Harrisburg Delay Shouldn't Have Been a Surprise

September 25, 2009

Just because Philadelphia's "doomsday" scenario is dead doesn't mean anyone in this region should relax. We have a lot more scenarios to consider before we can truly say we're on a path to regional prosperity.

At the Economy League, we have been as frustrated as anyone else by the seemingly intractable impasses that have marked this year's state budget debate. More and more, it seems that by the time our elected officials finish haggling over one year's money, it's time to start haggling over the next year's money. 

Make no mistake: this kind of vicious political cycle comes with a price tag. The longer any Harrisburg impasse lasts, the harder it is for anyone even remotely connected to government to plan for anything but the immediate future. School districts, police departments, social service providers, and public agencies of all kinds are forced to set aside their long-term plans and ask themselves, "What about tomorrow? What about next week? What about next month?"

That kind of short-term thinking is at times unavoidable. But long-term, stable success comes to those who plan for the months and years that follow tomorrow. That's as true for cities and regions as it is for businesses and investors. 

So, even as the specter of Mayor Nutter ‘s catastrophic budget fades, consider some of the emerging scenarios that could make or break the region's economy in the years to come:

• Health care reform could dramatically affect our life sciences industry;
• The rising cost of student loans and tuition could significantly reduce the number of prospective students for our educational institutions;
• Public and private investment could open up major opportunities in green technology and mass transit;
• Rising energy costs could have a dramatic impact on the region's competitive advantage.

These are just a handful of the changes on our horizon. If Greater Philadelphia were a smart-thinking private corporation, we would dedicate an entire department to exploring these scenarios and look for ways to turn them to our regional advantage. 

In the business world, that's called "scenario planning," and the classic case study is that of Royal Dutch/Shell which planned its response to a hypothetical Arab oil embargo years before OPEC turned off the taps. When the real embargo hit, Royal Dutch/Shell made millions while its competitors went broke.

The classic case of non-planning is, of course, that of the once-mighty General Motors, which never allowed itself to consider the possibility that Americans would buy Japanese or German cars. Turns out, they would. Neither GM nor Detroit ever recovered from what amounts to a failure of imagination, and now it's the taxpayer who pays the price for it.

Fortunately, our region has no shortage of imaginative, forward-thinking leaders. Last week, as part of our ongoing Greater Philadelphia Leadership Exchange program, the Economy League gathered more than 140 of the sharpest minds from our private, government, and nonprofit sectors to consider the many economic scenarios that could shape our region in the decades to come. 

We heard from local and national experts who helped us envision Greater Philadelphia's possible futures, and we explored the kind of questions that go far beyond the number of police officers or librarians who should or shouldn't be laid off. What are our long-term economic advantages? With whom do we actually compete? Where do we invest now in order to benefit 10 or 20 years from now?

We didn't come up with any hard-and-fast answers, of course. But one thing became clear: better to be like Royal Dutch/Shell, than like General Motors. Better to find and prepare for the opportunities provided by something like health care reform, than to be blindsided once it actually happens. Better to play out all the scenarios, than to pretend that the world isn't changing all around us.

For a day, at least, we realized that the really important scenarios that face our region involve much more than the latest agreement out of the state capitol. They involve dramatic shifts in the national and global economy. Whether those shifts bring regional prosperity or more doomsday budgets is up to us.

--Steve Wray, Executive Director