Pittsburgh Builds On Its Steel Legacy

These days, Pittsburgh is busy transforming its economy to meet the demands of the future.

Any profile of Pittsburgh usually inspires a perfunctory mention of the city’s history of steelmaking dominance from 30 years past and its subsequent economic collapse. But newcomers to the area would find no usefulness in this stale reference.

Rather, locals are focusing on the innovative spirit that fueled Pittsburgh's former glory and channeling it toward the growth of a new kind of economy.

Long before southwestern Pennsylvania was home to the rigid, dying steel industry, it was a birthplace for ideas. Not only steel, but oil energy, electricity, aluminum manufacturing and air brakes all have their origins closely tied to the region. Pittsburgh’s steel industry launched in the 19th century when the city was a crucible of capitalist investment -- new industries sprouting, startup businesses growing fast and some burning out even faster -- that local leaders want re-created today.

“One of the continuing threads that we’ve seen is that this is an area that is welcoming to new ideas, that supports new ideas, that has people willing to take a chance on new ideas,” said Anne Madarasz, museum division director at the Senator John Heinz History Center in Pittsburgh. “That’s one of the reasons we’ve had this metamorphosis over time, that we didn’t die in the late 1970s. We had already set the seeds. ... and had a new economy to grow out of that old regional economy that others didn't.”

Building On Its Steel Foundation

The steel industry scarred the region, but it also left behind the foundation for Pittsburgh’s reinvention. That new economy started with health and higher education, two sectors built decades ago because of the success of steel. The next hope for Pittsburgh is its tech sector, rich with startup spinoffs from the local universities, often using the same land, the same workspaces and the same infrastructure that steel left behind. The question is how far that can take the region.

It has been over 10 years since the Wall Street Journal dubbed the town “Roboburgh” because of its growing robotics industry, and now tech companies pay some of the best salaries and make up more than a quarter of employee wages in the region, according to the Pittsburgh Technology Council's State of the Industry Report.

"The convergence of advanced technologies and innovation, a well educated workforce and a strong industrial heritage, has repositioned Pittsburgh as one of today’s choice destinations for corporate locations or expansions," said Michael Langley, CEO of the Allegheny Conference on Community Development. "Despite a global economic crisis, the Pittsburgh region economy remains strong, and employment is at a near-record high."

Many smelly mills have disappeared, their rusty remnants razed to make room for new shopping centers, corporate headquarters and new research complexes. Regional leaders are pushing another renaissance. They’re promoting Pittsburgh’s high concentration of green buildings and selling its old-style neighborhoods to environmentally aware and cost-conscious consumers who want to walk to work, shops and theaters.

Bringing New Life to Downtown

Much of this development has improved Pittsburgh dramatically in just the past 10 to 15 years, said Luis F. Rico-Gutierrez, director of Carnegie Mellon University's Remaking Cities Institute.

“We walked about a block to Liberty Avenue (downtown on our first night in Pittsburgh). It was a little like an old Western movie, empty, desolate. Instead of tumbleweeds, there were Giant Eagle (supermarket) bags. And my wife said, 'Where did you bring me?' ... I don’t think that happens anymore,” said Rico-Gutierrez who arrived in 1996 after working in Mexico and Spain, and he has lived in the Squirrel Hill neighborhood ever since.

The Cultural District has enlivened the downtown area since then, and Pittsburghers have found renewed confidence in their town, he said. “The people I met were wonderful to me. I feel I can contribute to the place. ... My kids love Pittsburgh. You can talk about anywhere in the world and they always bring it back and say 'Well, my city’s better.' ... I can walk to places, it’s very commercial, it’s also very real. You know, we’re seeing a little bit less of that, but I can walk out and speak with the person whose selling the produce and the next block will be a school, a hospital, a little business selling magazines.”

Pittsburgh’s growth depends on how the city confronts the problems the steel industry left behind. 

Overcoming the Challenges to Growth

Whether the region can keep growing will depend on how it confronts some of the problems the steel industry left behind. Its collapse triggered a vast emigration of talent and now the city has one of the oldest populations in the country. Immigration, once a hallmark of Pittsburgh, slowed to a trickle. Much of the region’s infrastructure is old and failing, and its governments are divided into scores of little towns, some unable to support themselves and their schools. Some local leaders have admitted these problems and attempted to deal with them.

Some problems the region hasn’t really considered at all, two experts said. The steel industry and related businesses, though not dominant, are still big players in the region. But the problems of its past have sometimes led to its presence being ignored, said Ravi Madhavan, an associate professor of business administration at the University of Pittsburgh. And while the region may have a healthy bevy of small startups, it has no unified strategy to help them grow larger and build job-rich production facilities in Pittsburgh, said economist Perry Wong of the California-based Milken Institute. The planned closing of three world-class technology companies stirred up some angst throughout the region in recent weeks.

“I think they are kind of shy, they’re shy in how they can convert their outcomes into an industrial base. Creating an industrial base is an idea that people in Pittsburgh have given up,” said Wong, part of a Milken team that in 2006 did a study of the region’s technology strategy. “In the past 60 years, Pittsburgh was the greatest industrial base in America. ... It looks like they don’t want to redefine their role in that process. They would rather maybe be a ... sports titan and focus on their universities, but they can define their position as an industrial complex, too.”

Building a Knowledge Economy

That will take time and long-term commitment from local leaders, economic experts said. Pittsburgh, in competing for high-tech and knowledge-sector jobs, is basically competing with any city that wants to grow a 21st century economy. Regions like San Diego and the North Carolina Research Triangle have blossomed because of those types of jobs, but it took decades for those areas to establish themselves.

“It is starting (to turn in Pittsburgh) but I know as a native who’s written about this issue that it was starting to turn 10 years ago and I was hopeful. It doesn’t just turn maybe as far and as fast as we hope,” said Mark Houser, who covered the region, including its technology sector, as a former reporter at the Pittsburgh Tribune-Review. “We’re digging ourselves out of the deepest hole that maybe any American city has ever found itself in. ... That takes a long time. It’s not that the engine is stalling, it’s that it takes a lot of work."

“I think that research and good universities are the drivers for building a knowledge economy," Houser said. "So if we possess ... a formidable research hospital (the University of Pittsburgh Medical Center) and certainly one of the best computer/robotic/AI/high-tech universities on the planet (Carnegie Mellon), then we are situated really well for these industries of the future.”

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