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Various indicators also show that Pennsylvania is not among the most entrepreneurial of states. For example, the economic research firm Cognetics ranked the state just 44th in its 2001 “entrepreneurial hotspots” report, which measures the frequency with which new firms start and young firms grow in states and metropolitan areas.43 Moreover, statewide job growth in new business start ups has been weak: From 1993 to 1998, Pennsylvania experienced less than 18 percent growth in employment in firms less than five years old—compared to 21 percent nationally.44 Finally, the Commonwealth fell in the middle of the pack based on a 2002 ranking of its share of “gazelle” jobs—jobs in companies with annual sales revenue that grew 20 percent or more for four years in a row.

The flight of households and jobs away from Pennsylvania’s older areas separates poor and minority residents from employment opportunities.

... and it’s fair to say the Commonwealth possesses arguably the most fragmented and inflexible system of local government in the nation ...

First off, Pennsylvania’s extreme governmental fragmentation hinders the state’s ability to mobilize its talents to generate growth. ... Pennsylvania’s profusion of players and agendas has made it difficult for the state to adopt a single economic development plan as other states have.
... the average land development plan takes from 19 to 24 months to obtain, compared to 60 to 90 days in Maryland.

A lack of systematic planning compounds the problems of governmental fragmentation in Pennsylvania.

To begin with, Pennsylvania’s intense localism in planning has over time stunted the Commonwealth’s own state-level planning and coordination capacity. ... As a result, projects and policies frequently work at odds. A shortage of professional planners in the government further hobbles sensible direction-setting and contributes to haphazard spending and program implementation.

Meanwhile, the largely voluntary nature of planning in Pennsylvania guarantees that many Commonwealth localities neither plan nor zone, meaning they lack a settled framework for fostering a desired pattern of development.

Even more problematic is the fact that planning remains mostly elective in Pennsylvania, which lacks binding requirements that local ordinances and actions conform to larger-view plans. [Cited is Ephrata Twp whose school district has chosen to build a new school "even though the new school flouted the region’s intricate growth-management system and several local plans."]

As a result, planning in Pennsylvania remains not only optional, but often feeble. Plans, lacking binding importance, are frequently out-of-date or highly vague. Meanwhile, Section 303(c) frees elected officials from worrying much about whether a particular rezoning or development permission runs afoul of any municipal or county land use plan. In this environment zoning and rezoning can easily deteriorate into an arbitrary exercise of deal-making and “ratables” chasing.

[A cited example:] New public sewer lines and individual or community on-lot systems are continuously opening new fringe areas to development even though substantial excess sewer capacity exist in older urban areas.

...state highway and bridge spending in Pennsylvania are flowing disproportionately into non-urban, outlying townships and away from older, more established parts of the state. ... State investments in non-urban, outlying townships outpaced spending in urban municipalities for all categories of spending on a per capita basis and for all categories but “operations” on an absolute basis. ... exactly the reverse of the regions’ respective population shares.

Any municipality wishing to redevelop its vacant and abandoned properties needs to know where the parcels are located, what condition they are in, who owns them, and other basic information. Unfortunately, such knowledge rarely exists. Most communities are still largely in the dark, in this regard, even though the advent of Geographic Information Systems and other technologies has encouraged some localities across the country to develop sophisticated parcel-based inventories of the land in their boundaries. Even if this information is collected, though, it often remains spotty, and is almost never made publicly available.

Many of Pennsylvania’s cities and towns are dominated by older, often historic, buildings that give them a distinctive charm most newer developments can’t rival. But while these structures remain some of the state’s greatest assets, they often present serious obstacles to the revitalization of older communities.

But not all older urban areas are tourist attractions, and even those that are can’t survive on visitor dollars alone. The fact is that over time preferences have changed, and many older buildings simply don’t accommodate today’s lifestyles and business needs. ... These trends are further exacerbated by outmoded building codes that thwart the rehabilitation or adaptive reuse of older structures. ... Renovation costs for historic structures are considerably higher than construction costs for new buildings, making unsubsidized redevelopment often infeasible.

Only by implementing policies and practices that facilitate redevelopment and market activity in older places will the Commonwealth begin to stem the deterioration that continues to threaten the state’s heritage.

Upgrade the State’s Own Planning Capacity
1. Create a state vision for economic competitiveness and development and then apply it across state programs.

2. Revive the State Planning Board and get serious about state-level interagency coordination.

3. Increase the incentives to plan.

4. Require that state and local infrastructure plans and development conform to land-use plans.

5. Require that local zoning ordinances conform to county and local comprehensive plans.

6. Promote quality in multi-municipal planning.

Currently, few states spend more per capita on economic development, and that’s a positive comparison—a sign of commitment to improving the future. However, the evidence suggests that this strong commitment needs to be focused. ... Consequently, Pennsylvania needs to reprioritize. Specifically, the Commonwealth should rethink its investment strategy so as to give first priority in its many development-related spending decisions to the state’s older, more established cities, rural and urban boroughs, and older suburbs.

1. Improve information disclosure. Strategy—and reform— require information. Yet Pennsylvania often lacks it. In fact, despite strides in several key departments, Harrisburg remains in many respects opaque when it comes to disclosing how its activities affect both land-use and economic performance.

2. Assess the spatial impact of state programs. Lacking the relevant information, the state really knows little about how its own activities actually affect land-use and development patterns ...

3. Make reinvestment the explicit priority. ... a clear and explicit state policy should soon require that all agencies give priority in funding and permitting decisions to infill projects and those involving the redevelopment, reuse, or revitalization of previously developed land.

5. Require consistency with county, local, or multimunicipal plans. Finally, the governor and General Assembly should insist that all state agencies conform their permitting decisions, infrastructure grants, business subsidy awards, and other investments to local and county planning preferences.


1. Make investment in education a priority. Despite its large number of colleges and universities, for example, Pennsylvania’s investment in higher education lags its competitors. The state’s 1997 per pupil spending for higher education ranked it 11th out of the 13 ...

2. Reform the workforce training system.

4. Appoint a task force to identify potential industry clusters and niches the state should cultivate.

7. Support manufacturing in older areas.

8. Invest in “consumption amenities.”No urban economic development strategy can ignore, finally, the important role that retail and services play in local economies. Restaurants, entertainment, shopping, hotels, and cultural institutions— as well as financial, business, and legal services—are essential components of thriving urban areas,