Wednesday, February 20, 2008

I Have a Pen Pal

My anonymous commenter has returned and makes some interesting points on Penn State's role in economic development. I don't really have much to argue about with him, but there are two points I'd like to go into a bit more.

Here is his (?) comment in toto.
Well, Veblen, I'm back. Perhaps your #1 fan after two visits. You took my comments out of context, but your thesis is more-or-less correct: PSU spin-outs don't ensure local jobs. I could list a bunch of other small local companies, but that's not productive. You want to argue about economic development vis-a-vis PSU's expenditures. There are a number of challenges to capturing PSU economic dev't locally:

Imagine you need a computer programmer in SC. We have computer programmers, they just all happen to have jobs. You want to convince them to leave Raytheon, or Minitab, or the blue tit of DOS for a start-up with six months' funding. Or better yet, relocate from the West Coast! Not so easy.

Now, what if you have a huge deal, able to attract $5 million (e.g., Anacor) in venture capital. In this instance you need 10 scientists and there's virtually no shot at doing this effectively in SC vs. silicon valley.

The jobs from PSU technologies often migrate, but so too do PSU alumni and faculty. The majority of research funding comes from Federal sources. I fail to share your outrage.


BTW, Zetachron merged with Watson Pharmaceuticals (WPI) in 1992. All the jobs went West; much of the wealth created was recycled locally.
First, economic development programs run by governments or quasi-government entities, which create wealth that doesn't disperse through the system by the creation of jobs is a failure. The whole justification for such programs is that they create jobs. Try selling the people on a program with the promise of creating a handful of very wealth people. It won't fly.

Second, most of my outrage is the result of Graham lying, exaggerating, misleading, misconstruing,..... on just about every issue, economic development amongst them. The point of my previous post is that, in his testimony before the Pennsylvania Senate on why Penn State must be exempted from complying with open record requests, he stated that passage of the law,"would hurt Pennsylvania's economic development goals," because, in part,
Each year Penn State spins out companies.... The details of the deals surrounding licensing fees, royalty structure and equity stake vary with each technology. If the details of these deals were publicly available, the ability to negotiate the best terms would be compromised.
Taking him on his own terms, how much damage could really be done to the Commonwealth's economic development goals if Penn State hasn't spun out a major employer in Centre County or the Commonwealth in twenty years of playing the economic development game? His words are divorced from reality. That outrages me.

PS. How about giving yourself a pseudonym, so that I can distinguish you from other anonymous commenters, like the one that recently called me a douche bag.

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Anonymous said...

I didn't call you a DB, VB. I'll think of a handle.

Veblen said...

Anon, I'm pretty sure I know who called by a DB and it wasn't you. But I didn't want my other readers to be confused.

BTW, my professional life has gotten the way of my blogging life. I probably won't be able to post anything until after the first of the week. I don't want you to think I was ignoring you should you comment again.