US Government Invests IDR 7.5 Trillion To Encourage Technology Innovation In Central America This Year

JAKARTA - The United States government is trying to turn the metropolitan area in the central part of America into the next center of technological innovation with an initial investment of US$500 million (Rp7.5 trillion).

The United States Department of Commerce announced on Friday its first funding opportunity notification, known as the NOFO (Notice of Funding Opportunity), for the Regional Technology and Innovation Hub program, also known as the Tech Hubs.

It begins the process for eligible groups across the country to apply for Tech Hubs. The design provides them with the opportunity to leverage these funds to make their territory an attractive place for entrepreneurs and technologists to live and work.

"America is leading the world in technological innovation. But the sad reality is that our technology ecosystem is very concentrated," Trade Minister Gina Raimondo told reporters in a press briefing on Thursday. He noted that 80% of US venture capital funds were invested in the Gulf of San Francisco, Northeast, and Southern California or Silicon Valey.

"There is still great potential for technological innovation across the country. In the United States, we have the best research institutes in the world. That is undeniable. And frankly, many of them are at the heart of America, far from the coast," Raimondo said.

Congress authorized a budget of 10 billion US dollars (Rp150 trillion) for this program between fiscal year 2023 and 2027, with 500 million US dollars available for distribution this year. On current funding opportunities, a total of 15 million US dollars (Rp225 billion) in planning grants will be available to registrants appointed as Tech Hubs.

Later, the Department will try to provide five to ten Tech Hubs design grants of up to USD 50 million to USD 75 million each to help build capacity in their territory, according to Commerce Department officials.

US President Joe Biden requested that $4 billion be available to Tech Hubs in next year's budget.

Applicants who meet the requirements are groups consisting of at least one entity of each following category: higher education institutions, subdivisions of local governments or states, industries or companies in the field of technology or related manufacturing, economic development groups, and labor organizations or labor training groups.

According to the law, Tech Hubs should focus on a number of key areas of technology, including artificial intelligence, robotics, prevention of natural disasters, biotechnology, cybersecurity, energy efficiency, and others. The department should appoint at least 20 Tech Hubs in accordance with applicable laws.

The hope is that the injection of these funds will help regions across the country become an important center of innovation and create more high-paid jobs in various regions of the United States.

"President Biden's mission is very clear, that is, everyone in America has the right to have a fair economic opportunity, no matter where they live, and they don't have to move just to get a good job," Raimondo said. "No one should have to leave their family, support system, or network to move to New York or San Francisco just to get a good job."

Raimondo also called this program an important investment in the national security of the United States. He pointed out current efforts by the country through the Chips and Science Act to invest in domestic semiconductor manufacturing, which is a pressing bipartisan priority when the pandemic highlights how fragile the supply chain of computer chips is.

This is because most of the advanced chips are not produced in the United States, and the industry's dependence on chips produced in Taiwan makes the supply chain very vulnerable, especially given tensions with China.

Raimondo said that the United States "submits our leadership in manufacturing and innovation for this important technology. And now we are in a difficult position to catch up."

"The Tech Hubs program is about making sure it doesn't happen again, ensuring we stay ahead in other important technologies, from quantum to artificial intelligence to biotechnology," he said.

With this effort, the United States government hopes to strengthen the ecosystem of technological innovation in various regions of the country, promote inclusive economic growth, and increase the competitiveness of the United States at the global level.