An In-Depth Look at Pa.’s Entrepreneurial Ecosystem Highlights the Strength and Importance of BFTP
By Ryan E. Glenn, Director of Statewide Initiatives
Ben Franklin Technology Partners
It seems like everywhere you look, communities across the nation are embracing strategies to create entrepreneurial ecosystems that foster innovation, drive technological advances, and support sustainable economic growth. They are engaged in these efforts for one very simple reason --- because they have the potential to provide a tremendous return on investment.
From tax revenue to family-sustaining careers, innovation allows Pennsylvania to remain globally competitive and attract and retain the best and brightest minds from a diverse array of in-demand industries.
Recently, the Pennsylvania Department of Community and Economic Development (DCED) and Carnegie Mellon University teamed up on a report to foster the commonwealth’s entrepreneurial ecosystem and create a dashboard of data to drive policy so our state remains competitive.
The genesis of this collaboration began in 2020 when Gov. Tom Wolf announced an ambitious budget proposal to spur innovation across Pennsylvania and focus on the commonwealth’s entrepreneurial ecosystem and growing tech sectors in order to make Pennsylvania a national competitor in attracting and retaining entrepreneurs and startups through strategic funding and community support.The governor’s plan included a $12.35 million funding increase to drive an evidence-based, statewide innovation strategy --- including $5 million to the Ben Franklin Technology Development Authority to support new levels of innovation and collaboration with institutions of higher education.
While noting Pennsylvania’s historical role as an innovation leader and one of the first states to fund collaborations between universities and tech companies through the Ben Franklin partnership, the Carnegie Mellon report also referenced the same challenges cited by the governor when he initially proposed his innovation budget. Bridging gaps between Pennsylvania’s renowned institutions of higher education and tech enterprises, maximizing the potential of home-grown businesses and talent, increasing access and support for all Pennsylvania entrepreneurs, and recruiting and retaining talent must remain a priority in the commonwealth if we’re going to grow and strengthen our economy.
However, a key finding of the Carnegie Mellon report specifically points to Ben Franklin as a vital asset that Pennsylvania can leverage to grow its innovation economy. The report notes that while state funding for Ben Franklin was cut during the 2008 recession --- and never restored to original levels --- the program continues to provide a business support network with a statewide footprint that has resulted in at least 19 alumni companies having gone public.
Despite challenges, our work to power innovation, fuel growth and create jobs --- perhaps never more important than right now --- continued as Pennsylvania addressed uncertainty caused by the COVID-19 pandemic. Ben Franklin’s economic impact was felt in every region of the commonwealth. Highlights from 2020 include:
· 1,309 jobs created by client companies
· 12,446 jobs retained by client companies
· 443 new products and processes launched
· 101 new companies formed
· 167 patents and software copyrights awarded to client companies
· 1,697 companies assisted by Ben Franklin
· $1,832,430,632 sales revenue generated by client companies
· $894,580,226 post-BFTP financing secured by client companies
For more information about Ben Franklin’s statewide impact and value to the commonwealth, check out our 2020 Impact Report.
Carnegie Mellon’s study was thoroughly researched and authored by six master’s students, with assistance from DCED. An ambitious undertaking, the final report drew from a multitude of available resources to provide a comprehensive look at the state of innovation in Pennsylvania. Chief among these sources is a 2019 study conducted by Robert Maxim and Mark Muro with The Brookings Institution, a widely respected public policy organization based in Washington, DC. They looked at what Pennsylvania must do to remain an innovation leader and correctly predicted emerging competition from neighboring states --- including recent initiatives in New Jersey and Ohio.
In addition to the report and recommendations regarding policy, budget, data collection, and follow-on work for DCED, the Carnegie Mellon team developed a web dashboard wireframe intended to serve as tools for the public, policy makers, economic development organizations, administrators, business organizations, and university administrators. The dashboard will help identify Pennsylvania’s strengths and challenges related to research and development funding, business creation, risk capital, education, employment, talent retention, and transportation and broadband access.
Pennsylvania is in a prime position to support and grow its innovation-based economy by utilizing existing resources to their full potential --- including Ben Franklin Technology Partners. Partnerships like the one between DCED and Carnegie Mellon, as well as investments like the $14.5 million we saw in the 2021-22 General Fund budget are essential to ensuring Pennsylvania remains globally competitive. By working together, across multiple disciplines and industries, Pennsylvania can continue to serve as the gold standard by which all other innovation-based economic development initiatives are judged.