Havana on the Schuylkill

With the prospect of $5 billion infusion and priceless publicity in the offing, the 20 cities on Amazon’s HQ2 shortlist are alternately strutting and supplicating before the online colossus with courting rituals that would put the greater sage-grouse to shame.  All other things being equal, Philadelphia has only a five percent chance of sealing the deal, but long odds notwithstanding, this moment presents a unique opportunity for our city to take serious municipal inventory around a central question: what do we have to offer?

To the uninitiated, Philly is known for the Liberty Bell, cheese steaks and obnoxious sports fans. Most of us locals are beyond tired of this hackneyed sketch (though that hasn’t made us any less obnoxious as sports fans), but if we’re being brutally honest with ourselves, what is there, really, that distinguishes our big city from any other in a way that ought to make us a center of cultural and commercial gravity? In the spirit of brutal honesty, we have to reckon with the fact that Philadelphia is the poorest of the ten most populous cities in the country. More than a quarter of Philadelphians live beneath the federal poverty line, and almost 200,000 subsist on incomes at or below half of the federal poverty level.

To say nothing of the individual struggles that so many of our neighbors endure just to make it from one day to the next, the invidious effects of this entrenched poverty are pervasive.  Blighted neighborhoods, poor public health practices, rampant opioid addiction, underfunded schools and sub-par educational attainment are all pistons in the perpetual motion machine of immiseration.

The sobering lowlight is that this social tragedy plays out under the shadows of the Comcast building and at the perimeters of the campus of the University of Pennsylvania, just two of Philadelphia’s great engines of wealth and innovation. To be sure, institutions like Comcast and Penn aren’t the cause of our poverty problem, but as corporate citizens who have profited in no small part thanks to the resources and benefits provided by the city, they just as surely have a responsibility to reciprocate by helping to break the wheel of poverty.

Market Street may not be dotted with rusty old Soviet Ladas, but we share with Cuba the problem of exporting our most valuable resource; in Philadelphia’s case, it’s not cigars but brainpower.

To ensure that Philadelphia is a city that doesn’t merely survive, but thrives into the future, our business, academic and civic powerhouses need to play an active role in shaping a sustainable ecosystem that reinforces itself. A rough but evocative analogy here is Cuba. To the western capitalist world, Cuba is recognized for its exquisite cigars, the communist nation’s most popular export. But the Cuban homeland remains in a state of perpetual disrepair, its infrastructure deteriorating, and its people looking for a dynamism that has pulled many away from the island’s stagnant economy.

Market Street may not be dotted with rusty old Soviet Ladas, but we share with Cuba the problem of exporting our most valuable resource; in Philadelphia’s case, it’s not cigars but brainpower. Our community of top flight colleges and universities excels at drawing the best and brightest students from home and abroad, but struggles to keep them here after graduating. Our higher education system has no problem cultivating talent; it’s preventing that talent from taking root elsewhere that seems to elude us.

This intellectual giveaway is particularly vexing in the context of the HQ2 sweepstakes. Both Amazon and Mayor Jim Kenney were tight-lipped about the substance of a March meeting on the subject, but according to a recent Wall Street Journal report, Amazon’s reps have asked city leaders for “breakout sessions on education and talent,” probing for information not only on tech graduates, but on local high-schoolers’ SAT scores.

Questions like those should have our pro-Amazon camp tugging anxiously at their collars.  The percentage of Philadelphians with bachelor’s degrees hovers just around 29 percent, substantially below the national average. Clearly Philly is producing no shortage of college graduates; we’re just struggling  to get them to stay here. Although we do have one of the fastest-growing millennial populations among large cities, trends suggest that fact is a result of astronomically high rents in Brooklyn, Manhattan, and other post-collegiate destinations with more cachet.  We shouldn’t accept this status as a bedroom community for twenty-somethings, particularly when those twenty-somethings decamp for suburban school districts as soon as their first kids are born.

Counterintuitively, according to a recent Chamber of Commerce survey of more than 1,200 young professionals and students, a majority of Philadelphia’s college seniors are confident in the local job market, but that doesn’t necessarily translate into a decision to remain in the local market. Our 20th century “eds and meds” economy is highly regarded, as well it should be, but the products of these industries are necessarily for domestic and export consumption alone; they don’t make Philly a magnet for anything.

It’s not an either/or proposition when it comes to tackling social issues and maximizing shareholder value. It’s a matter of mindset and prioritization. If we can shut down our schools for a $2 million parade for the Super Bowl champion Eagles, can’t we publicly celebrate the groundbreaking work of Penn Medicine’s Dr. Carl June?

In the post-manufacturing 1960’s, the disappearance of factory jobs and the ensuing white flight hollowed out our economic base. But whereas real estate development, law firms and regional banking filled that void in Philly, other cities without the benefit (or perhaps, the detriment) of an existing infrastructure like ours cleared peach orchards and scrub bush to build visionary new centers of technological innovation. From the microprocessor to the internet to the app-based sharing economy, show me a game-changing technological disruption, and I’ll show you a cloud of dust kicked up in our face by an another region passing us by. Our politicians and policy makers refuse to abandon an outdated industrial era attitude to economic growth. The sad irony is that many of the great innovators stirring up all that dust in San Francisco and Austin were educated right here in our ivory towers, but couldn’t wait to flee a political environment that only throws up roadblocks to creativity and bold thinking.

As the tech industry continues its onslaught across all sectors, mid-Atlantic graduates with STEM degrees are willing to face significantly greater competition for the opportunity to build a career in Silicon Valley or one of the country’s other few tech meccas. Of course, megafirms like Comcast and Aramark have been profoundly successful for their own accounts, but they haven’t really attracted peers or created a meaningful multiplier effect in Philadelphia. If you’re a millennial and want a job in advanced manufacturing, robotics, AI, blockchain or any other industry of the recent past, present or future, you’ll be setting your sights westward. The simple truth is that our corporate and venture communities and our public policy machine  have not done nearly enough to cultivate the fertile terrain that would allow the next Philadelphian to build the next Apple in her Fishtown garage.

The Chamber of Commerce report prescribes a range of development and retention tactics that companies ought to take to keep skilled young workers here. Engaging mentors to work with young professionals to define career pathways and a transparent development plan are among the key strategies identified to help these individuals envision and pursue lifelong careers in the Delaware Valley.  Mentorship is important, as far as it goes, but Philadelphia needs to be thinking big picture if we want real transformation and to keep the pistons of Philadelphia’s collective brainpower churning. From a macro-perspective, we simply need more capital investment, combined with a coordinated exploitation of Philadelphia’s breathtaking capacity for innovation. That means demanding substantive cross-pollination between our corporate and academic research communities, and a political attitude that emphasizes green lights over stop signs.

We may or may not land Amazon, but even a miss is an opportunity. Why not earmark the public funds that would otherwise pave the way for HQ2 for catalytic investment in entrepreneurship initiatives and public improvements?

We may or may not land Amazon, but even a miss is an opportunity. Why not earmark the public funds that would otherwise pave the way for HQ2 for catalytic investment in entrepreneurship initiatives and public improvements? For example, working millennials are demanding walkable neighborhoods, comprehensive and functioning  public transit systems, and access to things like safe bike lanes to get to and from work and around town. Even if a massive infrastructural upgrade is undertaken primarily for the benefit of young professionals and their employers, the positive externalities for Philadelphians writ large are self-evident.

And it isn’t only enhanced amenities that millennials are demanding from employers. The new generation of professionals wants their employers not just to do well, but to do good. A 2015 Society for Human Resources study revealed that more than half of young professionals are motivated by a meaningful corporate social responsibility ethos. Further, it’s a proven reality that companies with robust social responsibility policies have stronger bottom lines and better records of employee recruitment and retention.  

These facts ought to be the mantra of a collaborative initiative led by our most powerful corporate and governmental actors to fight blight, inequality and to lead the charge on lifting our fellow Philadelphians out of poverty. It’s not an either/or proposition when it comes to tackling social issues and maximizing shareholder value. It’s a matter of mindset and prioritization. If we can shut down our schools for a $2 million parade for the Super Bowl champion Eagles, can’t we publicly celebrate the groundbreaking work of Penn Medicine’s Dr. Carl June? (You may be asking yourself, “Who is Dr. Carl June?” To which I reply, “Exactly.”)

Philadelphia can’t recreate the climate or clone the venture capitalists of Palo Alto or Mountain View, nor should we try.  What our region lacks in reliably pleasant weather and a stable of eager venture capitalists, it more than makes up for in top flight educational institutions, major corporate headquarters and a unique proximity to the country’s primary hubs of finance and policy.  It will take more coordination between our business and civic sectors than we have yet to see, but there’s no reason we can’t stand on our own as a new tech mecca in the 21st century. Philadelphia isn’t Silicon Valley, but that doesn’t mean we have to be Cuba.

Ajay Raju, an attorney and philanthropist, is chairman of DilworthPaxson and a founder/board member of The Citizen.