Maybe the Greater Philadelphia Chamber of Commerce or StartupPHL should put this guy on retainer.

I’m talking about Joshua Davidson, founder & CEO of Chop Dawg, which he touts as one of the “fastest-growing app development companies in the United States.”

And here’s the catch:  Chop Dawg isn’t based in San Francisco, Silicon Valley or any of a number of other high-tech boomtowns. In fact, it’s thriving in Philadelphia, of all places.

In a post earlier this week on startupgrind, Davidson, 23,  said he’s “become frustrated by the lack of love for the Philadelphia tech scene” and “clear distrespect” for the City of Brotherly Love. Then, he proceeded to make the case for why startup founders should relocate to Philly. Now.

Among the reasons Davidson cited are the plethora of universities and young  talent in the city; great networking, co-working and funding opportunities; proximity to the Jersey shore, mountains and other East Coast metropolises; ability to grow your business in an unsaturated market; and the city’s affordability.

In his closing argument, Davidson says Philadelphia is “quickly popping onto the radar” and like-minded individuals, i.e,., startup founders like Davidson, “will continue to put it over the top.”

I like Davidson’s fire in the belly for Philly. There’s no doubt the tech scene here is much more robust than it was even a few years ago. But I take issue with the theory that Philly is “quickly popping on to the radar.”

As much as it wish it were, I don’t think it is. Part of the problem is a lot of the mainstream tech media–periodicals and websites like Fast Company, Entrepreneur, Techcrunch, Wired and others–don’t write squat about the tech scene here.

And very few of the startups here are going to make major tech exits if we don’t get more–a lot more–early-stage venture capital flowing here.  As they say, money talks, and I’m afraid to many VCs based in Philadelphia listen too much to their own echo chamber.

While Philadelphia is the 5th largest city in the U.S., a recent study by creative economy guru Richard Florida identified the 10 leading metros with the largest clusters of VC investment and startup activity, found that Philly is still a laggard. Florida found that most of the investment occurred in five leading industries: software, IT services, biotechnology, medical devices and equipment and media and entertainment.

Philadelphia ranked No. 7 for biotech investment, with $206 million, or 3.6 percent of total investment. That was the only industry sector where Philly even scratched the top 10.

Another telltale sign for Philadelphia is the dearth of patents relative to the population of other tech clusters. A 2013 Brookings study found that the tech sector share of employment in the Philadelphia region was 5.7 percent, ranking it 40th out of 358 metro areas, meaning a lot of smaller cities have a higher percentage of tech workers than Philadelphia. (During the same five-year period analyzed, from 2007-11, Philadelphia ranked 12th in the number of patents.)

Why is this important?  Patents prevent an inventor’s valuable idea from being commercially implemented by a business rival without penalty. Patents, as legal records of novel and useful ideas, help drive regional innovation and economic growth.

So, yeah, Josh, while it’s true the startup scene is much livelier than it was even a few years ago, and I agree with much of what you say, I don’t think we’re “quickly popping on to the radar” yet.

 

 

 

Apparently, small business isn’t feeling the love from Uncle Sam. In fact, half of all respondents to an online survey of small-business owners said the government does not do enough to support small businesses.

That’s the conlcusion from a online survey of more than 1,100 small-business owners and executives of companies with five to 499 employees in December 2015  by Wasp Barcode Technologies in its 2016 State of Small Business Report. About 80 percent of all U.S. small businesses have 10 or fewer employees. (Wasp is a barcode system provider that enables businesses to track everything from fixed assets to inventory to people.)

Among the other key findings:

Top challenges facing small business.

Half of all respondents said hiring new employees, 45 percent said increasing profit and employee healthcare were the next biggest challenges, closely followed by 43 percent who said growing revenue was the biggest challenge.

Too Much Paperwork robs time from building the business.

According to regulations.gov, on average, federal agencies and departments issue nearly 8,000 regulations annually. Consider the impact of complying with just a few regulations of the Affordable Care Act. Businesses with 50 or more employees are now subject to new IRS reporting requirements and must complete two additional forms related to healthcare coverage.

Each form is supposed to take just 15 minutes to fill out, but that doesn’t account for the hours of accounting, eligibility determination and data-collection time that must be put in before the business owner can even start work on the reports.

At 15 minutes per form, that’s an extra 30 minutes per year spent on paperwork. Now multiply that by 161,000 small businesses with 50 or more employees, and that’s 3,354 days spent on paperwork for just one government requirement.

Government support, or the lack of it, directly impacts small business.

Additional time and costs associated in complying with rules and regulations means small businesses have less time to focus on core business needs, such as capital expenditures and raises for existing employees.

There’s also a ripple effect. The construction firm can’t hire the contractor. The contractor can’t buy the new truck he needs for his business. The car salesman can’t get the commission he needs to hire a plumber.

Interestingly, the smaller the business, the less they want government involved. Larger small businesses, on the other hand–those with more than 100 employees–feel better about government, and 37 percent of them said government does enough to support small businesses.

The Obama administration says it has made support of small business a top priority. The administration cites 18 tax cuts it has passed for small business, that it expanded and accelerated payment on government contracts and also launched a one-stop shop to make it easier for small businesses to access services and information they need to help them grow, hire, export and compete globally.

The administration also repealed the Bush administration-era rule requiring that the IRS withhold 3 percent of a contractor’s income.

Unless you’re a small business that’s part of the ecosystem of oil production and distribution, or is in a part of the country where oil is produced, chances are the impact of lower oil prices can be like a tax cut in which billions of dollars are left in your pocket. Here is the mostly good news.

You’ll continue to pay less for gasoline.

$2.08/Average price of a gallon of regular gasoline (4/13/16)

$2.38/Average price of a gallon of regular gasoline (4/13/15)

30 cents/Savings per gallon year-over-year

$6.00/Savings per tank full (20 gallons, year-over-year)

Source:  American Automobile Association

You’ll pay more for car insurance.

Lower gas prices typically mean more drivers on the road, and more drivers on the road increases the likelihood of accidents. And more accidents generally mean higher insurance premiums, says James Lynch, chief actuary at the American Insurance Institute.

You may be able to save some on airfares.

Lower fuel costs for airlines should, in theory, mean lower airfares.  Still, many airlines are also trying to improve their bottom lines and adding the new charges for bags and such and not necessarily passing on fuel savings to consumers. However, Delta, United, American and Southwest are offering historically low fares on some domestic routes, says George Hobica, founder of AirfareWatchdog.com.

The bottom line, then, is that lower-priced oil is generally a net positive for the economy. “As consumers begin to realize that this drop in gas prices isn’t just a one-off, more confident consumers will begin to open their pocketbooks,” Michael Hanson, an economist at Bank of America Merrill Lynch, recently told Kiplinger Finance Magazine.