To Fix Philly's Business Climate, Start With Mysterious Business Process


You can't go a day on social media in 2017 without seeing a story or listicle about how Philadelphia is on the upswing. And compared to our own recent history, this is true. There's a lot of good stuff happening, and some amount of self-back patting is appropriate. But as a corrective, everyone should also read Christy Speer Lejune's piece at Philly Mag pouring a big glass of ice water on all the happy talk about Philly's economy. 

Lejune notes that our recent economic gains are actually pretty weak sauce compared to what's been happening in many of our peer cities, and more importantly, that our modest successes are more the result of Philly coasting on some national trends that have boosted cities, as opposed to anything our local policymakers have gotten especially right.

Reasonable people can disagree about just how much to fear a structural economic slowdown versus a continuation of the current disappointing growth trends (the latest round of "peak millennial" handwringing, for example, rests on a misreading of what "peak" means.) But Lejune's larger point is important: slow growth is a crisis, and deserves a crisis response from local decisionmakers.

To start the conversation, she offers ten ideas for breaking Philly out of our economic doldrums. The whole thing is worth a read, but we wanted to highlight this section on the need to improve the business climate at the micro-level:

"What’s going on is that a series of small inefficiencies and larger obstacles paints a picture of a city that if not hostile to businesses isn’t so hospitable, either. Consider David Bookspan, the founder of tech accelerator Dreamit who just launched the adtech start-up Curren-C, which he and partner Will Luttrell headquartered in Philly, flouting advice from their lawyers and accountants. “They said, ‘Are you sure you want to be in Philly?’” Bookspan says with a laugh.

“Will and I are both committed to Philly for a number of reasons. We think it’s a great city that has lots of advantages — location, quality of life and talent pool, to name a few, plus a lower cost of living.” Mayors Kenney and Nutter and a handful of other city players have also been “extremely committed” to helping the start-up community, he adds.

But, Bookspan says, on the con list was Philadelphia’s high city wage tax. (We’ll get there in a minute.) He also recounts the comedy of errors that was the day he tried to follow state and city new business registration protocol: dead ends on email, a 35-minute phone hold time followed by a disconnection, a Philly “help line” where every option was broken. Not exactly a welcome mat for entrepreneurs — especially considering the pair had an easy time with the same chores in other states.

Bookspan isn’t alone in his call for more updated processes to ease doing business — other people called out everything from incomprehensible tax codes (“You need a Philadelphia lawyer to get through it all!” says one business leader) to a lack of technology. In his February speech to the Chamber of Commerce, Mayor Kenney noted improvements to L&I in particular, but it’s still a long haul toward modern-day efficiency. It’s 2017. Let’s get at it."

Whenever local politicians talk about business policy, the focus always seems to turn to tax reform. And tax reform is important! But there's also a whole world of problems to work on that are less politically and ideologically charged, which no elected officials seem to be interested in fixing. 

To be fair, L+I has been working to improve their services. We had an event last year focused specifically on how L+I director Dave Perri is working to streamline the development review process. The Planning Commission also put out a checklist for developers that clarifies all the different permits that are required for a typical project. 

But there aren't checklists or guides for starting any other common types of businesses, and from our own investigations into this, nobody at the City seems able to say with any confidence what the roadmap is for getting all the required sign-offs. It's totally unclear for new business owners what they have to do to get in compliance, and then once they're up and running, stay in compliance. 

We plan to spend more time over the next year highlighting some of the more underappreciated opportunities for Philly to make life easier for businesses, but it starts with more political attention to this issue. Council took a good first step by introducing a new Special Commission on Regulatory Review and Reform this past winter, which will comb through the code looking for outdated and onerous regulations, but the conversation needs to be even more holistic, approaching the process from the firm level.

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