Portal economy to lead the way

The cable giant has quietly built a massive data network that rings the inside of the United States like a track loop. Some of this was "dark fiber" - unused data-transmission lines - available after the dot-com bust. Comcast bought it at a discount.

Comcast is not the only digital portal. Sebastian Moser is the general manager of 1&1 Internet Inc. in Chesterbrook, a division of a German Web-hosting giant. Moser opened the company's office in Chesterbrook in 2003 with himself and one other employee. Today there are about 100 employees, with an average age of 28, who run a business that hosts about 700,000 U.S. Web sites. The computer servers are in Kansas.

Moser chose the Philadelphia suburbs for the U.S. subsidiary headquarters because the German company needed to be on the East Coast. The time difference with California was too great. Boston and New York were too expensive. Washington was not considered, and Moser crossed Miami off the list because of hurricanes.

Moser has had no problem finding employees for 1&1 Internet. But he is disappointed that he cannot easily tap into the city's labor market of college students. "If I had to do it again, I would get an office smack in the middle of the Drexel campus," Moser said.

This talk of economics and portals may be tantalizing for a region that hung its head for so long. But it will not stop the hard times in 2009. For that, past recessions may be the best guide.

Downturns have hurt the city more than its South Jersey or Pennsylvania suburbs. Philadelphia lost 6 percent of its job base, or about 44,300 jobs, in the early-1980s recession. There are no comparable figures for the suburbs.

A recession a decade later washed away 8.5 percent of the city's job base. Suburban areas, along with Wilmington, lost 3.9 percent.

In the wake of the dot-com bust, the city emptied of 1.8 percent of its jobs. The areas outside Philadelphia lost less than 1 percent.

One threatened industry in the current recession is pharmaceuticals. These companies hired thousands of researchers, marketers and sales reps in the 1990s for high-paying jobs. But the companies have retrenched as they lose patent protections on blockbuster drugs and face competition from generics.

"It's not Silicon Valley - hey, that's true," said William Stull, chairman of Temple University's economics department and co-author of a 1991 book on postindustrial Philadelphia. "But it's not Detroit or South Dakota. We don't have huge blips in home prices, but we don't have tremendous layoffs from General Motors. There's nothing flashy, and there are no splashy industries."

Said Steven Wray of the nonprofit Pennsylvania Economy League: "The next year will be rough for everybody. . . . You just hope that people don't get so hunkered down that they don't look to the future."

David L. Cohen, chairman of the Greater Philadelphia Chamber of Commerce and an executive vice president at Comcast, said the Philadelphia region seemed on its way to having a "reasonably vibrant 21st-century economy."