‘Great Ideas’ for fixing cycle of investment and entrepreneurship in Philadelphia

How to break a cycle of investment and entrepreneurship leaving the region proved a central theme of the One Great Idea panel discussion and forum held by the Philadelphia Media Network as part of Philly Tech Week.
Hosted Wednesday night in the historic Inquirer building on North Broad Street,  the panel was moderated by Greg Osberg, the new CEO of PMN and publisher of the Inquirer, Daily News and Philly.com. It was the first event based on the network’s One Great Idea series, which asks leading Philadelphians for a single, actionable idea for making the region stronger.
Focused on the role of technology and entrepreneurship, the forum kicked off with a panel discussion between Stephen Tang, President and CEO of the University Science Center, Ben Franklin Technology Partners President RoseAnn Rosenthal and City Councilman Bill Green and closed with each presenting their own One Great Idea for the city.
Below, find those ideas and more from the discussion, attended by more 60 and capped by a reception on the building’s 12th floor deck.

Steve Tang. Photos by Yusuf Muhammad/Phrequency.com

1. Tang: “We need to eclipse our home-base rivals like Boston and San Francisco as innovation centers by using what we already have in the way of anchor institutions of research in University City as a nexus. Something like 60 percent of the region’s research happens in that square mile, and if we can focus on growing and connecting there, we can better connect all of the region.
2. Rosenthal: “I propose the Greater Philadelphia Innovation Challenge… to create a $100 million fund to support innovation, built up by the many big regional technology companies here that do not otherwise participate.”
3. Green: “Philadelphia should become the first truly paperless city in the country with legislation that mandates ‘every form becomes a field [meaning online interfaces with city government].’ We can become the most open and transparent city in the country and a model that can be followed in other cities of the future over the next five years if we start now.” [Green has proposed such legislation before.]

In further celebration of the event and Philly Tech Week, in the network’s formal One Great Idea submission of the day, longtime Wired magazine contributor Steven Levy contributed an idea: that Philadelphia invest in becoming the most broadband-connected city in the country, through investment and corporate support. Watch his pitch below.
http://c.brightcove.com/services/viewer/federated_f9?isVid=1
Here are some answers to questions from moderator Osberg:
How can we better support small businesses?

• Tang: “We also need to do a better job of promoting what we have done right,” Tang said, noting Avid Radiopharmaceuticals, which is working on early warning Alzheimer’s treatments, has grown in size from one employee in 2004 to 50 today while remaining in Philadelphia.
• Rosenthal: “There are not enough people who will quickly write that check to support a young business very early here,” said Rosenthal, ” so we lose people.
• Green: “The City of Philadelphia needs to be seen as a business enabler instead of a business regulator,” said Green, who noted his three years and three months in office.

How can we better retain talent?

• Tang: “I’m going to give my best Mike Worth nod,” said Steve Tang, referring to the Videogame Growth Initiative leader. “Philadelphia needs to be seen as a big slice of awesome and that will keep young people here, so part of it is cultural.”
• Rosenthal: “We need to connect broader internship programs, to connect that low cost labor with those who can work with those who need the experience,” said Rosenthal.
• Green: “The jobs arent here because the companies arent here, and that has to do with the business tax structure in the City of Philadelphia,” said Green. “We need to eliminate the net income tax over the next few years.” [Green has introduced legislation in that vein, though it received criticism from the business community and failed to move forward.]

How do you improve the perception of Philadelphia?

• Tang: “Things start in the city and flee to the suburbs. We have great diversity in the tri-state area, but we need to have a strong central core and that comes with a new mindset when starting a business [and where it should be],” Tang said.
• Green: “Well, it’s [entrepreneurship here] not ‘a chicken or the egg’ story because neither the chicken nor the egg wants to be here. We need to create an enabling climate for businesses to grow and investments to be made.”

Why is stopping Philadelphia from having greater innovation?

• Tang: “In Boston, if you are between jobs, it means you are availalbe for a venture,” Tang said. “Here, it means you need to find a new job. We don’t have a strong relationship between venture and entrepreuenrship and other parts of the equation.”
• Rosenthal: “This is not just a Philadelphia story, but across the country we’ve seen a disruption in the innovation pipeline post-World War II. We’ve gone from a time when there was a close connect between the technology and those who would develop it for market to now when innovation has moved back to the universities, without much of a market function, and we’ve seen big companies reduce their R&D,” said Rosenthal. “Are we not supporting the basis for the next 20 years of innovation here? That’s why there’s so much excitement around GPIC [the Greater Philadelphia Innovation Cluster] because it is meant to connect the market to the innovators again.
• Green: “We are motivated by fear. If you do the same thing, even if you do it poorly, no one can say you made a mistake. We need to stop tinkering around the margins. We need to make a big change.” In referring to tax and paperless government changes he’s suggested.

What is one industry we can be the best at?

• Tang: “It’s a bigger picture, I think, and not a specific industry but healthcare generally. Health care will collapse on itself if costs don’t fall and services increase, that can be done with technology. We have a lot of strength here already and with issues like electronic medical record, device efficiencies and others, we can make a play there.”
• Rosenthal: “I think it’s in energy efficiency. Our play hasn’t been in the development of new fuel but in the management and making current fuels better. We can be a leader in things like smart grid technology, and GPIC is already making us a leader.”
• Green: “I’d tend to agree with sustainability, as the biggest bang is in fixing what is already there, like with white roof expansion, insulation, but because we’re each saying something different, I’d suggest that we could be a hotbed center for mobile technology. If we turn on our network and give broadband access to every citizen, we could see amazing experiments here. We already have one of the biggest Mobile Monday groups, so there is business and interest here, but if we could invest with that kind of service, very interesting things could happen.”

Who needs to step up the most?

• Rosenthal: “Multi-billion companies in the Philadelphia region who have not been asked to participate in a fund to help grow seed and pre-seed companies here.” … “I don’t think it’s who should start, you should start, we all need to start.”
• Green: “It’s harder to connect if government is working against you.”
• Tang: “Real true economic development has never been embraced by all parties, so I see the need for real public/private partnerships.”

Other comments of interest during the panel:

• Tang: “We have a need for ‘innovation intermediaries,” Tang said. “Philadelphia is the right sized city to try to pilot broadband technology or collaborative efforts to bring buyers and sellers into the market place. There isn’t an obvious model yet, and that’s why I still can’t believe Kansas City was chosen for Google’s broadband trial.”
• Tang: “We’re seeing big pharma companies consolidating and divesting of expensive research, pushing it back into the universities,” Tang said.
• Green: “In 2000, it took $16 million to bring a product to market as a CEO,” said Green, noting his time in the private sector. “Now you could do it for few hundred thousand dollars. Venture capital is becoming so less relevant.”
• Tang: “Places are about where you work, where you live and where you play,” Tang said. “Philadelphia has a lot of strengths there to start.”
• Tang: “Video gaming and digital arts could be a place to grow jobs, with Drexel and Penn having such strong programs.”
• Rosenthal: “If you aren’t starting a business, you aren’t going to care about taxes, so you need to create a constituency of people who will put pressure to move away from such taxes.”
• Tang: “The top five [largest, with most employees] companies in Boston and San Francisco are all venture funded, so it’s built into the fabric there. With apologies to Comcast and PECO and our other large companies, they are not venture-funded innovations or experiments. Granted, we’re much older, but there is still room for the new.”
• Tang: “This becomes a numbers game. We need more at-bats, so we need more people to try businesses.We have a risk averse climate here, we need to change this.”