Geo-economics

How Pittsburgh shed its rust belt image

Deborah L. Wince-Smith
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Nearly 30 years ago, Pittsburgh had an unemployment rate of over 17% and was losing thousands of jobs monthly; the steel industry on which it depended had been devastated in the late 20th century by slowing demand, higher costs and intense competition. Now, the city boasts lower-than-national-average unemployment rates.

While still employing 100,000 manufacturers as America’s second-largest market for industrial metal employment, Pittsburgh successfully reinvented itself by attracting and creating new industries, even earning a new moniker, “Roboburgh”, for its success in robotics and advanced manufacturing. Can its story become a roadmap for other cities, especially those in America’s “rust belt”, to overcome industrial decline?

The challenge of Pittsburgh’s transformation was presented in the 2002 Clusters of Innovation report by the Council on Competitiveness. The report cited obstacles hindering the city’s economic performance, including poor workforce retention, low levels of innovation, a challenging start-up environment, and weak coordination among different levels of leadership. Over the next decade, Pittsburgh took steps to address each these challenges.

In order to keep talented graduates from leaving the city and attract others from around the globe, attention was focused on changing the culture of the city. Funds, incentives and appropriations were invested in new revitalization programmes. Results were seen quickly: Pittsburgh was named the most liveable city in the US by the Economist Intelligence Unit.

In an effort to boost start-up creation and growth, a number of innovation projects were started. Innovation Works, a state-run programme, promoted and supported entrepreneurship. Private-public partnerships such as this have become a powerful tool, not only for directing finance to deserving start-ups and growing companies, but also in providing channels of communication and cooperation between various economic stakeholders. This sort of effort was combined with the already existing foundations of a skilled workforce and strong research community, to make Pittsburgh’s transformation possible.

The city’s success was recognized in 2009 when it was chosen as host city for the prestigious and influential G20 summit. Organizers pointed to its “diverse, balanced and resilient economy”, making Pittsburgh “a model for economic, environmental and quality-of-life transformation”.

Beyond the previously mentioned success in advanced manufacturing, the city has witnessed great performance in a range of fields: financial and business services (hosting two of the 15 largest US law firms); global business (home to more than 100 over–$1 billion businesses), healthcare and life sciences (providing more than 100,000 jobs), education and research (Carnegie Mellon University and University of Pittsburgh ranking high in research, and over 70,000 jobs provided by research and development as a whole), and information and communications technology (roughly 1,600 technology firms).

President Obama recently commented on how Pittsburgh had “transformed itself from the city of steel to a centre for high-tech innovation – including green technology, education and training, and research and development”.

Pittsburgh’s recovery demonstrates the vast potential for transformation in cities dependent on declining industries. It can be looked to as an example of how it is possible for manufacturing cities to find a second life through innovation and new technology. In a 2014 National Bureau of Economic Research report, Pittsburgh was named the second best city for being able to achieve the American dream, recognizing the newfound prosperity and economic mobility it offers its citizens.

Read the new Competitiveness of Cities report here.

Author: Deborah L Wince-Smith is the president and CEO of the Council on Competitiveness.

Image: A view of downtown Pittsburgh from the Duquesne Incline on Mt. Washington September 22, 2009. REUTERS/David A. DeNoma

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Related topics:
Geo-economicsFinancial and Monetary SystemsEconomic Progress
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