PHILADELPHIA, PA — Members of the Manufacturing Task Force and Advisory Committee and officials from the Department of Commerce and the Philadelphia Industrial Development Corporation (PIDC) joined Mayor Michael A. Nutter to unveil the Manufacturing Growth Strategy for Philadelphia, a detailed analysis with recommendations aimed at growing manufacturing in the Greater Philadelphia region. The findings are the result of the City of Philadelphia’s Manufacturing Task Force, which was formed in January 2013 to evaluate the City’s competitiveness for manufacturing and recommend specific strategies for improvement. After the release of the report, the Task Force members toured the production line at AgustaWestland, a global helicopter manufacturing company in Philadelphia.
“Philadelphia has a history of great manufacturing and many assets, like location, infrastructure and research institutions, that can support continued growth in this sector of the economy,” said Mayor Nutter. “The Task Force’s analysis and recommendations are the beginning of a long-term strategy to bolster manufacturing in Philadelphia. I want to thank Task Force members their hard work and dedication on this report, especially the Co-Chairs. If we take the right steps, I am confident that Philadelphia’s manufacturing will continue to grow and provide good-paying jobs for residents.
Led by a diverse group of private sector business leaders, the Task Force worked in concert with an Advisory Committee representing government, economic development, academia, utilities, labor, and workforce development to identify key issues and recommend attainable solutions to make Philadelphia a better place for manufacturing.
Serving as co-chairs on the Task Force were: Daniel K. Fitzpatrick, President and CEO of Citizens Bank and RBS Citizens for Pennsylvania, New Jersey and Delaware; Alan Greenberger, Deputy Mayor of Economic Development for the City of Philadelphia; The Honorable Bobby Henon, City Council of Philadelphia; and William Hunt, CEO of AgustaWestland Philadelphia.
“The first goal of the Task Force was to understand the manufacturing sector and create a detailed definition. Philadelphia’s manufacturing sector is broad and diverse; it no longer features the traditional ‘smoke stacks’ and vertically integrated factories that formerly abutted residential neighborhoods,” said Alan Greenberger, Deputy Mayor of Economic Development. “Today, Philadelphia’s manufacturing industry is faster, more technologically driven, and largely exists within 15 industrial districts located throughout the City. Among the city’s competitive strengths are chemicals, medical equipment, machinery, food processing and transportation equipment and parts.”
Once the Task Force defined the manufacturing sector, the next step was to perform an analysis of key foundational issues identified as critical to the sustained growth of the manufacturing sector in Philadelphia. These issues are talent, innovation, government, energy and logistics, utilities and transportation.
After the Task Force developed the manufacturing sector definition and the key foundational issues were analyzed, the group established a series of strategy recommendations to encourage growth in manufacturing.
- Talent – Expand technical training programs offered by the community colleges to align with the needs of the manufacturing sector. Increasing opportunities for technical skills training and boosting enrollments will create a pipeline from which manufacturers can recruit. Additionally, focus high school and technical education programs on science, technology, engineering and math (STEM) to support manufacturers and help close the skills gap;
“An available and qualified workforce is critical to the success of manufacturers in the Philadelphia region,” said Bill Hunt, CEO of AgustaWestland. “A significant investment in education – including the expansion of technical programs and reinforcement of STEM skills in the classroom – will prepare our young people today for the manufacturing jobs of tomorrow.”
- Innovation – Expand linkages between existing university product design programs at local universities and regional manufacturers. Providing local firms with access to students enrolled in these programs will produce immediate benefits for both parties. Furthermore, by using the federal manufacturing accelerator model, Philadelphia should explore continued development of these connections into new partnerships between industry and universities to establish innovation centers or incubators to assist private companies in solving technical problems and spur innovation;
- Access to Capital – Create new loan and/or equity funds targeted specifically to small and mid-size manufacturers investing in product development and innovation which would offer an alternative to funding major investments in new products or technologies from cash flow alone. Also, expand access to flexible business loans for small equipment purchases and working capital. PIDC ought to utilize its recent CDFI designation to raise new private capital for this type of small business lending;
Citizens Bank President Daniel K. Fitzpatrick discussed the recommendations from a financial standpoint. “As with all types of business, access to capital is necessary in order to grow and expand. By increasing access to flexible capital through flexible business loans and equity funding targeted to small businesses, Philadelphia’s manufacturing sector can prosper through growth in innovation and product design.”
- Advocacy, Networks and Business Development – Conduct an image campaign educating students, parents, teachers and guidance counselors about employment opportunities in manufacturing and how they can provide a challenging work environment, livable wages and a path for professional growth. Also, implement a focused business attraction campaign to publicize the City and region’s competitive advantages for manufacturing;
- Government & Regulation – Decrease the tax burden on manufacturing companies and identify targeted incentives to decrease operating costs, and continue to preserve by-right zoning in industrial corridors in order to protect manufacturing users from being priced out of the City or from land speculators. Also, the Task Force recommends enhancing communications between government and manufacturers while providing services to the industry to be done through a working group formed and convened by the Department of Commerce consisting of those actively engaged in the manufacturing community to coordinate the implementation of recommendations outlined by the Task Force;
Councilman Bobby Henon added, “An important step to reducing cost gaps with competing regions is addressing the tax burden on manufacturers and creating a simple and competitive tax and regulatory environment. The new Single Sales Apportionment tax-reform legislation the City will begin implementing in 2014 will addresses the rising tax burdens previously faced by businesses allowing for a decrease in their business tax liability.”
- Energy – Increase the supply of natural gas and natural gas liquids available to manufacturers in the City and Region by increasing pipeline capacity which will help provide a strong competitive advantage to the chemical and petrochemical clusters. Also, promote the use of energy efficient technology, distributed energy systems and smart grid technology to improve energy efficiency of large manufacturing operations.
“Through these recommendations, we believe we have developed the foundation for a comprehensive strategy that will strengthen Philadelphia’s identity as a major player in the manufacturing sector,” said Deputy Mayor Greenberger. “As we implement these strategies, we will be positioned as an attractive location to private sector investors and public funding opportunities that lead to job creation in our city.”
Efforts to implement the recommendations made by the task force are already underway. Mayor Nutter has directed the Department of Commerce to convene monthly and create a roadmap to implement the recommendations, coordinate the attraction of new manufacturing companies to Philadelphia and work together to pursue federal and other funding opportunities. Some early action items identified by the Mayor include the development of Philadelphia’s Advanced Manufacturing Industry Partnership career pathway that will be expanded to include field trips and job shadowing for high school students. The pathway will also be extended to internships and co-ops for post-secondary and vocational students drawn from the initial cohort that completed their work this past summer.
