Senator Dinniman: Chester County Leads Innovation in the Commonwealth

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Walnut Street Labs
Walnut Street Labs, Ben Franklin Tech PArternrs
Mark DeGrantpre of Ben Franklin Technology Partners briefs entrepreneurs at Walnut Street Labs. --photo via Jehrin Flanik, WSL.

Innovation, entrepreneurship, hard work – these are the core values that built this nation. They drive economic development. They encourage investment. They create jobs. That’s why we continue to support them to keep Chester County and Pennsylvania growing strong.

It’s no secret that our region is an undisputed hotbed for the biotech industry. But did you know that the 19th Senatorial District, which encompasses most of Chester County, led the Commonwealth in the amount of Research and Development (R&D) Tax Credits awarded to life sciences and healthcare companies in 2015? Seventeen sciences and healthcare companies in the county were awarded more than $3.7 million in R&D Tax Credits, according to information from Pennsylvania Bio, the trade association of Pennsylvania’s bioscience industry.

In fact, Chester County was the overwhelming leader, being awarded more than $1 million more in credits than any other region, including Philadelphia and Pittsburgh. Furthermore, life sciences and healthcare companies in Chester County accounted for more than 30 percent of the total R&D credits awarded.

Chester County beats out all its competitors when it comes to R&D tax credits--an important indication of future economic health.--photo via Globalspec.com
Chester County beats out all its competitors when it comes to R&D tax credits–an important indication of future economic health.–photo via Globalspec.com

The R&D Tax Credit program has been a success story at both the county and state levels since it was established in 1997. The program has proved invaluable in enhancing the growth and development of technology-oriented business. A quick review of the latest awardees shows that it assists large companies, small startups, and everything in between.

Perhaps most importantly, awards are directly based on applicants’ R&D investments in the economy – companies are required to pursue innovation and in so doing, create jobs here in Pennsylvania to receive a tax credit. Fortunately, legislators on both sides of the aisle recently worked together to ensure that the R&D Tax Credit Program continues to spur economic growth in the future.

Another way we continue to support and drive innovation in Chester County is through the Ben Franklin Technology Partners (BFtP), a state-funded nonprofit that operates four regional technology company incubators throughout the Commonwealth. For more than 30 years, BFTP has provided access to capital, knowledge, and networks that foster technological advances, development, and success for both early-stage and established companies.

During that time, BFTP has been recognized as the gold standard for technology-based economic development in the nation. For example, between 1989 and 2011, BFTP has boosted the Pennsylvania economy by more than $23.5 billion and generated 140,000 new jobs. According to the latest figures, in 2014 alone, the organization helped companies create more than 1,000 jobs, retain another 1,000, launch more than 300 products, and win 130 patents. Sales revenue generated by client companies that year amounted to more than $500 million.

Several emerging businesses in Chester County have already received economic boosts from BFTP, through investments in the form of low-interest loans. ESS Energy Products, a Paoli company that produces proprietary energy-saving niche products for homes, received $275,000 last year. TuvaLabs of Chester Springs, which developed a data literacy training platform that makes data and statistics accessible and usable for novices and learners around the world, received $150,000.

Most recently, Narbis, an early-stage neurotechnology company based in Paoli, received a $50,000 investment from BFTP. Narbis has developed neurofeedback technology that provides brain training to enhance focus, attention, and learning to improve the brain’s overall performance. The pioneering work and research emerging technology that is being done right here in our backyard is not only astounding, it is also an asset to the region. As a member of the Ben Franklin Technology Development Board of Directors, which oversees the BFTP, I’ve seen firsthand the way these investments can advance innovation and transform the economic climate of Chester County and the Commonwealth for the better.

In addition, we must recognize the role of our colleges, universities, and institutions of higher education in preparing students for promising careers and contributing ground-breaking research to the development of new products and technologies. In fact, West Chester University continues to be a pioneer in educating students for careers in biopharma, having established a Bachelor of Science in Pharmaceutical Product Development degree more than a decade ago.

In order to continue to support innovation at state-owned universities and to assist them in attracting and retaining talented faculty members, the legislature recently, unanimously passed Act 41 of 2016, the State-Owned University Intellectual Property Act. The legislation, of which I was the prime co-sponsor, ensures that the intellectual property rights of professors and faculty members at public universities are protected at the same level as their counterparts at private and state-related institutions.

The new law ends arcane rules and cuts through bureaucratic red tape to allow employees and state-owned public universities to enter into economic development agreements to help fund research and give credit to both the researcher and university. Not only will the act make it less burdensome for faculty at state-owned universities to build partnerships with the private sector to conduct research and commercialize intellectual property, but a portion of any revenue generated will help universities offset tuition increases. It will take effect in next month, just before the start of the school year.

Felix_Zandman_300
Felix Zandman

Apple visionary Steve Jobs said, “Innovation distinguishes between a leader and a follower.” Chester County is already home to a rich history of innovation in the pharmaceutical, life sciences, and technological fields. Our economic prosperity was shaped by trailblazers like Hubert Schoemaker, who co-founded Centocor, one of America’s first biotechnology companies; Felix Zandman who survived the Holocaust and went on to form Vishay Intertechnology in Malvern, one of the world’s largest manufacturers of electronic components; and G. Raymond Rettew, who developed the mass production of Penicillin, the world’s first antibiotic, in West Chester during World War II.

That tradition of leadership in innovation continues today. Success in the new global economy depends on utilizing knowledge to identify and solve problems in unique and collaborative ways. As home to a deep well of human capital, high paying jobs, and residents with the highest level of education in the Commonwealth, our area is uniquely positioned to continue to lead and succeed for decades to come. Let’s keep Pennsylvania and Chester County on the cutting edge by making key investments through programs like the R&D Tax Credit and the Ben Franklin Technology Partners and supporting legislative initiatives that foster an environment of innovation, encourage entrepreneurship, and attract the best and brightest minds to our county.

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