Technology hubs embraced as catalyst for growth
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Two years after the federal CHIPS and Science Act became law, its goal of fueling domestic innovation and high-tech manufacturing in the areas of microelectronics, biotechnology, artificial intelligence and more is starting to move from concept into action in Indiana and nationwide.
On Tuesday, the U.S. Department of Commerce’s Economic Development Administration awarded $51 million to Indiana’s Heartland BioWorks Hub, making it one of 12 federally designated technology hubs, or networks, nationwide that will receive funding.
That’s in addition to $33 million the U.S. Department of Defense awarded last year to the Indiana-based Silicon Crossroads Microelectronics Commons Hub.
And in an award that is separate from CHIPS, the U.S. Department of Energy last year chose the Midwest Alliance for Clean Hydrogen—of which Indiana is a key member—to receive up to $1 billion in federal funding for projects related to clean energy.
The designations make Indiana the only state with a hand in three federal innovation hubs, which state officials say puts it in a prime position to build a stronger workforce and persuade companies to invest and stay here.
And they put Indiana at the forefront of the federal government’s plan to accelerate U.S. standing in key high-tech sectors, particularly microelectronics and its impact on national security. The strategy focuses on providing incentives to companies and organizations involved in a range of technology activities, from ideation and research to commercialization and implementation, to join the hubs.
“We’re dependent on that supply chain to keep our systems going,” said Doug Crowe, a federal director for a microelectronics growth program. “The biggest driver we have right now is onshoring that allows us to start redeveloping that capability they had to design and fabricate and package on shore.”
Down the line, said David Watkins, Indiana Economic Development Corp.’s senior vice president of entrepreneurship and small business, the hope is that the hubs will be the flywheel that creates a heightened level of talent retention, corporate innovation and commercialization in the state.
The hubs are not a place; their members might not be neighbors. They’re instead alliances, whose members include local-sector powerhouses, national mainstays, universities, not-for-profits and other entities involved in a type of manufacturing. By bringing the partners together, hubs provide members opportunities to collaborate, land funding for projects or research topics, and develop momentum around government-supported economic development.
“Our framework allows for those collisions and those ideas to happen that normally wouldn’t happen without the framework and without that orchestration that we provide,” said Brooke Pyne, executive vice president of innovation and strategy at the not-for-profit Applied Research Institute.
ARI, under contracts with the Indiana Economic Development Corp., is the organizer and administrator of the Heartland BioWorks Hub and the Silicon Crossroads Microelectronics Commons Hub and is a member of the Midwest Alliance for Clean Hydrogen. It also partners with the IEDC on other entrepreneurship and innovation efforts.
ARI’s role is to convene stakeholders in academia, industry and government to design networks to spur innovation through collaboration. For example, ARI can pair a research team at a university with companies interested in prototyping and commercialization, Pyne said.
Partnerships are key to snagging big opportunities like the innovation tech hubs, said Karen Plaut, Purdue University’s executive vice president for research. Purdue, she said, is uniquely positioned to support those opportunities through lending facilities and equipment as well as digging into research and supporting startups.
“Commercialization is about innovation,” Plaut said. “And anytime you have these hubs, which really are designed to spur innovation, you can commercialize more and more product.”
Where do the hubs stand?
The hub that’s furthest along in development is the Silicon Crossroads Microelectronics Commons Hub, one of eight federal microelectronics hubs aimed at moving the military away from using chips made outside the United States, Crowe said. A report released in January by data analytics firm Govini found that 40% of the semiconductors in Defense Department weapon systems and infrastructure are from China, which national leaders fear is a security threat.
The CHIPS and Science Act (CHIPS stands for Creating Helpful Incentives to Produce Semiconductors) is meant to fund the innovation, research and manufacturing needed to ensure that the United States can supply its own defense equipment.
That means onshoring previously outsourced supply chains, Crowe said.
The Silicon Crossroads hub received an initial $33 million allocation aimed at workforce development and equipment for members, primarily universities. The hub is nine months into implementation, which officials say means the programs are launched and the equipment is ordered.
The hub hosted a grand opening of its Silicon Crossroads Collaboration Center—called SC3—at an event June 17 at WestGate@Crane Tech Park in Odon.
ARI submitted its petition for a second phase of funding in February to pay for some of its members’ projects and expects to find out this month whether any of its requests were granted. There will be an annual call for project funding, Pyne said. Next month, ARI also will submit a proposal to receive more money for its workforce development programs.
The Heartland BioWorks Hub, meanwhile, is in an earlier phase of work. It must finalize details of a contract with the Commerce Department’s Economic Development Administration for its $51 million award, which it plans to use on workforce development training and support for early-stage companies.
ARI will establish a training and demonstration facility at 16 Tech Innovation District in Indianapolis, as well.
The hydrogen hub is finalizing its framework, which the IEDC’s Watkins expects to be finished in the coming weeks.
Abstract to reality
State economic development leaders have their own incentive for hosting and working on the federal hubs: the potential to turn abstract ideas into on-the-ground investments and actual physical innovation campuses in Indiana.
Each of the hubs reflects an industry with companies established in the state. General manufacturing is a primary employer already, and microelectronics and advanced manufacturing generally will require those workers to scale up their training. The state also has a strong life sciences roster that includes Eli Lilly and Co., now one of the nation’s most valuable companies, as well as Elanco Animal Health and Roche Diagnostics.
The hydrogen hub is focused on northwestern Indiana, where BP is working on hydrogen-related technology for its refinery in Whiting and steel manufacturers could benefit from cleaner energy sources.
Watkins said it’s helpful to diversify the types of industry in the state, but the greater focus is on ensuring those industries stay on the cutting edge.
“How can we organize a coalition around these types of innovative movements, if you will, that are happening within industries that have a strong presence here in Indiana to make sure that the state stays at the cutting edge of those innovations?” he said.
For example, the state is prepping and expanding a corridor of tech and research parks to absorb the growth of the key focus sectors. By doing so, leaders say, the ecosystem will propel the innovation aspect of the hubs.
For example, the Purdue Research Park in West Lafayette enables the university to translate research into economic impact for the state, Plaut said. Students and faculty, she said, are a critical spoke in the system to partner with companies to develop products and technologies to launch.
The innovation park “allows us to be on the cutting edge of research,” she said. “You can go to Purdue, and you can work together to solve a real problem that you need to solve right now.”
A critical initiative funded by the hubs is workforce development, a key concern for Indiana and the country. A July 2023 industry estimate cited by the White House says the country will need at least 25,000 new technicians without four-year degrees and a similar number of highly educated engineers by 2030.
ARI has focused a significant part of its current and potential funding in each hub toward upskilling Indiana’s workforce. Ivy Tech Community College and Purdue have a number of workforce development programs in motion as well.
“We can build that workforce,” Plaut said.
Positioning for sustainability
Two major factors made Indiana an attractive place for a microelectronics hub, Crowe said. The state already had convened partners to start cultivating a microelectronics ecosystem locally, he said.
And then Todd Young, the state’s senior U.S. senator, sponsored and advocated for the CHIPS Act.
“Indiana, maybe, recognized the future need [for a renewed microelectronics industry] and jumped into it to start establishing an ecosystem that was supportive of that,” Crowe said. “They’ve obviously been engaged in microelectronics for many, many years.”
Crowe said the initial funding for the microelectronics hubs is meant to create the infrastructure to jump-start the industry domestically after years of overseas production of key components.
“The main driver was just seeing that percentage of U.S.-produced microelectronic circuits drop,” he said. “It finally got to a low enough level that it almost became a national emergency.”
The goal is to continue funding the hubs over time—but project by project, rather than any one massive disbursement. However, additional grants are no guarantee.
Federal funding can go only so far, Pyne said. The hubs will need to augment that with other revenue streams and find the model that works in Indiana.
This current surge of federal funding, though, is one Pyne said she’s never seen before and one the state needs to capitalize on.
“This is a massive infusion of funding to onshore and try to make up for some time that we’ve lost,” she said. “We’re not only making up for capability within the technical area, but we gotta come alongside it and start really investing in the workforce development.”