Report suggests increased spending by universities would create jobs

A report on how universities and hospitals contribute to Philadelphia’s economy recommends these institutions increase local spending by 25 percent to create 4,400 new jobs and generate $642 million in direct local spending.

However, the report commissioned by the City Controller’s office on Philadelphia’s anchor institutions, which comprise 18 universities and 16 hospitals in the city, found that Penn and Drexel University are already leading institutions in local purchasing and spending.

City Controller Alan Butkovitz said that the report serves the dual purpose of showing how large of an impact anchor institutions can have on the local economy, while also identifying local companies that would like to provide goods and services to these urban institutions.

“Penn has been doing a lot of work on their own for years with this,” Butkovitz said in a phone interview. “There is a genuine, deep interest and Penn and Drexel have been the leaders in the movement.”

Related: Report defends Penn’s economic impact on city

One example cited in the report of ways in which both Penn and Drexel support the local economy is their purchasing from Telrose Corporation , a Philadelphia-based, minority-owned office supply company. Of the company’s 22 employees, 70 percent live in West Philadelphia.

Engaging locally is a large part of the Penn Compact 2020, Penn President Amy Gutmann’s vision for the University. A large way Penn engages with local vendors is in the way it purchases its products, Director of Penn Purchasing Services Mark Mills said. Through Penn Purchasing Services, the University has been actively purchasing goods from local companies since 1986. Penn has spent approximately $1 billion working with local businesses since that time.

Mills added that purchasing from the local community is more than just about securing necessary resources, but also about supporting Philadelphia businesses by giving qualified local suppliers “as much opportunity as we can possibly give them at Penn.”

Both Mills and Barbara Lea-Kruger, spokesperson for Penn’s Business Services, said one area in which Penn could still improve its local spending is in its food services program, specifically for non-dining hall catering.

However, Mills noted that Penn Purchasing Services is not directly seeking ways to increase its local spending by 25 percent. Rather, they are looking at West Philadelphia on a macro-level to see what new businesses could develop here that could benefit both Penn and the city.

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