It\’s not easy to reinvent or to grow a regional economy. That old proverb, \”It requires a whole village to boost a child,\’\’ does apply equally to creating a sustainable and vibrant economy since it requires the whole community to be successful in sometimes complicated and intertwined facets.
There are some key ingredients to many successful regional economies: A powerful community of entrepreneurs with investment finance is essential, but same with the availability of state-of-the-art technology. Innovative companies should be willing to work hand-in-glove with institutions better education to help develop technology and to create other high-tech products and services. And perhaps, most important of all is the local workforce and also the region\’s standard of living.
So seven years ago, business and education leaders within the nine-county area that comprises Northeastern and Eastern Pennsylvania attempted to rebuild the foundation of our own economy from manufacturing to technology with the assistance of a $13 million grant in the U.S. Department of Labor and the Workforce Innovation in Regional Economic Development (WIRED) project.
The genesis from the 2004 grant was the belief that the region could be a backup site for that financial district of New York City and even Philadelphia if another 9/11-type disaster occurred. Some people, though, have suggested that the results of the WIRED grant, later dubbed \”Wall Street West,\’\’ were at best, mixed.
Few people knew that shortly after the grant was received that the financial markets would experience an historic meltdown. The resulting contraction in financial-related business, coupled with the inability of the commonwealth to provide the high-speed connection from New York City that was promised like a match to the grant, inhibited the growth of Wall Street West, per se. Our local economy, though, is much better today due to the grant. A lot was accomplished thanks to significant input and direction in the Northeastern Pennsylvania Technology Institute (NPTI) and also the Great Valley Technology Alliance (GVTA).
The formation from the NPTI and GVTA was based upon the recommendations of a study conducted through the Battelle Memorial Institute that was commissioned in 1999 by the Greater Scranton Chamber of Commerce, Greater Hazleton CAN-DO, and the Greater Wilkes-Barre Chamber of Business and Industry. They visualized a \”Great Valley Technology Corridor,\” running along Interstate 81 and finally branching out to Stroudsburg and the eastern part of the state. The concept was based upon a proven system for Twenty-first century economic development where innovative new companies paired with area colleges and universities to create high-tech services and products.
Of course, creating a community with strong entrepreneurial attributes based on state-of-the-art technology does not happen overnight. It requires many interested parties, spanning several areas of expertise and working closely together to create a new technology-based focus. The NPTI and GVTA – that have subsequently merged – helped facilitate the WIRED project. They were conduits for the distribution of competitively-awarded funding for internships that were supported by the WIRED grant and also the Keystone Innovation Zone (KIZ) in NEPA. KIZ allowed small, start-up businesses the opportunity to sell tax credits to larger companies and by so doing, enhance the capital they have to grow their new business. The NPTI and GVTA also developed an Angel Network, where local investors can review and, after discernment, invest in local businesses that offer exciting opportunities for development and growth.
The Department of Labor estimates that 90 percent of start-up companies are under-capitalized both in relation to financial resources and personnel. The WIRED grant and KIZ are a perfect match to offset this inevitable phenomenon.
With WIRED support, along with the help of the KIZ program, countless young college students fanned out to serve new firms such as Pepperjam, Baby Age, Solid Cactus, and TMG Health, to name a few. These firms go on to hire many local college graduates. Some of these companies happen to be sold to larger firms, and also the wealth developed by those sales has multiplied locally. For example, Kris Jones, the founding father of Pepperjam, is now using the capital developed by the sale of that company for any new innovative, knowledge-driven marketing firm called ReferLocal.com.
TMG, which will soon be opening a brand new office in Jessup, was among those companies that benefitted from the efforts of the NPTI and GVTA.
Two ingredients for this new knowledge-based economy are critical to a region\’s ability to compete: The first is the quality of the workforce and also the second is the quality of life. Talented and technologically-sophisticated companies will flock to areas where local college graduates be capable of help them create new wealth through hard work and innovation. Similarly, firms will grow within an area where social, cultural, and recreational facilities are prevalent where schools are good and neighborhoods are safe. These attributes are rich in the region.
Economic growth also requires well-managed technology or biotechnology-based firms which can hire young college graduates and supply them with the opportunities for career growth in NEPA. For years, this region was noted for its \”brain drain\” as countless viable young adults left the area to seek their fortune in larger cities. This tradition can be, and in part continues to be, reversed by the growth of firms that owe their success a minimum of partially to the NPTI and GVTA.
Regional leaders had to adjust their focus for Wall Street West when elements beyond their control changed the scope from the initial project. The location continues to benefit today because of the work of those innovative and difficult working people.
Michael A. MacDowell is president of Misericordia University in Dallas, Pa., where he occasionally teaches economics.