City Controller Alan Butkovitz has an ambitious plan to bolster the city’s manufacturing sector: Get anchor businesses like hospitals and colleges to buy local.
If they did buy medical supplies, refrigeration equipment or office supplies from local firms, it would create 1,250 new manufacturing jobs in the city, according to a new report issued from Butkovitz’s office. It even says that such a plan would generate 4,000 indirect jobs and have a total economic impact of $292 million for Philadelphia.
The study’s five participants (Children’s Hospital of Philadelphia, Thomas Jefferson University Hospital, Drexel University, Temple University and the University of Pennsylvania) collectively spend $3 billion, but just $800 million (27 percent) is spent annually with Philadelphia-based vendors. When it comes to manufactured items, the numbers are even worse: The five institutions spend $860 million annually but only 16 percent locally.
But is Butkovitz’s plan actually feasible?
He points to existing programs in Chicago and Cleveland as evidence that big businesses can put their purchasing power to work and make changes to their local economies.
“The only idea that’s been circulated in Philadelphia in past couple of decades has been business tax cuts, which have a much more marginal effect,” said Butkovitz. He noted that mayoral candidates Jim Kenney and Anthony Hardy Williams have expressed support for his plan. Butkovitz said it’s uncertain whether the city would offer incentives to those anchor businesses to encourage them to buy local.
The next step is to match large Philadelphia institutions with local manufacturers.
“We hope it will expand to other locally based companies,” said Butkovitz. “After it has a proven track record in ‘eds and meds’ sector, we hope other large Philadelphia employers will sign on.”
Is Butkovitz’s plan a good idea to help bolster the manufacturing sector? Let us know in the comments or on the BizPhilly Twitter page.