Industry and Population Shifts
The decline of manufacturing, in particular the steel industry, has had a significant impact on Chester County municipalities.
The closing and downsizing of steel manufacturing facilities over the past several decades, including Phoenixville Iron and Steel, Lukens/Bethlehem Steel (now Mittal Steel) in Coatesville, and Worthington Steel in East Whiteland, had a major impact on the local economy. The Phoenixville and Coatesville regions, and in particular the urban cores, experienced significant economic and social decline. During the same time, development of suburban retail and commercial centers drew customers away from the central business districts of the county's urban centers and many local businesses lost their market base. The City of Coatesville, Chester County's only city, experienced declining population, increasing crime, and deterioration and abandonment of property. In spite of multiple individual efforts at supporting revitalization, the city continues to struggle and has not developed or implemented a "big picture" strategy for economic development.
Chester County, like Pennsylvania as a whole, has seen its population shift from the urban centers to sprawling residential developments within suburban and rural landscapes.
The majority of population growth in the county since the adoption of Landscapes has been concentrated in the suburban and rural townships. In fact, from 2000 to 2006, the townships, on average, grew at more than twice the rate of the county's urban centers. Residential development spread further and further out from the urban cores, often far removed from employment centers, major transportation routes, and public transit. Employees are faced with longer commutes, which can result in lower productivity on the job. These types of development patterns may not be economically, socially, or environmentally sustainable over the long term. Retail has also relocated from "Main Street" locations in the city and boroughs to highway-oriented commercial centers and strips along the county's major roadways and highway interchanges.
The growth of knowledge-based industries and the life sciences sector in the county has created a significant need for advancements in the general education system, as well as ongoing training requirements for incumbent workers.
The advancement in information technology, and the growth in both biopharmaceutical operations and health care services, creates the need for advanced and specialized training. The Chester County K-12 school system, while considered among the best in the state, has not kept pace with the technological advancements that are needed to prepare today's students for the workforce, or to move on to more industry-specific training. In addition, advancements in these fields occur so rapidly that incumbent workers require ongoing training and development to remain competitive. There are currently insufficient connections or partnerships between businesses and educators to effectively address these issues.
With strong economic growth comes the need to address transportation systems and housing supply.
With the rapid growth of business and industry along the Route 202 Corridor, in particular the high tech, life sciences, and financial services industries, this geographic area has become one of the major employment centers of the Philadelphia metropolitan area. This growth creates the need for additional moderately-priced housing, improved highways to handle the growing volume of automobiles, and more transit options as existing roads become more and more congested. The planned improvements for "Section 300" of Route 202, which serves the Great Valley Corporate Center and vicinity (including the proposed Uptown Worthington development by O'Neill Properties), are not expected to begin until 2011. Currently, housing options that are moderately-priced, and convenient to businesses throughout the corridor, are extremely limited.
Upgrades to the transportation systemâ€“ including highways, bridges and transit â€“ are critical to sustaining a strong and vibrant economy.
Businesses require a safe and efficient transportation system to serve both the customer/client base and the workforce. While the county's transportation infrastructure is an incredible asset, critical maintenance needs are found throughout the county on all types of roads, from expressways to local roads. Also, as Chester County continues to develop at a relatively low density it becomes increasingly difficult to provide public transit services. The cost of long bus routes with limited ridership becomes inefficient and expensive. In 2000, only one-third of Chester County's population lived within a one-quarter mile of public transit.
The lack of sewer and water capacity in some parts of the county is a major limitation to the expansion of business and industry.
Moratoriums on older municipally-owned sewer systems can limit development and redevelopment opportunities. The boroughs of Avondale and Atglen both have experienced moratoriums on development due to sewer capacity limitations. The development or expansion of businesses in those areas has been limited. Residential development continues to occur in some rural areas, making rural centers and villages more attractive to locally-oriented retail and service establishments. In many areas, especially within the southwestern part of Chester County, the lack of sewer and/or water capacity prevents commercial or industrial development from occurring where residential growth has been significant.
There is a growing need to upgrade aging infrastructure, but there is limited funding available for those upgrades.
The county's infrastructure, including transportation, sewer and water, and stormwater management facilities, has significant need for improvement. In order for business growth or expansion to occur, systems must be upgraded. In many cases, municipal budgets are strained and other public subsidies are limited. The county's Community Revitalization Program (CRP) was created in 2001 to fund infrastructure improvements in the county's urban centers to attract and retain businesses and residents. In 2008, the county commissioners awarded approximately $3.9 million in CRP funding for infrastructure projects, while the requests totaled $6.7 million. This funding is also limited to the urban centers, leaving even fewer options for outlying areas. Many infrastructure improvement needs are deferred until funding becomes available.
The growth and advancement of information technology as an independent industry, as well as an integral part of the infrastructure for other industries, has not been adequately addressed within the K-12 school system.
Partnerships between the business community and the K-12 education system are critical to keeping schools and students current with technology related programs. Computer hardware and software, web-based technologies, communications and media, are all areas where industry can assist educators to innovate their programs in ways that will prepare students to meet the needs of industry moving forward. There are some partnerships in place, but currently their reach is limited.
Technology advancements are making significant changes to the manufacturing sector and some businesses are struggling to make the necessary adjustments.
The nature of manufacturing, both locally and on a national scale, has changed in the past few decades from an industry sector dominated by "heavy" or durable goods manufacturers, to one characterized by non-durable goods that range from food processing and medical devices, to the highly technical production of pharmaceutical diagnostic and therapeutic products. These manufacturing operations have needs for specific materials and equipment, and some require extensive research and development processes in addition to the manufacturing of the products. These environments must be upgraded regularly in order for manufacturers to be competitive within the industry. Some businesses need assistance to provide these upgrades and training.
The telecommunications industry has been "re-invented" through technology.
Once considered utilities, telephone service providers have become "media" industries, providing television, internet, land-based telephone, and mobile communication services. The industry is changing extremely rapidly and competition between providers is strong.
Land Development Limitations
The successful land and open space preservation efforts established under Landscapes, and the rezoning and redevelopment of formerly commercial and industrially-zoned land, have created the unintended consequence of limiting land that is available for the creation or expansion of business and industry.
Open space preservation has been a priority in Chester County under Landscapes, and will continue under Landscapes2. At the same time, the high quality of life that results from the county's preserved open space and scenic resources continues to draw residents and drive growth. Preserved land is removed from available developable acreage. Economic growth is also a critical component to sustaining the community over the long term. However, the strong residential market has created a steep increase in land costs, and has also created demand for land such that many commercial and industrially-zoned parcels have been rezoned for residential use. This practice reduces the supply of land available for commercial and industrial development or redevelopment, and in turn increases costs.
The lengthy and complicated land development process in many Chester County municipalities has become a significant obstacle to the development and expansion of businesses.
The land development approval process in many Chester County municipalities can be lengthy, difficult, and expensive. Requirements for permitting have become complicated and costly. Local impact fees have also contributed to higher development costs. All of this, combined with high land costs and limited available land, can effectively discourage, or prevent the growth or expansion of business.
The decline in durable goods manufacturing in recent decades has left acres of abandoned and underutilized facilities that are in need of environmental remediation.
In Chester County, many abandoned industrial facilities are considered to be "brownfield" sites. Brownfields are abandoned, idle, or under-used industrial and commercial facilities where expansion or redevelopment may be complicated by environmental contaminations. Some brownfield sites have been targeted for redevelopment through various funding programs and mechanisms. Others, however, continue to sit abandoned and idle, a blight on the local community. There is great potential within many of these sites for economic development, but there are limited resources and very limited expertise to address these issues at the municipal level.
Challenges for Agriculture
While agriculture continues to be viewed as a critical and valued component of the Chester County economy, farmers face increasing conflicts with neighboring property owners.
A large majority of respondents to the Landscapes2 public opinion survey identified "farmland and rural character" as what they valued most about Chester County. Participants in the Landscapes2 focus group on Agriculture commented that "Many new residents have a positive but unrealistic expectation of rural life and do not understand the high-tech nature of farming or the tradeoffs essential to rural life." Farming operations can produce noise, odors, and other activities that suburban neighbors find offensive. Farmers are finding less community support and advocacy for their industry over time.
The success of farming operations is dependent upon other critical issues that farmers cannot effectively address, including the inadequacy of transportation systems, the lack of affordable housing, and national immigration policies.
Modern farming is best supported when roadways are improved adequately for truck shipping. Old rural roadways do not accommodate the needs of modern farming. Also, much of the agriculture industry in Chester County depends upon migrant workers earning very modest wages. Housing options for this income group are extremely limited. In addition, policies that make it more difficult for immigrants to come to or remain in the county have a negative impact on the farming community here.
The mushroom industry, which represents the majority of agricultural market sales in the county, is currently feeling the negative impact of spiraling energy costs.
Mushroom farming is an industry that has traditionally been less susceptible to the variations and extremes of climate than other agricultural operations. In recent months, however, mushroom growers in Chester County are feeling the impact of rising fuel costs. Fuel is needed to regulate the large, environmentally controlled greenhouses that require fresh air from outside to be heated or cooled. The price of oil has also increased transportation costs. Growers are furthered concerned about the removal of utility rate caps in 2010 and 2011, with the deregulation of Pennsylvania's wholesale electricity market.
Workforce Development Issues
While Chester County's population has historically been among the best educated in the region and the state, the rapidly changing needs of developing industries are making it difficult to fill positions in the Information Services, Life Sciences, and Diversified Manufacturing sectors.
In 2005, the Chester County Workforce Investment Board, along with efforts of a number of key project partners that include the Chester County Economic Development Council, PA Careerlink - Chester County, and the Chester County Department of Community Development, identified three targeted industry sectors as those with the greatest needs for staffing and workforce development: 1) Advanced Materials/Diversified Manufacturing, 2) Information and Communication Services, and 3) Life Sciences. The partners have received funds to support Industry Partnerships and Incumbent Worker training programs. Many employers have been assisted through these programs, but the rapid growth and changing needs within these sectors continue to present challenges for employers.
Businesses of all sizes, within every sector, are experiencing difficulty with recruitment and retention of staff due to the high cost of housing, in relation to income, in Chester County.
Housing that is affordable to the workforce is critical to the local economy, and directly impacts the ability of employers to recruit and retain staff. Businesses, commercial establishments, schools districts, universities, and municipal governments employ workers at moderate-income levels who often cannot afford housing within the Chester County communities they serve. In particular, the retail sector, now the largest employment cluster in the county, employs a workforce that is best served by affordable housing located in close proximity to employment centers and public transit routes. These opportunities are extremely limited. Housing becomes more affordable in some neighboring counties, but energy costs may soon make it impractical for employees to commute from outlying areas.
The changing nature of manufacturing, now with requirements for specific environments and research and development processes, has created the need for ongoing training of incumbent workers in order for businesses to remain competitive.
Businesses are not only challenged to fill positions in the changing manufacturing sector, but also to keep the skill sets of workers current. Many employers are generally not able to meet those training needs without assistance. Funding for services is limited and the need is growing.
Planning and Coordination
Historically economic development planning in Chester County has not been well coordinated with the implementation efforts of economic development professionals.
Economic development is a relatively new area of focus for community planners. While the original Landscapes plan did address the topic, the focus was very broad, and implementation steps were generally left to other entities. Chester County planners have not worked closely in coordination with community developers and economic development professionals. Many new programs and initiatives have been launched since the adoption of Landscapes, administered through multiple agencies. Coordination of many of these efforts is lacking.
Sources of economic development data are varied, use differing standards of measurement, and can be inconsistent on many levels.
Sources of economic development data for Chester County include, but are not limited to the U.S. Census, the Census of Agriculture, the U.S. Department of Labor/Economic Development Administration, the North American Industry Classification System, and the Pennsylvania Department of Labor and Industry/Center for Workforce Information and Analysis. These data sources show little consistency. They may report on different time schedules, use different classification systems, and view economic situations in inherently different ways. Researching and analyzing data into a practical and useful format presents great challenges for economic development planners.
Resources for efforts such as brownfield redevelopment are not coordinated between federal, state, and local agencies.
While there are many resources available to assist communities with economic development initiatives, and to assist businesses to develop or expand, coordination of these resources, from federal to state to local level, has been slow in developing.