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Pennsylvania’s innovation economy remains challenged

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(The Center Square) – Pennsylvania’s innovation economy is highly concentrated in three hubs, and expanding growth statewide remains a challenge.

Though the commonwealth has some strengths in research, it’s not translating into its full potential said the director of Brookings Metro.

“The full promise of Pittsburgh’s next economy remains unrealized,” said Alan Berube, interim vice president and director of Brookings Metro, during an event in the city on how to revitalize American industry. “The region’s top-flight research assets are not yet yielding top-flight job creation and inclusive growth.”

Berube complimented the Pittsburgh area’s advanced industry, pointing to computer systems design, scientific research and development, and high-tech instrument manufacturing. Though it’s has above-average growth in productivity and earnings, the smaller size of Pittsburgh’s advanced manufacturing sector means it still lags.

A Brookings ranking found that, of 56 regions, Pittsburgh was 54th for its change in jobs since 2012 and 50th for its change in employment rate. The region’s share of jobs in advanced industry is still below the American average.

Advanced industry jobs in both Pittsburgh and Philadelphia, according to data that Berube shared, lag behind the familiar hubs of Boston, North Carolina’s Research Triangle Park, the Bay Area and Seattle.

However, Pennsylvania is also chasing parts of Texas, Kansas, Wisconsin and Michigan.

Innovation in the state, experts and business leaders have said, must overcome a “valley of death” to succeed. That struggle comes from lacking the workforce – skilled and unskilled – to fill jobs, statewide regulatory headaches that cause delays, and a lack of incentives and investment.

Young people leaving for other states and business leaders looking to expand complain of a lack of opportunity within Pennsylvania’s borders.

But more collaboration on things like job training has given some experts hope.

“We need to align our policies better,” said Rob Cherry, CEO of Partner4Work. “When a business comes to this area, they want to explore (on-the-job training policies), they don’t care where it comes from – they want it all to look the same.”

Government grants that bring different workforce development boards together to align policies, he said, have helped get through some of those headaches.

“If these training programs don’t truly benefit employers, they’re just not going to work,” Cherry said.

To build worker pipelines for advanced manufacturing requires a years-long commitment and focus, which means they carry a risk of petering out. Sustaining them has been a challenge, Brookings Metro Senior Fellow Mark Muro said.

“How do we make that convergence happen, how does that conversion from research to employment growth actually occur?” Muro said. “I think we are learning a lot more about that and realizing that federal research and development is a prerequisite – but is not sufficient by itself. Regions have to take a lot of responsibility for what happens as ideas move within the university, through the walls, and into the surrounding ecosystem.”

Universities aren’t walled-off institutions of education – they have to be more, he said.

“Just having a research university isn’t enough; the university itself has to want to make these tech conversions happen,” Muro said.

For economic growth, he said, scaling-up technological advancements may be more important than research. Without the supporting networks of university leaders, entrepreneurs, and the support of political leaders, growth is hard.

Rick Siger, secretary of the Department of Community and Economic Development, said state leaders can clear the way for some growth.

“We don’t have real estate solutions for the kinds of significant advanced manufacturing we’re talking about,” Siger said. “A lot of those companies that are benefiting from this federal stimulus cannot locate here because there’s literally not a place to put them.”

Gov. Josh Shapiro’s administration has proposed a $500 million program to find and prepare sites for that sort of growth, he said, along with a “regional competitive challenge” to push regions to think of ideas to grow and prioritize at the state level.

If all goes well, Siger sees an opportunity for big-city and small-town Pennsylvania alike.

“We have to be transparent and real,” he said. “These innovation industries, though located in urban areas, have the potential to have real positive impact in rural areas – but it takes real intentionality to do that,” he said.

Intentionality would also mean a long-time focus.

“These regions can’t be transformed in one or two years,” Muro said. “It will take a decade of patient, consistent, strategic working with a degree of support from federal and state investments.”

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