History of BFTP/CNP
Ben Franklin Technology Partners was founded in 1983 by the Pennsylvania General Assembly and funded by the Department of Community and Economic Development as a statewide initiative to foster innovation and stimulate economic growth.
In February 1981, Governor Thornburgh proposed the Ben Franklin Partnership Challenge Grant Program for Technological Innovation to the Pennsylvania General Assembly. The General Assembly appropriated one million dollars for the start-up of the Program in the 1982-1983 fiscal year. Near the end of 1982, the General Assembly also passed legislation establishing the Ben Franklin Program and the Ben Franklin Partnership Board, to replace the Pennsylvania Science and Engineering Foundation.
In February 1982, the newly constituted Ben Franklin Partnership Board evaluated applications from seven proposed consortiums to establish regional Advanced Technology Centers. Penn State was awarded The Ben Franklin Technology Center of Central and Northern Pennsylvania (CNP). Three offices were established based on this Center’s geographic responsibility for 34 of the Commonwealth’s counties, with the main office located in State College. Two satellites were created, one at Penn State Erie, The Behrend College, and the other on Penn State Harrisburg’s campus in Middletown.
At its inception, the Program had four major project thrusts: Research and Development, Entrepreneurial Development, Workforce Training, and University-based Centers of Excellence. Research and Development projects focused on new product/ process development or the improvement of existing products and processes. The majority of these projects had a university partner component that performed the actual research and then transferred the knowledge or prototype to the company for application.
The Entrepreneurial Development segment of the Program was focused on supporting small business incubators, especially in the more rural areas to help start and grow new technology-based companies. The Workforce Training component focused on creating training infrastructure across the region that would eventually become self-sufficient in meeting the requirements of small and medium sized businesses. Centers of Excellence developed multi-company partnerships with research groups in universities that had extensive experience in particular technologies such as Nanotechnology and Dielectrics.
The early years of the Ben Franklin Research and Development Program could best be characterized as a technology push, and this approach reflected the views of the main architect of the program as well as sponsoring legislators. At the time there was a significant amount of developed, but unused, technology held “on the shelf” in many universities. In line with this approach, the early activities of the staff involved becoming familiar with university researchers and their expertise, as well as finding Pennsylvania companies able to utilize the technology.
Unfortunately, industry representatives often resisted “state or university involvement” in their R&D projects, and university researchers were not always comfortable with company deadlines. Regardless, some very strong relationships between industry and universities developed. These partnerships helped grow new businesses and employment opportunities in companies such as Lee Industries, Minitab, Centre Analytical Labs, and Zetachron.
In a major policy decision in 1985, the Partnership Board required that the Technology Centers be incorporated as private, non-profit, independent corporations to be governed by a Board of Directors, the membership of which would include institutions of higher education, and at least 50 percent private sector participation. By 1986, CNP’s governance was changed in order to comply with the Partnership Board mandate and was incorporated as a subsidiary corporation of the Corporation of Penn State. An eleven-person Board of Directors was developed, with eight members drawn from the private sector and three from the University. This created a governance structure quite similar to an incorporated, for-profit business.
As a follow-on to this change in governance, CNP started to make direct R&D investments in companies with fewer than 50 employees, without requiring a university partner. The company then had an option to engage university input or to proceed without academic contribution. This strategy was the initial step away from the Program’s historical grant based operation and a move toward becoming a statewide investment vehicle for job creation and economic development.
By the mid 1990’s, because of CNP’s new focus on R&D projects within emerging tech-based businesses, the Center developed the Transformation Business Services Network. This team of seasoned business professionals offered a complete menu of management services to early stage companies. This pioneering effort in entrepreneurial support provided constant, consistent mentoring to CNP companies in areas such as strategic planning, financial management, marketing research, and human resources.
As the Center’s mission evolved from investing in R&D projects within companies, to the development of the companies themselves, the payback policies were modified to provide for equity participation in a modest percentage of the portfolio’s potentially high-growth companies. At the same time, CNP recognized the need within the region for the ready availability of follow-on financing – bank loans, angel investment, or venture capital – and has played a central role in establishing resources designed to help emerging businesses gain access to other funding opportunities.
The first 25 years of the Ben Franklin Program in Central and Northern Pennsylvania can be characterized by methodical, deliberate, and continuous improvement in program marketing, focus, administration, mentoring, project development, financial investment sophistication and economic development returns. Today, the Program is recognized as one of the premier technology-based economic development programs in the nation.