Increased funding for innovation is vital to economic growth | Opinion
By Capital-Star Op-Ed Contributor - June 18, 2019
This article was originally posted in the Pennsylvania Capital All-Star
By Catherine V. Mott
Politically, there are few things most people can agree on these days. But one thing we can agree to is supporting a program that creates jobs and pays for itself.
Thus, I find myself perplexed when our state budget slashes taxpayer support for the Ben Franklin Technology programs that are proven job creators, and a proven accelerator for Pennsylvania’s tax coffers (The Pittsburgh Ben Franklin program is known as “Innovation Works.”).
The research findings of the SBA Business Dynamics Statistics, the National Business Economics Research, and the Kaufmann Foundation all separately demonstrate that all net new jobs in the United States are created by companies 5 years old or less.
This is the target market of all Ben Franklin Technology programs; they create the new jobs and support industries of the future that will help make Pennsylvania a contender in a very competitive national economy.
Instead of driving towards creating a healthy competitive economy, the state budgets over the past decade have slashed the support for Innovation Works and the other Ben Franklin programs by more than 50 percent; the funding has decreased from $28 million to $14.5 million.
That’s a steep decrease and impedes our region’s ability to support seed funding for new companies and university spinouts. Neighboring states like Ohio, New York, Maryland, New Jersey and West Virginia are increasing investments in startups, and are offering incentives for founders to relocate to their region. Our current budget keeps historic lows in place and that risks our economic future.
Why should you care?
Since its inception, the statewide Ben Franklin program has invested in more than 4,500 technology-based companies and boosted Pennsylvania’s economy by more than $25 billion, helping to generate 148,000 jobs through investments in client firms and spinoff companies. Not many organizations have had such a demonstrable impact on jobs, tax revenue, and the economy in Pennsylvania.
As our state seeks new streams of revenue to meet fiscal challenges, funding Ben Franklin makes sense. Every dollar invested by the state into Ben Franklin generates $3.90 in additional state taxes. What would it mean for our state to continue to lose a great startup to another state?
Do the math.
I’ve spent 17 years building a network of individual investors (angel investors) who use their own money to invest in startups. Our network’s investments frequently overlap with investment from Innovation Works and the reason is simple: these are the companies most likely to succeed and grow in our own backyard.
If we shortchange Innovation Works and the Ben Franklin network, we shortchange Pennsylvania’s future and we tell the next crop of promising entrepreneurs they might have to move to a neighboring state to start and grow their company.
Ben Franklin’s track record speaks for itself. Please let your representatives know how important it is to keep Pennsylvania competitive by restoring funding for this high-tech economic development engine.
Catherine V. Mott is the founder, CEO and managing partner of BlueTree Capital Group, LLC., in Wexford, Pa. She is also the chairwoman of Innovation Works.