Mike Kerlin and Jessica Lamb | Philadelphia Business Journal
Nov 10, 2022
The Phillies and the Union had an impressive season despite the outcome of the World Series and the Major League Soccer Cup. Still, the Eagles remain undefeated in the National Football League, and Philly has been tapped as a host city for the 2026 FIFA World Cup, causing Philly sports pride to run high.
Like our sports, the Philly economy has been a source of pride lately. While the city faces the same macroeconomic headwinds as the rest of the world, our regional economy has achieved recent wins worth celebrating. Fueled by some of the nation’s leading academic medical centers and research universities, Philly ranked as the No. 2 cell and gene therapy region in the country in a recent e-consult study.
Philly has nurtured multiple tech unicorns valued at more than $1 billion each, and our region attracted nearly $8 billion in venture funding in 2021.
Real estate projects are also booming, with growing innovation campuses in University City and the Navy Yard and a major logistics and innovation hub planned for the 1,300-acre South Philadelphia refinery site.
Greater Philadelphia also recovered jobs faster than Northeast and Mid-Atlantic peers like Boston, New York and Washington, DC, in the two and a half years after the pandemic started.
That’s the good news on the economy. But, unlike Philly sports, the spoils of our economic success are not fully shared. Greater Philadelphia’s Black and Hispanic residents are more than three times more likely to live in poverty than white residents and earn median wages roughly half those of white residents. Minority-owned small businesses capture only 6% of small business revenue.*
The inequality is geographic too. Annual median household income in some of our poorest neighborhoods in North Philadelphia, Camden and Reading is roughly eight times less than income in some of the wealthiest zip codes in Gladwyne and Villanova.
This inequality affects more than residents’ bank accounts. It affects their hopes for the future. McKinsey & Company’s American Opportunity Survey found economic optimism in Greater Philadelphia lower than in all but two of the 17 metropolitan areas studied. Women and Hispanic residents were the most discouraged.
But there is hope. Like our professional athletes, our residents are showing a lot of hustle. Almost one in two respondents reported they are looking or plan to look for career training opportunities. The numbers are especially high among workers of color. Almost half of those interested in training reported taking action to advance their careers through training. Seventy two percent — more than the national average — went on to say the training advanced their careers, according to survey.
Greater Philadelphia’s business, civic and government leaders should capitalize on this hustle now and help our residents improve their economic lot.
Training and retraining are critical for workers to boost their incomes and meet changing workplace needs. Employers face talent shortages in transportation, health care, life sciences and information technology, among other areas. Degree-granting and training programs that build career-ready science, technology, engineering and math skills merit investment, and employers must offer more apprenticeships and internships.
There is some momentum. One public-private consortium won a federal Good Jobs Challenge grant of $22.7 million to invest in workforce development. In addition, the Chamber of Commerce of Greater Philadelphia is organizing employers and educators to build diverse life sciences and technology talent pipelines.
If our region can continue coming together to invest in our residents and workers, Philly will make real progress on many of our economic challenges. So, as Philly continues cheering for our sports teams, let’s also cheer for our regional economy and share the economic success as broadly as we share our sporting success.
Published by: Philadelphia Business Journal
Mike Kerlin and Jessica Lamb – McKinsey & Company | Nov 10, 2022
McKinsey & Company is a global management consulting firm committed to helping organizations accelerate sustainable and inclusive growth. We work with clients across the private, public, and social sectors to solve complex problems and create positive change for all their stakeholders.
* According to Economic Competitiveness Intelligence Tool (ECIT) Diagnostic; US Census Bureau, American Community Survey (ACS) 5-year estimates.