May 26, 2016
Predicting the course of innovation is a tricky proposition when a single breakthrough — Facebook and Twitter, for example — can open the floodgates to developments in multiple regions and industries that would otherwise not have been achievable.
In recent years, however, advances in digital technology have penetrated markets to such an extent that we now have a much better grasp on the factors that create a climate of innovation both in and between cities.
So where does Philadelphia stand in this equation in 2016? A new report published by 1776, Free Enterprise and the U.S. Chamber of Commerce Foundation ranks Philly number eight among 25 cities evaluated in terms of innovation readiness.
"The further technology embeds into every aspect of life, the more innovators will shift from straightforward apps and tools to solving much harder challenges," the authors write in their 2016 "Innovation That Matters" report. "What might be a daunting challenge to all cities can be a massive opportunity for some to be successful in the digital economy."
To determine their rankings, the report examined six themes across the 25 cities included in the study.
1. Talent: Does the city have the workforce it needs?
2. Capital: Has the city mobilized adequate financial resources?
3. Industry Specialization: As tech evolves from general IT to specialized sectors, is the city ready to capitalize on this shift?
4. Density: Is the community concentrated enough to form a cohesive identity?
5. Connectivity: Are the city’s key actors well integrated with the startup community?
6. Culture: Does the city have the mindset and lifestyle to attract entrepreneurs?
The report's snapshot of Philadelphia highlights several strengths and points out a few weaknesses that could hold the city back from capitalizing on them.
Because of Philadelphia's established education, energy and health clusters, Philadelphia is in a solid position to facilitate the creation of new startups in these sectors. This is especially true because of the city's startup-focused professional services firms and universities that invest in promising ideas — whether it's DreamIt, the Digital Health Accelerator at University City Science Center, or firms like Robin Hood Ventures and First Round Capital.
To date, the report finds that Philadelphia has yet to capitalize fully on startup creation in Ed Tech and Energy Tech, though Health Tech is a clear bright spot. Philadelphia is also a leader in smart city entrepreneurship, evidenced by a top rank in tech utilization from the Center for Digital Government.
Philadelphia's biggest challenge is attracting talent, according to the report, because of a "relatively stagnant population base" and "middling levels of educational attainment" compared to competing cities, with the exception of the health sector. This has lately inspired some debate after Wallethub recently ranked Philadelphia 142nd in the nation as a place to start a career.
While the city offers plenty of amenities and an appealing quality of life, the report argues that business and job growth are made difficult by a regulatory environment that acts as a burden for entrepreneurs.
Putting those concerns together, Wallethub suggested in its own report that Philadelphia can improve workforce diversity and talent by implementing programs and policies designed to spur business growth.
Here are the top 10 cities in the "Innovation That Matters" report:
2. Bay Area, Calif.
5. San Diego
7. Los Angeles
9. Washington, D.C.
10. New York City