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  • Writer's pictureReed McManigle

Ben Franklin’s Storied History Holds the Promise of a Bright Future for Pennsylvania (Pt. 2 of 2)

By Reed McManigle, Mentor in Residence

Carnegie Mellon University Center for Technology Transfer and Enterprise Creation

Pennsylvania was the first state to strategically adopt an economic development policy based on technology and entrepreneurship. In 1983, when heavy industry was in steep decline and high-paying manufacturing jobs were being eliminated by the hundreds of thousands, a bi-partisan initiative of the state (led notably by late Republican Governor Dick Thornburgh and Democrat Representative Tom Murphy) created the Ben Franklin Technology partners program. The state invested significant resources and built partnerships with research universities and regional communities to support entrepreneurs building a new economy around technology, sometimes on the very footprint of the heavy industry it was supplanting. The program has been enormously successful and emulated around the world as it laid the foundation for much of the economic transition of the last three decades in Pennsylvania.

Now we are enmeshed in another great economic disaster with unemployment rates in the state peaking above 15% at times in 2020, and recovery still an uphill battle. So, it is a good time to revisit the premise of the Ben Franklin program and consider the direction of the program for current recovery efforts.

A technology-based, entrepreneurially-focused economic development strategy is essential to our state’s competitiveness and job creation. In an increasingly global economy, technological innovation is the foundation upon which competitive advantage is created, which fosters high-paying jobs and robust communities. The sophistication of competition from abroad requires that we continue to invest in science and technology to address societal challenges and to seize opportunities in new and dynamic markets.

The Ben Franklin program continues to be an essential part of the startup support ecosystem, but it is not being sufficiently funded to meet the demand for its programs and services. Within the universities, our entrepreneurial support systems can help researchers and students to make the initial steps toward startup formation, but we are not able to provide the levels of funding and business mentoring that is provided by the Ben Franklin Centers in the state. The early-stage companies typically supported by the Ben Franklin Centers are not yet mature enough to generate interest among venture capitalists. When the handoff happens from university support to Ben Franklin support, many great startup companies are formed, mentored, and positioned for follow-on investment and growth. But the regional Ben Franklin Centers only have the ability to invest in a few dozen startup companies, including those emerging directly from universities as well as those arising from the broader community, while the volume of promising startups just from our universities is much greater. Many are turned away that could have otherwise led to creation of high paying jobs in the state. The state appropriations for Ben Franklin is now roughly half of what it was in its peak years.

Many other states and regions are expanding their programs. In my position at Carnegie Mellon University, I receive a deluge of solicitations on an almost daily basis from accelerator programs, early-stage startup studios, pitch competitions and other programs seeking to recruit our best and brightest to participate in their programs, with the implicit goal of seeking to lure our startups to other regions. The Ben Franklin Partnership was the first, and for many years the largest state-supported technology-based economic development program, but now is one of many and far from the largest.

It is a time to be bold in our state’s investment in technology and entrepreneurship. Sweeping changes in the underpinnings of our economy are taking place as we seek to address manufacturing competitiveness, climate change, health care, education, cybersecurity, grid modernization, broadband access, autonomous vehicles, smart cities, and more. Upcoming federal stimulus funding will provide an added boost to activities in these domains. Regions and states like Pennsylvania that have academic research excellence in these fields have an opportunity to be leaders and to capitalize on the economic opportunities, but only if we have a world-class entrepreneurial support system. Many federal programs will seek to partner with existing support infrastructures like the Ben Franklin Partnership and university technology transfer programs. Matching funding from the state will be required in some cases, and our support ecosystem needs to scale up to meet the expanding volume of opportunities. Bold investment now will leverage new stimulus funding and help to launch our state out of economic distress and into lasting prosperity.

While it is daunting to consider increasing funding when the financial condition of the state is in turmoil due to the pandemic and recession, it is imperative that strategic investments be made to capitalize on the historic opportunities and to build an economy to support our citizens now and in the future. We should be inspired by the history of the Ben Franklin Partnership, as former Governor Dick Thornburgh and his bi-partisan colleagues made a big investment in similarly difficult financial conditions in the recession of the 1980s that continues to pay dividends in terms of job creation and economic competitiveness to this day.


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