CINCINNATI — In a state-of-the-art clean room at the University of Cincinnati, a grad student in a bunny suit is trying to build a better mouse trap.
It’s a cutting-edge computer chip that Aaron Ruen designed himself, using resistive random-access memory to efficiently retrieve data.
“With machine learning, they’re trying to do a lot more with brain-inspired hardware,” Ruen explained. “So, these devices kind of fit very well with that.”
The Perrysburg native expects to graduate by next summer with a master’s degree in electrical engineering. He’ll have a lot more options to apply his newfound knowledge thanks to two huge economic development opportunities that await Greater Cincinnati.
Intel Corp. is spending $20 billion on two new semiconductor plants near Columbus. And the Biden Administration is preparing a national competition to designate 20 U.S. cities as regional technology hubs.
“We will certainly put up a fight with our partners here in the region to become a technology hub,” said Katie Eagan, vice president of government affairs for the Cincinnati USA Regional Chamber of Commerce. “This is building out the future of the American economy. And why not do it in a city where we have the work force, the training ground and such a rich history of manufacturing as Cincinnati does?”
Technology hubs are the creation of the CHIPS and Science Act of 2022, a legislative attempt to reduce U.S. reliance on semiconductors produced overseas. The law provides $52.4 billion to construct chip plants in the U.S. and support chip research and development. It also provides an estimated $24 billion in tax credits to build and equip plants. Both will help Intel grow beyond its January commitment for two factories that employ 3,000 people in Licking County. With access to CHIPS Act subsidies, the company has said it might eventually invest $100 billion to construct eight plants.
Intel’s investment alone should be enough to stimulate job growth in Southwest Ohio, said Kimm Lauterbach, president and CEO of REDI Cincinnati, the region’s lead economic development agency. REDI’s pipeline of potential expansions grew 25% to 60 companies in the last several months. And that doesn’t count the 43 companies that already do business with Intel from locations between Cincinnati and Dayton.
“It certainly has the potential to give us an entirely new industry,” Lauterbach said. “So, it’s really the research, the development. It’s the supply chain. It’s the vendors. It’s the customers that all plan to come to be close to that Intel investment.”
But the CHIPS Act provides an even bigger opportunity for Cincinnati by pledging $10 billion toward the creation of 20 “regional and innovation technology hubs,” that will “position communities throughout the country to lead in high-growth, high-wage sectors such as artificial intelligence, advanced manufacturing, and clean energy technology,” according to a White House fact sheet.
Technology hubs will be chosen in a competitive process that’s yet to be defined by the U.S. Economic Development Agency. And although Congress has endorsed the idea of tech hubs, it has yet to authorize funding for them, said Mark Muro, a senior fellow at the Brookings Institution and co-author of “The Case for Growth Centers: How to spread high-tech innovation across America.”
Assuming those hurdles are crossed, Muro said Cincinnati has “a very interesting potential for winning” a merit-based tech hub competition.
“The bill’s language very much favors places with mix of large corporations, research universities and strong focus on technology-oriented education and work force development,” Muro said. “It also favors heartland locations. The whole discussion that the Senate had was about making sure the places that weren’t on the coast had a shot at real prosperity and participation in tech.”
Cincinnati has “a better shot than most,” Eagan said. “Our proximity to the Intel plant certainly helps as well.”
But it’s not a slam dunk, based on Muro’s report and Cincinnati’s past results.
Muro’s 2019 study ranked Cincinnati 18th out of 35 “promising candidates” to become technology-inspired growth centers, citing its relatively low cost of living and above-average number of patents per 100,000 residents in 2018. That’s the good news. The bad news? Cincinnati will likely compete for three tech-hub slots in a five-state region that includes five cities that rank ahead of Cincinnati in the Brookings analysis.
It was a similar story in 2018, when Cincinnati was among 238 cities that competed for Amazon Inc.’s HQ2 project. Then estimated to be a $5 billion prize, Amazon ultimately split the project between Long Island, N.Y. and Arlington, Va. Cincinnati failed to make the list of 20 finalists but regional peers like Columbus, Indianapolis and Pittsburgh did. Amazon told city officials our region lacked technology talent and a cohesive transportation plan.
“We’ve made progress against a lot of that feedback,” said Lauterbach, who joined REDI in 2014 and became CEO in 2018.
She cites transit improvements underway through the Reinventing Metro initiative and a new funding plan that appears likely to solve the region’s biggest bottleneck at the Brent Spence Bridge.
She also cites the Cincinnati Innovation District, established with a $100 million funding commitment from JobsOhio in 2020. It includes the 1819 Innovation Hub, which opened in 2018 to encourage collaboration between local companies and researchers from UC and Children’s Hospital. And starting this fall, it will include a $200 million multi-disciplinary research center called Digital Futures at the Martin Luther King exit off I-71.
“You think about the feedback that we had from HQ2, not only was it that Cincinnati needed more STEM talent, but it was, ‘Cincinnati was really spot on’ in what they were doing,” Lauterbach said. “We had all of the mechanisms in place. We were growing in the right direction. We were focusing on the right things. It just wasn’t mature.”
Four years later, UC’s number of science, technology, engineering and mathematics graduates is on the wane. UC awarded 5,404 STEM degrees in 2021, down 12% from its 2018 peak of 6,120. After ranking 96th with 29 patents in 2019, UC has yet to return to the National Academy of Investors’ annual list of the Top 100 global universities to be listed first on U.S. patents.
But those are just two metrics among many factors that could make or break a region’s bid to become a federally funded technology hub.
“Linkages of urban hubs with nearby rural or small-town areas that include some of the same supply chains could be a winning bet,” said Muro, the Brookings expert. “The best counsel for places is to make a strong proposal that builds on your strengths.”
One approach might be to differentiate Cincinnati’s fledgling innovation district from the health-care focused innovation hubs in Columbus and Cleveland.
“What’s beautiful about it is that it’s not industry specific,” said Lauterbach, from REDI Cincinnati. It’s “a testament to the diversity of our economy.”
From the consumer marketing expertise of Procter & Gamble Co. and Kroger Co. to the logistics capabilities of Amazon Inc. and Total Quality Logistics, Cincinnati has a unique mix of innovative companies that could set it apart from regional rivals.
“One of the interesting areas of growth you wouldn’t associate with Intel is in the analytics industry,” Lauterbach said. “They’re making chips. Looking at the analytics of that supply, how do you increase the quality and increase the volume? Cincinnati is known for analytics. So, will there be the possibility to attract more analytics firms who are based here to do that work for Intel?”
UC Engineering Professor Rashmi Jha said Greater Cincinnati’s concentration of automotive and advance-manufacturing companies could form “a great ecosystem” that creates demand for new kinds of computer chips that fuel Intel’s growth.
“The area which is going to boom these days is the area called domain specific computing, or application-specific computing. You design chips that cater to certain applications,” Jha said. “This (region) makes a lot of sense for these kind of chip designers and fabs to move into.”
Back in the clean room, Ruen isn’t the only UC student encouraged by Cincinnati’s prospects as a tech magnet.
“That’s something I always kind of wanted, to be able to do some type of semiconductor work but close to home,” said Greg Muha, who grew up in Cuyahoga Falls. “Really makes it look like there’s going to be like a long-term career opportunity here in Ohio for me to pursue what I’m really interested in.”
