Growing Pennsylvania’s High-Tech Economy: Choosing Effective Investments

PA Should Grow Its Own High-Tech Jobs, Shun Tax-Break “War Among States”
Date of Press Release: 
January 13, 2010

For Immediate Release: January 13, 2010
Contact Michelle Lee 202-232-1616, ext. 210

Study: PA Should Grow Its Own High-Tech Jobs, Shun Tax-Break “War Among States”

Pittsburgh—A major new study released today argues that Pennsylvania will best grow its high-tech economy by focusing on its existing employers and shunning the “economic war among the states” involving costly tax-break competitions.

The study, issued by Good Jobs First, draws that conclusion based upon two unique analyses never performed before on the state. One details where the state's high-tech jobs have come from since 1991; the other reveals the state's effective corporate tax rate for high-tech companies and compares it to six competing states—even when lucrative economic development incentives are accounted for.

“Over time, all the growth in Pennsylvania high-tech jobs comes when existing workplaces expand and new ones are born—not from smokestack-chasing,” said Greg LeRoy, executive director of Good Jobs First and primary author of the study. “We also find that Pennsylvania's effective tax rate and incentives are right in the middle of the pack and are therefore not an issue.”  The Keystone Research Center advised on the study.

Instead of competing with other states for specific companies, Pennsylvania's resources will best be spent strengthening programs that help small, young, and locally owned businesses, and that improve the skills of workers to match industry needs, the study concludes. Indeed, the study finds that Pennsylvania has high concentrations of engineering and biomedical talent that give it distinct advantages in certain high-tech niches.

Although interstate movement of high-tech jobs is almost negligible, the study finds that offshore job flight is a far more significant issue. It recommends redress be sought through federal trade policy, not to be confused with state tax policy.

The study also provides eight original case studies of big-ticket incentive deals including Dell, Google, AMD, Westinghouse, two pharmaceuticals, a plastics factory, and a research lab. 

The study was funded by the Heinz Endowments' Innovation Economy Program and was released at the Endowment's headquarters today with opening remarks from its President Robert F. Vagt. Good Jobs First is a non-profit research center based in Washington, DC promoting best practices in economic development. The full study is also online at Ohio, New Jersey, New York, Maryland, West Virginia, and North Carolina are the other states compared.