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Brookings report: ‘Pennsylvania’s innovation economy has gone flat’

The state needs to bring more serious money and resources to early-stage innovators if it's going to compete with neighboring Northeast Corridor cities, the report says.

Penn's campus looking east toward Center City in March 2005. (Photo by Flickr user Shreyans Bhansali via a Creative Commons license)

Pennsylvania was once a leading state for innovation, but in recent years, it hasn’t kept up with other cities on the Northeast corridor, a new report by Brookings says.

Through research supported by the Henry L. Hillman Foundation, Senior Fellow Mark Muro and Research Analyst Robert Maxim summarized that while larger metro areas such as Philadelphia, Pittsburgh and State College are hubs for research and innovation, smaller areas are lagging far behind.

The pair told that the state itself has scaled back public investment in its most significant innovation resources.

“On a variety of measures, Pennsylvania, which used to be a real leader in this space, has gone sideways,” Muro said (or “flat,” as described in the report). “The state is not making the same effort that it was a few years ago.”

(Courtesy image)

The report shows a decline in the state funding going toward research and development into tech and business sectors. Ten years ago, the state was offering up 0.6% of its overall budget to research and development, and in 2019,  it’s designating just about 0.2%.

“Philly is doing well right now, relative to the rest of Pennsylvania,” Maxim said. But it’s having a tough time competing with “superstar tech cities” like Boston, New York City and D.C., which has states supporting those sectors in a more concrete way. 

Also noted in the report is Ben Franklin Technology Partners state funding decrease over the past decade, to $14.5 million from $28 million.

Improvements could come from the state insuring that universities and businesses outside of these metro-university-heavy bubbles have the funding and resources they need.

Maxim said it’s hard for folks to understand how innovation could impact their daily lives, but the building and growth of new industries create new, high-paying jobs for areas surrounding it — even if it’s just that a factory opens to manufacture products coming out of a tech startup nearby.

“Each of these instances can create new jobs, that helps people in all areas, it raises the standard of living for all areas,” he said. 

In order to match Pennsylvania with states that have thriving innovation sectors, the researchers pose a few challenges for the state to meet:

  • Create an evidence-based state innovation strategy
  • Strengthen business R&D in the state
  • Bolster state investment in early stage financing
  • Mitigate significant spatial divergence
Read the full report
Companies: Brookings Institution / Ben Franklin Technology Partners

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