Pennsylvania, you’re slacking. When it comes to innovation — and the economic growth that it brings — Pennsylvania is a chronic underachiever, according to a report issued Thursday by the Brookings Institution that outlines how our state can get back on track.
The good news in the report, Commonwealth of innovation: A policy agenda for revitalizing Pennsylvania’s economic dynamism, is that the state has truly world-class strengths in research and development, mostly due to academic powerhouses such as Carnegie Mellon University, Pitt, Penn State and the University of Pennsylvania.
It just isn’t capitalizing on these advantages — adding far fewer high-paying “advanced industry” jobs than it should.
Brookings has designated eight “peer states” for Pennsylvania: Illinois, Indiana, Maryland, Massachusetts, Michigan, New Jersey, New York and Ohio. Our state lags behind most of its peers in innovation-related jobs, according to the 92-page report, which was funded by the Pittsburgh-based Henry L. Hillman Foundation and co-authored by Mark Muro, Robert Maxim and Yang You, with the research of dozens of Pennsylvanians cited.
“Pennsylvania universities are powerhouses, with many boasting top-echelon strengths in scientific research,” notes the report. “Only New York institutions conduct more such research. Yet for all that, the conversion of leading-edge science and technology into business expansions and employment growth in Pennsylvania remains spotty and insufficient.”
The key to the state’s future lies in clusters of “advanced industries” — 46 manufacturing, services and energy industries that form the basis of America’s innovation economy. These include medical device and electronics manufacturing, energy and chemicals production, and high-tech services such as computer systems design and software publishing. Advanced industries perform 90% of the nation’s private sector R&D and generate 85% of its patents. These industries also generate long supply chains, with an average of 2.2 other jobs being created for every advanced industry job.
Software jobs had the state’s biggest growth rate (153% from 2015 to 2021), though “Soap, Cleaning Compound and Toilet Preparation Manufacturing” was the fourth-fastest growing cluster (17% growth), which is strange.
In 2020, Pennsylvania was fourth in the nation in the amount spent on higher-education R&D spending ($4.8 billion), behind California, New York and Texas. Pennsylvania ranked 10th among all states for the growth of its higher education R&D expenditures, behind just Massachusetts among its peers and behind only Georgia and Arizona among high-growth states. Carnegie Mellon alone produces research in computer and information science at over 14 times the national average.
There are other bright spots. The state ranks above the national average in life sciences research, mathematics and statistics research. Life sciences is a significant innovation focus across Pennsylvania, with the strongest concentration in Philadelphia, which has become a global leader in cell and gene therapy in recent years. Pittsburgh has a significant cluster in robotics and autonomous vehicles.
However, the authors found that Pennsylvania lacks a visible vision and messaging on innovation and that years of budget-cutting have reduced the size and relevance of its innovation-support programs (such as the Ben Franklin Technology Development Authority).
The state also falls behind when it comes to turning research into growing companies with major employment footprints. Also, the benefits of the state’s innovation economy remain unequal by race and gender.
The Washington, D.C., think tank recommends that the incoming governor commit to innovation by rebuilding the budget for the state’s flagship innovation programs, and support an “Innovation Hubs” program to help regional innovation clusters thrive.
Brookings also suggests strategies to grow innovation outside of the state’s major metros, including strengthening the Penn State LaunchBox and Innovation Network. In addition, the state needs to focus on inclusion for workers who have been historically underrepresented in innovative industries.
“In short, Pennsylvania has much of what it takes to be a winner on a national economic map characterized by a short list of ‘superstars’ and a longer one of ‘left-behind’ places,” notes the report. “Powerhouse research universities are working on the most critical issues of the day in the life sciences, artificial intelligence, robotics, transportation and energy.”
However, there is clearly much work left to do.