Where do you see philly in 20 years (Philadelphia, Chester: income, income tax)
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I'm not a fan of incubator hubs because every city seems to have them and they only seem to attract guys who couldn't hack it in the real world. I'd rather a big company announce they are moving into the area because it raises the profile of the city. What's more, stuff from incubators can end up in another part of the world and they can reap the benefits.
Industry clusters, life sciences especially, don't develop and grow becuase of big company moves. The Bay Area and Boston are the leaders in life sciences because MIT and Stanford are the leaders of commercializing research and built the region-wide infrastructure to support it. The Bay Area is home to PARC the mother of all incubator hubs. Philadelphia's comparative weaknesses are, Penn was very late to focusing on building the infrastructure to support commercializations, a smallish local VC base, the absence of an elite engineering program on par with even Georgia Tech, and the presence of only one elite research university. The Bay Area has UCSF and Cal in addition to Stanford. Boston has Harvard and to a lesser extent BU.
You're very mistaken. Look at the big companies in the US today. They were not born out of incubators. They were born in dorm rooms, bedrooms, basements and garages. Incubators are good at producing lots of hype and dead ideas.
Quote:
Originally Posted by BR Valentine
Industry clusters, life sciences especially, don't develop and grow becuase of big company moves. The Bay Area and Boston are the leaders in life sciences because MIT and Stanford are the leaders of commercializing research and built the region-wide infrastructure to support it. The Bay Area is home to PARC the mother of all incubator hubs. Philadelphia's comparative weaknesses are, Penn was very late to focusing on building the infrastructure to support commercializations, a smallish local VC base, the absence of an elite engineering program on par with even Georgia Tech, and the presence of only one elite research university. The Bay Area has UCSF and Cal in addition to Stanford. Boston has Harvard and to a lesser extent BU.
You're very mistaken. Look at the big companies in the US today. They were not born out of incubators. They were born in dorm rooms, bedrooms, basements and garages. Incubators are good at producing lots of hype and dead ideas.
I work in life sciences. Life sciences companies don't get started out of dorm rooms. They are heavily dependent on NIH and privately funded research.
Stanford is in large measure responsible for why Silicon Valley exists and why the Bay Area has its entrepreneurial infrastructure. Stanford established the first university owned commercial research park which more recently was home to Facebook in Facebook's early years for example. That combined with the university's efforts to foster entrepreneurship and establish engineering programs to rival MIT's is what led to the current Bay Area economy.
None of that was accidental. Fred Terman and other MIT educated colleagues at Stanford sought to create the West Coast's MIT, albeit one with a Med school. As I wrote earlier Boston is a leading technology center because of MIT and the university's early commitment to commercializing its research. Raleigh-Durham follwed Stanford's lead and created RTP and is now a leading life sciences / tech cluster. Philadelphia was a latecomer to the game, but that's why the science center exists and it has produced some very successful companies.
I'm not mistaken. You don't know what you are talking about. I'm also correct about what Philadelphia's strengths and weaknesses are. It's based on industry and other research not my offhand opinion.
Last edited by BR Valentine; 04-01-2016 at 04:04 PM..
Other than churning out graduates, universities don't have a good track record when it comes to commercialization.
Quote:
Originally Posted by BR Valentine
I work in life sciences. Life sciences companies don't get started out of dorm rooms. They are heavily dependent on NIH and privately funded research.
Stanford is in large measure responsible for why Silicon Valley exists and why the Bay Area has its entrepreneurial infrastructure. Stanford established the first university owned commercial research park which more recently was home to Facebook in Facebook's early years for example. That combined with the university's efforts to foster entrepreneurship and establish engineering programs to rival MIT's is what led to the current Bay Area economy.
None of that was accidental. Fred Terman and other MIT educated colleagues at Stanford sought to create the West Coast's MIT, albeit one with a Med school. As I wrote earlier Boston is a leading technology center because of MIT and the university's early commitment to commercializing its research. Raleigh-Durham follwed Stanford's lead and created RTP and is now a leading life sciences / tech cluster. Philadelphia was a latecomer to the game, but that's why the science center exists and it has produced some very successful companies.
I'm not mistaken. You don't know what you are talking about. I'm also correct about what Philadelphia's strengths and weaknesses are. It's based on industry and other research not my offhand opinion.
Other than churning out graduates, universities don't have a good track record when it comes to commercialization.
Quote:
Originally Posted by BR Valentine
I work in life sciences. Life sciences ... are heavily dependent on NIH and privately funded research.
Nope. Work in private sector. Try re-reading what I wrote. I wrote that federal and private research funds are key. I did not write that most life sciences companies come out of academia. Regardless, life sciences companies don't get started in dorm rooms and garages.
There is no denying Stanford's and MIT's outsize influence on their respective regions. Stanford didn't create Hewlett-Packard, but it did foster its development and the two founders wouldn't have been in Palo Alto if not for Stanford's presence in the first place. Fred Terman and the university were early investors and provided other assistance to the two Stanford alumns. The university has been responsible for intentionally promoting an entrepreneurial ecosystem realated to engineering and science in the Bay Area. The same is true for MIT in the Boston metro. That's what has never been as well developed in Philadelphia and has a lot to do with why the area trails the other two.
Highly unlikely that a large company will move to a city with a 4% wage tax in a state with a 10% corporate tax. Philly's best days are well behind it in terms of being a corporate hub. It's continues to lose corporate HQ's on a regular basis (recently Sunoco, Cigna, GSK, and Rohm & Haas), either due to acquisition or relocation, and nobody is moving in to take their place. Not just a Philadelphia problem, obviously. Part of a larger nation-wide trend to move to more competitive business environments.
Not to get too far down the political rabbit hole, but you're creating a false dichotomy.
The cost of business is far higher in cities like, Boston, New York and San Francisco than Philadelphia, but they all have very robust corporate sectors. Taxes are but one factor (and one that many people focus on way too much) in business location decisions--access to human capital, infrastructure, public education, local cultural institutions and amenities--these are additional crucial factors that the business community cares about, as well.
Not to mention, it is a fool's errand for any city to shell out constant tax breaks for major companies. It's essentially a race to the bottom as each city has to publically subsidize their own supposed "competitive advantage" with the business community. I'm not saying there aren't some fiscal policies that can't be implemented to ease the cost of doing business, but the reality tends to be that businesses most often makes locational decisions for reasons outside of anyone's control but the Board of Directors.
In addition, although modern Philly has a dearth of corporate HQs compared to many other cities, I'd argue that the city is taking a much more sustainable strategy moving forward to home-grow as many mid-to-small size businesses as possible, particularly by strengthening the academic and medicine commercialization pipeline that has enormous potential in the region (e.g., University City research).
Trying to attract an elusive Holy Grail corporation is pretty much a once-in-lifetime event for any city not named Chicago or New York.
Not to get too far down the political rabbit hole, but you're creating a false dichotomy.
The cost of business is far higher in cities like, Boston, New York and San Francisco than Philadelphia, but they all have very robust corporate sectors. Taxes are but one factor (and one that many people focus on way too much) in business location decisions--access to human capital, infrastructure, public education, local cultural institutions and amenities--these are additional crucial factors that the business community cares about, as well.
Not to mention, it is a fool's errand for any city to shell out constant tax breaks for major companies. It's essentially a race to the bottom as each city has to publically subsidize their own supposed "competitive advantage" with the business community. I'm not saying there aren't some fiscal policies that can't be implemented to ease the cost of doing business, but the reality tends to be that businesses most often makes locational decisions for reasons outside of anyone's control but the Board of Directors.
In addition, although modern Philly has a dearth of corporate HQs compared to many other cities, I'd argue that the city is taking a much more sustainable strategy moving forward to home-grow as many mid-to-small size businesses as possible, particularly by strengthening the academic and medicine commercialization pipeline that has enormous potential in the region (e.g., University City research).
Trying to attract an elusive Holy Grail corporation is pretty much a once-in-lifetime event for any city not named Chicago or New York.
There are specific reasons why certain companies in certain industries essentially NEED to be in NYC or the Bay Area (and maybe to a lesser extent Boston). They can get away with being less competitive, because they have a captive market (for the time being). There's no reason, however, why any company NEEDS to be in Philadelphia, and if you're a CEO deciding where to re-locate a company, there's no compelling reason to move there.
If you compare PA/Philly to places that are actually attracting jobs, PA has a state corporate income tax rate of 9.99% (the highest in the country) versus 0% in Texas, 6% in Georgia, and 6.5% in Tennessee. It's also no coincidence that some of these states, including Texas and Tennessee, have no tax on wage income. Compare that to Philadelphia, where it is in excess of 7%. If you're a CEO with a high income, where would you rather live?
Taxes play a great deal into these types of decisions. Unfortunately, like most northeastern states, PA/Philly became bloated over the years with inefficiency and corruption, and it is very difficult to reduce the size of government to enable a reduction in taxes. To the contrary, the people of Pennsylvania elected a governor who ran on a platform of actually RAISING taxes. This will continue to drive more and more jobs out of the state over time, and tax revenue along with it.
There are specific reasons why certain companies in certain industries essentially NEED to be in NYC or the Bay Area (and maybe to a lesser extent Boston). They can get away with being less competitive, because they have a captive market (for the time being). There's no reason, however, why any company NEEDS to be in Philadelphia, and if you're a CEO deciding where to re-locate a company, there's no compelling reason to move there.
In the 21st Century, the extent to which a company "NEEDS" to be based anywhere is rarely based on anything more than location reputation and the ability to attract/retain professional talent. Philadelphia is without a doubt making progress on the former, and based on data in recent years, is doing remarkably well on the latter.
Capital also used to be more tied to being in places like New York or San Francisco, but that is very quickly changing. If you have a good idea, there's no reason why you shouldn't be able to find investors that are willing to finance you from afar.
Quote:
Originally Posted by Angus215
Taxes play a great deal into these types of decisions. Unfortunately, like most northeastern states, PA/Philly became bloated over the years with inefficiency and corruption, and it is very difficult to reduce the size of government to enable a reduction in taxes. To the contrary, the people of Pennsylvania elected a governor who ran on a platform of actually RAISING taxes. This will continue to drive more and more jobs out of the state over time, and tax revenue along with it.
Again, you're really driving into a political debate, which I know is hard to avoid with this topic. But the fact of the matter is Pennsylvania's tax situation is much more complex than you're admitting, and it risks a very troubling scenario if it does not raise more revenue.
Unfortunately, there is little other alternative for any state than to raise taxes in the long-run. The notion that government can NEVER raise taxes for eternity is completely unrealistic, and Pennsylvania is far from alone in potentially doing so.
All of the other supposedly "low-cost" business environments will inevitably face the need to raise their own taxes as time goes on when necessary investments must be made in things like schools, infrastructure, etc. It's just that an older, much more established state like Pennsylvania is facing more of these types of issues today.
In the 21st Century, the extent to which a company "NEEDS" to be based anywhere is rarely based on anything more than location reputation and the ability to attract/retain professional talent. Philadelphia is without a doubt making progress on the former, and based on data in recent years, is doing remarkably well on the latter.
Talent will go where there is opportunity. The problem isn't that Philadelphia is an undesirable place to live, it's that there isn't much opportunity for people who want to make real money, and therefore the talent leaves. If you want to attract talent, you have to attract high-end jobs, to do that you have to attract (and retain) large companies, and to do that you have to have a favorable business climate. All the restaurants, coffee shops, and museums in the world won't change that. People can say what they want, but the reality is that jobs will continue to move away from places like PA and NJ unless something drastic is done. Personally, I gave up waiting and left.
Talent will go where there is opportunity. The problem isn't that Philadelphia is an undesirable place to live, it's that there isn't much opportunity for people who want to make real money, and therefore the talent leaves. If you want to attract talent, you have to attract high-end jobs, to do that you have to attract (and retain) large companies, and to do that you have to have a favorable business climate. All the restaurants, coffee shops, and museums in the world won't change that. People can say what they want, but the reality is that jobs will continue to move away from places like PA and NJ unless something drastic is done. Personally, I gave up waiting and left.
But there are several huge world renown companies in the region, they are just all located in Newtown Square, Chester Springs, and King of Prussia, not Philadelphia.
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