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The Pittsburgh Economy

The Pittsburgh Economy. Challenges and Innovations. Key Points. Details on the transition Resources and programs Defining cluster connections Effective cluster policy. Initial Development Efforts. Smoke and Flood Control 1907 – Chamber of Commerce

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The Pittsburgh Economy

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  1. The Pittsburgh Economy Challenges and Innovations

  2. Key Points • Details on the transition • Resources and programs • Defining cluster connections • Effective cluster policy

  3. Initial Development Efforts • Smoke and Flood Control • 1907 – Chamber of Commerce • 1911 – Pittsburgh Industrial Development Corporation • Rebuild Industrial Infrastructure • 1956 Pennsylvania Governor George Leader created PA Industrial Development Authority

  4. Restructuring

  5. Recovery

  6. Pittsburgh Economy, 1969-2000

  7. Tech & Mfg. Employment

  8. Timeline

  9. 1980s Development Focus • Legacy of Big Steel • Technology • Materials, instruments, environmental • Research and Development • Bio-medical technology, information technology • Services • Finance • Healthcare

  10. Services Overview Industry Legend All Spike Technology Manufacturing Special Initiatives Start-ups GAT County/ Cornerstone Team PA PRA EAN PRA Special Init. Catalyst Navigators Team PA Tech/ Extension Services Marketing/ Prospecting IW Special Init. PRA IDC/URA Cornerstone DCED / GAT Identify Needs Site Selection Assistance Identify Prospects Finance & Incentives RIDC SPC Comm R.E. Catalyst WIB IW Workforce & Talent Special Init. PRA Permits and Regulatory Assistance PRA/WFC GAT PTC Cornerstone Catalyst Site Development Business & Mgmt Consulting Networking & Industry Info. Cornerstone RIDC Catalyst Commercial Real Estate IW PTC Chamber Special Init. SMC SBDCs Special Init.

  11. Why So Many Agencies? • Historical Incrementalism (“Layer Cake”) • Creating a new agency was easier than choosing between competing existing agencies (also see Turfism) • Turfism, Suspicion, Lack of Cooperation • Agency success measured by control of programs rather than accomplishment of objectives • Federal and State Requirements & Incentives • IDCs, IDAs, LDDs, ALOs, ATCs, IRCs, TPAs, etc. • State/national uniformity conflicts with local structure • Sensible Targeting of Effort • Focus on particular industries, geographic areas, stage of business

  12. Jobs in the Region • Before: Concentrated in steel and metals • Now: Diverse employment base • Bio-Medical Technology • Environmental Technology • Information Technology • Instruments • Materials

  13. Business Creation Our rate of business starts is falling.

  14. Small Business Development • Business Plans – Small Business Development Centers (SBDCs) • University of Pittsburgh • Chrysler Center, Duquesne University • St. Vincent College • Marketing • Don Jones Center

  15. Technology Strategies Provide $ to Sources of Technology • Create Technology • Transfer Technology • Adopt Technology • Develop Climate & Assets Encourage Private $$ Technical Assistance Foster Networks People Infrastructure

  16. Innovation Risk & Profit • +$ Profits Investment 0 Time Personal Banks -$ Angels Wall St. Federal Venture States

  17. Finance For Startups • Federal • SBIR – Small Business Innovation Research • SBICs – Small Business Investment Companies • State • Opportunity Grants (PA) • Ben Franklin Partners – Innovation Works • Venture Capital

  18. Innovation Works • A Pennsylvania Ben Franklin Partner • Max of $100,000 for prototype and proof of concept (x3) • Max of $300,000 for market entry • Equity investments up to $500,000 • Disburse $1.5M per quarter • Quarterly cycle, 60-90 day turn-around

  19. BFP Impacts, 1983-1992

  20. Pittsburgh Venture Investment

  21. Venture Capital Flows

  22. Catalyst Connection • A Pennsylvania Industrial Resource Center and NIST Manufacturing Extension Partner • Catalyst Connection provides customized consulting services to small and medium-sized manufacturers • Financial • Information Technology • Lean Manufacturing • Market Development • Quality Systems • Web Enhancement • Workforce

  23. Doyle-TIDE Program • A new $5 Million initiative to implement COTS in the defense supply chain and to address issues like the rapid scaling of production that is required under the new dual-use, single production model of defense industries (www.sei.cmu.edu/tide/).

  24. The transition from manufacturing to Life Sciences

  25. Life Science Employment

  26. Life Science R&D Exp.

  27. Pittsburgh’s areas of strength

  28. Biotech Investment is rising

  29. Biotech Convergence • IT joining a new wave of Biotech • Leverages Region’s Life Sciences R&D • Center for Biomedical Informatics (University of Pittsburgh) • Pittsburgh Tissue Engineering Initiative • BioVenture / Life Sciences Greenhouse

  30. Human Capital and Amenities • Tech / Innovative Industries Growing • Knowledge worker in high demand • Areas with skilled labor attract good jobs • Knowledge workers can choose their location • Amenities / Quality of life become more important • Education and Training are critical • Highly competitive markets

  31. Population Drain Pittsburgh is one of a select club of major metropolitan areas that has NOT grown.

  32. People Do Matter • Region continues to lose population, albeit slowly • PSU study shows that disproportionate share of losses are young, well-educated • Push for amenities is in full swing • Chicken and Egg – • Jobs bring people OR • People attract job

  33. What attracts them? • High quality, high paying jobs at cool companies still #1 • Depth of job opportunity in local market • Quality of life • Coolness • Amenities – music, outdoor activities, culture • Diversity (or perceived openness to it)

  34. The End Thank you

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