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G20—Why Pittsburgh? A Tale of Three Cities


Pittsburgh is known for its three rivers. To me, it's been three cities over the past 30 years.

It's the city that I grew up in when the Steel Era was strongest in the late 1970s.

Pittsburgh, PA

It became a city whose universities and hospitals flourished over the next decades, while a growing number of global services businesses started calling Pittsburgh home.

And now the city that G-20 visitors will see can credit those institutions for helping it weather this financial crisis.

"It used to be we'd dive into a recession and leap out," says Doug Heuck, a former colleague from my days as a fledgling reporter at the now defunct Pittsburgh Press. "Now all of those curves are much flatter. It's kind of a brain power center now as compared to a brawn power center."

Heuck edits Pittsburgh Quarterly, the city's glossy commerce and culture magazine. Its stories — features on educational and medical breakthroughs, conservation and greening programs, and the city's lively cultural district — couldn't have been written in the 1980s.

"Pittsburgh is really much better off now, it's much more livable, much more vibrant," he says.

The City of Steel

It's been a slow process but Pittsburgh seems to have figured out how to deal with difficult economic times, like this current recession. After all, the city has seen much worse. Pittsburgh's unemployment rate hit 17 percent in 1983, after the collapse of the steel industry. Today unemployment here is under 8 percent, about 2 percent below the national average.

The steel mills that provided my grandfather with a living for three decades are mostly gone. Manufacturing lost 100,000 jobs when that industry largely shut down in early 1980s. Yet the manufacturing sector — now diversified into energy, technology, life sciences and robotics — still contributes about $14 billion to the local economy.

Financial Services, Education & Healthcare

Downtown Pittsburgh's skyline is dotted with Fortune 500 companies and global services corporations, including financial services companies (Federated Investors and PNC ) and top law firms (K&L Gates), which have also been critical to the city's survival. About 14 percent of the local jobs are here and financial activities, business and professional services account for $35 billion in gross regional product.

But to me, the most stunning change in Pittsburgh's economy over the past 30 years has been the explosive growth of its universities and hospitals.

"When I came here, Pittsburgh was known mainly for steel, ketchup and football and now while I love all of those things in many parts of the world it really is pioneering research and world-class medical care that people know about this city," says University of Pittsburgh Chancellor Mark Nordenberg, who joined the faculty in 1977 and worked for nearly 25 years with my father, now a retired university dean.

Today the University of Pittsburgh accounts for nearly $1.75 billion in local spending and supports 34,000 jobs. Fifteen years ago, the university's research expenditures were a little over $200 million dollars a year.

Today they're more than $650 million dollars a year. Collaborating with Carnegie Mellon University — a few blocks away — to create technological innovations, these schools have spawned hundreds of start-up companies.

"We're spinning off new companies from university-based research," Nordenberg says. "Those companies are rooting here and beginning to grow here and that of course is the generator of not only new jobs but good jobs."

The University of Pittsburgh's Medical Center — known now just as "U-P-M-C" — is the most shining example of the city's transformation. Its letters are emblazoned on top of the city's iconic U.S. Steel Building, the $8 billion corporation is the biggest tenant of this 42-story skyscraper and the region's largest employer with 50,000 employees.

Support From 'Mom and Pop'

But Pittsburgh's small businesses, the "Mom and Pop" shops, will be critical to Pittsburgh's continued growth. My mother's family owned a dry cleaning business in the city for nearly 70 years. One of the locations, under new ownership, still serves the Homewood neighborhood. Justin Strong's dad runs it now.

Spotlight Pittsburgh

Justin, also an entrepreneur, owns the popular "Shadow Lounge" in Pittsburgh's East Liberty neighborhood and is scouring the forgotten areas of the city for new business opportunities. He's hoping to convince visitors from around the world who are in town for the G-20 to consider investing here.

Vacant lots and abandoned buildings in the city's East End are prime locations for urban farming and green manufacturing, he says.

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"It's about using what is already here and using it in a new way that you may not be thinking about that actually gets us the best potential and the best bottom line."

That has been Pittsburgh's promise for the past 30 years and may be the key to its future progress.