[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]
BUILDING REGIONAL
INNOVATION ECONOMIES PART II
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON RESEARCH AND TECHNOLOGY
OF THE
COMMITTEE ON SCIENCE, SPACE,
AND TECHNOLOGY
OF THE
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTEENTH CONGRESS
SECOND SESSION
__________
DECEMBER 14, 2022
__________
Serial No. 117-73
__________
Printed for the use of the Committee on Science, Space, and Technology
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://science.house.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
49-783PDF WASHINGTON : 2024
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COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY
HON. EDDIE BERNICE JOHNSON, Texas, Chairwoman
ZOE LOFGREN, California FRANK LUCAS, Oklahoma,
SUZANNE BONAMICI, Oregon Ranking Member
AMI BERA, California MO BROOKS, Alabama
HALEY STEVENS, Michigan, BILL POSEY, Florida
Vice Chair RANDY WEBER, Texas
MIKIE SHERRILL, New Jersey BRIAN BABIN, Texas
JAMAAL BOWMAN, New York ANTHONY GONZALEZ, Ohio
MELANIE A. STANSBURY, New Mexico MICHAEL WALTZ, Florida
BRAD SHERMAN, California JAMES R. BAIRD, Indiana
ED PERLMUTTER, Colorado DANIEL WEBSTER, Florida
JERRY McNERNEY, California MIKE GARCIA, California
PAUL TONKO, New York STEPHANIE I. BICE, Oklahoma
BILL FOSTER, Illinois YOUNG KIM, California
DONALD NORCROSS, New Jersey RANDY FEENSTRA, Iowa
DON BEYER, Virginia JAKE LaTURNER, Kansas
SEAN CASTEN, Illinois CARLOS A. GIMENEZ, Florida
CONOR LAMB, Pennsylvania JAY OBERNOLTE, California
DEBORAH ROSS, North Carolina PETER MEIJER, Michigan
GWEN MOORE, Wisconsin JAKE ELLZEY, TEXAS
DAN KILDEE, Michigan MIKE CAREY, OHIO
SUSAN WILD, Pennsylvania
LIZZIE FLETCHER, Texas
VACANCY
------
Subcommittee on Research and Technology
HON. HALEY STEVENS, Michigan, Chairwoman
MELANIE A. STANSBURY, New Mexico RANDY FEENSTRA, Iowa,
PAUL TONKO, New York Ranking Member
GWEN MOORE, Wisconsin ANTHONY GONZALEZ, Ohio
SUSAN WILD, Pennsylvania JAMES R. BAIRD, Indiana
BILL FOSTER, Illinois JAKE LaTURNER, Kansas
CONOR LAMB, Pennsylvania PETER MEIJER, Michigan
DEBORAH ROSS, North Carolina JAKE ELLZEY, TEXAS
C O N T E N T S
December 14, 2022
Page
Hearing Charter.................................................. 2
Opening Statements
Statement by Representative Haley Stevens, Chairwoman,
Subcommittee on Research and Technology, Committee on Science,
Space, and Technology, U.S. House of Representatives........... 10
Written Statement............................................ 11
Statement by Representative Randy Feenstra, Ranking Member,
Subcommittee on Research and Technology, Committee on Science,
Space, and Technology, U.S. House of Representatives........... 12
Written Statement............................................ 14
Witnesses:
Hon. Alejandra Castillo, Assistant Secretary of Commerce for
Economic Development, Economic Development Administration
Oral Statement............................................... 16
Written Statement............................................ 18
Ms. Maureen Donohue Krauss, President and CEO, Detroit Regional
Partnership
Oral Statement............................................... 28
Written Statement............................................ 30
Mr. David Spalding, Raisbeck Endowed Dean of the Debbie and Jerry
Ivy College of Business and Interim Vice President of Economic
Development and Industry Relations, Iowa State University
Oral Statement............................................... 40
Written Statement............................................ 42
Ms. Linda Olson, President/CEO, Tampa Bay Wave
Oral Statement............................................... 51
Written Statement............................................ 53
Discussion....................................................... 61
Appendix: Answers to Post-Hearing Questions
Hon. Alejandra Castillo, Assistant Secretary of Commerce for
Economic Development, Economic Development Administration...... 74
Mr. David Spalding, Raisbeck Endowed Dean of the Debbie and Jerry
Ivy College of Business and Interim Vice President of Economic
Development and Industry Relations, Iowa State University...... 78
Ms. Linda Olson, President/CEO, Tampa Bay Wave................... 80
BUILDING REGIONAL
INNOVATION ECONOMIES PART II
----------
WEDNESDAY, DECEMBER 14, 2022
House of Representatives,
Subcommittee on Research and Technology,
Committee on Science, Space, and Technology,
Washington, D.C.
The Subcommittee met, pursuant to notice, at 10 a.m., in
room 2318, Rayburn House Office Building, Hon. Haley Stevens
[Chairwoman of the Subcommittee] presiding.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chairwoman Stevens. This hearing will come to order.
Without objection, the Chair is authorized to declare recess at
any time.
Before delivering opening remarks, I just wanted to note
that, today, the Committee is meeting both in person and
virtually, and I wanted to just announce a couple of reminders
to Members about the conduct of this hearing. First, Members
and staff who are attending in person may choose to be masked,
but it is not a requirement. However, any individual with
symptoms, a positive test, or exposure to someone with COVID-19
should wear a mask while present. Members who are attending
virtually should keep their video feed on as long as they are
present in the hearing. Members are responsible, certainly, for
their own microphones. Please also keep your microphones muted
unless you're speaking.
Finally, if Members wish to submit for the record, please
email the Committee Clerk, whose email address was circulated
prior to this hearing.
So with that, good morning, and welcome to the final
Research and Technology Subcommittee hearing of the 117th
Congress. Today, we're taking a closer look at the Economic
Development Administration, or the EDA, and their role, their
incredible role to promote regional innovation through
community-led economic development.
I want to thank our distinguished witnesses for joining us.
I know you all have powerful testimony to share. And I would
like to especially express my deep gratitude to Assistant
Secretary Alejandra Castillo. Since I was elected to Congress,
I devote Mondays primarily to visiting manufacturers or small
businesses in my district. It's what I call Manufacturing
Monday. And part of this is to showcase southeastern Michigan's
innovation economy. I've seen firsthand the power of targeted,
direct Federal investments to uplift the industry and talent
already in our region. And these investments create coalitions
by bringing a wide variety of community stakeholders to the
table with a shared vision and shared goals. It opens new doors
that otherwise would not be possible to open. And frankly, we
have seen the return on the investment and the return to the
dedication of supporting our manufacturing economy, our
emerging industries all over this country.
All the Members participating in this hearing know great
innovators in their district, and they see it all across the
country. So the question before us today is how to build
innovation ecosystems in different communities with different
strengths because I believe we can widen this pie. We can carve
out equitable pathways for economic growth by supporting
modernization to become part of a supply chain for industries
of the future and to ensure American competitiveness.
And certainly this is not just an issue of geography. Women
and entrepreneurs of color have faced a more difficult road to
commercial success. And in recent years, Black and Hispanic
founders in the United States raised just 2.4 percent of the
total U.S. venture capital funding, despite making up 30
percent of the population. When we leave behind segments of our
population, we leave behind countless great ideas and the
benefits that come with them. An investment to increase
geographic diversity and participation is also an investment to
bolster domestic supply chains and grow our manufacturing
capacity.
Despite our standing, America still has lost about 1/4 of
its manufacturing capacity over the last quarter of a century.
This has certainly cost us good jobs and left critical supply
chain vulnerabilities and gaps. The COVID-19 pandemic, as we
all know, was a wake-up call in this space, and it was hardly
our first wake-up call.
In response to the Great Recession, this very Committee
authorized the regional innovation programs at EDA in 2010.
Through these programs, EDA has been building up support for
entrepreneurs in local investment networks around the country.
In midst of the COVID-19 pandemic and associated economic
impacts as a result of the pandemic, EDA took on a much larger
task. Congress directed EDA, in the American Rescue Plan, to
help enable economic recovery in an effort to rebuild American
communities. The Build Back Better Regional Challenge
contributes to a stronger EDA going forward, one with an
expanded suite of proven tools to nurture and support
innovation economies across this country.
We will hear from a variety of EDA success stories today
from our witnesses. I recognize the hometown advantage, and I
certainly am eager to hear from our witness, Maureen Donohue
Krauss, President and CEO (Chief Executive Officer) of the
Detroit Regional Partnership, and her experience securing the
$52 million grant through EDA's Build Back Better Challenge
known as the global epicenter for mobility. Led by one of the
most diverse regions in the United States, this example offers
the opportunity to create a national model for equitable
economic growth. And the award is a testament to the power of
integrating all the pieces of an innovation ecosystem together.
This Congress has taken immeasurable steps to bolster
American manufacturing to lead the world in innovation and
advanced technology, and I'm so proud of the multitude of
bipartisan provisions this very Committee advanced in the CHIPS
and Science Act. While this legislation is now law, I recognize
that Congress still has work to do to fully fund the
appropriations the bill authorized and certainly the role that
we will play in oversight of the implementation of the CHIPS
and Science Act. America's ability to compete globally hinges
on us taking action to fully fund the CHIPS and Science Act.
Lastly, it is my hope that this discussion continues beyond
just today's hearing. As we look to the future of our work in
Congress, I believe there is an appetite from both sides of the
aisle to advance a vision for America to lead the world on this
front. I want to thank our witnesses and my colleagues for
their their contributions today.
[The prepared statement of Chairwoman Stevens follows:]
Good morning and welcome to the final Research and
Technology subcommittee hearing of the 117th Congress. Today,
we take a closer look at the Economic Development
Administration and their role to promote regional innovation
through community-led economic development. I want to thank our
distinguished witnesses for joining us--I know you all have
powerful testimony to share. I would like to especially express
my gratitude to Assistant Secretary Alejandra Castillo.
Since I was elected to Congress, I devote my Mondays to
visiting a manufacturer or business in my district--what I call
``Manufacturing Mondays''--to showcase southeast Michigan's
innovation economy. I have seen firsthand the power of targeted
federal investments to uplift the industries and talent already
in our regions. These investments create coalitions by bringing
a wide variety of community stakeholders to the table with a
shared vision. It opens new doors that otherwise would not have
been possible to open. I have seen the return on investment.
All of the Members participating in this hearing know great
innovators in their Districts and in pockets across the
country. So, the question before us today is how to build
innovation ecosystems in different communities with different
strengths. Because I believe we can widen this pie. We can
carve out equitable pathways for economic growth by supporting
modernization to become part of a supply chain for industries
of the future.
This is not just an issue of geography. Women and
entrepreneurs of color face a more difficult road to commercial
success. In recent years, Black and Hispanic founders in the
U.S. raised just 2.4% of the total U.S. venture capital funding
despite making up over 30% of the population. When we leave
behind entire segments of our population, we leave behind
countless great ideas, and the benefits that come with them.
An investment to increase geographic diversity and
participation, is also an investment to bolster domestic supply
chains and grow our manufacturing capacity. Despite our
standing, America has lost a quarter of its manufacturing
capacity over the past 25 years. This has cost us good jobs and
left critical supply chains unacceptably vulnerable. The COVID-
19 pandemic was a wake-up call for sure, but hardly our first.
In response to the Great Recession, this very committee
authorized the regional innovation programs at EDA in 2010.
Through these programs, EDA has slowly been building up support
for entrepreneurs and local investment networks around the
country.
In midst of the COVID-19 pandemic and associated economic
impacts, EDA took on a much larger task. Congress directed EDA,
in the American Rescue Plan, to help enable economic recovery
and rebuild American communities. The Build Back Better
Regional Challenge will contribute to a stronger EDA going
forward--one with an expanded suite of proven tools to nurture
and support innovation economies across the country.
We will hear a variety of EDA success stories today from
our witnesses. I recognize the hometown advantage and am eager
to hear from our witness, Maureen Donohue Krauss, President and
CEO of the Detroit Regional Partnership and her experience
securing a $52.2 million grant through EDA's Build Back Better
Regional Challenge. Led by one of the most diverse regions in
the United States, this example offers the opportunity to
create a national model for equitable economic growth. This
award is a testament to the power of integrating all of the
pieces of an innovation ecosystem together.
This Congress has taken incredible steps to bolster
American manufacturing to lead the world in innovation and
advanced technology. I am so proud of the multitude of
bipartisan provisions this committee advanced in the CHIPS and
Science Act. While this legislation is now law, I recognize
that Congress still has work to do to fully fund the
appropriations the bill authorized. America's ability to
compete globally hinges on us fully funding the CHIPS and
Science Act.
Lastly, it is my hope that this discussion continues beyond
just today's hearing. As we look to the future of our work in
Congress, I believe there is an appetite from both sides of the
aisle to advance a vision for America to lead the world on this
front. I want to again thank the witnesses and my colleagues
for their contributions today.
Chairwoman Stevens. And with that, the Chair now recognizes
Mr. Feenstra for an opening statement.
Mr. Feenstra. Thank you, Chairwoman Stevens, for holding
this wonderful hearing today. I also want to thank Chairman
Lucas for attending today. Thank you for being here. And I also
want to thank our witnesses for your participation today and to
hear your stories. I look forward to hearing your testimonies
and all your success stories. I hope that we can use this
hearing as an opportunity to build upon prior work to learn how
we can continue to support regional innovation economies around
the Nation.
I would especially like to thank Assistant Secretary
Castillo for taking the time to speak with us today and how the
Economic Development Agency, EDA, supports local and regional
economies. We have to ask ourselves, how do we promote
meaningful innovation to drive economic development not only in
Silicon Valley, but also in places like Iowa and the American
heartland? This is a challenge for my colleagues as I have
examined this in Congress to learn how we can support regional
innovation around the country as every community has their own
unique set of goals and challenges for developing their own
innovation economy.
I've directly seen result in investing in our regional
innovation in my own home State Iowa, and I believe it can
provide a strong example of how public-private partnerships and
a focus on local strengths can build an economy of good-paying
jobs while supporting innovation. Agriculture is one of the
driving forces in our economy. In Iowa, we are proud to be one
of the Nation's leading States in the agricultural sector and
the Nation's largest producer of pork, corn, eggs, ethanol, and
biodiesel. Iowa has developed several key industries such as
biosciences, advanced manufacturing, and transportation to help
drive economic growth and innovation. And when it comes to
enhancing both economic growth and economic opportunities, Iowa
State University has done an exemplary job at cultivating an
innovation ecosystem to spur growth.
Thank you to Dean Spalding for being here today to discuss
the role of higher education and how it plays out in promoting
regional innovation and economic development. Just last month,
Iowa State won an Innovation and Economic Prosperity University
Award for the fourth time since 2017 from the Association of
Public and Land-grant Universities. Iowa State took home first-
place award for innovation--for exemplary innovations, spurring
entrepreneurship, technology-based economic development. This
recognition demonstrates how Iowa State Leadership in
innovation can successfully enhance economic opportunities
across Iowa and across our Nation.
Iowa State is home to Iowa State University's Research
Park, which serves as a technology community and incubator for
business and provides access to countless resources at Iowa
State, including talent pipelines, specialized equipment, and
research infrastructure. The research part plays a key role in
economic development at Iowa State when it comes to technology
transfer, as it's part of a network that connects technology
creation, business formation, and development assistance with
established technology firms. This is just one example of how
public-private partnerships at Iowa State have a tremendous
success to advance innovation across Iowa and our Nation.
I hope we can use today's hearing as an opportunity to
discuss the importance of private partner--partnerships to
drive regional innovation. I am proud of Iowa State's
tremendous work in promoting innovation and entrepreneurship,
and I hope institutions around the country look to them as an
example of how to be successful in this space. I also hope we
can continue the important dialog of how all communities,
whether big or small, rural or urban, can have the opportunity
to become leaders in regional innovation. Every American in
every zip code deserves the opportunity to participate in the
innovation economy, whether that's starting their own business
or building a career in a high-tech, good-paying job.
I would be remiss if I did not acknowledge my support for
the Metropolitan Areas Protection and Standardization Act
called MAPS, which the President signed into law last month,
that ensures smaller and rural communities have a fair
opportunity to receive Federal funding and assistance from
programs like the ones we are discussing today.
With that, I thank our witnesses. And with that, I yield
back.
[The prepared statement of Mr. Feenstra follows:]
Thank you, Chairwoman Stevens, for holding today's hearing.
And thank you to our witnesses for your participation today.
I look forward to hearing your testimonies and success
stories. I hope we can use this hearing as an opportunity to
build upon prior work to learn how we can continue to support
regional innovation economies around the nation.
I would especially like to thank Assistant Secretary
Castillo for taking the time to speak to us today about how the
Economic Development Agency (EDA) supports local and regional
innovation economies.
We have to ask ourselves: how do we promote meaningful
innovation to drive economic development not only in Silicon
Valley, but in places like America's Heartland?
This is a challenge my colleagues and I have examined this
Congress to learn how we can support regional innovation around
the country, as every community has their own unique set of
goals and challenges for developing their own innovation
economy.
I've directly seen the results of investing in regional
innovation in my home state of Iowa, and I believe we can
provide a strong example of how public-private partnerships and
a focus on local strengths can build an economy of good paying
jobs while supporting innovation.
Agriculture is one of the driving forces of our economy. In
Iowa we are proud to be one of America's leading states in the
agriculture sector, and the nation's largest producer of pork,
corn, eggs, ethanol, and biodiesel.
Iowa has developed several other key industries such as
biosciences, advanced manufacturing, and transportation, to
help drive economic growth and innovation.
And when it comes to enhancing both economic growth and
economic opportunities, Iowa State University has done an
exemplary job at cultivating an innovation ecosystem to spur
growth.
Thank you, Dean Spalding, for being with us here today to
discuss the role higher education plays in promoting regional
innovation and economic development.
Just last month, Iowa State won an Innovation and Economic
Prosperity University Award for the fourth time since 2017 from
the Association of Public and Land-Grant Universities.
Iowa State took home the first-place award for
``Innovation'' for exemplary initiatives spurring innovation,
entrepreneurship, and technology-based economic development.
This recognition demonstrates how Iowa State's leadership
in innovation can successfully enhance economic opportunities
across Iowa and the United States.
Iowa State is also home to the Iowa State University
Research Park, which serves as a technology community and
incubator for businesses and provides access to countless
resources at Iowa State including talent pipelines, specialized
equipment, and research infrastructure.
The Research Park plays a key role in economic development
at Iowa State when it comes to technology transfer, as it is
part of a network that connects technology creation, business
formation, and development assistance with established
technology firms.
This is just one example of how public-private partnerships
at Iowa State have had tremendous success to advance innovation
across Iowa and the nation.
I hope we can use today's hearing as an opportunity to
discuss the importance of public-private partnerships to drive
regional innovation.
I am proud of Iowa State's tremendous work in promoting
innovation and entrepreneurship, and I hope institutions around
the country look to them as an example of how to be successful
in this space.
I also hope we can continue this important dialogue on how
all communities, whether big or small; rural or urban; can have
the opportunity to become leaders in regional innovation. Every
American in every zip code deserves the opportunity to
participate in the innovation economy, whether that's starting
their own business or building a career in a high tech, good
paying job.
I would be remiss if I did not acknowledge my support for
the Metropolitan Areas Protection and Standardization (MAPS)
Act, which the President signed into law last month, that
ensures smaller and rural communities have a fair opportunity
to receive federal funding and assistance from programs like
the ones we are discussing today.
Thank you, and I yield back.
Chairwoman Stevens. Great, thank you, Mr. Feenstra. And in
the spirit of big 10 rivalry, you should remember that while
Iowa has great public-private partnerships, Michigan invented
the public-private partnership. So we're glad to all be here
discussing that today. But if--just kidding.
But at this time, if there are Members who wish to submit
additional opening statements, your statements will be added to
the record at this point.
And at this time, I'd like to introduce our incredible
witnesses. Our first witness is the Honorable Alejandra
Castillo, Assistant Secretary of Commerce for Economic
Development. Assistant Secretary Castillo has served in
leadership positions for three Presidents, President Biden,
President Obama, and President Clinton. Prior to her position
at EDA, Ms. Castillo was the Chief Executive Officer of the
YWCA USA. In 2014 she was appointed by President Obama to serve
as the National Director of the Commerce Department's Minority
Business Development Agency, becoming the first Hispanic woman
to lead the agency. Ms. Castillo has served as a senior policy
analyst in the White House during the Clinton Administration,
and we love watching her leadership shine.
Our next witness is Ms. Maureen Donohue Krauss from my home
State of Michigan. Ms. Krauss is the President and CEO of the
Detroit Regional Partnership, a leading economic development
nonprofit, serving the 11-county metro Detroit region. Ms.
Krauss is an accomplished economic development officer with
more than 30 years of leadership in economic development,
nonprofit, and government sphere, successful having shepherded
the Global Epicenter of Mobility (GEM) initiative through. This
initiative will accelerate economic growth in metro Detroit by
building on the region's unrivaled--our region's unrivaled
mobility assets to create a smart, secure, sustainable, and
inclusive advanced mobility industry. Prior to her role at the
Detroit Regional Partnership, Ms. Krauss served as Vice
President of Economic Development and Business Attraction at
the Detroit Regional Chamber and worked for the Oakland County
Department of Economic Development and Community Affairs, an
award-winning county agency where she led a team of over 100.
Our third witness is Mr. David Spalding. Mr. Spalding is
the Raisbeck Endowed Dean of Debbie and Jerry Ivy College of
Business at Iowa State University. He also serves as the
interim Vice President for Economic Development and Industry
Relations. During his time as dean, the college has added five
undergraduate majors and launched five master's programs. Dean
Spalding has served on a number of corporate boards and
nonprofit organizations and currently serves on the Ames
Economic Development Commission Board of Directors.
Our next witness is Ms. Linda Olson. Ms. Olson is the
founder and CEO of Tampa Bay Wave, which runs the only Florida-
based accelerator accredited by the Global Accelerator Network.
In 2012, Ms. Olson led a regional effort to secure a $1 million
Federal grant from the U.S. Economic Development Administration
that launched Tampa Bay Wave's Venture Connector and
Accelerator Program in partnership with the University of South
Florida. Ms. Olson is an original member of Startup America
Partnership and is currently an active member of Startup
Champions Network.
As our witnesses should know, you will each have 5 minutes
for your spoken testimony. Your written testimony will be added
in the record for the hearing. When you have all completed your
spoken testimony, we'll begin with questions, and each Member
will have 5 minutes to question the panel. We will start with
Assistant Secretary Castillo.
TESTIMONY OF HON. ALEJANDRA CASTILLO,
ASSISTANT SECRETARY OF COMMERCE
FOR ECONOMIC DEVELOPMENT,
ECONOMIC DEVELOPMENT ADMINISTRATION
Ms. Castillo. Good morning, and thank you, Chairwoman
Stevens, and Ranking Member Feenstra, and distinguished Members
of the Subcommittee. Thank you for this opportunity to testify
on the Economic Development Administration's regional
innovation programs and place-based economic development
strategies. Since our inception in 1965, we've made targeted,
locally driven investments directly in distressed communities.
While these investments are and will remain a core of our
investment strategies, we have evolved with economic
development approaches and now invest with a regional and
place-based focus toward innovation and competitiveness.
Our Build to Scale, our Build Back Better Regional
Challenge, and our Good Jobs Challenge programs are excellent
examples of the direction we are taking today. With recent
substantial appropriations including $3 billion appropriated
through the American Rescue Plan and disaster supplemental
funding, EDA has ramped up its capacity and technical
assistance to support the growth of regional industry clusters,
strengthen our critical national infrastructure, and broaden
the opportunities for communities to develop and implement
innovation strategies that help them compete in the global
economy.
EDA's flagship program for enabling innovation is the Build
to Scale program. The Office of Innovation and Entrepreneurship
leads and manages the design and implementation of this
program. These grants advance the growth of connected tech-
driven economies that enable innovation and accelerate
technology commercialization to increase global
competitiveness. The Build to Scale program is incredibly
impactful, and it is a great example of place-based programming
that is critical to driving the innovation ecosystem and our
Nation's economy forward. We are committed to maximizing the
impact of these programs to best serve our customers, your
communities.
As part of the recently enacted Research and Development
Competition and Innovation Act, Congress authorized two new
programs for EDA. While no funds have been appropriated to
implement either program, we are excited about how these
dynamic new programs will continue to strengthen and build on
our legacy of providing impactful place-based programming to
stoke the innovation economy. If funds are appropriated for the
program, we will build a fair and equitable process to ensure
all regions across the country have the opportunity to compete.
To have place-based strategies succeed, we strongly believe
that we need programming like those delivered through EDA's
historic $3 billion American Rescue Plan allocation and as
proposed through the CHIPS Act.
With our Build Back Better Regional Challenge and Good Jobs
Challenge EDA supercharged its focus on regional cluster,
making multiple simultaneously--simultaneous interconnected
investments and explicitly funded governance to make those
regional clusters more durable. The $1 billion Build Back
Better Regional Challenge is the Nation's largest economic
development competition, awarding 21 regions across the country
between $25-$65 million to catalyze local innovation and
competitiveness. Nineteen of the 21 winners had at least one
technology-based project component.
The $500 million Good Jobs Challenge is helping build
communities that are resilient to future pandemic, economic
downturns, and climate-related shocks through industry-led
worker-centered workforce training grants. Together, the 32
Good Jobs Challenge awardees will train workers in 15
industries with a focus on industries that are essential to
powering regional competitiveness and economic growth. Tech
hubs would continue the evolution initiated under these
challenges. Leveraging EDA's expertise, agility, and
scalability, as well as our range of perspective from local to
national, to enable regions to rapidly grow into global leaders
in the industries of the future.
To close, I'd like to mention our efforts to reauthorize
EDA. It has been 17 years since EDA was last authorized by
Congress. EDA's Public Work and Economic Development Act and
Stevenson-Wydler authorized programs work together seamlessly,
forming a continuum of assistance to meet community needs
wherever they are on the economic development journey. New
industries have emerged while other sectors have declined,
regions have encountered and responded to devastating natural
disasters, and we have all suffered the impact of a pandemic.
Reauthorization is vitally important to strengthen EDA's
response to new economic development challenges.
Chairwoman Stevens, Ranking Member Feenstra, and Members of
the Subcommittee, thank you for the opportunity to discuss how
EDA is promoting regional innovation through programs and
initiatives to support local economic development strategies.
We have a bright future ahead, and I'm happy to answer any
questions you may have. Thank you.
[The prepared statement of Ms. Castillo follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chairwoman Stevens. Thank you so much. And with that, if we
can, we're going to hear from Ms. Maureen Donohue Krauss.
TESTIMONY OF MS. MAUREEN DONOHUE KRAUSS,
PRESIDENT AND CEO, DETROIT REGIONAL PARTNERSHIP
Ms. Krauss. Good morning, everyone. And thank you,
Chairwoman Stevens, Ranking Member Feenstra, and distinguished
Committee Members. I'm honored to speak to you today. Thank you
for your leadership on this important issue. And thank you to
Chairwoman Stevens, who has been extremely supportive and a
champion of the Detroit region and the State of Michigan and
the automotive industry. She truly is out visiting companies
every Monday in our region to learn firsthand.
I'm Maureen Donohue Krauss, President and CEO of the
Detroit Regional Partnership. We are tasked with attracting
investment and jobs to create a more prosperous 11-county 5.4
million-person Detroit region. Our organization essentially
travels the world to look for and meet with companies who want
to innovate and expand their operations in southeast Michigan.
With that perspective, I would like to share our experience in
being awarded a $52 million grant from the Economic Development
Administration's Build Back Better Regional Challenge.
As you know, the world is experiencing a historic shift as
we transition from internal combustion engines to electric and
automotive companies continue to provide more advanced
connected and fully autonomous vehicles. Building off our
automotive legacy, the Detroit region is at the forefront of
this new mobility innovation, but we understand that our
leadership comes with no guarantee.
Detroit, like our country, faces intense global competition
to win the future of advanced mobility and electrification. The
global electric vehicle (EV) market is expected to grow from
$287 billion in 2021 to $1.3 trillion in 2028. Given the
current rate of technological development, the trajectory of
automotive industry for the next 100 years will likely be
defined in the next 10 years. This is a critical juncture for
the entire industry.
Our region and our State are leading the push for
electrification but also providing the testing grounds for
alternative power sources such as hydrogen and other forms of
clean energy technology. Let me share two recent examples with
you. Our Next Energy is a homegrown startup founded in 2020
that is poised to deliver cutting-edge energy storage
technology that will allow electric vehicles to drive 600 miles
on a single charge, doubling their current range. They recently
announced a $1.6 billion investment to build a gigafactory in
our region that will employ more than 2,100 people and deliver
cutting-edge battery technology developed right here in the
Detroit region. Less than 3 years ago, Our Next Energy did not
even exist, and now they employ 150 on their way to 2,100.
There are not many places in the world that can develop and
produce this level of transformation innovation that quickly.
Another company, Dunamis Clean Energy Partners, is the
first Black-owned EV charging manufacturer that we are aware of
in the world. Dunamis is building high-tech chargers for
residential, business, and commercial fleets. They're committed
to ensuring that historically excluded communities are included
in the transformational wealth transfer that electrification
will bring.
Up and down the supply chain, the Detroit region is home to
pioneers who continue to deliver cutting-edge battery, EV, and
advanced mobility technologies. This advanced mobility
stretches beyond traditional automotive and includes unmanned
ground vehicles for the military, e-bikes, personal aviation,
and drones, creating more opportunities to innovate. This grant
will help the region marshal all of our resources to support
the next Our Next Energy and the next Dunamis Energy.
Building on more than 100 years of industry leadership,
this grant will further entrench our region as the Global
Epicenter of Mobility. GEM, as we call it, will help create an
inclusive and sustainable advanced mobility cluster and ensure
workers, companies, and communities are not left behind during
this transition. The beauty of GEM is that we are not starting
from scratch. We're building around more than 400 existing
assets in our region that comprise the world's densest
automotive and mobility industry cluster. The Detroit region
has the world-class universities, testing facilities, supply
chain, and infrastructure to deliver even more innovation and
to do so in a way that maximizes the EDA's investment.
Before I close, I have a few recommendations on how to
build regional innovation economies. First, require regions--
incentivize regions to collaborate in order to qualify for
transformational economic development projects that will
maximize the best return on your investment. Require--secondly,
require inclusion and equity to be a continued focus in
economic development. Regions across this country have so much
untapped or unutilized talent that can increase productivity
and innovation. And third, seek out regions in this Nation that
do something better than anywhere else. Innovative regions like
Detroit are worth investing in.
Thank you for this opportunity to testify today, and I look
forward to your questions.
[The prepared statement of Ms. Krauss follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chairwoman Stevens. Thank you. And with that we'll hear
from Mr. Spalding.
TESTIMONY OF MR. DAVID SPALDING,
RAISBECK ENDOWED DEAN OF THE DEBBIE AND JERRY IVY
COLLEGE OF BUSINESS AND INTERIM VICE PRESIDENT
OF ECONOMIC DEVELOPMENT AND INDUSTRY RELATIONS,
IOWA STATE UNIVERSITY
Mr. Spalding. Chairwoman Stevens, Ranking Member Feenstra,
and esteemed Members of the Subcommittee, thank you for this
opportunity to testify on behalf of Iowa State University. As
part of today's hearing, I look forward to exploring the role
of the Economic Development Administration to promote regional
innovation through support for community-led economic
development strategies.
For over 150 years, Iowa State's motto has been ``science
with practice'' and aptly describes our interest in science
with practical applications. We pride ourselves in serving each
of our almost 30,000 students and businesses in all 99 counties
in the State of Iowa through our economic development programs.
Innovation is woven into the fabric of our university culture,
which inspires entrepreneurial thinking and innovation in all
seven of our colleges. For each of the last several years we
have been among the top 100 universities worldwide for U.S.
patents granted for our science and technology discoveries.
In the last 2 years, we won the two top awards for
entrepreneurship in higher education. In 2021, we received the
United States Association for Small Business and
Entrepreneurship Model Program Award. And just last month, we
received the Nasdaq Center for Entrepreneurial Excellence Award
from the Global Consortium of Entrepreneurship Centers. We are
proud for the last 3 years we were--we have been recognized as
the number 11 undergraduate entrepreneurship program by
Princeton Review. And I appreciate Congressman Feenstra
mentioning the four awards we've received for economic
development over the last 6 years from the Association of
Public and Land-grant Universities. All the accolades are
really a testament to the work our economic development teams
do every day.
The Build to Scale program goal is building regional
economies through scalable startups. The program has provided
Iowa State and the State of Iowa with foundational funding to
expand or establish two important programs, the Iowa Startup
Factory and the Iowa Go-To-Market Accelerator. These programs
are the centerpieces of our work with startups, and both have
provided substantial economic return on investment. To date, 88
startups have graduated from our Startup Factory program, and
they've raised more than $52 million in external funding. Our
first Build to Scale grant began in the fall of 2017. We used
EDA's $406,000 award in the Startup Factory to support founders
working to develop startups in food production, food safety,
and new food products. Twenty-nine companies were supported,
and they reported raising over $16 million in financing.
One of these companies is Clayton Farms, a startup founded
in 2017 by Iowa State alum Clayton Mooney, who grew up on a
farm in a small town in southeast Iowa. Now, Clayton Farms
doesn't grow row crops. They are a vertical organic farming
operation, which means they grow on racks indoors. They grow
lettuce, tomato, microgreens that they sell to over 800
subscribers to their service. Clayton Farms attributes the
Startup Factory as being one of the major reasons for the
success that they had in their launch, and they've raised more
than $3 million in external capital.
Our second and most recent grant from the Build to Scale
program helped us partner with BioConnect Iowa to launch the
Iowa Go-To-Market in fall of 2020. Go-To-Market is a post-
accelerator that provides startups with advanced training,
business resources, and advising services to develop innovative
technology-driven products or services. Since its launch, nine
startups have completed the program with three more beginning
this month. One of those companies, Mazen Animal Health, takes
traditional animal vaccines and puts them into animal feed.
They've successfully raised $11 million in venture funding
shortly after completing the program.
We've also leveraged the early success of the Startup
Factory and the first EDA investment in responding to demand
for rural innovation programs. We shared resources with
America's Small Business Development Center Iowa to launch the
Rural Business Innovators program, which provides customized,
one-on-one counseling and group training to help rural
technology entrepreneurs develop and scale their businesses to
create jobs in rural Iowa.
I hope that the testimony shared today showcases what
programs like Build to Scale can do when thoughtfully
administered and executed to maximize return on investment.
Iowa State University remains committed to delivering science
with practice, and we hope to continue to partner with the EDA
as we innovate at Iowa State. It has been an honor to share my
perspective with you today. Thank you for the opportunity, and
I look forward to answering any questions. Thank you.
[The prepared statement of Mr. Spalding follows:]
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Chairwoman Stevens. Thank you. And with that, we'll hear
from Ms. Olson.
TESTIMONY OF MS. LINDA OLSON,
PRESIDENT/CEO, TAMPA BAY WAVE
Ms. Olson. Good morning, Chairwoman Stevens, Ranking Member
Feenstra, and honorable Members of the Subcommittee on Research
and Technology. It is a great honor to be part of this
distinguished panel, and I'm grateful for the Subcommittee's
kind invitation to join you. My name is Linda Olson, and I'm a
proud Tampa Bay native and the CEO and founder of Tampa Bay
Wave, Florida's No. 1 accelerator that helps entrepreneurs
transform innovative ideas into real-world solutions and
scalable businesses through our world-class programs and
services. As a 501(c)(3) nonprofit, our mission is focused on
the expansion of Tampa Bay's innovation-driven economy
throughout an eight-county region by providing early stage
companies with the resources they need to build bold,
innovative, breakout tech companies.
I can state without any hesitation that funding provided by
the EDA's Office of Innovation under the Regional Innovation
Strategies program has been absolutely essential to the rise of
Tampa Bay's innovation economy and our reputation as a
burgeoning tech hub. I am--in my role as the founder of Tampa
Bay Wave, I've had a front row seat to this growth for more
than a decade. I originally launched Tampa Bay Wave as a meetup
group in 2008, being myself a tech founder struggling to build
my own company in a region with little to no tech ecosystem.
Given my previous experience working for a venture-backed dot-
com in Boston before and after the bubble burst, I saw
firsthand what a healthy tech ecosystem looked like, and I
wanted better for my own hometown.
Within just a few years, the entrepreneurs in Wave's meetup
group would decide to roll up their own sleeves to lead the
change we wanted to see. We could no longer sit idly by waiting
for a healthy ecosystem to magically emerge on its own, and we
were tired of hoping the region's political and economic
development leaders would start to prioritize innovation-based
ecosystem building in our region. Tampa Bay was our home where
we were raising our families while growing our businesses.
Plus, we wanted the economic benefits of a thriving innovation-
based ecosystem in our local community, benefits like new
business formation, high-wage job creation, capital and talent
attraction, not to mention the creation of pathways to economic
mobility and opportunity for those at risk in our communities.
In 2011, we brought together local early stage investors
and entrepreneurs, academia, and big corporate execs to build
an exciting vision for our region, but the primary hurdle was
how to fund such a vision in a region without the local
political will to invest in ecosystem building and local--and
without local, large companies capable of making sizable
sponsorships since Tampa Bay lacks any Fortune 100 companies.
Everything changed in the summer of 2012 when I led a
regional coalition that included the University of South
Florida and a network of universities, local businesses,
nonprofits, and public sector partners, which was awarded a $1
million i6 Challenge grant from the EDA to launch Wave's
venture center and accelerator. We were also awarded a second
i6 Challenge grant of $500,000 in 2014 and a $300,000 seed fund
support grant in 2018. Overall, Tampa Bay Wave has now raised a
total of $14 million from various Federal grants, corporate
sponsors, generous donors, all in support of our mission and
vision, including a new $2 million Build to Scale grant awarded
just in October 2022.
Ten years since that first grant after 28 accelerator
cohorts, I am proud to report Wave has now supported 450
startups that have raised over $650 million and created over
4,000 jobs, making Wave one of the critical economic drivers
for the region and the State of Florida. Without this first EDA
i6 Challenge grant, I can confidently say that the Tampa Bay
tech startup ecosystem would not be anywhere close to what it
is today. A mere total of $1,800,000 in EDA grants from 2012 to
2018 has led to hundreds of millions of dollars of impact in
the region in terms of new business formation and high wage job
creation, not to mention the creation of a new $25 million
early stage seed fund in Tampa Bay called Tampa Bay Ventures. I
hope you agree this is a pretty good return on investment for
taxpayer dollars.
As a mother to two future female entrepreneurs, Cadence and
Cassidy Creely, who are now 9 and 7 years old, respectively,
both my husband Curt Creely and I cannot stress enough how the
EDA grant programs give my family, as well as families
throughout the United States, hope for their children and for
the future of this country.
Again, I appreciate this invitation to appear before the
Subcommittee today and I look forward to your questions, which
I will try to answer. Thank you.
[The prepared statement of Ms. Olson follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chairwoman Stevens. Thank you to our witnesses. And at this
point, we are going to begin our first round of questions, and
the Chair is going to recognize her herself for 5 minutes.
The overwhelming majority of entrepreneurs, as Ms. Olson
just intimated, founding high-growth startups are oftentimes
White and male. And certainly, this leaves out essential
wealth-building and economic growth opportunities for Americans
in minority communities, including many communities here in
metro Detroit but obviously all across the region. And the lack
of founder diversity also limits the types of businesses
created and the types of challenges that the businesses are
addressing.
And so while some of the Build to Scale and Regional
Challenge awardees have focused on supporting entrepreneurs
from underrepresented groups, a significant gap still exists.
And, Ms. Donohue Krauss, I wanted to ask you, what are ways
that the Global Epicenter for Mobility Consortium is engaged
with historically left behind communities, and how did
relationships and your approach evolve through the planning
process of GEM?
Ms. Krauss. Thank you for that question. When we put this
proposal together, we ended up with 140 individuals and
organizations throughout the Detroit region who participated in
the process. And it was really terrific to hear all of the
voices. We were very inclusive. We said at every meeting we
had, who is not at this table, get them an invitation. And so
there were groups that might not traditionally be in the
conversation, but we were very intentional about keeping them a
part of it. Our GEM proposal does have a DEI (Diversity,
Equity, and Inclusion) officer who will assist entrepreneurs
and small- to medium-sized companies in making sure that they
are including those communities that haven't been--haven't had
access to support or haven't had voices before, so it was very
intentional. And we appreciate that the EDA made sure that was
a part of all proposals.
You know, in the Detroit region, we have a very diverse
population here, but we know that, especially in the
entrepreneurial, small- to medium-sized companies, they don't
always have access to the support they need. So this was very
intentional on your part, and in fact, very intentional on our
part to make sure that--and that goes for every--even in the
urban-rural sense, our region is diverse that way as well. And,
you know, we talk about the ag space, look forward to talking
to Professor Spalding about, you know, how can we look at
autonomous plows. Perhaps that might be the future for farming
and in the mobility space. So it has been really eye-opening
for some, but it was really a part of who we are already, and
we just have to make sure it's front and center.
Chairwoman Stevens. Assistant Secretary Castillo, having
previously led the Minority Business Development Agency, and
now the EDA, you know, I imagine you've put a lot of thought
into this topic. And how is EDA creating opportunities for
high-growth potential minority-owned businesses?
Ms. Castillo. So thank you for that question. Indeed, it is
a--it is a personal passion of mine but a true commitment for
EDA, as Ms. Krauss said. We not only took a look at our
investment strategies, making equity one of the top investment
strategies, but we also baked it into the notice of funding
opportunities, making sure that applicants understood from the
very beginning that we were looking at a broad table, and
equity meant many things across the country. It was not just
responding to underserved communities, communities of color,
but also rural communities, looking at a very broad approach of
how we needed to make sure that when we put these grants
together, we were actually addressing those areas of our
country that either have been forgotten or left behind. And I
will tell you, in my travels, particularly under these two--the
ARPA grants, the Build Back Better Regional Challenge and the
Good Jobs Challenge, it is so satisfying to hear individuals
say thank you for keeping us in mind, thank you for giving us
this opportunity. And it's been not only important in terms of
who has been awarded but also, as was mentioned before, the
broad scope of the coalitions that came together. And we are
monitoring those engagements, as I mentioned in my testimony,
on the governance side, just to make sure that those
partnerships continue to be strong and that all communities are
represented in these deep--in these different initiatives.
Chairwoman Stevens. It's so incredibly important and so
also deeply touching. And obviously, I'm out of time, but I
think Ms. Olson's concluding testimony sticks with me, you
know, the on-the-ground work here in metro Detroit and
certainly from your national perch, Ms. Castillo.
So with that, I'll turn it over to Mr. Feenstra for 5
minutes of questioning.
Mr. Feenstra. Well, I just want to thank each and every
witness for your testimony. It is quite amazing and very
impressive. So I've got several questions. Dean Spalding, Iowa
State University has received multiple awards for EDA Build to
Scale programs to support Iowa's innovation ecosystem. In
addition to these Federal awards, Iowa State has also received
financial support from State and local communities. Can you
explain the importance of State and local buy-in to create and
maintain self-sustaining innovation ecosystems?
Mr. Spalding. Thank you, Congressman Feenstra. I think that
State and local support is critical to ensuring that you are
bringing the control over efforts like this down to the to the
ground level and ensuring that you are funding the programs
that are successful within a State, within a region, within an
area, that you have that community buy-in that the community is
going to get engaged and get behind your programs because a lot
of these programs require grassroot efforts. You know, we're--
when I talked about companies that we have involved in our
programs that are scaling technology, those often start as a
smaller business that might be working with our small business
development centers or working one of our student programs. And
so having had that community and local support for those
programs to feed them into these programs that can be supported
by the larger dollars that come from an EDA grant I think is
critically important.
Mr. Feenstra. Yes, and I agree with that. Thanks for those
comments. I mean, being a past city administrator, I see how
local support is so important to make sure things thrive and,
you know, be successful.
With that, your role in higher education, I just want to
know, how is it so important when you think of higher education
and promoting entrepreneurship and innovation programs? I came
out of a university, Dordt University, that does some of this.
Also, I know Iowa State University is ranked 11th in the Nation
for entrepreneurial studies, which I'm so excited about. But
what do you think the benefits are from the academic world to
be so involved in entrepreneurial studies?
Mr. Spalding. Well, you know, when you think about it, I
think it's still the case that studies would show that small
businesses are the job creation engines for our country. Having
a stronger climate, stronger support for small businesses
really helps create good jobs all across our country, whether
it be in rural areas, whether it be in inner city areas, which
we have close to Ames and Des Moines that those small
businesses are really critical to that. And so we in higher
education, I think, have a role to play in preparing our
students to be a part of that ecosystem. You know, we have 140
students in our entrepreneurship major this year. Not all of
them are going to go off to start a company themselves, but
they are perfectly prepared to be employee number 8, or
employee number 20, or employee number 50 in a smaller venture
that's looking to get going and continue to grow and continue
to create jobs. And so I think that's where we have an
important role to play. And it's very much core, again, to what
we do here at Iowa State.
Mr. Feenstra. Yes, yes, well, thank you for those comments.
I really appreciate those.
Assistant Secretary Castillo, the recently reestablished
National Advisory Council on Innovation and Entrepreneurship,
NACIE, EDA is considering the development of a national
entrepreneurship strategy. The strategy would strengthen the
United States' ability to compete globally as the world's
leading startup Nation and leader in critical emerging
technologies. Can you update me on the progress of this
development and what are the next steps?
Ms. Castillo. Yes, Congressman. And if I may just take a
minute to also underscore a couple of things to your previous
questions to Dean Spalding. The interaction of so many
different stakeholders is essential to the work that EDA does,
and we rely on stakeholders like our university centers, of
which Dean Spalding is part of it. We also rely on over 390
economic development districts, which are multijurisdictional
entities that all come into play to make sure that economic
development strategies is coming from the ground up. So I
wanted to underscore those stakeholders because universities,
community colleges, mayors, so many different individuals have
to be part of a broader economic development ecosystem.
To your question about NACIE, Congressman, we're very
excited. As you well noted, it has been reestablished. We
announced the Members of that committee, advisory committee.
The focus really is on a couple of really high level areas,
one, as you well pointed out, the entrepreneurship strategy.
We're also leveraging the expertise and background of NACIE to
help us as we think about possibilities of tech hubs. What
would that look like? What elements need to come into play? But
we're also challenging NACIE to think about moonshots. What are
those areas of the economy that need to really be bolstered by
an array of not only investments but expertise, capacity
building.
And I'll just give you an example. The President's Office
of Science and Technology just put out a report on the
bioeconomy. These are the type of issues that NACIE is
tackling. And I will also tell you, when we talk about
entrepreneurship, we're talking about a broad spectrum of
issues or barriers, but also opportunities. And with regards to
some of those barriers in entrepreneurship, whether it's access
to capital, access to technical assistance and support. So
NACIE is very busy. We have a wonderful cadre of individuals,
and we're looking forward to their report to the Secretary
toward the end of 2024.
Mr. Feenstra. Thank you so much for those comments. And my
time is up. I greatly appreciate it. I yield back.
Chairwoman Stevens. Thanks. And with that, we're going to
hear from Ms. Wild of Pennsylvania for 5 minutes of
questioning.
Ms. Wild. Thank you, Madam Chair.
And this is really a pleasure to have this hearing. I was
the author of the Regional Innovation Act, which I was proud to
see signed into law on a bipartisan basis as part of the final
CHIPS package. And it was driven by my focus on creating
opportunities for a wide array of community stakeholders,
including not only universities, of which we have many in my
district, but also economic development organizations,
workforce boards, and unions. And I know that these groups each
play an essential role in my own district, and I'm confident
that their ability to collaborate and develop a sustainable
strategy for regional innovation in the greater Lehigh Valley
area will lead to continued success in this field and in my
district.
Ms. Donohue Krauss, what are some of the benefits and
challenges involved in building these types of broad
coalitions? We are still very much in that process in my
district, and I'd love to know what lessons can be learned from
your experience with the Build Back Better Regional Challenge.
Ms. Krauss. Thank you. You know, that is something with our
proposal, our successful proposal that I am as proud of as
getting the acceptance and approval from the EDA. Two things,
inclusiveness and transparency were the two keys to doing this,
but of course, it's much more than that. It was really digging
deep and working together. I will say 5 years ago the EDA would
have received five different proposals from our region, and
none of them would have talked to each other. It was a much
more competitive time. And this time, we all decided--and
really, this is our overarching economic development, as well
as for this proposal. We have decided--my organization is only
3 years old. We decided--and it was driven by our business
leadership and our political leadership--that we're much more
impactful when we combine our assets than when we show them
separately.
And so when--I just returned from a trade mission with the
city of Detroit and Ann Arbor, both parts of our region, and
one of our local banks. So it was a process, but I think we've
seen the benefits through a regional economic development
organization that, you know, combining resources, combining
assets, everyone gets to say, you know, that we have a world-
class airport, and everyone gets to say we have world-class
universities in our region because boundaries between
communities aren't really important for businesses that look
for regional talent, regional supply chain, and, you know, an
overall regional economy. So that's the theme we've used, and
it's working well for us. And it's--as someone who's done this
a long time here, it's really nice to see.
Ms. Wild. Excuse me. Let me just say, I agree with
everything you just said. We've successfully done that in my
district. My one concern--and I don't--I'm not asking you to
comment on this because I want to get to another area--but is
just making sure that we don't leave out certain sectors,
whether it be minority communities or other types of
communities that just somehow don't make it into that
networking that exists. That's where I think we all probably
need to really focus to make sure.
Assistant Secretary Castillo, in the near future, I hope to
see Congress fully fund the creation of the regional innovation
hubs in communities like mine across the country. Based on your
experience, what qualities make a community well-suited to
successfully develop emerging technologies and promote
innovation on a regional scale?
Ms. Castillo. Congresswoman Wild, I'm going to piggyback a
bit on what Maureen Krauss just said, a couple of things just
to put it into perspective. One is the ability to come into
partnership and coalitions and to do an assessment of their
assets to look at where--what are the technologies or the
spaces in which that particular community has some some
positive gains in it.
I also want to mention that what made particularly the
Build Back Better Regional Challenge as a good example of how
to even think about the tech hubs was the fact that we, too,
included equity into the notice of funding opportunity, but we
also provided transparency. We provided the general public all
of the information of the applicants. And that in itself
stirred--created an opportunity for people to talk to one
another, to speak to one another, to share lessons learned.
We have instituted a couple of things that I think is going
to be very important as we think about tech hubs. One is
communities of practice, communities of practice so that there
is shared opportunities to learn from one another, but
communities of practice to also look at how to best leverage
assets and resources across region.
The other thing I think is going to be very important in
terms of tech hubs in the event that Congress does appropriate
the funds is to make sure that we do proper listening tours,
but also that we keep ourselves very open to to work across the
Federal Government and leverage all of the different resources.
Ms. Wild. Thank you so much. I do see that my time is up,
which is always frustrating in these hearings. This one is so
important. I would very much like to work with all of you in
the future on making sure that these tech hubs become a
reality. And I--my office will be reaching out. Thank you so
very much.
Ms. Castillo. Thank you, Congresswoman.
Ms. Wild. Madam Chair, I yield back.
Chairwoman Stevens. And with that, we're going to hear from
Ranking Member Lucas for 5 minutes of questioning.
Mr. Lucas. Thank you, Madam Chair.
Assistant Secretary Castillo, in September of this year,
EDA awarded the Tulsa Regional Advanced Mobility Corridor
approximately $39 million. The project, led by the Indian
Nations Council of Governments and Oklahoma State University
will strengthen Oklahoma's national leadership as a hub of
transformational air mobility research and development.
Investing in this critical industry and local and State
economies will increase Oklahoma--or--and I should actually say
Oklahoma and America's technological competitiveness around the
world.
So, Assistant Secretary, how does EDA plan to ensure that
more rural and tribal communities like those in my district
that received this award have the same opportunities as larger
communities at developing innovative economies?
Ms. Castillo. Sure. And thank you, Congressman, for the
question. And congratulations. As you know, it was a very
competitive process. But here's what we have not only
identified but also tried to work to address. We are very
cognizant that we want to make sure that communities on the
ground have the capacity and technical assistance to go after
these grants. So in order to address some of the capacity
questions on the ground, we have initiated both an equity
impact investment program as well as an economic development
core program. These two programs--and I'm happy to provide your
team with more information--are--were designed to address some
of the concerns that we saw on the ground of making sure that
all communities had the wherewithal, the capacity to go after
EDA grants.
Secondly , as I mentioned before, we work very closely with
our economic development districts across the country, of which
there are 390. We work closely through our regional offices,
and our outreach is but one part of the work that we do to make
sure that all communities are well-positioned to apply for EDA
grants. We provide the technical assistance, the webinars. And,
as I've mentioned before, I am on the road, Congressman,
because it is the only way that we can bridge any gaps that may
exist between the EDA opportunities and communities on the
ground. So I'll work with you and your team to continue to
engage communities in Oklahoma, but more importantly, our
commitment to indigenous communities still stands very, very
strongly, as has been witnessed by the many grants that were
issued to indigenous communities across the country.
Mr. Lucas. Continuing with this line of thought, Assistant
Secretary, in your testimony you state that EDA is prepared to
move forward in executing the vision of the authorizations
should the funding be made available, always a key phrase, for
the Regional Technology and Innovation Hub program. Can you
share more about how EDA is planning to administer and oversee
the program, given the large authorizations included in CHIPS
and Science for the Regional Hub program?
Ms. Castillo. Sure, and thank you, Congressman. The tech
hub authorization is not only exciting but so necessary. And
you're absolutely right. If given the opportunity to have it
appropriated, EDA stands ready. And here's how we're thinking
through this process. Our Office of Innovation and
Entrepreneurship really has a very deep expertise in that area,
not only administering the Build to Scale, but it was
instrumental in the way we not only designed but also executed
our Build Back Better Regional Challenge. So we do have the
expertise in-house and the ability to scale depending on the
authorized levels, appropriated levels, I should say.
A couple of things that I've mentioned before, we're
leveraging the National Advisory Council on Innovation and
Entrepreneurship to help us bring together not only the
information but the elements that would make for a good tech
hub, so we're leveraging that level of expertise. We're also
leveraging the expertise across the Department of Commerce and
the Federal--other Federal agencies as well. So in addition to
not only doing our work and our due diligence, we have the
experience and operation structures to execute on tech hubs
within that time--within the timeframe that it was allotted.
So I will tell you, we're excited about it. The country
needs it. Areas across the country, I usually say tech hub is
going to democratize technology and innovation and bring it to
communities that have all the right assets to transform their
local economies.
Mr. Lucas. And it's important that we work together since
the money, substantial authorizations as they are in the CHIPS
and Science program are not mandatory money, they're
authorized, so we have to make the case to persuade the
budgeteers and the appropriators to fund it. The Administration
has to use it wisely. And then together, we can justify
continuing to advance that good work, so it's a team sport.
Thank you, Assistant Secretary.
Ms. Castillo. Absolutely. Thank you. Thank you, sir.
Chairwoman Stevens. And with that, we'll hear from Mr. Lamb
for 5 minutes of questioning.
Mr. Lamb. Thank you, Madam Chair. And thank you to all of
our guests for being with us here today.
Secretary Castillo, I want to first say thank you for all
of your work, particularly as it related to the Build Back
Better Regional Challenges. My region of western Pennsylvania
was lucky enough to win one of those awards, and we really have
high hopes about the impact that it's going to make,
particularly on jobs. You know, I think the reason so many of
us supported these programs was to create jobs for people in
our regions that need them, better jobs than what they have
access to now.
But we had an interesting thing happen, which was that the
week in October that we got together with two Members of
Congress, an official from the EDA, and a whole host of local
people who had supported our grant application, university
folks, business folks, people from our Allegheny conference on
economic development that really led the way, we got together
in Westmoreland County, which is a more rural county outside of
where Pittsburgh is at their community college. But it's also
the home to a major investment that an autonomous vehicle
company made in establishing a test track, so they had a ton of
jobs. It was like a case of what we want to do, which is create
jobs in areas that haven't had as many of them in this new
economy. So we got together there, and then we had this
wonderful event to talk about everything we were going to do
with the award.
And then literally the very next week, that company went
out of business. And now no one knows what's going to happen to
all of those workers that they already had. It's not entirely
clear how this award is going to employ people in that sector
in the future. Our hope is obviously that it still will, but it
was just kind of gut-wrenching to see such a major potential
source of jobs for people be taken away so quickly at the very
time that we're investing money to try to train people in
robotics and self-driving and everything that goes into it.
So the first thing I just wanted to ask is whether, you
know, you have seen examples like this, and maybe not
identical, but that show that we need to find some way for
these big companies--and the investors in the company that I'm
talking about are two of the largest auto companies that there
are--to get them to put more skin in the game. I mean, they
didn't really have any skin in the game. We did this award with
Federal tax dollars, and, you know, it didn't cost them
anything to walk away just a week after we basically announced
it. So have you all thought about that problem of making sure
that, as we're creating jobs and doing job training for people,
that the actual beneficiaries of all that work, these large
for-profit companies actually have some skin in the game to
stay involved?
Ms. Castillo. Thank you, Congressman. And it is an
unfortunate situation. We have seen some of--situations like
that. A couple of things that I would say. One is here is where
we also want to work on the entrepreneurial side because you're
absolutely right. There are these large companies that are
anchor companies who are providing the businesses. But we also
understand that by creating new, smaller--small businesses and
connecting them to other sources of--melding them into the
supply--the broader supply chain is also a way to grow the
economy on that front.
As it relates to--and just to use your terminology--having
skin in the game, we like to have stakeholders have skin in the
game. There's a part of EDA, as you may know, that many of our
grants require a match, and that is a way to have community and
other stakeholders have ownership in this process. So I would
very much welcome, Congressman, to work with you and others in
your district to find solutions to the situation. I will tell
you that the proposal that was put together was a strong
proposal, and I--and we believe that there's a lot of future
for that. So I welcome the opportunity to work with you more
closely and also to address these matters.
Last thing I will say, sir, if I may, is a lot of this
information is critically important to us, but we're also
building more data analysis to be able to foretell, if
possible, wherever possible, but to have some predictive
analytics as well to address these issues before they happen.
So please take my words as an invitation to work closely with
your office on this particular matter.
Mr. Lamb. Thank you. Yes, and I know nobody expects you
guys to be able to predict the future. I mean, the tech sector
is very volatile right now. I just hope that if you see things
like this going on in other parts of the country and it becomes
an obstacle, please report that, you know, to the Congress. I'm
on my way out, but I know my colleagues care about this as well
because we may have to revisit, you know, some of the ways that
these awards get handed out if their intended beneficiaries are
larger companies like this who are so free to walk away. I
agree with you that there are a lot of smaller entities we want
to help, and they often tend to be more locally rooted. But
when our goal is to create jobs, it also makes sense to focus
on the larger players as well. So thank you very much for the
excellent work you're doing. I know we're going to make
something out of it in western Pennsylvania.
Madam Chair, I yield back.
Chairwoman Stevens. Great, thank you, very productive.
And with that, we're going to hear from Mr. Baird for 5
minutes of questioning. Jim, let's get you off mute.
Mr. Baird. Does that work better?
Chairwoman Stevens. We can hear you.
Mr. Baird. Hey, thanks.
Chairwoman Stevens. Good to see you, Dr. Baird.
Mr. Baird. Good to see you. Thank you, Chairwoman Stevens
and Ranking Member Feenstra, for holding this interview
session. And I really appreciate all of the witnesses being
here. But, you know, with Purdue University in my district,
I've had the opportunity to see firsthand the regional
innovation efforts that really benefit Hoosier State, as well
as directly affect the rest of the country. And so I often get
the opportunity to meet with startup companies wishing to
potentially set up learning centers and other entities
associated with Purdue. And when I think about building
regional innovation economies, these types of startup companies
and partnerships are directly what comes to mind.
So, Assistant Secretary Castillo, in forming these
partnerships, what role should the Federal Government play? And
in that same vein, the State of Indiana is fortunate to have an
active Economic Development Agency. So what would a healthy
productive relationship look like between the Federal
Government and the State? So would you care to elaborate on how
you see that?
Ms. Castillo. Absolutely, sir, and thank you for the
question. You know, we've talked about ecosystems throughout
this entire hearing, and part of a very healthy ecosystem is
one, not only the relationship on the ground, but as you point
out, EDA's relationship with many stakeholders at the State and
local level. I think we've been--we've shown what that looks
like. And I'll give you a couple of examples of what that looks
like. One, you know, leveraging EDA's opportunities to provide
planning grants. One of the most important tools within the
economic development space for EDA is the CEDS, the
Comprehensive Economic Development Strategies. So making sure
that at the State and local level we're developing CEDS that
are comprehensive, that have equity at the forefront, that are
also looking at opportunities to provide capital, but also tech
commercialization, as well as STEM (science, technology,
engineering, and mathematics) employment. So these are all some
of the ingredients that are essential to it.
On the--on another level, I will tell you working with the
universities, and Purdue is a prime example, but also working
with our community colleges. And to the previous questions,
also very--working with employers, one of our most successful
grants under the ARPA, the American Rescue Plan, was the Good
Jobs Challenge and, again, looking at making sure that not only
are we developing a robust ecosystem that is supporting
technology innovation, but at the same time developing a
workforce that's upskilled and reskilled to meet these--those
opportunities.
So, sir, I'm sure I can go on on many elements, but I also
extend my--EDA's invitation to work very closely with you and
your team.
Mr. Baird. Well, thank you very much. And, you know, I
really appreciated you mentioning STEM because I think that's
all integrated, you know, the STEM--but then the fact that
those people have the opportunity, they get their hands on, and
that stimulates them to get into the STEM program probably. And
so thank you for that comment and your focus there.
Mr. Spalding, do you care--government should play in
forming----
Mr. Spalding. Sorry, Congressman, you broke up, and I was
not able to get your question.
Mr. Baird. Do you want me to do that again?
Mr. Spalding. Please.
Mr. Baird. Here you go. I just wanted you to comment on
this, the role the Federal Government should play in forming
these partnerships and just get your perspective on that issue.
Mr. Spalding. You know, I think, Congressman, the EDA
funding for us has been particularly helpful for us in starting
up new programs, new initiatives where we're looking for seed
funding. We may have local partners. We're always putting up
match as part of those programs, but that seed funding is
particularly important to us when the EDA gets involved. And we
have a great, close working relationship with our EDA
representative who covers the State of Iowa. He does an
outstanding job, and that really helps us with being able to
talk about these seed opportunities.
Mr. Baird. Well, thank you very much. I see my time is
almost up, and so I yield back.
Chairwoman Stevens. Excellent, excellent. No, that's great.
Thank you.
And with that, we're going to hear from Mr. LaTurner for 5
minutes of questioning.
Mr. LaTurner. Thank you, Madam Chairwoman.
My first questions are for Dean David Spalding. How are you
doing today?
Mr. Spalding. I'm doing just fine. Thank you.
Mr. LaTurner. Good. I represent eastern and southeastern
Kansas, and many of my constituents are farmers. Connecting the
technical support for these programs to the real-world effects
is important for garnering continued support. Can you discuss
some examples that you're personally aware of that showcase how
EDA investment helps support startup companies that benefit the
agricultural sector?
Mr. Spalding. Yes, so the first of the grants that we
received we actually used in our Startup Factory Accelerator to
focus on advancements in the food area writ large. And so that
includes both growing food successfully, food products, food
safety, food innovation. And so it was great to have the EDA
support that effort, specifically focused on the work that we
do here around agricultural startups.
Mr. LaTurner. I appreciate that. From your perspective,
what is the biggest challenge for rural communities and--when
it comes to participating in regional innovation, and what's
the solution to that?
Mr. Spalding. I wish I had the solution. You know, Kansas,
Iowa, we're facing much the same challenge with a hollowing out
of our rural communities. And there are a number of reasons for
that. We need to create more reasonable-cost housing. We need
to create more jobs, broad-based jobs in those communities. We
need to have stronger childcare arrangements in those
communities. But when I look at it, you know, I mentioned the
Rural Business Innovators program that we have, and this is a
program where we're reaching out across the State. We don't
extend into the urban areas. We're extending only into the
rural areas and bringing scalable businesses in those
communities and giving them the opportunity to participate in
our Startup Factory program. The program has been so valuable
that we've had people drive 45 minutes in order to get to a
good internet connection to participate in the program. And
there's another one of those fundamental issues in rural
communities, right, that lack of broadband access. But our
programs have been so valuable that these people were willing
to drive regularly to get to a place where they had a good
internet connection and spend 3 hours connected into the
sessions we run as part of that Startup Factory program. And so
we're really, with that program, looking to build more scalable
businesses in those communities, create more jobs in those
communities, and really help our small rural ag communities
thrive.
Mr. LaTurner. Talk to me about how Congress can continue to
support the development of new regional innovation economies in
your opinion.
Mr. Spalding. Well, I think some of this comes with the
base investment that I've talked about, whether that be rural
broadband, which remains a challenge in our communities. But
then we've pulled together here at Iowa State in the last year
a group we call our Rural Vitality Council where we're pulling
together faculty and our extension folks from across the
university who are working in programs to help strengthen rural
communities. It's giving us a chance to share best practices,
share ideas, and we are talking about some opportunities to
apply for Federal grant funding to help support the best
performing of the programs that we've identified, which often
are based on faculty research that's being done into what works
best in those communities.
Mr. LaTurner. I appreciate it very much.
Ms. Castillo, how are you today?
Ms. Castillo. Doing great, Congressman.
Mr. LaTurner. Good. In your testimony you discussed the
coordination that the Economic Development Administration does
with other agencies and leaders to facilitate policy
recommendations that grow innovation economies. Can you
elaborate on that coordination process?
Ms. Castillo. Yes. And thank you for that question. The
economic development integrators are our way to really blend in
and braid so many of the different policy and initiatives
across the Federal Government.
I want to underscore something that Dean Spalding just
mentioned as well as we were talking about some of the
challenges in rural America. I--as you may know, Congressman,
EDA is part of a broader Commerce Department family. And one of
the areas that we are working closely with is the National
Telecommunication and Information Agency (NTIA), $48 billion
that's being invested in terms of broadband because we
understand that we need to continue to work with our our sister
agencies across the Federal Government so that--the opportunity
to work with NTIA but also the opportunity to work with
Department of Energy, Department of Transportation, other
Federal agencies across the government to make sure that as we
think about these investments that we're keeping an eye both on
economic development, but also how to--how do we spur
technology innovation.
If I may, sir, one last thing I will tell you, one of the
Build Back Better Regional Challenges was in your State, but
we--because we're putting in place communities of practice, we
are able then to also leverage what's happening in Central
Valley in California, which is a Build Back Better Regional
Challenge on tech--agri-tech. So these are the type of
opportunities to learn from one another, to be able to bring it
to places as in your district, and make sure that we are
continuing to invest in technologies in all industries and all
in all sectors.
Mr. LaTurner. I want to thank you and all the witnesses and
our very able Chairwoman. Thank you very much. I yield back.
Chairwoman Stevens. Well, great, thank you so much.
And with that, we are at that time of bringing this
incredible hearing to a close. And I just want to thank our
witnesses so much for joining us and certainly thank my
incredible partner and our Ranking Member, Randy Feenstra, for
his close collaboration not only on this hearing but all the
work that we have done throughout the 117th Congress.
Certainly, a lot of great engagement today and interest in
deepening the success, doubling down on the success, and
connecting the dots. And I certainly want to take a minute to
thank, as this is our concluding Subcommittee hearing for the
term, our just very dedicated Research and Technology
Subcommittee staff who have worked long and hard throughout
this term sort of nonstop and orchestrating just an impressive
slate of hearings.
And given how things run at the end of the year, I know
that many of our Members will be delighted to be reminded that
the record is going to remain open for 2 weeks for additional
statements from Members and for additional questions that the
Committee may ask of the witnesses.
And, again, thank you to our witnesses for informing today,
and we look forward to further conversation and efforts to
advance the goal of regional innovation inclusivity strategies,
growing economies of scale, winning in places like the
heartland, to the South, to rural America, to the industrious
Midwest, and on.
And with that, the witnesses are going to be excused at
this point, and the hearing is now adjourned.
[Whereupon, at 11:21 a.m., the Subcommittee was adjourned.]
Appendix
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Answers to Post-Hearing Questions
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