What a new innovation index tells us about Philadelphia

Philadelphia’s tech economy isn’t as bad as Philadelphians say it is. 

In the 2000s, Philadelphia civic leaders attacked the rotten brain drain problem, where most of its many college students moved elsewhere after graduation. Helped by macroeconomic trends, they turned the tide, and Philadelphia became a leader in college graduate retention. Last month, well-regarded nonprofit Campus Philly celebrated 20 years and 180,000 degree holders.

In the 2010s, Philadelphia startup and tech boosters attacked its dim reputation for commercialized invention. Helped by size and proximity, they made progress: Of the 10 regions that attract the most venture capital in the country, Philadelphia’s  share grew the second fastest between 2013 and 2023. The region got its first unicorn, then others, and put a few thousand software developers into its downtown. Last year, University of Pennsylvania researchers won a Nobel Prize for their modified mRNA technique that was commercialized into a COVID vaccine. 

In Philadelphia, though, where the native birdcall is a guttural boo, the headwinds are better known. 

Pennsylvania is a slow-growth state, and Philadelphia still exports most of its STEM graduates. Worse yet, in fresh research evaluating the country’s 50 biggest regions, Philly had the worst decline in economic mobility for poor residents. Philadelphia is a grand place to be rich, and a rotten place to be poor.  

Post-pandemic, people boosting technology-led growth with entrepreneur engagement and workforce development strategies give the sense that they’re starting over. Many successes ring true, plenty of problems persist. 

All these themes appear in Technical.ly’s second annual State of the Philadelphia Tech Economy report, which was released today. It’s part of our deeper dive into the communities we follow closest: Find them all here. Join us tomorrow, Wednesday, Dec. 11, at 12 p.m. ET for a LinkedIn Live webinar discussing themes from the reports.

Inside our State of the Philadelphia Tech Economy report, we look at Technical.ly’s brand-new Map of Innovation Ecosystems, which we released Monday. 

The map is designed to help get started in any of the country’s most vibrant tech and startup hubs. It also includes the first go of our Innovation Index, which measures the regions we track on six indicators that are informed by the Ecosystem Stack we developed from our reporting.

Philadelphia’s strengths, and challenges, are on display. Philadelphia’s Penn is a true world-class institution, spinning about as much research and development as any other. Its startup ecosystem is a credible peer with Austin, Chicago and Miami — and outpaces Denver and Atlanta. The region is low cost, especially by big city standards, and contrary to local narrative, its city gets good marks for ease of business. 

But the region’s diverse economy has a sizable tech workforce more by scale than density: Its 30,000 software developers are large in number but not in percentage of workforce. Worse still, per new research from Opportunity Insights at Harvard Business School, the Philadelphia region has had the worst decline in economic mobility, a strong signal of dynamism. 

All that leaves the Philadelphia region in the middle-pack of the regions we indexed — lagging behind smaller Atlanta and Denver. 

Where to go from here? Philadelphia economic and civic leaders gathered this fall for a glitzy dive into the economic mobility research. It’s a new approach to the stubborn problem that Philadelphia can’t outgrow its poverty. Likewise, Philadelphia’s persistent dim view of itself needs new solutions: Get as effective at diagnosing problems as it is as effectively championing its successes.