Don’t fool yourself into thinking Silicon Valley chasing is some novel pursuit of today. It’s at least a generation old.
More than 30 years ago, in May 1985, then-President Ronald Reagan, early in his second term, visited the Great Valley Corporate Center, a suburban business park that Reagan would call “the workplace of the future.” (He may have been using Great Valley’s own branding — a banner that boasted the same name hung across one of the buildings that day.) The locals cheered.
Back then, the campus held some 200 early IT, digital and biomedical companies, as the New York Times reported at the time, and represented “Philadelphia’s late-blooming answer to those glittering concentrations of technological and entrepreneurial success that symbolize the post-industrial age.” After being developed on Chester County farmland in 1980, the Great Valley Corporate Center had become the central hub of an innovation corridor.
“Here in the Route 202 corridor, America is truly on a high-tech highway, rolling full speed ahead,” the Gipper said. “And there ain’t no stopping us now.”
Reagan was there to unveil a simplified tax plan, including further reduction in the federal capital gains tax rate, which he argued was a major factor in boosting venture capital spending.
“From a disastrous low of $39 million in the depths of 1977, the total of venture capital in this country — it exploded to $4.2 billion last year,” said Reagan. That would be something like $10 billion in today’s money. (For reference, in 2015, there was nearly $60 billion in U.S. venture investing.)
And in Reagan’s remarks, he spoke of that iconic suburban Philadelphia corridor’s foundation. The similarities to then and now are easy to make.
The city? Or the suburbs? Those preferences will inevitably change but the hunger for innovation clusters won't.
Consider the case for growing a tech company in suburban Philadelphia at the time. ”If you go out to Silicon Valley today, it’s not a very nice place to live. … It costs a fortune to buy a house,” said Charles Robins in 1982. Now the managing director of investment banking firm Fairmount Partners, Robins cofounded early software firm Rabbit Software Corporation, a Great Valley company that became part of the legendary Safeguard Scientifics portfolio. Access to Philadelphia’s culture was a clear benefit then too, but, founders like Robins would say, the Schuylkill traffic is bruising.
It’s in part why the Route 202 corridor developed into the 1990s powerhouse it became — a few thousand acres that became Safeguard founder Pete Musser’s throne. It’s that corridor against which any Philadelphia city corridor development is compared and, frankly, there’s still considerable distance between the two. For example, the vast majority of big tech exits (a handy way of assessing private company size) and tech talent headcount are outside the city, though a generational flip appears to be happening.
Not unlike what Reagan presided over more than 30 years ago in Malvern.
Great Valley itself, owned by Liberty Property Trust, continues to expand, as it moves in a more urban design direction. It has more than five million square feet of real estate spread over a massive 700 acres, according to the company. Contrast it with the University City Science Center and its neighboring innovation corridor buddies — Penn, Drexel, Brandywine Realty and others. Founded in 1963, the Science Center’s urban core is now its strength, with its campus covering 17 acres and 2.5 million square feet. Both are major real estate players in the region that have straddled both generations (Reagan’s gasoline-powered 1981 and today’s more bicycle-informed urban twist).
Mark Seltzer, now a development vice president with Liberty Property Trust, pointed Reagan’s noteworthy speech out to us last month. Seltzer has made his still-young career on urban economic development, starting with Toll Brothers, then Philadelphia Industrial Development Corporation, Jones Lang LaSalle and now at Liberty Property. It’s fitting now that when Seltzer bought a home in Montgomery County’s Narberth, he was captured by the coincidence of finding a button from that very Reagan visit left over by the previous homeowner.
“What I love about the buzz word of ‘innovation’ is in fact it’s a decades old notion,” Seltzer wrote in an email. It’s “no real surprise in concept, but the idea that the vernacular hasn’t shifted is amazing.”
The lesson is that generations may change where they want to build — suburban or city, for example — but the goals of bringing together economic dynamism remain unaltered. Will a generation from now return to Great Valley or is something bigger happening? That’s still very much a debate. But few question that there will still be a focus on competing for being a home for big ideas. Seltzer, who works for the real estate company that played host to Reagan and today works on many other major business hubs, makes no bet on the old city versus suburbs divide.
“In order to be a dynamic world class city with a robust company base, there needs to be diversity in options, creating choice for employers,” said Seltzer.