A New Day for Pennsylvania
30 Apr, 2006By: Edward G. Rendell
Pennsylvania’s Governor Edward G. Rendell has made economic revival a top priority, and has moved on many fronts since taking office in January 2003. He's done more than just trim government waste or offer tax incentives -- Rendell has created an innovation economy where our culture and infrastructure exist to develop ideas, thoughts, processes and products – and translate these assets into sustainable economic value and wealth.
The Commonwealth is in the midst of the critical process of transforming its legacy economy – one that made Pennsylvania an industrial leader in the 19th and 20th centuries – into a new economy that is fueled by its globally competitive manufacturing sector. Pennsylvania’s economic raw materials are its greatest competitive advantage – an entrepreneurial spirit, smart labor, creative people, available capital and critical support services.
In April 2004, Pennsylvania’s Legislature passed and Rendell signed into law an Economic Stimulus Program that contains key elements to “jumpstart” the state’s economy plus incentives to support the private sector and improve the number of projects being undertaken in the Commonwealth. The Package invests over $2.8 billion as a magnet to attract at least $5 billion in private investment in the following target areas: Business Investment, Community Revitalization, and Site Preparation, Infrastructure Improvement and Construction. To fuel the Commonwealth’s community and business growth, the Economic Stimulus focuses investment in new high-growth companies. It channels new resources to aging communities in need of new and improved infrastructure, and provides the resources that will allow Pennsylvania’s traditional industries, especially manufacturing, to access new technology to enhance their productivity. Most of all, it brings a new vision for creating jobs, retaining talent, growing the economy and positioning Pennsylvania for success in the 21st century.
Manufacturing contributes far more than any other sector to Pennsylvania’s economy, generating more than $65 billion, or over 16 percent of the annual gross state product.
Having over 691,000 employees in 2004, Pennsylvania is ranked 5th in the nation for total manufacturing.
Pennsylvania’s large and prominent pharmaceutical and medicine manufacturing sector accounts for 13 percent of all U.S. output for the sector. The state’s food manufacturing sector stands out nationally as well, for the prominence of its candy and chocolate producers, bakeries, pasta manufacturers, and producers of snack foods.
Economic development organizations and industry associations serve Pennsylvania manufacturers throughout the Commonwealth. The Pennsylvania Economic Development Association, a statewide association of local, state, corporate and non-profit economic development professionals, provides leadership and communication between geographically dispersed initiatives.
The Governor’s Action Team (GAT), a group of economic development professionals who report directly to Governor Edward G. Rendell, is the single point of contact for businesses considering locating or expanding in Pennsylvania. The team provides critical information for evaluating facility locations, including workforce characteristics, demographic information, permit and regulation assistance, infrastructure and utility data, state and local tax information, quality of life statistics and information, and site details. Recently, the Governor’s Action Team worked with the Seton Company, a leather interior products manufacturing company, to consolidate its operations in Bedford County from its New Jersey facility, creating 100 new jobs over the next three years and retaining 265 jobs at its Saxton facility.
Pennsylvania invests significantly in manufacturing innovation, positioning the Commonwealth as an epicenter of manufacturing innovation on a global scale. In fact, from 2003 to 2004, GAT increased the number of successfully completed manufacturing company projects by 68 percent and provided over $282 million in assistance to those firms. These investments have been driven by “Manufacturing Innovation: A Strategy to Enhance Competitiveness of Pennsylvania Manufacturers”, released by Governor Rendell in 2004. This comprehensive strategy initiates, expands and integrates programs supporting areas critical to manufacturing innovation: financial, workforce development, technical support, communications and research.
In 2004, the Governor’s Manufacturing Summit brought together more than 200 manufacturers, labor leaders, government workers, economic development organizations and service providers. These stakeholders examined current challenges facing Pennsylvania manufacturers and discussed strategies to create a globally competitive, advanced manufacturing industrial sector.
Governor Rendell’s Manufacturing Strategy is built on the premise that businesses that innovate and actively try to remake themselves are more likely to succeed than those that resist change. The Commonwealth’s comprehensive strategy offers a variety of powerful tools for Pennsylvania manufacturers. The Pennsylvania Manufacturing Ombudsman provides information and referrals to manufacturers requesting services in areas such as financing, education and training, technical assistance and regulatory issues. The Ombudsman also serves as the primary advocate for manufacturing businesses to help them navigate programs and regulations when dealing with state agencies.
The Office of Trade and Policy helps develop Pennsylvania’s trade and investment policies, advocates for businesses, and works to ensure that competitors play by the rules. It serves as a resource and can advise firms on how to take advantage of trade rules and how to navigate the export control and sanctions regime.
Improving the Commonwealth’s business climate and meeting manufacturer’s financing needs helps companies prosper and create jobs. Capitalizing on manufacturing innovation also attracts high-growth firms focused on research, development, and commercialization of new products and technologies.
The Machinery and Equipment Loan Fund (MELF), The New Pennsylvania Venture Guarantee Program and Keystone Opportunity Zones are just a few of the Commonwealth-funded programs currently promoting manufacturing innovation in Pennsylvania.
The Machinery and Equipment Loan Fund supports machinery projects for businesses creating or retaining jobs within the Commonwealth. Recent programmatic changes have increased available funding by $50 million.
The New Pennsylvania Venture Guarantee Program is attracting investment from top-tier investment funds by guaranteeing a portion of the investments in Pennsylvania companies. This $250million guarantee will create a $500 million pool of available new capital.
Businesses located in Pennsylvania’s Keystone Opportunity Zones pay virtually no taxes for ten years. Currently, there are 12 KOZs. These areas all have been deemed to have undergone adverse economic and socioeconomic conditions—and noted as locations not generating much tax revenue. Since the program began in 1999, it has been a huge success, creating more than 23,418 new jobs and retaining some 21,136 more. It has, so far, resulted in total investment of more than $5.2 billion.
Pennsylvania as the Ideal Business Location
Pennsylvania’s great location—within a 500-mile radius of six of the ten major American market areas—offers access to vital markets that make for 40 percent of the country’s population and purchasing power; over 60 percent of Canada’s population; 45 percent of U.S. manufacturers; and 41 percent of the country’s domestic trade and service industries. Four of the Top 10 Logistics metros in the American northeast are located in Pennsylvania. To assist companies in accessing these markets, Pennsylvania offers 120,000 miles of highways and invests nearly $3.5 billion annually for road and bridge construction and maintenance. Other modes of transportation include air, rail and ports. The Commonwealth has 6 international airports; 134 public-use airports and16 scheduled service airports which serve 24 million passengers annually. Nearly 800,000 metric tons of air cargo is moved in Pennsylvania each year. The Commonwealth has 69 railroads that include more than 5,100 miles of railways—ranking it 5th in the country. Additionally, Pennsylvania has access to the Atlantic Ocean via the Port of Philadelphia and access to the Great Lakes via the Port of Erie.
Pennsylvania gives manufacturers access to a trained and educated workforce that can adapt to new business models, innovative practices, and shifting priorities. More than six million people comprise Pennsylvania’s workforce. More than 86 percent of Pennsylvania adults have earned at least a high school diploma and more than 24 percent have a Bachelor’s Degree or higher. Pennsylvania is home to four of the nation’s top 50 universities, the nation’s top undergraduate business school and second ranked graduate school, and one of the country’s top graduate computer engineering schools. And, the world’s best Materials Science Program is located at Pennsylvania State University.
The Commonwealth’s $438.4 billion economy ranks 17th largest in the world, making it a major player in the global economy. Pennsylvania is also a technology leader, with more than a million miles of fiber optic cable crisscrossing its borders. The Commonwealth is home to more than 6,600 high-tech establishments, and has a growing biotech cluster, which has the nation’s largest concentration of tissue engineering firms. Pennsylvania ranks in the top five nationally for life sciences and medical device firms; 1st for pharmaceutical and medicine production and 1st for health care industry employment. Pennsylvania is the 6th leading state for new and expanded business plants overall, as well as 4th for new manufacturing plants. It is a leader in Research and Development and ranks 9th in industry spending, investing $9.8 billion annually for R&D.
Pennsylvania’s quality of life is very desirable, as well, and includes a low crime rate, quality schools and healthcare. There are various cultural attractions that include theater, art, and music and many kinds of festivals. There is professional baseball, football, basketball and hockey, as well as college sports. Pennsylvania has many parks and forests in which to enjoy all kinds of outdoor recreation.