Innovation Drives Greater Philadelphia’s Diverse Economy
Greater Philadelphia is an economic force, a breeder reactor of innovation that has transformed the 11-county, three-state region into a highly diversified economic powerhouse.
Greater Philadelphia is an economic force, a breeder reactor of innovation that has transformed the 11-county, three-state region into a highly diversified economic powerhouse.
“We have a very diverse economy,” says Tom Morr, president and CEO of regional economic development marketing organization Select Greater Philadelphia. “It’s not dominated by any single industry, which makes it more stable. We don’t rise as fast in good times, but we don’t fall as far.”
The region includes five counties in Pennsylvania, five in new Jersey and one in Delaware as well as the cities of Philadelphia; Wilmington, Del.; Camden, N.J.; and Trenton, N.J.
Within a 200-mile radius of the region are 47 million people and economic activity that contributes $2.8 trillion to the U.S. Gross Domestic Product, a figure that would make it the fifth largest economy in the world.
“Greater Philadelphia is right in the middle of the largest economy concentration in the U.S.,” Morr says. “It’s in the heart of a huge market that includes New York and Washington. Being in the middle of this mega-metropolis is a good thing.”
A Home for Professionals
One of Greater Philadelphia’s significant assets is its education system. The region boasts 101 colleges and universities, and each year 85,000 students graduate with a degree, providing a supply of highly educated workers.
The region includes headquarters for 13 Fortune 500 companies, and its highly diverse economy includes major clusters in life sciences, information technology, clean energy, advanced manufacturing, food production, logistics and financial services.
“We are strong in business and financial services,” says Morr. “Not only banking but insurance. And we have a significant amount of investment management. Vanguard (which has its headquarters in Chester County, Pa.) manages more than $2 trillion in mutual fund assets.”
The region has cultivated an active and innovative technology sector that leverages the presence of major players in industries such as financial services, health care and communications.
Siemens Healthcare, a provider of health-care information technology; diagnostic, imaging and therapy systems; and medical devices maintains its U.S. headquarters in Chester County, Pa. Comcast, the communications giant whose business includes ownership of NBC Universal as well as cable television, phone and Internet services, is based in Philadelphia.
“Philadelphia is a premiere place to do business, and that is why Comcast has called the region home for 50 years,” says Karen Dougherty Buchholz, the company’s vice president of administration. “Greater Philadelphia offers businesses a powerful combination of talent supplied by world-class educational institutions, a supportive infrastructure, state-of-the-art facilities, a diverse, balanced and resilient economy, as well as access to leading arts and culture that make the quality of life here top-notch.”
And that combination of qualities has made the region an attractive place for businesses to locate and expand.
Trendy retailer Urban Outfitters, which includes its flagship brand as well as the Anthropologie and Free People chains, announced a massive expansion of its headquarters presence at Philadelphia’s Navy Yard, where it will eventually add 2,000 jobs and refurbish 250,000 square feet of office space as part of a $210 million expansion.
Campbell Soup Co. has been located in Camden, N.J., since 1869. In the early 2000s, the company considered moving, but recommitted to the city in 2007. Campbell has invested $132 million in the area, revitalizing the company’s campus and adding an 80,000-square-foot employee center.
Additionally, GuardianMPS, a subsidiary of British-based Guardian24, announced in fall 2013 that it would establish its U.S. headquarters in Philadelphia in early 2014. The company transforms a broad range of cellular and smartphones into dedicated mobile personal safety devices. The company recently completed a working trial of its product with the city’s Department of Human Services and has signed a contract to expand this service to more employees.
Henry Woods, CEO of Guardian24, said the company, which expects to create 30 headquarters jobs, came away impressed with its initial experience with Philadelphia.
“We have found the city very welcoming and professional as it supports potential incoming organizations,” he says. “Separately, we also found the city to be highly innovative.”
Energy Changes With the Times
The region is also seizing on opportunities in energy created by proximity to the massive Marcellus Shale play. Four refineries in the region – one in Delaware and three in Pennsylvania – are getting millions of dollars in investment to be repurposed to make products from Marcellus Shale gas.
Sunoco formed a joint venture with the Carlyle Group to repurpose its Philadelphia facility into the new Philadelphia Energy Solutions, which processes 330,000 barrels of crude per day. Another refinery was repurposed to produce jet fuel for Delta, providing 250,000 gallons of jet fuel per day.
“What could have been a loss of as many as 36,000 jobs became positive growth opportunities,” says Select Greater Philadelphia’s Morr.
Manufacturing Becomes Advanced
Manufacturing remains a key component of the region’s economy, though it has evolved from its traditional smokestack roots to highly sophisticated production that can take advantage of the region’s access to workers with the math and computer skills required for technology-driven processes.
“During the 1950s, Philadelphia was a major manufacturing area; 45 percent of residents had manufacturing jobs, at a time when the national average was 30 percent,” Morr says. “Today the national average is 10 percent, and Greater Philadelphia’s manufacturing jobs account for 6.8 percent. We used to make clothing, locomotives and steel; today we make things like helicopters, satellites, pharmaceuticals, vaccines and ships. It’s cleaner, brighter and safer. It allows us to offer a better working environment and creates new opportunities that will help propel Philadelphia into the future.”