Rich Overmoyer was invited to facilitate a strategy session of the Ben Franklin Technology Development Authority's Board of Directors. The The Ben Franklin Technology Development Authority (BFTDA) is one of the largest single state technology development programs in the nation, providing a vital vehicle for investment in economic, community, and university-based innovation. To frame the conversation Rich presented these slides on the overall technology economy and national trends.

1. Economic Development Today:
National Observations and Pennsylvania
Perspective
Presented by Rich Overmoyer, CEO
October 2011

2. Overview
 National Trends
– Overall Economic Development
– IBED
 Pennsylvania Observations
– Industry Sectors
– Entrepreneurship
– Data Points
2

3. “Necessity,
who is the
mother of
Invention.”
:: Plato
3

4. NATIONAL TRENDS
4

5. In my state,
we’ve created a lot of JOBS
Cost Based – Job Creation
Production Driven – Cost Sensitive
Low Skill – Limited Investment
5

6. In my state,
we’ve created a lot of WEALTH
Place Based – Wealth Creation
Knowledge Driven – Value Sensitive
Skilled Workforce – Community
6

7. Infrastructure Investments
 Beyond access roads
 Cost of operations are impacted
 Not all news is good news
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8. Community is Infrastructure
 Where will the employees live?
 Attracting talent takes a broad view
 Transportation is a critical variable
8

9. Water Poor
 Clean water availability will drive growth
 Cost of water is an increasing decision point
 Climate change impacts
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10. Water Rich
 Tap into Erie (PA)
 Milwaukee Water Council
 Global Investment Opportunity
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11. The Good Times
Source:
Bureau of
Labor Statistics
(via New York Times)
11

12. The Impact of the Recession
Source:
Bureau of
Labor Statistics
(via New York Times)
12

13. The New Reality? Not Yet…
Source:
Bureau of
Labor Statistics
(via New York Times)
13

14. New Priorities
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15. States are Making Investments
The following are NEW investments made by States
Initiative State
Angel and Investment Tax Credits CO, LA, NE, ND, OH
Commercialization / Proof of Concept CO, AK, MD, MN, NE, OH, VT, VA
Bonding for Facilities CT, MD
New Entities Managing IBED FL, OH, GA, IA, KS, OH, VT, VA, WI,
WA
Venture Capital Investments IL, CO, MD, NJ, OH, VT
Economic Gardening NE, PA, VA
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16. PENNSYLVANIA
OBSERVATIONS
16

17. The BioScience Industry:
In Transition
 Loss of patents  University
 U.S. tax laws partnerships
 Medical devices  R&D venture funds
 Health care reform  Startups
17

18. Energy: Portfolio Management
 Shale Gas and its upstream and
downstream impacts
 Renewables are now mature – they
have bad press
 No clear national/ state strategy
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19. Economic Development: Small Scale
 Double down on business calling
 Support launch of spin outs
 Responsive transformation can create strength
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20. If you are Alive…
…You are Doing Well
 Class of 2011 is graduating in a challenging
environment
 Specialization is primary driver for growth
 Integration is opportunity and challenge
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21. When I Grow Up, I Want to
Take Out a Second Mortgage
 A silver lining to the recession:
start up rate highest in 15 years
 Entrepreneurs are goin’ at it alone
 Capital from the Coasts
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22. VC Funding in Pennsylvania
Venture Capital Investment In Millions - 2010 State Ranking
Rank State VC $ Rank State VC $
1 California $11,603 11 Maryland $403
2 Massachusetts 2,472 12 Virginia 397
3 New York 1,401 13 Georgia 343
4 Texas 981 14 Florida 225
5 Illinois 732 15 Connecticut 223
6 Washington 634 16 Oregon 196
7 Pennsylvania 559 17 Ohio 185
8 North Carolina 529 18 Michigan 155
9 Colorado 483 19 Minnesota 147
10 New Jersey 469 20 Utah 145
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23. VC Funding by Industry
VC Investment in PA - Industry Breakout - 2010
23%
39%
7%
7%
8% 16%
Biotech Medical Devices Software Electronics Networking Other
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24. Capital Attraction
In 2010, venture capital dollars invested in PA companies came from venture firms
headquartered in:
CA
Other 19%
44%
PA
20%
NY MA
7% 10%
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25. Top Ten States:
R&D Expenditures 2006 – 2007
250
200
Expenditure in Millions
150
100
50
0
NY PA CA OH FL MI NJ IL MD TX
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26. Total Patents 2005 – 2010
(Per 10,000 residents – State Rank # in Bar)
350
300
250
200
150 8
11
12 13
100 14
15 16 19 20 22 23
50
0
CT DE NJ MI WI NY RI IL OH MD PA
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27. State Technology &
Science Index
14th Overall Ranking
10th Human Capital Investment
9th R&D Inputs
21st Risk Capital and Entrepreneurial Infrastructure
25 th Technology Concentration and Dynamism
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28. Summary
 Still don’t know what the recession-related economic impacts will be
 The pace of industry change is accelerating
 State and Global competition for jobs is real
 Pennsylvania lags on many of the Innovation economy metrics
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