Infrastructure and Economic Development Quarterly Newsletter
July 2, 2021 | Lewis-Burke Associates LLC |
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In this Issue:
A VIEW FROM WASHINGTON
CONGRESSIONAL UPDATES
FEDERAL AGENCY AND ADMINISTRATION UPDATES
A VIEW FROM WASHINGTON
Expanded federal investments in infrastructure and economic competitiveness remain key topics of discussion in Washington. While the last several months have seen significant progress by the Biden Administration and Congress in articulating measures associated with this unprecedented focus (details on major initiatives are in the articles below), an outcome at the scale and scope envisioned by Democrats remains elusive.
The transition from unveiling policy priorities earlier in the year through the sprawling American Jobs and Families Plans to the process of enacting historic investments has moved slower than expected. A recent deal struck between the White House and a bipartisan group of Senators on “hard” infrastructure stimulus has drawn criticism over the absence of funding for many of the ambitious programs envisioned by the Biden Administration. Senate Majority Leader Chuck Schumer (D-NY) has embraced the deal, but simultaneously coupled it to consideration of a larger measure that would include increased funding for social programs, clean energy deployment, climate research, and other measures. Speaker Nancy Pelosi (D-CA) has voiced skepticism at the bipartisan Senate deal and indicated her plan to move an expansive legislative package aligned with the Administration’s American Jobs and American Families Plans.
Likewise, while Congress made significant progress to advance numerous major innovation and economic development priorities, including the Senate’s passage of the U.S. Innovation and Competition Act of 2021 (USICA), there is a degree of uncertainty about the path forward. While major provisions of the bill are expected to be conferenced with House counterparts, there is a major question over how the new policies and programs would be funded. Aside from the Creating Helpful Incentives to Produce Semiconductors (CHIPS) for America Act, which provides emergency appropriations to jumpstart the nation’s semiconductor industry, Congress will have to find vehicles to fund the bill’s remaining provisions.
While there is robust bipartisan support for USICA, the path forward for an infrastructure stimulus is particularly opaque. Democrats will likely be forced to proceed without Republican support, however the ultimate scope and timing is yet to be determined.
CONGRESSIONAL UPDATES
Congress Begins Work on Legislation to Reauthorize DOT R&D Programs
Legislation that sets funding, policy, and direction for transportation and infrastructure programs at the U.S. Department of Transportation (DOT) expires on September 30, 2021, the end of the fiscal year. Congressional activity to build on the current popular and bipartisan authorization, Fixing America’s Surface Transportation Act of 2015 (FAST Act), has increased due to the upcoming expiration and in light of President Biden’s emphasis on infrastructure investments as a key component of his policy agenda. This involves discussion and consideration of proposals impacting DOT’s portfolio of surface transportation research and development (R&D) activities, such as the University Transportation Centers (UTC) and the creation of new major competitive opportunities. It is anticipated a surface transportation reauthorization bill will pass before the September deadline.
Four committees in the Senate share jurisdiction over transportation policy: Environment and Public Works Committee (EPW); Commerce, Science, and Transportation Committee; Banking Committee; and the Finance Committee. The Senate Environment and Public Works Committee unanimously approved the Surface Transportation Reauthorization Act of 2021 (STRA) in May. The Senate Commerce bill provided their additions to the legislation on issues that fall within the committee’s jurisdiction, namely R&D, rail, and transportation safety. The Senate Banking and Finance committees will weigh in on the legislation, with the latter responsible for providing the mandatory funding details. Once those two committees add their sections to the bill it will move to a vote on the Senate floor.
Compared to the Senate, the process in the House is relatively straightforward. The Transportation and Infrastructure (T&I) Committee holds primary jurisdiction over transportation policy and approved the INVEST in America Act on June 9. The full House of Representatives passed the INVEST in America Act on July 1. Separately, the House Science, Space, and Technology Committee (HSST) unveiled a bill focused solely on DOT’s R&D programs. HSST does not share formal jurisdiction over these matters, but some elements of the committee’s past proposals have historically been adopted in later stages of the bill’s consideration. This was the case with the FAST Act in 2015.
Once the Senate and House bills are approved by the full chambers, Congress will have to agree on a conference bill and have President Biden sign it into law before the FAST Act expires on September 30. Additional details on each of the proposed bills are included in the analysis that is linked below.
This legislation is separate from a potential infrastructure package that Congress is still in the early stages of negotiating. That package would be aligned with the Biden Administration’s American Jobs Plan and American Families Plan. The former would expand the definition of “infrastructure” well beyond the scope of surface transportation legislation making its way through Congress.
Lewis-Burke’s full analysis of the current legislative landscape, including proposals from the individual bills that will ultimately comprise a final surface transportation reauthorization measure is available here.
Congress Passes Major Competitiveness Legislation
On June 8, the Senate passed the Endless Frontier Act (EFA) as part of a giant package containing innovation, trade, and research security legislation called the U.S. Innovation and Competition Act of 2021 (USICA). The bipartisan vote of 68-32 indicated strong support for investment in research and technology development as key planks for enhanced competitiveness and economic revitalization across several federal agencies.
USICA would prioritize ten key technology focus areas such as artificial intelligence, advanced computing, resilience, advanced communications, wireless research, energy innovation, and biotechnology. In addition to reauthorizing the National Science Foundation (NSF), the bill includes a number of major innovation provisions for the agency, including the creation of a new Technology and Innovation Directorate at NSF that would focus on research and development in key technology areas, University Technology Centers to advance use-inspired research, technology testbeds, and other activities to enhance commercialization and technology transfer capabilities. The bill would also authorize $100 billion for the new Directorate, 20 percent of which would be designated to support research in key technology focus areas through the Established Program to Stimulate Competitive Research (EPSCoR). In addition, the Department of Energy (DOE) Office of Science would be authorized for $16.9 billion in funding towards the same focus areas.
In addition to the major research agency titles, the bill would provide around $10 billion to create at least 18 Regional Technology Hubs at the Department of Commerce (DOC) with at least three in each of the Economic Development Administration’s (EDA) six regions. The hubs would support geographic diversity and economic growth in key areas by providing support to regional consortia for workforce training, regional strategies, business activity related to the domestic supply chain, attraction of investments, manufacturing development, commercialization, and entrepreneurship support. USICA would also expand the Manufacturing USA and Manufacturing Extension Partnership programs at DOC’s National Institute of Standards and Technology (NIST), as well as create a competitive award program at NIST and NSF for institutions of higher education or consortia to operate test beds and fabrication facilities to advance the operation, integration, deployment, and, as appropriate, manufacturing of new, innovative technologies in the key technology focus areas, which may include hardware or software. The bill would also provide $50 billion in emergency appropriations for the previously passed CHIPS for America Act to fund semiconductor research, development, and manufacturing.
The legislation now heads to the U.S. House of Representatives, which is aiming to produce its own package of competitiveness legislation to be voted on as individual bills. The furthest along of these bills are the Department of Energy Science for the Future Act and the NSF for the Future Act, both of which passed the House in late June. Of note, the NSF for the Future Act also create a new NSF directorate to support collaborative, use-inspired and translational research but is generally less prescriptive than USCIA about its activities. The bill would also provide support for entrepreneurial fellowships, Technology Research Institutes to advance research development and commercialization, and technology transfer capacity-building grants for smaller institutions.
House leadership has charged all committees of relevance to produce additional competitiveness legislation. The House and Senate are likely to use an informal conference negotiation to produce a final package merging USICA and relevant House-passed bills. This final package could be passed on its own or ride major must-pass legislation later in the year.
House Holds Small Business Innovation Hearing
On May 13, the House Committee on Small Business held a hearing on the importance of innovation programs at the Small Business Administration (SBA), including Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR), which provide competitive awards that allow small businesses and research institutes to develop and commercialize federally-funded research. Although the programs are authorized through September 2022, the discussion outlined some topics the Committee may consider in the future.
Witnesses spoke about the success of the programs, ideas for streamlining the contract process, ways to better reach underrepresented groups, the importance of the Federal and State Technology (FAST) Partnership Program, among other topics. SBIR and STTR are funded out of specific set-asides from federal agencies’ extramural research budgets and, while the programs are important to the university-innovation ecosystem, the higher education community generally believes that set-asides should not increase without also raising funding for the extramural research budgets. One of the witnesses, Jere Glover, Executive Director of the Small Business Technology Council, advocated for drastically raising set-asides for these programs, which would be problematic for the university community. The Committee appears to be in the early stages of their evaluation of SBIR/STTR. Lewis-Burke will continue to monitor these discussions and opportunities to provide input from the research and higher education communities.
House Holds Hearing on Regional Innovation, Technology Hubs
On June 9, the Research and Technology Subcommittee of the House Committee on Science, Space and Technology (HSST) held a hearing titled “Building Regional Innovation Economies.” The hearing focused on the importance of regional innovation ecosystems and how they could be appropriately spread across the nation through additional federal funding. Of note, the hearing featured extensive discussions over how Congress could best craft legislation to support a Regional Technology Hubs competition at the Department of Commerce (DOC) similar to the one called for in the U.S. Innovation and Competition Act of 2021 (USICA).
Recommendations provided by the witnesses included support for regional innovation programs that include many relevant stakeholders, including universities; suggested selection criteria in which applicants state a goal for regional growth and agencies hold them accountable so they can “meet them where they are” in the ecosystem-development process; ensuring investments align with regional capabilities and goals; and assurances that rural areas will be more meaningfully supported than they have been previously.
As previously reported, Speaker of the House Nancy Pelosi (D-CA) has charged congressional committees in the House of Representatives with drafting their versions of bills to address provisions within USICA. As the committee of jurisdiction for the Economic Development Administration’s (EDA) innovation programs, HSST appeared to take its first step toward addressing a key economic development proposal in the Senate bill.
FEDERAL AGENCY AND ADMINISTRATION UPDATES
President Biden Releases First Budget Request with Several Innovation Initiatives
On May 28, the Biden Administration released their fiscal year (FY) 2022 budget request, which included important proposed investments in economic development, domestic competitiveness, and innovation. Highlights from key agencies include:
Department of Commerce (DOC): President Biden proposed a budget of $433 million for the Economic Development Administration (EDA) overall, which would be $77 million over FY 2021, and $45 million for the Regional Innovation Program (formerly known as Build to Scale), which would be an increase of $7 million over FY 2021. Themes throughout the budget request for EDA include investments to create a resilient economy, as well as racial and regional equity. The increases to EDA in the proposed budget are a stark reversal from the Trump Administration, which routinely proposed eliminating EDA. Also within DOC, President Biden proposed a $10 million increase for the National Telecommunications and Information Administration’s (NTIA) broadband programs to be used to establish the Office of Internet Connectivity and expand broadband access in the United States. The budget request also includes proposed investments in securing the supply chain and increasing advanced wireless research. Further, the budget request for the National Institute of Standards and Technology (NIST) would increase support for the Manufacturing USA Program by investing nearly $150 million to fund two additional institutes, one of which with the aim to help restore the United States as a leader in the design and manufacture of semiconductors. The DOC FY 2022 budget justification is available here.
National Science Foundation (NSF): The proposed budget for NSF would increase support for innovation through the proposed creation of a new Directorate for Technology, Innovation, and Partnerships (TIP). TIP would aim to advance science and engineering research and innovation, accelerate the translation of basic research, solve national and societal problems, and support education pathways. NSF plans that TIP will operate in partnership with other NSF Directorates to accelerate the transition to market for innovations across all NSF areas of investment. TIP would catalyze partnerships with academia, industry, the federal government, foundations, and other stakeholders to ensure U.S. leadership in critical technologies and societal challenges.
TIP would be composed of three Divisions: Innovation Ecosystems (IE), Technology Frontiers (TF), and Translational Impact (TI) as well as a Partnership Office (PO). The Directorate would include $200 million to support a new centers program titled, Regional Innovation Accelerators (RIAs) supported through IE and TF. NSF plans to fund up to 20 RIAs at $10 million per year for 10 years for “use inspired, solutions-oriented research and innovation in a range of technology areas (e.g., artificial intelligence, quantum information science, advanced wireless, advanced manufacturing, semiconductors) as well as in a diverse set of national-challenge areas (e.g., climate change and biotechnology) of priority to the Administration and Congress.” TF also plans to use $90 million to fund translation of research discoveries across NSF. Additional new activities to be included in TIP would be $50 million for a new program for Accelerating Public Private Partnerships through PO, $20 million for new NSF Entrepreneurial Fellows, and $20 million to support racial equity. TIP would also support lab-to-market programs previously housed in the Directorate for Engineering (ENG), such as Partnerships for Innovation (PFI) and Innovation-Corps (I-Corps). The Convergence Accelerator program would also move to TIP but the Industry-University Cooperative Research Centers (IUCRC) program would stay in ENG. More information on TIP is available here. The full NSF FY 2022 budget justification is available here.
Department of Transportation (DOT): The proposed budget request for DOT includes $2 billion to establish the Advanced Research Projects Agency for Infrastructure (ARPA-I). If established, ARPA-I would scale up research and development efforts (R&D) to “accelerate novel, early-stage research projects with potential for transformation in areas that industry is unlikely to undertake due to technical and financial uncertainty.” The full DOT FY 2022 budget justification is available here.
Small Business Administration (SBA): The proposed budget request for the SBA would increase support to innovation through Growth Accelerators ($8 million over FY 2021 enacted level), Regional Innovation Clusters (RICs, $3.48 million above FY 2021 enacted level), and the Federal and State Technology (FAST) Partnership Program ($6 million over FY 2021 enacted level). The budget proposes an increase of $20 million for scaling support for the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs which grow with federal research funding. The SBA FY 2022 budget justification is available here.
While the budget request is a helpful guide for future federal investments and understanding President Biden’s policy priorities, it is still up to Congress to embrace, modify, or reject budget proposals. Lewis-Burke will monitor the appropriations process and continue to provide updates as appropriations for programs of interest are finalized. Lewis-Burke’s full analysis of the President’s budget request is available here.
EDA Releases New Investment Priorities
This spring, the Economic Development Administration (EDA) released updated investment priorities. These priorities are shaped by the U.S. Department of Commerce’s (DOC) pillars to increase American competitiveness and will be used by EDA to guide their investments in the upcoming fiscal year. The updated investment priorities are:
- Equity;
- Recovery and Resilience;
- Workforce Development;
- Manufacturing;
- Technology-Based Economic Development;
- Environmentally Sustainable Development; and
- Exports and Foreign Direct Investment.
EDA also provided definitions for all the investment priorities, which are available here. EDA moved “equity” to the top of its priority list and added “technology-based economic development” and “environmentally-sustainable development.” “Coal and powerplant communities,” which was a previous investment priority, was moved within the “recovery and resilience” investment priority. Applicants for EDA’s funding opportunities should try to align projects with at least one of the investment priorities for future competitions. The updated investment priorities reflect alignment with the Biden Administration’s emphasis on racial equity, economy recovery, and workforce development.
EDA Holds Economic Development Districts Webinar
The National Association of Development Organizations (NADO) Research Foundation hosted a webinar series on Economic Development Administration’s (EDA) Economic Development Districts (EDD) and their work to drive pandemic recovery. The webinar included staff from EDA and EDD stakeholders to discuss strategies and best practices for economic recovery and provide details as to how EDDs are assisting their communities and regions through resilience planning, administering Revolving Loan Funds, connecting local businesses with resources and information, forging new partnerships and coalitions, and launching creative initiatives to support with long-term recovery and diversification. Most large funding opportunities out of EDA require partnerships with an EDD, making it important for universities and business to understand how to engage in these partnerships. If you would like to know more information about which EDDs are near you, please contact your EDA regional office.
FUNDING/ ENGAGEMENT OPPORTUNITIES
EDA Solicitation for American Rescue Plan Funding Expected Soon
The American Rescue Plan Act (ARP) provided the Economic Development Administration (EDA) with $3 billion dollars for emergency financial support to be given out through competitive grants. A solicitation for this funding, minus about 25 percent of the funds that must be reserved to help the tourism industry, is expected in the coming weeks. While no firm details have been released at this point, it is expected that the solicitation will require projects to align with certain EDA investment priorities. The Equity priority, especially through outreach to underrepresented groups, and Workforce Development priority are likely to be elevated and reflected in the upcoming solicitation. Grant sizes are also expected to be significantly larger than funding provided under the Coronavirus Aid, Relief, and Economic Security Act (CARES). As with CARES funding, ARP is expected to leverage the flexible Public Works and Economic Adjustment Assistance solicitation. Additional information on the EDA CARES funding, which could shed light on allowable expenses and necessary regional partnerships for the upcoming APR solicitation, can be found here.
NIST Releases Manufacturing USA Technology Roadmap Grant Competition
The National Institute for Standards and Technology (NIST) released a new solicitation seeking technology roadmaps for advanced manufacturing clusters. The NIST Manufacturing USA Technology Roadmap (MfgTech) Grant Program supports projects to create new or strengthen existing industry-driven consortia to increase U.S. competitiveness in advanced manufacturing including potential technology areas for creating future Manufacturing USA institutes. The roadmaps developed through this, and other related solicitations have the potential to influence significant future funding opportunities across the federal government. Manufacturing USA is a network of Institutes that aims to foster advanced manufacturing innovation across the nation, bringing together industry, academia, and federal partners to increase U.S. manufacturing competitiveness and national manufacturing research and development (R&D) infrastructure.
NIST utilizes technology roadmaps as a decision-making tool that identifies challenges, not solutions, and the time frame in which these challenges need to be addressed. NIST is interested in technology roadmaps are encouraged to address (but not limited to) manufacturing-related challenges across the following industries:
- advanced communications networks;
- advanced industrial robotics;
- artificial intelligence machine learning;
- autonomous and remotely piloted vehicles;
- computing ecosystems;
- critical materials manufacturing;
- electronics design and manufacturing;
- food and agricultural manufacturing;
- high performance and nanomaterial processing;
- medical products manufacturing;
- quantum information science; and
- semiconductors and advanced packaging.
Awards will be up to $300,000 for 18 months through cooperative agreements. The total number of awards will be dependent on final funding allocated in fiscal year (FY) 2022. Proposals are due August 17, 2021. Additional information on the goals and objectives of the MfgTech roadmaps can be found here and in the full solicitation at www.grants.gov under solicitation number “2021-NIST-MFGTECH-01.” More information on Manufacturing USA can be found here. Previous examples of NIST roadmaps can be found here.
SBA Launches New Community Navigator Program
On May 25, the Small Business Administration (SBA) released its solicitation for the Community Navigator Pilot Program, a program established by the American Rescue Plan Act (ARP). The program encourages underserved communities to adopt a community navigator approach to help small businesses start, expand, and remain competitive in global markets through quality training, counseling, and adequate resources. The program will support $100 million in investments targeted at individuals with disabilities and/or in minority, immigrant, rural, and other underserved communities across the country. Awards will range from $1 million to $5 million for roughly 50 projects over two-years. Universities other economic development organizations are among those that are eligible to compete. The deadline for applications was extended to July 23, 2021 and awards will be made in August.
FHWA Region Transportation Workforce Centers Solicitation Expected in the Coming Months
From conversations with program managers at the U.S. Department of Transportation (DOT), Lewis-Burke has learned that the solicitation for the Federal Highway Administration’s (FHWA) Region Transportation Workforce Centers is expected to be released in the next few months. FHWA anticipates making four to five awards for five years, with an award size of $300,000 per year. These centers “provide a strategic and efficient approach to transportation workforce development” through public private partnerships in the transportation, education, and workforce sectors. Universities and community colleges will be eligible to apply.
WHAT WE'RE READING
NSF Releases Report on Business R&D
The National Science Foundation (NSF) National Center for Science and Engineering Statistics (NCSES) recently released an infobrief that shows businesses performed sixty percent, or $262 billion, of U.S. research and development (R&D) in ten metropolitan areas in 2018. The San Jose, San Francisco, and New York City metro areas were the top three cities for business R&D, and of the top ten cities for business R&D investment, only two metro areas (Detroit and Chicago) are not located on one of the coasts. Additional information is available here.
NTIA Releases Interactive Broadband Map
The White House, in partnership with the Department of Commerce’s (DOC) National Telecommunications and Information Administration (NTIA) released an interactive map that shows high speed internet needs in rural areas. The map highlights states like Alaska, New Mexico, Idaho, and Mississippi as those with the most widespread needs. More information on the interactive map is available here.
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