Not Just Chips

Amid the frenzy of recent activity by the 117th Congress, the press and public at large shifted focus from the CHIPS and Science Act of 2022 to the climate and health provisions in the Inflation Reduction Act. The higher education community will benefit from fully reflecting on the former piece of legislation. Based on our review of the CHIPS and Science Act—and our recent conversations with college and university leaders—we believe that many in our sector may not yet grasp the extraordinary magnitude of this law’s potential impact.

In short, the CHIPS and Science Act, which was signed into law by President Biden Aug. 9, opens transformational and once-in-a-generation opportunities for a diverse array of institutions. While the scale of new funding opportunities for universities is seismic—more on that in a moment—the act’s impact will go far beyond the Association of American Universities and other R-1 (very high research activity) institutions. Beyond the research mission, the law also authorizes funding for STEM-related higher education and workforce development at levels that are unprecedented since the early days of the Space Race during the 1950s and 1960s. This funding stands to benefit smaller, regional institutions, those that are most likely to be struggling against complex headwinds since the onset of the pandemic. Moreover, many of the act’s provisions are designed to ensure that some funding is routed to historically Black colleges and universities, minority-serving institutions, community colleges, and institutions in states that historically have not benefited from this type of federal support.

The opportunities created by the law will not be distributed uniformly among the thousands of colleges and universities in the U.S. These will be competitive processes. Institutions that begin now to proactively marshal resources and position themselves to receive funding will have a significant advantage as the requests for proposals associated with these opportunities are released in the months and years ahead.

The first step is to review the law’s provisions. The law itself suggests some concrete actions that institutions can begin to take, even while the details of some programs have yet to be determined, including the exact amounts of funds actually appropriated to federal agencies.

Broadening the Recipients of Sponsored Research

The acronym for the CHIPS Act masks the reality that the law will support university-based research and development far beyond the semiconductor industry. For the National Science Foundation, the act authorizes a total of $81 billion over five years (pending final appropriations), which would more than double the current annual appropriation for the NSF from approximately $9 billion in fiscal year 2022 to $18.9 billion in fiscal year 2027.

Over the next five years, more than $16 billion will be designated for a new Directorate for Technology, Innovation and Partnerships, which will support research and technology commercialization in areas like artificial intelligence, quantum computing, energy and material science. Expanded funding is also authorized for foundational research in areas like the food-energy-water system, sustainable chemistry, critical minerals, information technology and behavioral health, and precision agriculture.

There is funding for the social sciences as well. The newly created directorate is charged, in part, with growing “the domestic workforce … in areas of societal, national and geostrategic importance,” including in “social, behavioral and economic drivers and consequences of technological innovations.”

The act ensures that this infusion of research support will not exclusively benefit existing research-intensive institutions. The act creates a five-year pilot program for multi-institutional partnerships involving emerging research institutions (ERIs), defined as colleges or universities with less than $50 million in federal research expenditures, and calls for at least 35 percent of awards within this pilot to go to one or more ERIs.

Furthermore, the act authorizes funding to build the capacity of historically Black colleges and universities, tribal colleges, and minority-serving institutions to successfully compete for and administer NSF grants, on the order of $200 million for fiscal year 2023 and $250 million in subsequent years through fiscal year 2027. In addition, the act contains $150 million per year to study and implement approaches to attracting and retaining students from diverse backgrounds and institutions in STEM research fields. In other words, the act is designed not only to support near-term “wins” for American R&D productivity, but to diversify the institutions and researchers themselves who conduct this work.

Cultivating a Diverse STEM Workforce

Beyond the research implications, the act contains significant funding to support undergraduate and graduate education. Much of this comes in the form of new student scholarship support, from the NSF and other federal agencies (e.g., the Department of Energy), for a wide range of fields and occupations. There are new scholarship and fellowship programs to support students studying, for example, cybersecurity and other STEM fields.

As with the research authorizations discussed above, funding is designated for historically underrepresented groups, including $100 million in undergraduate NSF scholarships for low-income students, with earmarks for those studying at HBCUs, MSIs, community colleges and other categories.

Outside scholarship and fellowship mechanisms, the act authorizes new educational grants to institutions to support the attraction and retention of students in STEM fields, and to support institutions that deliver STEM education to a high proportion of low-income students. The totality of the educational support in the act includes hundreds of millions of dollars in opportunities for institutions to diversify their financial support streams away from tuition dependence, while reinforcing their educational missions.

Expanding Geographical Participation

The act recognizes the role that colleges and universities play within their regional communities and contains mechanisms to support partnerships and impact beyond campuses. Through the Department of Commerce, the act provides $10 billion to establish 20 geographically distributed regional technology hubs—partnerships between for-profit companies, universities, local and federal government entities, and community organizations to support the “development and implementation of regional innovation strategies.” These projects carry the capacity to be game-changers for selected institutions, enabling new collaborations and capital expenditures that could, during a span of a few years, advance regional economic development that might otherwise take decades to achieve.

The act designates funding thresholds for institutions in EPSCoR states (Established Program to Stimulate Competitive Research), defined as those that have not historically benefited significantly from federal research funding. This requirement—the push for which was led by Senator Roger Wicker of Mississippi—ensures that a minimum proportion of funding from NSF will go to EPSCoR states, many of which have predominantly rural populations, at a rate of 15.5 percent in fiscal year 2023, scaling up to 20 percent in fiscal year 2029.

Preparing to Pursue These Opportunities

The new funding available from the CHIPS and Science Act will provide welcome support to many colleges and universities at a challenging and fluid time for higher education. Although the funding levels may be extraordinary, the opportunities are also finite and will likely attract competition. Ambitious institutions have already begun to position themselves to pursue these forthcoming opportunities, and there is no reason to delay.

Institutions ought to begin with a thorough review of their strategic alignment with the various programs in the law. This review would contain a few essential elements: first, a review of the law itself, diving deeper into the provisions, with particular attention paid to those that prioritize institutional profiles that align with one’s own. This analysis should be complemented by a reassessment of institutional strategy that evaluates the alignment of any existing strategic plan with the opportunities presented in the act. Next, the exercise should identify ways to reframe or restate priorities to optimize this alignment. As institutions begin to develop proposals to receive funding from the law, the ability to highlight how these opportunities will drive overall institutional goals will be compelling to reviewers and decision makers.

Going further, institutions should consider establishing a task force or project management office to focus on monitoring relevant updates at federal agencies resulting from the law and strengthening external relationships to enhance readiness to pursue opportunities. An institution’s task force should include staff with government relations expertise, focused on communication with the offices of their congressional representation. The congressional delegation will share the desire to bring the law’s impact home and can facilitate further communications with key relevant federal agencies.

For institutions interested in pursuing the funds associated with regional technology hubs, the task force should include corporate relations staff as well. The focus should be on strengthening existing relationships with your region’s largest and most relevant science and technology companies and reaching out to those with whom relationships are not yet established. Much of the private sector’s access to the act’s funding will come from partnerships with higher education. Many companies will likely welcome the outreach, and some may even be willing to provide staff and other resources to aid the institutions in preparing to pursue the funding.

There is something in the act for almost every college and university in the nation, and many of the institutions that stand to benefit the most may have little experience pursuing opportunities of this magnitude. Time may be of the essence, as the act authorizes funding but requires appropriations, which may reflect changing political winds. Higher education leaders should not delay in inspecting the act’s language for the most relevant opportunities. Institutions should candidly assess their capabilities to pursue these funding opportunities and make arrangements to pursue them expeditiously.