Pittsburgh: The Steel City Comeback

Supported by a booming regional energy-production industry, rebounding manufacturing sectors, notable research-and-development capabilities, and a deep and stable corporate base, Pittsburgh has outstripped both national and Pennsylvania job-creation rates over the past two years. With an unemployment rate below the national average, a growing base of human capital, and continued signs of economic growth, the region stands positioned to become a leading metro area for job creation.

Allegheny Conference: A Framework for Collaboration

Part of Pittsburgh’s success can be attributed to the region’s collaborative approach to economic growth and job-creation efforts. Key public and private- sector stakeholders, including the Greater Pittsburgh Chamber of Commerce, the Pittsburgh Regional Alliance, and the Pennsylvania Economy League of Greater Pittsburgh work together through the Allegheny Conference on Community Development to develop and implement a unified regional agenda for job creation.

The Conference uses this unique structure to tap the leadership, vision, and commitment of CEOs and corporate executives throughout the region to drive regional advocacy, business investment marketing, project management, and public policy research and development activities in affiliation with its partners. This commitment to private-sector leadership is emphasized through the Conference’s Regional Investors Council, comprising over 300 top regional employers contributing leadership and financial support to the organization.

Launched in the 1940s to improve air quality in the then “Smoky City” and to better unify regional development efforts, the Allegheny Conference continues to build sustainable prosperity by making Pittsburgh a location of choice for workers and business investment, strengthening communities, and energizing tomorrow’s economy.

Built on nearly 70 years of proven public-private partnership results, today’s Conference partnerships reach across state lines to build economic collaborations throughout the tri-state area (PA, OH, and WV). Major efforts include:

  • The Tech Belt, an initiative to encourage investment across a region from northeastern Ohio to northern West Virginia.
  • Joining with chambers of commerce from 11 other states and two Canadian provinces to support a federal agenda that recognizes the economic power and potential of the Great Lakes region.
  • Partnering with leaders and citizens from a four- state, 32-county region surrounding Pittsburgh to envision a common future through the “Power of 32” initiative.

Supporting Growth from Within

Providing support to existing, stable local businesses is a key focus of Pittsburgh’s efforts to promote economic growth. The Greater Pittsburgh Chamber of Commerce founded CompetePA, a statewide coalition of business organizations and employers, supporting business climate improvements.

The Pittsburgh Regional Alliance, which has been recognized as one of the top regional economic development organizations in the US, targets regional economic sectors for growth through market research, supply chain strategies, project management and national and global marketing. The Pittsburgh Regional Alliance’s Pittsburgh Impact initiative offers businesses that have a track record of job creation and job retention expansion support services, helping small businesses in the region identify new markets, grow, and create more jobs. In 2011, businesses and developers in the Pittsburgh region announced 286 projects in the pipeline representing nearly $1.5 billion in capital investment and a total impact of 17,000 jobs (new and retained).

Public sector leaders from throughout the 10-county region have also taken an active role in promoting business growth and encouraging private-sector job creation. Through the Tri-County Airport Partnership, the counties immediately surrounding Pittsburgh International Airport worked together with the Conference and other stakeholders to prepare 2,000 shovel-ready acres for private investment. The Regional Air Service Partnership, another public-private effort, focuses on strengthening and expanding air service to critical markets, including the establishment of a direct international flight to Paris.

Both the City of Pittsburgh and Allegheny County have redevelopment authorities which offer a range of business-support programs, including initiatives focused on site development, entrepreneurship, small-business development, and financing and work in partnership with a strong network of community development organizations.

Most strikingly, since the steel industry’s heyday in the middle of the last century, the Pittsburgh region has evolved to develop a more robust and diversified industrial base. A look at the region’s most concentrated industries in 2011 (Table 1) reveals strength in many manufacturing sectors, as well as in energy, business management and corporate headquarters, health care, education, and finance.

The Innovation Economy

Long a national hub for manufacturing, Pittsburgh has made development of advanced manufacturing and retention and expansion of existing industries a key focus. The region is home to nearly 3000 advanced manufacturing firms, which, along with the existing research and development base at the region’s leading universities and over 100 private sector R&D operations, provide a solid foundation for development, commercialization, and production of innovative new products.

In addition to providing skilled graduates and R&D output to regional industry, Pittsburgh’s universities have also taken an active role in partnering with regional manufacturers to support job creation. The University of Pittsburgh’s Manufacturing Assistance Program (MAC) offers technical assistance and job training support to regional companies, helping them increase productivity and efficiency. Carnegie Mellon University’s world-class Robotics Institute also works with manufacturers, partnering on industry-sponsored research projects and providing companies with access to top-rate research resources and students with pathways to careers in the region.

In addition, the University of Pittsburgh, Carnegie Mellon University, and the University of Pittsburgh Medical Center have collaborated to foster creation of a nonprofit support and investment network to commercialize spin-off technologies and bring innovation to market. Growth Fueled by Energy Development

The unfolding boom in shale gas exploration and production in Pennsylvania has been a major engine for economic growth in the Pittsburgh region over the past several years. As more gas capacity has come online, driven by new drilling technologies and increased world energy demand, job growth in energy- related industries has jumped by leaps and bounds.

The Conference actively works to ensure that the Pittsburgh region reaps the economic benefits of the Marcellus Shale gas through an active energy supply chain initiative that reaches beyond drilling to downstream uses of natural gas as an alternative fuel and manufacturing feedstock, new targeted workforce deployment efforts and increased focus on public- private sector collaboration.

The Regional Alliance’s energy supply chain initiative communicates with businesses already in the region about new energy-related opportunities and identifies supply chain gaps to be filled through business expansion and relocation. Early successes to date include new investments by Hunting Energy, BOS Solutions, and Valerus.

The Allegheny Conference is a founding partner with Innovation Works, the region’s lead organization for supporting and funding start-ups and spin-offs, in creating the Energy Alliance of Greater Pittsburgh. The alliance is a public-private partnership with more than 100 members working to increase the scale of the region’s energy industry, create and retain jobs and investment and advance our leadership in environmental sustainability.

Regional collaborative efforts to encourage major energy developments have paid dividends. Shell Oil recently chose the Pittsburgh region as the preferred site for a multi-billion dollar ethane cracking facility which will produce a range of chemicals from the region’s natural gas reserves. In addition to creating hundreds of jobs building and operating the plant, the facility should unlock opportunities for associated petrochemical industry development and job creation in the region.

Filling the Talent Pipeline

The Pittsburgh region has turned the corner on brain drain, the outmigration of young people educated at the region’s 36 colleges and universities. According to IRS tax return data since 1996, the region’s outmigration rate has never been higher than 60% of a typical metropolitan area. Pittsburgh’s out-migration rate has declined even further since 2008 and the region is now enjoying a small net gain in residents due to increasing inward migration. In recent years, Pittsburgh has not had a problem with high out- migration; rather, its in-migration rate has lagged other metropolitan areas. Pittsburgh’s new challenge is not in stemming an outflow of residents, but in improving its performance in attracting new ones.

In fact, the region’s young workforce is one of the most educated in any region of the country. Pittsburgh’s lower educational-attainment figures are a product of its top-heavy age structure overall and not a true indication of the education level of its workforce. Half of the region’s residents aged 25 to 44 have at least a two-year degree, the seventh-highest of the nation’s 51 largest metropolitan areas.

While energy-related industries have been a regional success story, continued expansion will rely on industry access to skilled workers. The Power of Pittsburgh, an initiative launched by the Energy Alliance, is designed to connect workers to growing companies in the industry, spurring continued economic growth. The initiative provides a one-stop online site listing career options, job openings, and energy companies in the Pittsburgh area. Individuals looking to launch a career in the industry can also access information on regional training programs and apprenticeships, easing the transition into new career fields.

Throughout the Pittsburgh region, community and technical colleges have also stepped up to the plate in support of growing industries. Westmoreland County Community College and the Pennsylvania Collegeof Technology, in partnership with the Allegheny Conference, colleges, workforce training groups, and industry partners in a four-state region, launched the ShaleNET initiative in 2011. The new effort provides standardized, industry-recognized training and certification programs to identify, train, and place individuals in the highest demand jobs related to the growing shale gas industry.

Building on a Strong Foundation and Looking to the Future

Local leaders in Denver and Pittsburgh recognize the importance of understanding the strengths and weaknesses of their regions, their individual economic DNA, and the value of coordination and collaboration in their communities. A chamber of commerce or an economic development agency does not create jobs directly, but it can become the critical link between business, government agencies, academia, and citizens.

In Denver, strong strategic leadership by the city of Denver and its mayor sets the stage for the regional chamber and Metro Denver EDC to take the lead on regional initiatives like the Colorado Energy Commission and the E-Force initiative. Pittsburgh’s Allegheny Conference provides the structure and leadership needed for economic research and community and economic development projects like the broad Power of 32 collaborative or the linking of workforce players with ShaleNET.

The coordinating function provided by these local groups may not steal headlines, but it is the behind- the-scenes work that can help catalyze job growth and help make public programs more efficient.