Four Reasons Why: Pennsylvania Should Invest in Tech Innovation
For more than 35 years, Ben Franklin Technology Partners has served as the gold standard of tech-based economic development. However, despite our success, state funding for Ben Franklin has dropped more than 50 percent since 2007-08, from roughly $28 million per year to $14 million per year.
The impact of that reduction will be felt by deserving enterprises seeking seed capital to launch and grow their advanced technology enterprises, by the communities in which they reside and, ultimately, by the Commonwealth. Because of Ben Franklin, Pennsylvania once led in technology-based economic development. But we are now falling behind other states that are investing aggressively, and in many cases, deploying the lessons learned and approaches perfected by the Ben Franklin Partnership over the years. If we are to regain our competitive strength, we have to reverse the current downward trend by making support for homegrown innovation in Pennsylvania a budgetary priority, starting now.
Based on a recent analysis of economic impacts of Ben Franklin, here are four reasons why Pennsylvania should invest in growing its innovation economy:
1. Ben Franklin Investments Pay Dividends: Ben Franklin Technology Partners’ investments generate $3.90 in additional PA tax revenue for every state dollar invested. The program boosted Pennsylvania’s economy (Gross State Product) by $4.1 billion. That’s an excellent return on investment for our commonwealth.
However, even though Ben Franklin maintains its high commitment to efficient operations, and continues to generate results even in the face of such drastic reductions from the state, competition is fierce. Other states have adopted technology-based economic development programs of their own. Among the 12 most competitive states in this sector, their spending is now nearly triple Pennsylvania’s.
2. Ben Franklin Lifts PA’s Tax Base: Pennsylvania received $350 million in additional tax receipts as a direct result of Ben Franklin investments in client firms. Another $36 million in state tax receipts flowed from related Ben Franklin client services, for a total of $386 million.
Client revenues, purchasing, and investments rippled throughout the Pennsylvania economy, giving rise to higher employment across the state. Ben Franklin generated an additional 7,225 spinoff jobs beyond the 4,182 in client firms for a total of 11,407 new Pennsylvania jobs. That leads me to my next point…
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