Editor’s note (April 4, 2024): This article has been updated to reflect relevant programs included in the second of two FY 2024 omnibus appropriations bills.

Many tech-based economic development (TBED) programs are seeing level funding in FY 2024, with some of the most high-profile programs experiencing decreases. Politically, this situation is less about disapproval than broader budgetary circumstances, as Congress agreed that spending would revert to FY 2022 levels. Practically, however, this means even the continued programs will not be keeping pace with increased demand or costs. The good news for organizations seeking federal support is that, despite the topline setback, there are multiple programs that can fund regional TBED initiatives.

A note about supplemental funding

Federal TBED initiatives received robust funding in FY 2023 largely due to a supplemental package that was included with the overall omnibus appropriations bill. This supplement included billions of dollars across the Department of Commerce and National Science Foundation, among other agencies. As of publication, the FY 2024 appropriations do not include any comparable supplemental funding, and very little of that new spending was included in the base bill. Below, we note both the regular and supplemental FY 2023 appropriations where relevant.

TBED-related programs

Economic Development Administration

In FY 2024, EDA received $400 million for programs, a decrease from $430 million in regular FY 2023 appropriations, which were further supplemented by $1,118 million.

Program highlights:

• Tech Hubs—$41 million in FY 2024 (FY 2023: $41 million in regular appropriations and $459 million in supplemental funds)
• Build to Scale—$50 million (FY 2023: $50 million)
• STEM Talent Challenge—$2.5 million (FY 2023: $2.5 million)
• Good Jobs Challenge—$25 million (FY 2023: $0)
• Recompete Pilot Program—$0 (FY 2023: $41 million in regular appropriations and $159 million in supplemental funds)

National Science Foundation

In FY 2024, NSF received $9.1 billion in total funding, which represents both a modest increase from the FY 2023 regular appropriation of $8.8 billion and a significant decrease from the $9.9 billion level the agency reached with supplemental funds.

This year’s explanatory statement accompanying the appropriations bill provides a few comments about the Technology, Innovation, and Partnerships Directorate or its programs.

Regarding the Directorate’s Regional Innovation Engines program, the report specifies that the Senate’s proposal of $200 million is not provided and that the committee “notes” the recent Type-2 awards. At this time, it is not clear what this will mean for a potential FY 2024 competition.

Other NSF TBED programs, such as Partnerships for Innovation, Accelerating Research Translation, and I-Corps, are not specifically addressed in the appropriations bill or explanatory statement.

Notable recommendations from the appropriations committee include encouraging the agency to support the National AI Research Resource Pilot and National Quantum Information Science Research Centers and using Established Program to Stimulate Competitive Research (EPSCoR) awards to invest in statewide research capacity.

National Institute of Standards and Technology

NIST received $1.5 billion in FY 2024, a decrease from its FY 2023 regular appropriation of $1.6 billion—but entirely due to a decrease in its construction budget. The agency is also not receiving supplemental funds that it received in FY 2023.

The bill’s explanatory statement encourages NIST to support Critical and Emerging Technologies, particularly those related to AI, quantum information science, biotechnology, and advanced communications.

Program highlights:

• Manufacturing Extension Partnership—$175 million in FY 2024 (FY 2023: $175 million in regular appropriations and $13 million in supplemental funds)
• Manufacturing USA—$37 million (FY 2023: $37 million in regular appropriations and $14 million in supplemental funds)

Department of Energy

The Department of Energy received $50.2 billion in FY 2024, an increase from its base FY 2023 appropriation of $46.2 billion (although nearly all of the difference is due to canceling a prior recission of funds to the strategic petroleum reserve account and the National Nuclear Security Administration).

The agency’s Office of Technology Transitions is receiving $20 million (a decrease from $22.1 million in FY 2023) with the following specifications:

• $2.5 million for the Energy Program for Innovation Clusters
• $3.5 million for a non-governmental Foundation for Energy Security and Innovation (of which $1.5 million is for administration and $2.0 million for its activities)

The Clean Energy Demonstration program is receiving $50 million (a decrease from $89 million), and the bill’s explanatory statement specifies that this funding is for projects previously selected by the department and for demonstration planning and analysis.

ARPA-E received $460 million in FY 2024 (FY 2023: $470 million).

Small Business Administration

SBA’s Entrepreneurial Development Programs received $316.8 million in FY 2024, a slight decrease from the FY 2023 level of $320 million. This account includes the agency’s three innovation-focused programs:

• Federal and State Technology Partnerships (FAST)—$9 million (FY 2023: $10 million)
• Growth Accelerators Fund Competition—$9 million (FY 2023: $10 million)
• Regional Innovation Clusters—$9 million (FY 2023: $10 million)

Department of Defense

Congress is providing the department’s Office of Strategic Capital with $84 million in FY 2024. This amount includes $49.2 million to fund a pilot program to provide direct loans and loan guarantees to companies developing critical technologies—and the office is authorized to support up to $984 million in loans. The Office of Strategic Capital was created in December 2022 and did not receive a direct appropriation in FY 2023. Currently, the office’s other main initiative is supporting a Small Business Investment Company-Critical Technologies (SBICCT) license in partnership with SBA’s SBIC program.

The Defense Innovation Unit (DIU) is receiving nearly $1 billion in FY 2024 and also directs the department to report back to Congress on the effectiveness of DIU’s most recent structural changes.

The Defense Manufacturing Communities Support program appears not have been funded in FY 2024. The appropriations committee typically lists the program as an addition to the President's budget request in its explanatory statement accompanying the appropriations bill, but in FY 2024, neither the President's budget nor the committee's statement include funding for the program. SSTI has reached out to the Office of Local Defense Community Cooperation, which manages the program, to confirm but had not received a response by publication.

Department of Health and Human Services

Funding for ARPA-H remains level in FY 2024 at $1.5 billion.

The Biomedical Advanced Research and Development Authority (BARDA) received an increase to $1,015 million (FY 2023: $950 million).

Additional TBED program notes

• The U.S. Department of Agriculture’s Rural Innovation Stronger Economies (RISE) competition received no funding in FY 2024 (FY 2023: $2 million)
• The National Aeronautics and Space Administration (NASA) is receiving $10 million for its regional economic development initiative.
• The Minority Business Development Agency (MBDA) received $68.3 million (FY 2023: $70 million)
• The Appalachian Regional Commission received level funding of $200 million, of which $15 million is specified for economic development, manufacturing, and entrepreneurship in the northern part of the region.
• The Community Development Financial Institutions (CDFI) Fund received $188 million (FY 2023: $196 million) for Financial and Technical Assistance Awards.
• The U.S. Department of the Treasury’s State Small Business Credit Initiative saw a recission of $283 million from unobligated balances.

R&D funding

FYI, Science, and other R&D-focused publications have noted that many research agencies and line items experienced cuts in FY 2024. In some cases, these cuts are largely or entirely due to the elimination of supplemental funding (e.g., NSF) and, in some cases, due more to declining construction funds than R&D activity funding (e.g., NIST). For some agencies, the budget situation will be experienced unevenly—for example, FYI reports increased funding for Energy’s Office of Science (particularly for Isotope R&D and Production), but ARPA-E received a $10 million decrease to $460 million, and NASA’s science funding is decreasing by $400 million, but this is entirely from the planetary science programs. The Department of Defense saw an increase in its Research, Defense, Test, and Evaluation budget to $152 billion, but FYI notes that this conceals a 10% decline in basic research funding to $2.6 billion. NIH funding was about level at $48.6 billion (a figure that includes ARPA-H).

Disclaimer: This article was prepared by SSTI using Federal funds under award ED22HDQ3070129 from the Economic Development Administration, U.S. Department of Commerce. The statements, findings, conclusions, and recommendations are those of the author(s) and do not necessarily reflect the views of the Economic Development Administration or the U.S. Department of Commerce.