5 Reasons Startups Are Setting Up Shop in Philadelphia
Cheap rent is just the beginning.
More and more new entrepreneurs are choosing to start companies in Philadelphia compared to other cities — and it’s easy to see why.
When we first brought our technology company to the U.S. from India in 2011, finding a home for our North American headquarters involved a long and exhaustive search for locations across the country. Ultimately we arrived on Greater Philadelphia – Wayne, PA, specifically — and looking back a few years later, I’m confident we made the right choice. Here’s why:
Fast-growing companies live here: Greater Philadelphia is home to 12 Fortune 500 companies, and 136 businesses on the 2015 Inc. 5000 list of the fastest-growing companies in the country. Pennsylvania overall boasts the eighth highest number of fast-growth companies with 195.
Philly’s “small” big city culture, abundance of top-rated schools and universities, and affordable housing also make it an ideal place to live and work. In fact, Fast Company included Philadelphia among its top 20 most livable cities in the world for work-and-play balance.
A close-knit startup community: Philadelphia is a large enough market to compete in a global economy, yet small enough where entrepreneurs will find a close-knit community and support group of business partners and colleagues to foster collaboration and innovation.
According to a February 2015 Popular Mechanics article, Philadelphia’s thriving startup ecosystem sets it apart from other cities across the country. The article says: “[Philadelphia] consists of shared office spaces, incubators, accelerators, and access to funding and other support from universities, non-profits, and local and state governments. All of these things work in concert to help people turn innovative ideas into businesses.”
The article is right, entrepreneurs have access to a growing network of incubator, multi-tenant, and co-working spaces across the city. Incubators and advocates like DreamIt Ventures and Philly Startup Leaders give entrepreneurs access to important networking opportunities and venture capital.
For instance, when we arrived here, we joined the Chester County Economic Development Council’s Ideas X Innovation Network (i2n) — an alliance that supports emerging growth companies by leveraging the assets of business partners and academic institutions while creating a network of physical and virtual resources. i2n has been an invaluable partner to us. They helped us every step of the way, from finding our new office space to introducing us to our lawyer and accountant.
Economic incentives for doing business: There are a number of programs, grants and tax credits designed to support business growth throughout the region and state.
With the guidance of i2n, we recently applied for the Keystone Innovation Zone (KIZ) tax credit — a tax incentive program which grants up to $25 million in tax credits annually to eligible new startups in Pennsylvania. As one of the recipients chosen for the credit, we’ve been able to significantly offset our costs and invest those savings back into our business.
Similar to the KIZ tax credit, there are several other state- and city-run programs designed to provide businesses with valuable funding and economic support. The Keystone Special Development Zone (KSDZ) is an incentive-based tax credit program that promotes the redevelopment of abandoned, deteriorated commercial and industrial sites. Eligible Pennsylvania businesses in a KSDZ can earn restricted tax credits in exchange for job creation within the zone. Another example is the Job Creation Tax Credit, which is available to approved businesses that agree to create jobs within three years in Pennsylvania.
At the city level, through a partnership with the Philadelphia Industrial Development Corp., companies are provided with a number of resources and incentives, including low-cost financing and tax credits for job creation, site selection assistance for publicly owned properties and assistance to support workforce recruiting and training.
Location, location, location: As the second largest city on the Eastern seaboard, Philadelphia is centrally located between two major business hubs (New York and Washington, D.C.), making it a very convenient place to set up shop.
An abundant talent pool of job candidates: Because Philadelphia is home to so many excellent colleges and universities, as well as companies which attract top talent, employers in the Philadelphia region can have their pick of an abundant pool of qualified job candidates of various skill levels and backgrounds. This has been very beneficial in helping us to recruit and hire great employees.
All of these qualities combined make the Greater Philadelphia region an attractive destination for young growth companies like ours to thrive. I’m optimistic that we’ll continue to hear and read more about Philadelphia as an up-and-coming destination for businesses.