Ben Franklin Technology Investment Grew Pennsylvania Economy by $9.3 Billion, Pennsylvania Economy League Study Shows

Impact study shows job creation, 3.5 to 1 payback for every dollar invested

HARRISBURG, PA - Government investment in early-stage technology companies and in innovation in established manufacturers in Pennsylvania from 2002 to 2006 injected billions into the state economy, returned $3.50 for each $1 spent and created thousands of new high-wage jobs, according to a new study released by the Pennsylvania Economy League.

The economic impact study shows that technology companies funded by the Ben Franklin Technology Partners (BFTP), a statewide economic development network, boosted the state economy (gross state product) by $9.3 billion from 2002-2006.

"The study shows that as federal and state policymakers look for proven ways to stimulate the economy, investments in new technology companies and industries should be a priority," said Rebecca Bagley, deputy secretary of the Pennsylvania Department of Community and Economic Development (DCED).

Ben Franklin funding comes from the Ben Franklin Technology Development Authority under guidelines that target promising companies in technology-driven fields such as information technology, biotechnology, nanotechnology, electronics, communications, advanced manufacturing, advanced materials and alternative energy and green technology.

"We found that companies and communities across the Commonwealth have experienced real benefits from the assistance provided by Ben Franklin," said Economy League of Greater Philadelphia executive director Steven T. Wray. "Ben Franklin companies have developed new products, established production capacity and contributed new jobs and income. They've also expanded the state's tax base."

"From 2002 through 2006, the Commonwealth received more than $517 million in additional state tax revenues as a direct result of Ben Franklin programs," added RoseAnn Rosenthal, president and CEO of Ben Franklin's Southeastern Partner in Philadelphia. "That represents a 3 ½ to 1 payback to the state on its $140 million investment during the same period."

Other key findings:

• From 2002-2006 Ben Franklin generated an additional 10,165 "job-years*" in client firms, and as a result of the ripple effects of client investments, generated an additional 22,667 job-years in Pennsylvania beyond that. The result was that Ben Franklin produced a total of 32,832 job-years in the state that otherwise would not have existed.

• Ben Franklin-supported companies are in industries that pay relatively high annual salaries and wages. The weighted-average annual salary for Ben Franklin industries is $54,509, or 33 percent higher than the average for all private nonfarm industries in Pennsylvania.

The Pennsylvania General Assembly created the Ben Franklin network in 1982 to grow technology companies and create new high-wage industries in the state. The 2008 study was the third impact evaluation of Ben Franklin programs, the first conducted by the Pennsylvania Economy League.

This latest study confirmed the wisdom of continuing to invest public dollars in creating and nurturing technology enterprises and industries," Rosenthal said. "The Economy League study shows that since 1989, Ben Franklin has boosted the state economy by more than $17 billion."

During its 25-year tenure, Ben Franklin has invested in more than 3,000 companies. Many were at the earliest stages of development when they first sought assistance-when fundraising is most critical and hardest to obtain.

Ben Franklin has often been the first institutional investor for firms, providing seed capital for initial product development and commercialization efforts. The network follows a competitive process that carefully considers a firm's potential for success and job creation before investing state funding. A Ben Franklin investment is a recognized and significant endorsement to an early-stage firm, earning it credibility and attention from follow-on investors.

Ben Franklin earned international and national recognition for its technology development effectiveness in 2008, including the 2008 Excellence In Economic Development Award from the International Economic Development Council (IEDC) in the category of Technology-Based Economic Development. The IEDC has more than 4,500 members across the US, Canada, Europe, Australia, New Zealand and other nations.

It also won the 2008 U.S. Department of Commerce Economic Development Administration (EDA) Economic Development Award for Technology-led Economic Development in recognition of its recent achievements and work over the past 25 years.

*Job-years are equivalent to the number of years of full-time work created by the program. For example, if a firm employed three more workers for five years as a direct result of the program, that is expressed as 15 additional job-years.

About Ben Franklin
Ben Franklin is among the most widely known and emulated state technology-based economic development programs, with a national and international reputation. Ben Franklin provides capital and expertise to startups, early-stage and established companies and promotes the development of a statewide climate and infrastructure favorable to technology-based companies. In so doing, Ben Franklin creates immediate economic gains while also building a foundation for continued economic growth in the future. Ben Franklin operates on a regional level through four Partners strategically located in Pittsburgh, University Park, the Lehigh Valley and Philadelphia. For more information, visit www.benfranklin.org.

About the Pennsylvania Economy League (PEL)
The Pennsylvania Economy League is an independent, nonpartisan, nonprofit, public policy research and development organization. Their mission is to provide critical information, perspective and support to the business, civic and governmental leadership of the communities nd the state in their efforts to make Pennsylvania a better place to live, work and do business. The research for this study was conducted by PEL's affiliate, the Economy League of Greater Philadelphia. For more information, call 215 875 1000 or email [email protected].

Contact:
Ben Franklin Technology Partners
Terry Singer, Director, Statewide Affairs
(717) 234-1748
[email protected]