PhillyTablet Inquirer Daily News
Mobile
Home Delivery
philly.com
email
font size
options
 
Thursday, January 14, 2010

Study advises Pennsylvania to grow high-tech, rather than recruit it

In a salvo to end the “economic war between the states,” a new study finds little benefit in the tax-based incentives offered to attract high-tech companies.

In fact, the researchers say it’s best to encourage companies already in your state to grow rather than recruit outside the borders.

Funny, except for a few expensive tangents (read: Aker Philadelphia Shipyard), that’s been the mantra for most Pennsylvania economic-development officials over multiple administrations since the early 1980s.

Witness the rise of the Ben Franklin Technology Partners program, Industrial Resource Centers, life-sciences “greenhouses,” and even the Keystone Opportunity Zones.

Still, the study by Good Jobs First, a labor-backed research group in Washington, D.C., is worth reading for those interested in how we might evaluate states’ economic-development efforts, especially during lean times for state budgets.

The study, funded by Pittsburgh’s Heinz Endowments, found that Pennsylvania’s taxes and incentives provided little advantage or disadvantage over its neighbors, including Maryland, New Jersey, New York, and Ohio.

For years, Greg LeRoy, executive director of Good Jobs First, has waged statistical war on the “corporate welfare.” Called “Growing Pennsylvania’s High-Tech Economy: Choosing Effective Investments,” this study skewers eight expensive high-tech deals, such as New York’s $1.2 billion effort that landed an Advanced Micro Devices factory and 1,200 jobs. (That’s $1 million per job.)

But the 106-page report also offers eight suggestions on how to make the best use of scarce funding.

The best recommendation advises requiring the executive branch to produce a “unified development budget,” cataloguing and analyzing all types of state spending on economic development. Right now, legislators and the public don’t know if tax breaks and low-interest loans are working, whether firms actually created the jobs they’d promised. Such accounting is long overdue.

After years of watching trophy deals land with a flash only to fizzle later, I can’t say I’m shocked by this study. But it should make Pennsylvania feel a little better about its future in the competition for high-value, high-tech jobs.
Posted by Mike Armstrong @ 7:31 AM  Permalink | File Under: Economic Development | Post a comment
Comments   


0 comments
About Mike Armstrong
Mike Armstrong, a business editor and writer for nearly two decades, is the Inquirer's business columnist and PhillyInc blog editor. Contact Mike via e-mail or at 215-854-2980
Advertise Here