Even in Eric Barron’s early days as the 18th president of Penn State University, the former College of Earth and Mineral Sciences dean recognized the need for more vibrant economic development in Centre County.
As early as June — just a month after taking office — Barron emphasized to local business leaders the need for more entrepreneurship — the kind born of town-and-gown partnerships, linked to regional, national and international business organizations, of capital investment from angel investors to state coffers.
The lack of a robust economic-development initiative in Centre County contrasts sharply against the millions of dollars that funnel into — and right out of — Penn State’s research and technology programs, each year.
On Wednesday, GE announced it would invest up to $10 million in a new campus innovation center to drive “cutting-edge advancements” in the natural gas industry.
While the hope to locally recoup, and perhaps even realize a return on, that investment seems plausible — the shale industry in Pennsylvania, although not an enormous presence in Centre County, is still in a healthy ascent — the harsh reality is that there really are no guarantees. In fact, there’s a poor history of any robust local return on these investments.
The paradox is simply this: Pennsylvania imports and grows tomorrow’s economic leaders at the university but exports them to more entrepreneur-friendly pastures upon graduation. That’s because the commonwealth doesn’t rigorously incubate startups and can’t offer tech — a high-growth, high-paying industry and sustainable sector — grads much in the way of large-scale employment or pay. Not surprisingly, education lopsidedly ranks supreme as the most common local industry, while hospitality, retail, health, construction and professional service jobs check in far lower.
In 2012, the most recent data available, nearly double the number of out-of-state students came to the commonwealth for higher education versus those who went out of state, according to the Washington Post and National Center for Educational Statistics. That earned Pennsylvania the No. 1 spot in the country for imports. Great. We’re getting them here.
But the bad news is we can’t keep them. The commonwealth has exported far more people ages 20-29 than it has kept in the past decade, according to the U.S. Census Bureau.
To capture the return on investment in the Centre Region is going to take more than a village; it will take a vision.
And that’s where the president of one of the nation’s top research and technology universities comes into play.
Last week, speaking before the university’s board of trustees — many of whom are successful business men and women, and many of whom operate far outside of Centre County or even Pennsylvania — Barron again raised the torch for entrepreneurship.
His plan was manifold and includes: adding entrepreneurship minors and business courses in all majors; creating partnerships between innovators and marketers; establishing a better process to foster students’ business ideas and help see them to fruition; encouraging angel investors and venture capitalists; fostering interaction between the university and organizations such as the Chamber of Business and Industry of Centre County; and seeking an additional $17.3 million 2015-16 state allocation to fund those items, as well as spending $1.8 million for eight entrepreneurs-in-residence.
In June, Barron outlined some of those same points to CBICC leaders, and they included adding more job fairs, offering monetary awards for startups, investing in sustainable fields and creating venues to showcase intellectual property for investors and venture capitalists.
“We want to transform State College as a business destination, not a place just known for education,” he told the business leaders at the time.
It would help justify the university's inordinately high tuition as well as Barron seeking additional state appropriations to create a stronger local economy — one that doesn’t rely solely on the university for employment.
More diverse employment equals a better quality of life and a stronger, more sustainable tax base.
Centre County needs a vision for entrepreneurship, especially after losing major, non-university, employers such as Corning and Raytheon in the past decade. Since then, the region has struggled to attract new investment. Besides the health services sector — specifically, Mount Nittany Health and Geisinger Health System — economic growth outside of the university is scant. A handful of smaller-scale companies have sprung up, but nothing to replace the likes of Corning or Raytheon.
That’s not to say Penn State doesn’t provide an enormous economic jolt; it does. Research alone has created more than 18,000 jobs in the commonwealth, which created nearly $2 billion in economic impact and $61 million in additional revenue for the commonwealth annually, according to the university. And, also according to the university, more than 17,000 alumni own business in the commonwealth, pumping more than $4.1 billion into the economy.
But Barron has a bead on what it will take to stimulate the Centre Region’s economic development and retain locally at least a portion of the entrepreneurs who earn their sheepskins from Penn State.
Unfortunately, the state appropriations component rises and falls with the whims of the legislature as well as what very well may be a new governor in January.
However, even without additional state funding, the university must form meaningful partnerships with the chamber, the Ben Franklin TechCelerator@State College and grass-roots groups such as New Leaf Initiative if meaningful economic development is to occur. It also should create meaningful dialogues with successful local and regional businesses to see what they need in a skilled workforce.
Barron can champion economic growth in Centre County, but it’s no one-man job.