As the University City Science Center helps burgeoning companies take business to the next level, the startups and "graduates" of its incubator space are pushing Philadelphia's economy forward by contributing nearly $13 billion in economic activity in the region, according to a new report.
A joint effort of the Science Center, the Economy League of Greater Philadelphia and Econsult Solutions Inc., The University City Science Center: An Economic Catalyst for Greater Philadelphia report shows the West Philly incubator helped to "drive $12.9 billion in annual economic activity" in Greater Philadelphia last year.
That's up from 2009 when companies connected to the incubator services generated $9 billion in annual economic activity, said Dr. Stephen S. Tang, Science Center president and CEO.
The $13 billion in annual economic impact came as no surprise to Matt Cabrey, executive director of Select Greater Philadelphia.
"The Science Center is successful because of this collaborative environment that provides connectivity that a small startup is looking to achieve," Cabrey said.
Tang, who says the Science Center shares the credit with its research partners, like Drexel, University of Pennsylvania, Temple University and Children's Hospital of Pennsylvania, said the upward trend could continue if we consider the factors that kept dozens of its graduates in the area.
Since the Science Center got its start in 1963, 442 companies have taken part in its incubator services, formally established as the Port Business Incubator in 2000 and later expanded to include ic@3401, which operates in partnership with Drexel University. Today 214 are still in operation.
There are 155 firms that are current incubator occupants or remained in the Greater Philadelphia region – defined as Bucks, Chester, Montgomery, Delaware and Philadelphia counties in Pennsylvania; New Castle County, Delaware; and Burlington, Camden, Gloucester, Mercer and Salem counties in New Jersey in the study – after using the incubator's services, the Science Center said.
The 155 graduates and current incubator occupants are spurring the $12.9 billion in annual economic activity and they are directly responsible for $7.1 billion in economic activity in the region, the study showed. The remaining portion comes from indirect and induced economic output.
In the 11 counties, there are 40,313 jobs that are directly or indirectly supported by the 155 firms, the study showed. That translates to one in every 100 jobs in the region.
Montgomery County boasted the most jobs with 5,785, according to the report, although at 22 employers, the suburban municipality had nearly half as many companies as the city. In Philadelphia, 45 firms account for 4,149 jobs, which Tang says is a bit skewed since the startups currently operating at the incubator, some with fewer than five employees, are included.
Five recent graduates – Avid Radiopharmacueticals, Invisible Sentinel Inc., Integral Molecular, Pulsar Informatics Inc. and Optofluidics – all stayed put not only in Philadelphia but within the Science Center's West Philly properties.
"Over the past six or seven years, companies that have graduated from an incubator have stayed in Philadelphia," he said. "It bucks the historic trend, which is start in the city, then leave the city."
"I think they made the determination that they would rather stay and grow their workforce here in Philadelphia then risk losing the workforce by moving elsewhere," Tang said.
Many firms while embedded in the incubator had staff members that were affiliated with its nearby research partners.
"And then those people chose the city to live in," he said.
To keep driving the momentum, Tang suggests a continued focus on developing live-work-play communities, where walkability is emphasized, and turning efforts to recruit companies to Philadelphia to those that already have a high number of millennials in their workforce.
He also said the recent work of individual institutions to combine their efforts to support startups and entrepreneurs needs to continue. "We need to be working together a little more intentionally," Tang said.
With a nod to the future uCity Square, Select Greater Philadelphia's Cabrey says, "We are already doing a lot of this, but we need to do more of it."
"The connectivity to expertise and the connectivity to capital are not necessarily easy to access," continued Cabrey, who also attributes some of the graduates' success to the Science Center's existing partnerships and encourages further collaboration among local institutions.
"Keep going outside the building," he said.
Life sciences, a well-established industry in our region given the presence of Big Pharma, is an area where Tang anticipates more growth given the number of research organizations and other related companies, like Independence Blue Cross, in the city and suburbs.
The report also showed the 155 local companies have an average salary of $103,000, which is almost twice as much as the region's median annual wage of $52,000.
The finding demonstrates the incubator drives growth in high-value sectors, which generally pay more.
"You want to not only be a destination location for companies, but also a destination location for careers to develop," Tang explained. "So it is possible to move around not only from the company you are working for today, but to other companies to advance your career."