Study: Ben Franklin Grew Pa.’s Economy by $4.1 Billion, Created 11,407 Jobs from 2012 to 2016
Challenges remain because of state funding shortfalls.
PHILADELPHIA, Pa. (Jan. 9, 2019) –With a focus on startups and innovation, Ben Franklin Technology Partners (Ben Franklin) remains a powerful job creation and high-tech economic development engine for Pennsylvania, according to the latest independent economic analysis of the organization. But state funding shortfalls are starting to curtail the partners’ ability to fund companies appropriately, creating missed opportunities.
An in-depth analysis from two nonpartisan research organizations, The Pennsylvania Economy League and KLIOS Consulting, found that Ben Franklin helped to create 11,407 high-paying jobs, generated $386 million in tax receipts for the state, and boosted the commonwealth’s overall economy by $4.1 billion between 2012 and 2016.
Every dollar invested by the state into Ben Franklin generates $3.90 in additional state taxes, the analysis found.
“Our region has captured national attention for its growing community of entrepreneurs and innovators, who are offering new solutions to real problems; solutions that are the basis of new enterprises that attract and retain talent here at home” said RoseAnn B. Rosenthal, President & CEO of Ben Franklin Technology Partners of Southeastern Pennsylvania. “We interact with nearly 600 enterprises annually but can invest in a small percentage: 50 to 60 startups each year. Our region must increase its ability to seed and nurture innovation if we are to remain competitive and generate the economic opportunities that are critical for sustainable families and communities.
Ben Franklin Technology Partners serves all 67 counties through four regionally based centers. Each center is united by a single mission — to invest in early-stage innovation-led firms and help to develop and support a more competitive and attractive Pennsylvania economy that creates highly paid, sustainable jobs. The partners also work with the state’s manufacturers to help them apply product and process innovations that enable them to be more internationally competitive.
According to the analysis, “The Economic Impact of Ben Franklin Technology Partners,” which represents the fifth in a series and covers the period from 2012 to 2016:
- Ben Franklin invested in 560 companies across the commonwealth.
- These investments generated 4,182 jobs in client firms, plus an additional 7,225 spinoff positions for a total of 11,407 new Pennsylvania jobs.
- That helped to boost Pennsylvania’s economy (Gross State Product) by $4.1 billion.
- Among the reasons for the large impact on the state’s GSP is that these jobs are in industries that pay annual salaries of $79,364 per year, or 52 percent higher than the average private nonfarm salary in Pennsylvania.
- Pennsylvania received $350 million in additional state 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 in state revenue due to Ben Franklin.
Since its inception, Ben Franklin has invested in more than 4,500 technology-based companies and boosted the state economy by more than $25 billion, helping to generate 148,000 jobs through investments in client firms and spinoffs companies in Pennsylvania.
The findings of this analysis come at a critical time for Ben Franklin.
Not only is competition fierce with other states launching and investing in their own high-tech economic development programs, but state funding for Ben Franklin Technology Partners has declined sharply over the years.
Since 2007-08, state funding for Ben Franklin has dropped more than 50 percent, from roughly $28 million to $14 million per year. Because of diminished state funding, Ben Franklin, which relies on state funding, already has been unable to invest in some deserving companies and has seriously short-funded others. Efforts to bring new customers and product innovations to small manufacturers also are hurt.
Still, the Ben Franklin program is among the most widely known and emulated state technology-based economic development programs in the nation, supporting fledgling enterprises at their most vulnerable point — the early stages of commercialization and market development.
Ben Franklin clients come from a variety of industries — from computer software, hardware and telecommunications firms to a variety of fabricated metal and industrial machinery manufacturers to life science companies, including pharmaceutical manufacturers, biotech firms, instrumentation, robotics and medical device companies.
The clients in these industries are innovative and technology-intensive, investing in research and development, intellectual property, capital equipment, and highly skilled labor.
About Ben Franklin Technology Partners of Southeastern Pennsylvania
Ben Franklin is the most active early stage capital provider for the region’s technology sectors. Ben Franklin combines best practices of venture capital with a public-spirited purpose: leading the region’s technology community to new heights, creating jobs and changing lives for the better. Ben Franklin is an initiative of the Pennsylvania Department of Community and Economic Development and is funded by the Ben Franklin Technology Development Authority. www.sep.benfranklin.org