Place-Based Innovation and Its National Security Implications

Strategic competition is at an inflection point. Policymakers around the world see robust industrial innovation policy as central to economic and national security. In the United States, both the Donald Trump and Joe Biden administrations have focused on re-shoring manufacturing, bolstering domestic supply chains, and rebuilding civil infrastructure. In recent years, Congress has furthered those aims, enacting legislation designating roughly $80 billion to focus on “place-based industrial policy”—which pools resources to drive capacity in local ecosystems. This historic level of recent government investment could significantly impact underinvested, underdeveloped regions of the country. However, changing political dynamics in Washington could put this funding at risk. As the federal government manages those investments, policymakers need to understand why and how this funding helps the United States stay ahead in the world and the direct national security implications of disinvestment.

Technology-based economic development (TBED) through place-based innovation has historically been used by municipalities, private-sector actors, and community leaders to promote economic development and introduce new industries to regions and cities around the world. Perhaps the earliest and most prominent example of modern innovation hubs is in Silicon Valley, California, which took hold in the early 1960s. Outside of the United States, one of the earliest examples of successful place-based innovation came with the rise of the 22@ Barcelona innovation district in Spain, which began soon after the 1992 Olympics.

A forthcoming review of the relevant publicly available literature by Georgetown University’s Center for Security and Emerging Technology (CSET), along with case studies of Pittsburgh, Pennsylvania; Cambridge, Massachusetts; Boston Seaport in Massachusetts; Tel Aviv, Israel; and Research Triangle Park in North Carolina, uncovered what success looks like for historical place-based innovation efforts and how to measure that success properly. Particularly notable: access to local talent and the ability to grow that talent are crucial to success. (A caveat: although some innovation hubs have emphasized restoring economies in left-behind communities, there is no successful formula for creating resilience for them through place-based innovation.)

There is, however, an intersection between place-based industrial policies focused on local economies and the inflection point in strategic competition that the United States now faces globally. In the emerging great power competition with China and Russia, the United States will need to continually increase the quality of its talent in science, technology, engineering, and mathematics (STEM). New data assembled by CSET shows that the United States is third among STEM-producing countries, behind China and India, with Russia just behind the United States, in fourth place. Accordingly, along with maintaining high quality, the United States will need to grow its quantity of STEM talent significantly during this next decisive decade of great power competition.

To meet this demand for talent, U.S. policymakers could add millions of additional founders, creators, and owners of technology to the innovation economy and defense industrial base by incorporating talent from populations typically underrepresented in STEM fields. However, some members of this underrepresented talent base live in communities that suffer from a lack of access to emerging technologies, ultimately impeding the development of this critical talent. Some of those same communities have been designated as prime targets for place-based innovation efforts. Expanding the talent base and growing community resilience are both key national security goals that place-based innovation can contribute to significantly.

In the context of great power competition, vulnerable communities are those American communities that have the least influence over the development of emerging technologies but are most likely to experience the disruptive impacts of those technologies at scale. Community resilience, then, is a measure of the degree to which communities are producers of technology and possess the ability to apply those technologies to recover from threats. Leveraging place-based innovation policy could transform vulnerable, left-behind communities across the nation into resilient centers of innovation well into the future.

In today’s global strategic competition, capable near-peer adversaries actively seek to exploit susceptibilities linked to vulnerable communities. For instance, in 2019 the bipartisan Senate Intelligence Committee, led by then-Senator Marco Rubio (R-FL), concluded that in the 2016 U.S. presidential election Russian cyber operations specifically targeted African Americans. The Congressional Black Caucus characterized those attacks as an “orchestrated effort” to drive down voter turnout. Unlike in past global strategic struggles where the oceans provided the United States with natural protection from its fiercest geopolitical foes, in this current competition vulnerable communities constitute nodes with new borders in cyberspace that necessitate protection.

Without resilient communities, the United States will be ill equipped to safeguard against great power competitors in the future. Given the connections between TBED and national security, policymakers should work to connect the two through place-based innovation policy. Additionally, policymakers should leverage place-based innovation as an effective means of enhancing the political, civic, and social stability required for strong national security by increasing community resilience for historically vulnerable communities. 

Recent studies suggest that there are common ingredients for successful place-based innovation that cities and regions can leverage as they work to develop innovation hubs, including strong local leadership; anchor institutions; public-private partnerships; and clustering talent, infrastructure, and resources. Policymakers need tools—new metrics, models, and mechanisms—to allow the U.S. innovation economy to leverage those ingredients with national security objectives in mind. For example, strong local leadership will be needed to maintain focus on key objectives throughout the life of long-term place-based efforts. Long-term investment is also necessary to access talent in vulnerable communities at scales adequate to contribute to the United States’ advantage in commercializing emerging technologies. The opportunity to revitalize communities and produce high-quality talent through place-based innovation should be a central component of U.S. economic policy. Instead of disinvestment, leaders in Washington need to prioritize funding for existing efforts in order to help realize both economic and national security objectives.

Jaret C. Riddick is a senior fellow at Georgetown University’s Center for Security and Emerging Technology (CSET).

Hayes Meredith is a graduate research assistant at Georgetown University’s Center for Security and Emerging Technology (CSET), and pursuing a master’s degree in the Security Studies Program at the Walsh School of Foreign Service.