Can the private sector of the Centre Region economy grow from $800 million annually to $3 billion in 20 years? Yes, says Todd Erdley, president and CEO of Videon Central and a visionary behind the 3B33 project at the Chamber of Business and Industry of Centre County.
Erdley’s energy is infectious, whether he’s talking about driving the local economy or his own business, launched in the 1990s with the advent of DVDs and then Blu-ray technology and now a major player in digital communications.
And he believes the region can climb to that $3 billion goal by 2033 — essentially expanding private dollars 400 percent.
“Is it a big hairy goal? Yes,” Erdley said. “Is it an unreasonable goal? No.”
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Why focus so heavily on private jobs when Penn State and the government already do so much for this region? That’s just the point, say Erdley and CBICC President Vern Squier, who points to a trend of “slippage from private-sector employment to public and quasi-public employment.”
From 1998 to 2012, Penn State’s share of the region’s jobs jumped from 46 to 59 percent, CDT data show, while private industry slid from 28 to just seven percent. From 1994 to 2013, Penn State research expenditures jumped by $500 million while the region lost $500 million annually in private sector revenue.
“What would we do if Penn State went away?” Erdley wonders in a question that might have seemed ludicrous before 2011 and the Sandusky scandal.
“We’ve reached a dip in the continuum,” he said. “We need to get back on track.”
Penn State now brings in about $1 billion annually in research dollars. But Erdley noted that research spending is expected to drop 3-5 percent each year, thanks to shifts in federal spending.
“Project that out 10 years,” he said. “That’s a problem.”
So how can the State College market avoid the economic troubles that have plagued other company towns when the cash cow stops giving milk?
It will be a mix of growth by existing companies and new commerce blood.
Erdley said one key is “building an entrepreneurial ecosystem” — collaboration hubs, mentoring programs, enhanced infrastructure, a small-business loan program.
The local Centre Region Entrepreneurial Network, of which Erdley is a member, is planting the seeds for a small business surge. Its membership and participation have doubled in two years — another sign that the time is right, Erdley said.
Those developing 3B33 envision 50 new local companies launched by the end of 2015, with 25 of them sustained. By the end of 2017, they say, look for 100 companies, $50 million in new revenue and 300 jobs.
Successes would build upon each other, increasing the rate of growth, Erdley said.
“We shouldn’t expect a huge amount of pop the first 5 to 10 years,” Erdley said. “But in years 10 to 20, look out.”
Of course, 3B33 is not independent of Penn State, which often sees its intellec-tual property land in the community in the form of small start-up companies. The plan also includes recruiting Penn State alumni back to the area, and convincing graduate students to start their careers — or their businesses — here.
“I don’t think they’re trying to reinvent the wheel,” said U.S. Rep. Glenn Thompson, R-Howard Township. “We have a tremendous amount of potential here. You have a lot of intellectual property coming out of Penn State. This is a centralized location with a strong transportation grid. We have exceptional natural resources.”
Squier said the business community has reacted positively to 3B33, some enthusiastically asking how they can get involved, others at least waiting to see how things go.
“They’ve seen this economy grow over time in a significant number of ways,” he said, “although maybe not coached or directed ways.”
The CBICC chief’s message to business owners: “Do your best. If you need help, shout. When you have a success, also shout about that.”
Erdley is the chairman of the CBICC’s entrepreneurship committee, and assembled what Squier called an “elite team” of professionals with ties to Wall Street and Washington, D.C.
That group will need help.
“This is about a commitment to the future and moving the needle in our corporate base,” Squier said. “Everybody realizes this is a marathon type of event.”
Erdley, a one-time member of the Penn State Blue Band, longs for a harmonious local economy with the university, private industry and other areas contributing more evenly to a crescendo of shared success.
“I’m an entrepreneur,” he said. “Anything’s possible.”