These were not symbolic projects. They were competitively selected, congressionally authorized under the CHIPS and Science Act, and structured to anchor America’s leadership in critical sectors like semiconductors, aerospace, biotechnology and clean energy. Each hub has a regional strategy, a coalition of partners and a plan to leverage public investment into long-term economic transformation. Now they are being told to reapply under a different set of rules, for a smaller pool of funds and with entirely different evaluation criteria.
From 2020 to 2024, the United States began building the outlines of a serious national industrial strategy. The CHIPS and Science Act, the Inflation Reduction Act and the Bipartisan Infrastructure Law were not just funding vehicles. They marked a broader shift: a recognition that free markets alone could not deliver resilient supply chains, regional equity or technological leadership in an era of global competition. What emerged was a place-based model grounded in public investment, regional coordination and strategic sector focus.
The Tech Hubs Program, administered by the Economic Development Administration, exemplified that approach. It asked communities and regions not just to apply for funding but to imagine themselves as global innovation centers. The response was overwhelming — and generative. Regions like Spokane and Birmingham assembled coalitions of universities, small businesses, workforce boards, tribal governments and anchor institutions to design 10-year strategies grounded in production, not just research.
The federal pullback raises the stakes for states and regions, which must now decide whether these coalitions will dissolve or evolve into lasting civic infrastructure. This moment — where implementation-ready projects are being clawed back midstream — raises a broader question: What happens to regional industrial planning when federal alignment disappears? The answer will depend on how local and state actors respond, and whether they treat these coalitions as temporary grant-seeking teams or as permanent civic infrastructure.
That momentum is now under threat. What is being framed as a procedural reset is, in fact, a reversal in values and direction. New funding rules explicitly exclude priorities like equity, labor partnerships or climate resilience. The Good Jobs Principles are gone. References to inclusive workforce pipelines have been removed. Even implementation grants already awarded and publicly announced in January are being recompeted without guarantee of reapproval. Birmingham’s biotech hub — built on collaboration among health systems, historically Black colleges and universities, and emerging biomanufacturing firms — has seen its project placed in limbo just as hiring and infrastructure work was ramping up.
These are not minor adjustments. They are structural setbacks, undermining the very concept of regional economic governance that these programs were designed to support.
The pullback comes at a moment of deep uncertainty in global trade. A patchwork of tariffs, retaliatory measures and shifting import restrictions has re-entered the policy landscape, leaving manufacturers, exporters and local planners with few reliable signals. But tariffs alone cannot secure a national industrial base. They must be paired with deliberate investments, workforce strategies and innovation infrastructure. Without that, we do not have industrial policy — we have industrial improvisation.
Which is why this moment demands leadership, and not just from Washington. Local and regional actors must continue the work they have begun. The coalitions formed through tech hubs and other place-based initiatives were never just vehicles for federal dollars. They are governance structures. They have brought together economic development leaders, university research centers, small and medium-sized businesses that support supply chains, and state agencies around shared long-term plans. That alignment must not unravel because a federal funding stream has been delayed or redirected. It must be deepened and expanded.
Regions should continue convening across sectors, sharing playbooks and aligning supply chain strategies. States must step in where needed with bridge financing and policy consistency. And Congress must act to ensure that competitive, awarded funds cannot be unilaterally withdrawn. Guardrails matter. So does institutional trust.
What is at stake is not just a few regional grants. It is the question of whether the United States can build again — intentionally, inclusively and with strategic clarity. The industrial strategy of the past four years gave us a glimpse of what is possible: onshored semiconductor fabs, biomanufacturing capacity in the South, clean-energy clusters in former coal regions. It showed that growth does not have to be coastal, extractive or zero-sum. And it reminded us that planning — real planning — is a form of power.
If we walk away now, we don’t just abandon funding. We abandon the institutional muscle it took to build these coalitions. We send a signal that industrial policy is conditional and that national strategy ends where partisan cycles begin. But if we stay the course — if we protect the vision and continue the work — the results will endure.
Matt Watkins leads Watkins Public Affairs, a consulting firm that specializes in federal grant funding, program design and evaluation.
Governing’s opinion columns reflect the views of their authors and not necessarily those of Governing’s editors or management.
Related Articles
