ICYMI: ‘A Big Bold Goal’: Pittsburgh Business Times Highlights the Shapiro Administration’s Economic Development Strategy

“Shapiro is a hands-on governor, especially when it comes to winning in economic development.”

“Siger, along with other key members of his administration, is managing these new initiatives and redirecting the power of state government toward getting and keeping companies and jobs.”

Harrisburg, PA – The Pittsburgh Business Times highlighted how Governor Shapiro and Department of Community and Economic Development Secretary Rick Siger are working to implement their new Economic Development Strategy and redirecting the power of state government toward getting and keeping companies and jobs.

Governor Shapiro and his Administration have been working aggressively to make Pennsylvania a leader in innovation and economic development and create economic opportunity for all Pennsylvanians. Earlier this year, the Governor and Secretary Siger launched the Commonwealth’s first Economic Development Strategy in nearly two decades — building on the Shapiro Administration’s work to make Pennsylvania a leader in innovation and economic development and to create economic opportunity for all Pennsylvanians.

Read about the Shapiro Administration’s commitment to transforming Pennsylvania into an economic powerhouse and below link.
Pittsburgh Business Times: ‘A BIG, BOLD GOAL’ DCED Secretary Rick Siger discusses the state’s economic development plan and how to make PA more competitive

When Rick Siger thinks about his job as secretary of the Pennsylvania Department of Community and Economic Development, he recalls the words of one of his former bosses, President Barack Obama.

Obama famously said of the presidency that it’s taking the baton and then running your leg of the race.

“I view this job, which is by definition temporary, as a real kind of solemn responsibility,” he said during a recent interview.

It’s a responsibility he’s been working toward his whole life: Siger, a Pittsburgh native, joined Pennsylvania Gov. Josh Shapiro’s administration in January 2023 after time as an executive in the Obama administration and the Commonwealth of Virginia. The Pittsburgh native also served as senior advisor and chief of staff for Carnegie Mellon University President Farnam Jahanian and was a leader in the redevelopment of Hazelwood Green and Mill 19.

Siger has energetically been not only championing Shapiro’s economic development efforts, but also touring the state, working with local officials and businesses on what is an overhaul of Pennsylvania’s business attraction and retention strategies. It also involves creating a statewide economic development strategy, the first for the commonwealth in about two decades.

“I believe we’re starting in a place informed by data, informed by real people operating in this environment across Pennsylvania,” Siger said. “We’re going to do some good here, and we want to adjust in a continuous improvement view.”

“A Ten-Year Strategic Plan for Economic Development in Pennsylvania” features five defined goals: A call for more investment into competitive economic growth opportunities; sustaining Shapiro’s mission of making the government “work at the speed of business” via faster permitting and approval processes; increasing job opportunities for Pennsylvanians by creating more career pathways; “innovating to win” by backing more innovators and entrepreneurs; and improving on and enhancing regional strengths for the betterment of the entire state. This includes a number of priorities directly related to Pittsburgh, including pumping more money into site preparation. The plan focuses on key industries including agriculture, energy, life sciences, manufacturing, and robotics and technology.

Shapiro is a hands-on governor, especially when it comes to winning in economic development. Siger, along with other key members of his administration, is managing these new initiatives and redirecting the power of state government toward getting and keeping companies and jobs.

“While I have the baton, having the great honor of doing this job, that’s what we’re going to try to do: Laying out that plan, getting people excited about it and then just executing,” Siger said.

Siger was interviewed in early March by the Pittsburgh Business Times about the economic development plan, of which portions are dependent upon the governor’s proposed 2024-25 budget being passed by legislators this summer. Below are excerpts from that interview.

What are you doing to cut down on the time for permitting?

If you look at the economic development plan, there’s five goals in that, and one of them, 20% of the plan give or take, is about the speed of business.

We acknowledge this as an important area and something we want to move forward on. And there’s a few ways to get at it.

One is something the governor has rolled out already, … where permits have a kind of time certainty attached to them now based on a bunch of analysis. So just to use a simple example, if you want to get a barber license, we now tell you it takes X days to do that. If it takes X + 1, you know you get your money back. Of course, for developers or companies looking to build industrial facilities, they actually don’t really want their money back. … (But) this is a step we can take to try to add some urgency to that process.

The other thing I would say is, especially for deals that we coordinate but also beyond that, we’re trying to really take a team mentality to these projects, in particular for projects with significant complexity. We’re going to be building a deal team … to have a core group of folks at the table in partnership with the Office of Transformation and Opportunity from minute one. If you’re interested in building this thing in Pennsylvania, we have the full team at the table. From the time you click on our web link to say “what about Pennsylvania” all the way through the time your building’s built, you have a single team working with you coordinated by us.

I think that’s been done actually quite well by the government in an ad hoc way on lots of different projects, like the Shell cracker [plant in Beaver County] comes to mind. But we need to just institutionalize it — that needs to be just the way we work. And I think that will also help because it will enable companies looking for that permit to get in front of regulators earlier in a more comprehensive way, to just be really transparent about what’s needed in both directions to get something done. This isn’t an overnight fix, but I think it’s the kind of structural approach that is needed to try to solve the problem.

Is the revision of the Governor’s Action Team part of that?

I think it’s an acknowledgment that we’ve got to strengthen the ties between agencies even more.

The concept that the Governor’s Action Team brings, which is this group of specialized folks that do deals [and] you can pull on folks across the government, I think is sound. I think in execution we’ve got to do even more as projects become larger and more complex to get it right. And I think we’re also poised to grow our team, to make sure that we have the right expertise, the right capability to address the marketplace.

The governor is very fond of saying he is tired of losing to other states. One of the ways in which we lose to those states is just in terms of horsepower. We have a lot of good folks that work in DCED, but our group of business development, project management, marketing professionals is substantially smaller than those of other states, in some cases orders of magnitude smaller. I’m not saying we’re gonna go out and hire 500 people, but we’ve got to build substantial capacity both in terms of scale and different kinds of expertise. And as we build, we want to build into it that kind of really rigorous cross-agency collaboration to get at some of those efficiencies we’re talking about a minute ago.

Every time the governor talks, he says how he doesn’t want to lose to Ohio and … West Virginia. But DCED is smaller and less funded than, say, JobsOhio. What can you do to compete?

I think of it as holding up our end of the bargain. We’re putting forward a big strategy. We’re saying we want to do all this stuff, we want to accomplish significant things. We want to be top 15 in job creation in the next 10 years when we’re currently forecasting 41st. That’s a big, bold goal. … We say that one of our four strategic initiatives is reinvent and invest in the Department of Community and Economic Development. That gives us the chance to move a really specific plan forward. … We’re going to hire a chief commercial officer to integrate the activities all along the sales cycle that we’ve talked about. … (We’re not going) to replicate what JobsOhio has done per se; ours will be made public among other distinctions. But (we want) to learn from them, to learn from Virginia, to learn from North Carolina, New York, to take different parts of different models to try to build out the delivery system that delivers deal excellence.

To compete, we’ve got to change some things about how we do the work. This hire of chief commercial officer is an important step. But it’s by no means the only step. Deal coordination among agencies, the toolkit review of all our tools, making sure that we have the right incentives and programs and tax benefits in place to compete with other states, these are all pieces as we try to make Pennsylvania more competitive.

Is there something that any of those states you mentioned have that you feel Pennsylvania lacks the most?

I wouldn’t think of it as one silver bullet. A bunch of states do this in a bunch of ways, some for example like JobsOhio have entirely spun out that activity into fundamentally a private organization outside the government. Others have a public-private like Virginia; others are entirely public like New York. We are remaining and selecting to remain at this point entirely public. I think that’s important for lots of reasons, including accountability, to the legislature and to our bosses, to the citizens of Pennsylvania. But they have a suite of incentives. They have a plan, a set of activities or a set of industries that they’re focused on, and they focus on it rigorously. They measure their progress rigorously like a business. I think we’ve tried to take what we like about a lot of those models. Not just take it lock, stock and barrel, but take it, understand it in a Pennsylvania context and meld it into this kind of new organizational change that we’re making with the understanding that we don’t know everything right now. We will learn and grow.

What are the most important ways the Shapiro administration is working to rebalance the strategy for its various funding programs?

I’ve been thinking about this since very early on, since my interview for this job over a year ago, which is to say, if you look at the DCED program set, … we’ve (got) 196 programs on the books. And so, if you’re a business that is well-capitalized and you have government relations, folks who can afford to pay consultants, you can pay people to know everything about all those programs and make decisions about what might be relevant for you. But if you’re not, what are you supposed to do? What you do now is you call us, and we have experts that help you walk through it and do it. We have a very high-touch model here. But at the end of the day, that’s not really the right path.

The right path is to look at all our tools, which we have started to do in great depth. We want to methodically and in a continuous improvement way go through, and in some cases we’ll say this tool is awesome. But we have a lot of tools that we have a hunch, but we haven’t really gotten all the way to look at the data and decide what works and what doesn’t. And so you could imagine us getting rid of tools altogether. You could imagine us taking tools that maybe were designed for an economic context in 1999 that with some adjustments we feel can be really powerful. You can imagine tools we have that are just highly undercapitalized, where the minimums were set in, say, 2003 and the economy has changed.

At the end of the day, my hope is to be able to look the governor and legislators in the eye and say this is what we think works. Here’s what we think doesn’t. … We’ve done some of the toolkit review already. … For example, the Main Street Matters program is a good example of taking a tool we really like and changing it to make it better. … We’re taking that program and building on it. We’re rebranding it, and we’re also changing some of the eligible costs and programmatic elements to it. And we’re proposing a bunch more money on it — up to $25 million statewide.

We’re not going to do that with every program. We’re going to do it with the ones that we think work. And we’re going to adjust them so they work as well as possible in today’s economy.

Talk about your philosophy about big projects in making sure the people who live around them get the jobs. Do you favor having stuff written into the programs/grants tied to jobs?

As part of the toolkit review, one of the things we’re really focused on is accountability because as we ask the legislature, ask Pennsylvanians for more dollars to do this work, I believe it’s also incumbent upon us to both ensure that we administer those funds with integrity and excellence, which we do, but also to hold folks accountable, and not all of our programs actually do that.

One reason I like PA First, for example, is you sign a piece of paper that says you’re committing to create X jobs and if you don’t, through a conciliatory and not adversarial process, after a certain amount of time, we will call you and say, “Hey, did you create the jobs? Do you need an extension?” And then if you don’t, we’ll claw some money back.

I think that kind of accountability is important. So I favor, especially as we scale these programs, whatever the accountability measure is, whether it’s jobs or construction or whatever makes the most sense in the context of a program, we’ve got to make sure we’re very clear about what we want and then hold folks accountable to it.

How do you look at things through the equitable lens?

We have a set of programs specifically targeted to supporting folks in disadvantaged communities to succeed in Pennsylvania in business.

In the current round of funds, these are microgrants we’re giving out through the Community Development Financial Institutions networks. We’ve had an overwhelming interest in the program. And I think it’s really important that we double down on those programs and get them right.

But I want to be clear that’s not all we’re doing here. We also need to make sure our full suite of programs, including things like PA First, our big-ticket programs, are focused on equitable outcomes. This plan needs to work for all people in Pennsylvania and all places in Pennsylvania. And that will mean different things in different places. But we’ve got to have a plan that gives regions and localities, especially those that have had a more difficult time, a chance to compete and allow people to chart their own course, whether it’s through workforce training opportunities or through the kinds of jobs that we hope to continue to create.

Among those 196 different programs, are there ones that jump out at you that bigger cities can look at more than others and that might help them?

The answer is in certain domains, yes, but at the scale of the issue in larger cities, I think we’ll need to look at some customization or enhancement of some of those programs.

For example, you can see the Main Street Matters program designate a main street in a small town, putting some dollars behind an anchor building and some facade renovations and even some housing that would make a really significant difference at the scale of that program. We would love to fund commercial [projects] in the City of Pittsburgh, whether downtown or elsewhere, and have and sure will continue to over time, but that is not I think a program at the scale of the challenge at the moment.

… We are engaged regularly with the City of Pittsburgh and other cities across Pennsylvania about solutions to issues facing our downtowns.

There’s a lot in the economic development plan. What do you see as the No. 1 priority?

We sent out a 10-year mission. This is not an instruction manual for what we’re doing right now. But we’re going to try to get a lot done fast because we’ve got a lot of catching up to do.

And so you see the plan very purposefully come out with a year one budget associated with it, and clearly a top priority if not the top at the moment is the PA SITES program, [which awards grant funding to help more sites become shovel ready to attract and retain businesses]. We’ve asked for $500 million, which while it’s really a multi-year investment (that) has been positioned as a bond, and therefore we’d spend it down over multiple years, that’s a huge shot in the arm.

It’s about competing and catching up to the kinds of investments that surrounding states have been making. And it’s also about responding to the marketplace in very direct ways.

We’ve talked to real estate professionals and site selectors, not just locally, but around the country, (and asked) what are we missing here? … We do not have the kind of large-scale sites with the kind of utilities we need. That’s not to say all those dollars are going to giant sites; there’s a lot of other development that they’ll go to. So that I think is a key top priority, but I don’t want to give short shrift to the Main Street Matters program, to the Regional Challenge program, all of which we’re launching in year one.

What do you think is going to be the biggest challenge?

We’re going to have to look at each other in the mirror and say there’s things in this plan we’re just not doing right now. We love this idea, but this is a year two thing, this is year three thing. I think sticking to that is a key challenge.

It’s the first time in almost 20 years the state has said here’s what we think we should do. Did we get every single thing in here precisely right over the next 10 years? That’d be impossible. Nobody can predict the future. But you got to start. And we believe we’re starting in a place that’s informed by data, informed by real people operating in this environment across Pennsylvania.

For more information about the Department of Community and Economic Development, visit DCED website, and be sure to stay up-to-date with all of our agency news on Facebook, X, and LinkedIn.

MEDIA CONTACT:
Penny Ickes, dcedpress@pa.gov

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