Archive for January 26th, 2010
Tuesday, January 26th, 2010
According to a recent report from the Kauffman Foundation, Pennsylvania is ranked dead last out of all states in entrepreneurial activity. Smeal’s Anthony Warren, director of the Farrell Center for Corporate Innovation and Entrepreneurship, weighs in:
Pennsylvania is ranked well below our neighbors Delaware, New Jersey, Ohio, Virginia, and West Virginia. And Philadelphia is worst among all major cities. What has gone wrong? There is ample evidence that the creation of new innovative companies is the lifeblood of long-term economic growth, sustainable high-paying jobs, wealth creation, and tax revenues. Companies are like people—eventually the old ones die off, to be replaced by energetic youngsters.
Some say that the problem is with Pennsylvania’s history and farming culture. Are we worse off in this regard than Alaska, Louisiana, or North Dakota—certainly not. Do we lack world-class higher education? Hardly, with leading research institutes such as Carnegie Mellon, Penn, Temple, and Penn State all with highly regarded educational programs in entrepreneurship.
Unfortunately we have to look at our leaders in Harrisburg, who, a few years ago, took on an outdated model for economic development, namely Porter’s cluster analysis method. This is best suited for established industries and designed to support the old, rather than nurturing the new. Politically expedient perhaps, but not good for the long haul. With markets globalized, and technology changing by the hour, new corporate structures must be fast and flexible, not solid and slow to change.
This “old is good” mindset is recently evidenced by major cuts in the budgetary support for Ben Franklin Technology Partners, a long-standing and successful program for helping early stage companies. While other states have envied this model and are looking to introduce similar programs, Pennsylvania is rapidly destroying any fertile ground we once had for growing new companies. Currently the economic environment has never been so bad for start-ups; those states that realize this, and provide support, will reap rich harvests in the future.