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The early years of the 2020s have the United States grappling with a number of major issues, including the COVID-19 pandemic, digital disruption, climate change, racial and gender divides, and the continued need for more middle-class jobs. But they also ushered in a period of bold, urgent responses. Across the federal government, agencies are launching larger, deeper initiatives to accelerate innovation, optimize supply chains, mitigate climate change, and address demographic and geographic inequities.
An important part of this response is the rise of programs that use place-based, challenge-oriented designs to generate experiments with the potential to solve the nation’s biggest problems, as first demonstrated by the Economic Development Administration’s (EDA) $1 billion. Build a better regional challenge (BBBRC).
These experiments see federal agency leaders mobilize regional networks, build shared approaches to funding, and align it all with the nation’s most pressing priorities. They are also ushering in a new era of national problem-solving across geographies and in the service of economic inclusion.
Specifically, BBBRC provides five-year grants ranging from $25 million to $65 million to 21 competitively selected regions. These investments will support the local development of nationally critical technology clusters, and seek to do so in ways that provide economic opportunity to people and communities that have traditionally been underserved.
In this context, it is worthwhile to study the initial draft of early programs like the BBBRC, with the goal of deriving guidance for $77 billion in new place-based programmatic investments in the coming years. In a Brookings report released earlier this month, we identified six key features of policy design that inform this new era of place-based economic policymaking:
- Macro relevant. BBBRC’s design positions place-based actors as key contributors to national missions and problem solving. Regional applicants have positioned their cluster opportunities as responses to national needs articulated by EDA, including global supply chain disruptions, public health crises, economic security priorities, and decarbonization. This framing ensures that the cluster is focused on battery technology, semiconductors, biotechnologyand agricultural technology are positioned not only as regional revitalization strategies, but as investments of national and global importance.
- Micro-based. At the same time, the BBBRC calls for informed problem-solving. National competitiveness derives in part from strong industrial clusters rooted in geography. Macro success therefore involves getting the micro conditions right. Moreover, significant national and global forces often feel too disconnected from local civic concerns such as access to education and skills, good jobs and quality neighborhoods. Place-based programs can translate macroeconomic problems into the language of local actors, creating civic and political coalitions to address challenges in new ways.
- Focused on the network. No single institution usually has the knowledge and capacity to execute a transformative regional economy strategies on its own. Cluster development—because of its reliance on university research and talent, industry partnerships, and government funding and coordination—is uniquely dependent on networks of institutions working seamlessly within a single vision. The innovation of the BBBRC required a dynamic leader (a “Regional Economic Competitiveness Officer”) to recruit, organize and lead these institutional networks towards a common strategy.
- Competition-driven. The BBBRC attracted over 500 applicants and its competitive nature was key to mobilizing regions and consortia, avoiding ‘business as usual’ and catalysing local urgency and funding. Indeed, the competitive structure—along with its considerable resources—probably motivated new institutional networks to come together around a common agenda.
- Learning enabled. BBBRC designers put continuous learning and technical assistance at the heart of the challenge, knowing that the process will push regional leaders to the limits of their capacity. By establishing a community of practice, offering pre-development resources to lower-capacity regions, and helping applicants learn from each other, EDA has built a model for other federal agencies implementing such programs.
- Risk adjusted. BBBRC’s 60 finalists and 21 honorees cut across a wide range of industries, communities and opportunities. The reviewers had to balance several factors: likely effectiveness based on the maturity and potential of the cluster; capital concerns; contribution to national priorities; and equity across the urban, rural and tribal spectrum. Ultimately, EDA created a balanced, risk-adjusted portfolio of grantees. As with investing, the success of the program will be measured at the portfolio level, as success will vary among individual winners.
The BBBRC represents the early phase of a major federal investment agenda to create better, more affordable jobs in the nation’s regional economies. In addition to EDA’s efforts, there are tens of billions of dollars in other new place-based programs within the Infrastructure Investment and Jobs Act, CHIPS and the Science and Inflation Reduction Act. As federal leaders design these programs and regional and state leaders seek their funding, we hope this initial analysis will prove useful in undertaking such critical work.
This report was prepared by Brookings Metro using federal funds under award ED22HDK3070081 from the Economic Development Administration, US Department of Commerce. The statements, findings, conclusions and recommendations are those of the authors and do not necessarily reflect the views of the Economic Development Administration or the US Department of Commerce.
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