The purpose of a greenhouse is to shelter new growth until it can survive in the environment on its own. Business and state officials in the Keystone State have taken that idea and applied it to the cultivation of new industries. In 1999, The Pittsburgh Digital Greenhouse (PDG) was started as an initiative to support an industry cluster around System on Chip or SoC technology. Currently, its membership numbers 23 companies Penn State, the University of Pittsburgh and Carnegie Mellon University are all participants. In November 2001, Oki, a Sunnyvale, Calif.-based telecom company, opened a microchip design center thanks to the initiative. Oki will bring a team of senior design engineers to the project.
      It's fair to say the Pittsburgh Digital Greenhouse has been a success. Since its inception in 1999, the project has brought 661 jobs to Pennsylvania, as well as raising US$10 million from the state and an additional $8 million to $9 million from companies, foundations and the federal government. Business officials estimate 45 percent of the new jobs created as part of the program are from six start-up firms and four new semiconductor design facilities. Two projects funded by PDG have produced new companies: Churchill-based Benchmark Photonics and Shaler-based Proxicast.

      The PDG also offers firms help with recruiting local talent and has joined forces with local universities in their efforts to retain and bring back graduates. Local universities graduate approximately 1,000 students per year in engineering, computer engineering and computer science.
      "When Oki and Sony opened design operations in Pittsburgh, we fulfilled the initial staffing to get these facilities up and running," says David Ruppersberger, vice president of business development for the PDG. "Typically our larger member firms rely on us to prescreen resumes, while start-ups or smaller companies employ us as their human resources department."
      SaRonix Inc. of Menlo Park, Calif., announced in the summer of 2001 that it will set up a design center in Penn State University's Innovation Park in State College. The firm, a manufacturer of frequency and timing control components used in electronic products, said it was attracted to the area by Penn State's faculty and research departments.
      Early in 2001, former Gov. Tom Ridge recommended three new biotech life sciences greenhouses in Philadelphia, Pittsburgh and Hershey. The new greenhouse initiative will promote and foster life science industries and research throughout Pennsylvania. Approximately $100 million in funds would pay for the programs from Pennsylvania's tobacco settlement funds. The three consortiums would invest resources in product investments such as biopharmaceuticals, biomedical devices, and bioinformatics and clinical trial supports. The state is home to a novice biopharmaceutical industry, and officials hope this effort will continue to attract manufacturing research and development.
      One such group looking for financing, the Biotechnology Greenhouse Corp. of Southeastern Pennsylvania has already applied for $45 million in state funds. "The regional greenhouse will capitalize on the tremendous base of life sciences assets already here," says Frank Baldino, chairman and CEO of Cephalon, a West Chester-based pharmaceutical company. "The strength of our pharmaceutical, medical device and biotech base coupled with the diversity and firepower of the medical research community represents a unique opportunity to create new companies, new product licensing and new jobs for the region."
      These new financing options as well as Pennsylvania's Keystone Opportunity Zone Program are scoring big with site investors. The Keystone Opportunity Zone Program, established in 1999, allows tax exemptions for businesses that locate in specific deteriorated areas. These tax exemptions can include corporate net income tax, state sales tax, capital stock tax, and use tax until the year 2010. Philadelphia has sweetened the options by exempting city net profit tax, general business taxes and real estate tax.
      State officials say the program is directly responsible for 10,000 new jobs and a new Marshall's warehouse in northeast Philadelphia that will employ 1,100 workers. Susan M. Huffman, principal with S. Huffman Associates, planning and development consultants in Philadelphia, thinks the Keystone Opportunity Program gets her vote for the most effective Pennsylvania state sponsored economic development tool. She also notes that local governments need to capitalize on these opportunities. "I'm talking about positive friendly attitudes as well as help with regulatory issues," she adds. "Local governments with these qualities are the ones that reap the benefits of state incentive programs."