Around 2010, as the U.S. economy began to rebound from the “Great Recession,” there was a significant need to revitalize hard-hit cities across the United States. By 2014, policy leaders had taken notice of the emergence of “innovation districts” and their role in recovering local economies. Over the years since, a series of articles and studies have emerged, including policy recommendations reflecting the potential impact of place-based innovation to “spur productive, inclusive and sustainable economic development.”

Since 2021, Congress has enacted a series of major legislative packages—the American Rescue Plan Act, the Infrastructure Investment and Jobs Act, the CHIPS and Science Act, and the Inflation Reduction Act—to support the Biden administration’s Investing in America agenda focused on on-shoring manufacturing, building up domestic supply chains, and rebuilding civil infrastructure. Among these investments, $80 billion was designated to focus on “place-based industrial policy,” representing a historic level of government investment that could significantly impact underinvested, underdeveloped regions of the country. The White House recently announced funding for 32 new place-based innovation zones through its Tech Hubs program. This program, authorized by the bipartisan CHIPS and Science Act, is led by the Economic Development Administration within the U.S. Department of Commerce. As the government begins to make these significant investments, policymakers need to understand how these investments help the United States stay ahead of its chief global competitors.

Examining historical place-based innovation attempts around the world is critical to understanding how locally-rooted, technology-based economic development (TBED) can work, what factors drive success, and how local communities are impacted. There are hundreds of place-based innovation cases to choose from across the globe. In 1994, for example, Carnegie Mellon University launched the National Robotics and Engineering Center in the Lawrenceville neighborhood of Pittsburgh. This underserved, underinvested neighborhood experienced a boon in the form of a dense collection of robotics companies, now known as “Robotics Row.” Other notable examples include Greater Boston’s Seaport and Cambridge innovation districts, Tel Aviv’s innovation hub, and North Carolina’s Research Triangle Park. Understanding this diverse set of TBED models, and others like them, will be crucial to informing federal funding efforts for high-technology innovation districts around the country. To do so, we must answer some key questions, such as: what makes place-based innovation districts thrive as a means for long-term TBED? And, how should federal funding be used in a way that ensures the sustainability of innovation hubs? 

Each innovation district is unique, from the issues the local population faces to the legacy and character of the city itself. However, many innovation hubs worldwide exhibit similar traits that empirical evidence suggests are critical to the sustainability of the hubs. Among the many factors that have driven success in these innovation districts, such as those in Pittsburgh, Boston, Tel Aviv, and Research Triangle Park, some common themes include robust anchor institutions that enable cities to draw and retain talent, strong public-private partnerships, community engagement and demand, and, of course, the advent of actual innovation. Finding a common recipe for the success of innovation hubs is key to successfully disbursing federal funding for TBED. Armed with research insights, how can stakeholders leverage this knowledge to drive success in innovation hubs? 

The landmark CHIPS Act includes direction and funding to create targeted innovation initiatives. To achieve the full national security benefit, these initiatives could seek to deliver increased innovation, train additional STEM talent, and create a more diversified workforce, CSET is currently conducting a study that is expected to inform and influence the creation and design of CHIPS Act-driven innovation centers, which will be capable of spurring innovation and improving the educational and economic outcomes for communities in their local area. 

Moreover, as an array of innovations in technologies such as artificial intelligence, robotics, and advanced microelectronics drive the creation of new commercial markets, too many economically and educationally underserved communities are being left behind. Recent adversarial attacks have shown that these underserved, and typically underinvested communities present vulnerabilities that malign actors outside U.S. borders can exploit, in ways not seen in past global strategic competition. One outstanding question for the current CSET study is whether place-based innovation can build resilience in these vulnerable communities that not only boosts local economies, but also enhances U.S. national security by reducing vulnerability to our primary strategic competitors on the global stage. If so, the United States can use place-based innovation centers not only to spur innovation, but also to build resilience in vulnerable communities, dually enhancing both U.S. economic and national security.

The journey toward success for place-based innovation hubs requires a commitment to research to understand and apply lessons learned from past successes. If vulnerable communities and declining cities create national security vulnerabilities for the United States, while innovation-driven competition simultaneously remains a clear strategic objective, there is a clear solution to address both challenges: technology-based economic development. Most prevalently, technology-based economic development spurred by place-based innovation to build community resilience, mitigating the susceptibility of vulnerable communities in the ongoing strategic competition with capable near-peer adversaries. In order for the United States to fully reap the benefits of the CHIPS Act and compete at the international level, it must understand place-based innovation efforts on a deeper level and determine how to replicate and transplant a model for future sustained innovation. At CSET, we look forward to working to address these questions and working with stakeholders to provide informed recommendations on research-driven, strategic approaches for TBED.