SCIENCE: New NSF program hopes to rev the nation’s ‘engines’ of innovation

Regional centers would get $160 million each to translate research into high-tech jobs and boost local economies

16 MAY 2022

The world was ready for a better surgical adhesive. But Pittsburgh wasn’t. So a decade after its founding Cohera Medical, a promising startup based on an invention by University of Pittsburgh (Pitt) chemical engineer Eric Beckman, left town for what its owners considered a more favorable location for biomedical innovation—Research Triangle Park in North Carolina.

This month, the National Science Foundation (NSF) rolled out a huge new funding program aimed at halting that type of exodus. Its goal is to help communities far from the country’s best known high-tech meccas build their capacity to turn research by local scientists into new companies and well-paying jobs that will bolster the regional economy.

The initiative, called Regional Innovation Engines, or NSF Engines, will offer the largest cash awards in the foundation’s history—$160 million over 10 years—to each of five regions hoping to create their own versions of Silicon Valley. A key measure of success, say experts in the field, will be whether companies like Cohera can find everything they need to prosper without having to flee their birthplaces.

“We spin out a dozen companies a year,” says Evan Facher, vice chancellor for innovation and entrepreneurship at Pitt, whose medical center is one of the top recipients of funding from the National Institutes of Health (NIH). “But they don’t stay. They go to Boston or San Francisco because we can’t nurture them.”

“A new direction”

Although NSF’s primary role is to support the best nonmedical academic research, it has also pioneered programs with a more applied bent. They include the Small Business Innovation Research program, begun in 1977, and the Innovation Corps, launched in 2011 for academics interested in becoming entrepreneurs. Its Established Program to Stimulate Competitive Research was the first program to tackle the uneven geographic distribution of federal research dollars. But the new innovation engines program, announced on 3 May, will “far surpass anything NSF has ever done before in this arena,” Facher says.

One thing that sets it apart is its size—up to eight times the funding given to NSF’s current research centers, and for twice as long. But the new engines also have different goals. The program is “taking NSF in a new direction,” says Deborah Altenburg, who tracks federal science policy for the Association of Public and Land-grant Universities. “Rather than simply funding the best science, it’s also looking to support those activities with the potential to produce significant economic activity in those regions.”

Gerald Blazey, vice president for research at Northern Illinois University, likes the fact that NSF has set itself such an ambitious goal, and one that dovetails with what his institution hopes to achieve with its small but growing pot of federal research dollars. But NSF “will have to work very hard to make it a reality,” he cautions.

The engines, he says, “are so much more focused on economic development than anything else NSF has ever done. I just hope that they don’t diminish NSF’s ability to support curiosity-driven research.”

The NSF announcement says the program is designed to serve regions “without well-established innovation ecosystems,” which Blazey and Facher say is an accurate description of their communities as well. Experts say those ecosystems have four essential components.

The first is one or more universities that receive ample amounts of federal research dollars. The second is a culture that encourages academic researchers to think like entrepreneurs when they make a discovery with commercial potential. Access to the money, talent, and know-how to perfect ideas and connect with customers is the third. A skilled regional labor force and a roster of companies that can put them to work is the fourth. Those elements must also be knitted together into a true regional partnership.

“Down here we like to call it singing from the same hymnal,” says Josh Carpenter, CEO of Southern Research, a nonprofit contract research organization that also manages technology transfer for its neighbor, the University of Alabama, Birmingham (UAB).

Barely 50 years old, UAB ranks in the top 10 of NIH grant recipients and is the region’s top employer. But the “eds and meds” it produces haven’t been enough to assure a healthy innovation ecosystem, Carpenter says.

“We haven’t translated that [federal support] into well-paying jobs for local people,” he says. “We desperately need something like NSF’s Regional Innovation Engines if we ever hope to regain the type of healthy economy we had when the steel industry was booming.”

Laying the groundwork

NSF says the engines will be the flagship program of its new Directorate for Technology, Innovation and Partnerships, and has asked Congress for $200 million for the 2023 fiscal year, which begins on 1 October. It will be several months before NSF gets an answer, however, and Congress rejected a similar request for the current fiscal year. So NSF has decided to proceed cautiously.

The first phase will be 50 grants, each for $1 million, for communities to craft proposals to make them capable of operating a full-fledged engine. Any “compelling societal challenge” is fair game, according to NSF’s solicitation, as are any “emerging technologies and industries.” The agency’s only caveat is that the topic must dovetail with the “needs, capabilities, and applications” of the local economy. Interested parties must submit “concept” papers by 30 June, and full proposals by 29 September.

NSF has not announced a schedule for the second round of the competition, only that the deadline for proposals will be “sometime” in fiscal 2023. Nor has it said how it expects applicants to allocate the money they receive. But the list of criteria it plans to use to rank the proposals gives some clues.

In addition to being judged on the standard categories of intellectual merit and broader impacts, the proposers must describe how the research “is driven by societal or economic challenges” and offer “a credible plan to move research to practice.” Other criteria include “an appropriate diversity” of partners, both by sector and by type of organization, a plan for workforce development consistent with the region’s needs, and realistic expectations of outside funding.

Better geographic diversity

Beckman says the story of his medical startup illustrates why NSF’s initiative is needed. He started Cohera Medical in 2006 together with Michael Buckley, then an oral surgeon at Pitt’s dental school, to commercialize a surgical adhesive Beckman invented. (Beckman describes it as being like Gorilla Glue, but for internal use.) “It was either die or start a company,” Beckman says.

But neither the university nor local leaders provided much help in getting the company off the ground, he says. “We had to do it all on our own,” Beckman recalls. The initial investors all came from “far away,” he says, as did the small workforce assembled to gain approval from the U.S. Food and Drug Administration (FDA).

That happened in 2015. Months later the company, which had been bought by the global investment firm KKR & Co., Inc., announced it was expanding—and moving to Raleigh, North Carolina, nestled within the region’s booming Research Triangle Park.

“Pittsburgh has been great for us,” the company’s then CEO told local media. “But we need to go where there are a lot of medical devices people, and Raleigh is a hub for that.”

The expansion plan, which included developing and marketing a bowel sealant, proved ill-fated. Beckman’s superglue, which reduces the buildup of fluid after surgery by eliminating tissue flaps, had already enabled hundreds of patients to leave the hospital without a drain. Gaining FDA approval for the second sealant, however, turned out to be a bridge too far; the company ran out of money and was forced to shut down in 2018.

The demise of a biomedical startup is not unusual. But Beckman, who remained a consultant to the company for several years after leaving his senior management post in 2009, thinks that a local investor might have been less aggressive and given the company more time to find its footing.

Facher thinks the company’s collapse was hastened by the absence of the necessary conditions—including low-cost lab space, plentiful job opportunities for skilled tech workers, and connections to local (and perhaps more patient) investors—that it needed to thrive in western Pennsylvania. And he’s hopeful that the NSF engines program will help western Pennsylvania—and other parts of the country—fill those gaps.

“An economy built around a few high-tech hubs on the [East and West] coasts is not sustainable,” he says. “We need them in the heartland, too.”

Going big

NSF isn’t the only federal agency pursuing that goal. In December 2021, the U.S. Department of Commerce kicked off a $1 billion program to create “regional industry clusters” with 60 planning grants to communities around the country. (Pitt is a member of a winning southwestern Pennsylvania consortium centered on artificial intelligence and robotics that builds on Carnegie Mellon University’s expertise in autonomous vehicles.)

The first round winners are now competing for some two dozen individual grants of between $25 million and $100 million. Five hundred twenty-nine U.S. communities applied for the Commerce Department’s initial $500,000 planning awards, and observers expect similarly stiff competition for the NSF program.

Facher says his university is likely to be part of a team making a bid. “I can’t imagine why we wouldn’t be interested,” he says. “The federal government is the only place that can offer a program with so many zeros.”