions for four of the 12: That first Lynchburg/Southwest Virginia bid is for a planning grant only. The second state-sponsored Lynchburg/New River Valley/Southwest Virginia bid is for a designation award only. The New River Valley/Danville bid is for both. The Hampton Roads bid is for designation only. Only since there’s no special formula for how many of the eventual 20-plus winners will be in which category, I’m not sure how much those distinctions matter (other than more money is available for designation awards than planning grants). It’s kind of confusing and I’ve had people involved in the process say it is to them, as well.
You’ll notice that many of these involve some type of manufacturing or hardware. My earlier description that the goal here is to create mini-Silicon Valleys is an inadequate way of describing the current state of technology. Silicon Valley conjures up an image of software and apps — Facebook, Google and so forth. But as a Brookings Institution report showed earlier this year, technology today is creeping into almost everything. What we’re generally talking about here with these tech hub applications is creating new tech-based manufacturing.
I had hoped that I’d be able to divide these applications into different brackets — those competing for the “small and rural” category, and those who aren’t. My theory all along has been that we need not worry about the bigger metros, we just need to worry about the other “small and rural” contenders.
I was wrong.
On June 15, the EDA issued an update to that “small and rural” criteria. Here’s how it reads on the EDA’s page of Frequently Asked Questions
How does EDA determine whether consortia “significantly benefit a small and rural community”?
EDA expects applicants to make a clear and measurable case that the economic benefits attributable to the growth of their selected core technology will be directed towards at least one small and rural community in their chosen geography.
The total population of an applicant’s chosen geography does not need to be below 250,000 in order to meet the criteria of small and rural. Rather, the chosen geography must include at least one small and rural community, and the applicant must provide substantial evidence that this small and rural community will significantly benefit from technology-based growth.
This is very different. We had gone into this assuming that the big metros would be over here and those population 250,000 and under would be over here in a different lane. Instead this says that if a big metro signs on an under-250,000 partner, it can qualify as a “small and rural” applicant.
There are some upsides for us here. The Lynchburg metro area is now about 263,000, so not formally “small and rural.” However, by partnering with Southwest Virginia, that Lynchburg/Southwest bid can qualify as “small and rural.” (Why that combination? Lynchburg has nuclear companies; Gov. Glenn Youngkin has said he’d like to see a small modular nuclear reactor built in Southwest Virginia, and economic development groups there are embracing that.)
The New River Valley starts out under 250,000. By signing on the Danville area as a partner, it brings in another under-250,000 region. Likewise, the Lynchburg/New River/Southwest bid would qualify as “small and rural.”
I’ll confess here that I’m a “homer,” to use a sports term: As someone writing for a publication covering Southwest and Southside, I’d like to see one of these three bids win. If this rule change allows Lynchburg to qualify as “small and rural” and not have to go up against, say, Baltimore and Philadelphia and Pittsburgh, then, hey, that’s a great thing.
However, this rule change also means the three bids from Lynchburg/Southwest Virginia, Lynchburg/New River Valley/Southwest Virginia and New River Valley/Danville are going up against — well, Hampton Roads for one. Its application territory includes the Eastern Shore and the Delmarva part of Maryland. Or that regional Philadelphia bid that includes Wilmington, Delaware, population 70,500. Suddenly that rule change doesn’t seem quite so advantageous. In fact, to my western eyes, it now appears rather disadvantageous.
Notice that the revised rule doesn’t say the primary beneficiary of “small and rural” must be “small and rural.” It just says the “small and rural community will significantly benefit from technology-based growth.” If, say, the New River/Danville bid won, the entire impact of the award would be in “small and rural” communities. If Hampton Roads won, only part of the impact would be in “small and rural” communities on the Delmarva Peninsula. Put another way: I’m sure the development of uncrewed aerial systems might well significantly benefit Accomack County, where the Wallops Island launch center is, but the major impact overall might still be in Norfolk or Virginia Beach. (Sorry, all you Hampton Roads readers. We love you and hope you win — just not at our expense. Go beat Baltimore or Philadelphia or Pittsburgh, not us.)
I had always viewed the politics of these tech hubs this way:
First, if each EDA zone gets three (and some get four or even five), it’s safer to bet on the three than the four.
Second, I always figured the logical disbursement would be one in the northern part of the zone, one in the middle and one in the southern part. If that’s so, the likely winner in the northern part is Buffalo. It’s in the home state of Senate Majority Leader Chuck Schumer, D-New York, and he’s long been on record championing Buffalo for one of these awards. This will be a Democratic administration making these awards and, while they may say politics doesn’t factor in, well, I’d assume that the Buffalo-Rochester-Syracuse bid is a winner. If that bid draws in some of the smaller communities between those three cities, it might qualify as “small and rural.”
For the southern part, let’s remember that Sen. Mark Warner, D-Virginia, was one of the bill’s authors. I think that means Virginia is a good bet to win a tech hub. With six entries, though, which one? Based on these new rules, Lynchburg/Southwest and New River Valley/Danville aren’t simply competing against each other for one of those “small and rural” designees, they’re also competing against Hampton Roads — and at least that regional Philadelphia bid and maybe others.
As for the middle part of the EDA zone, we’re basically talking Pennsylvania. If I were Commerce Secretary Gina Raimondo, here’s how I’d look at those Pennsylvania applications: The Keystone State is a swing state. If there are any politics involved here (and I assume some will be), it seems smart politics for the Biden Administration to award a tech hub there to give President Biden a talking point in the 2024 campaign. But how to choose between Pittsburgh and Philadelphia? The easiest thing would be to pass over both – on the grounds that they’re already in good shape – and designate the Lehigh Valley. Conveniently for us, the Lehigh Valley has a metro population of about 870,000 so wouldn’t qualify as “small and rural” unless the bid there has written in some outlying area.
A countervailing argument: Both the Buffalo-Rochester-Syracuse and Lehigh Valley bids deal with semiconductors. We certainly need more of those but how many semiconductor winners will there be?
That brings up another way to look at these bids: Figuring out which technologies the administration wants to invest in. Since we don’t know all the bids around the country yet, we don’t see the whole chessboard. We can see some of it, though. Knoxville, Tennessee, is in a different EDA zone but it’s also submitted a bid based on nuclear energy. If there are only 20 national winners, how many will be based on nukes? Lynchburg/Southwest Virginia could find itself up against Knoxville at some level. I haven’t found any mention of other tech hub proposals around additive manufacturing — the New River Valley/Danville focus — but that doesn’t mean there aren’t any others, just that their local news media haven’t reported them yet. For that matter, I haven’t found any other tech hub proposals on uncrewed aerial systems (there’s some good news for our Hampton Roads readers). On the other hand, I see lots of applications that invoke some reference to artificial intelligence – the same field that Richmond is pitching.
Ultimately, of course, we’ll just have to wait and see what happens this fall when the Commerce Department announces the winners. But if you’re curious how things are stacking up, here’s what we know so far.