The G-20 summit is over, and the world finally knows Pittsburgh is no longer the dirty, smoky steel town pictured in the history books. Now it's time to stop talking about how we recovered from job losses 30 years ago and start talking about how we can accelerate job growth over the next 30 years.
The fact that we've lost fewer jobs than most regions during the recession doesn't mean we'll grow more jobs than other regions when the recovery begins.
In the years after the end of the last recession, the Pittsburgh region's economy had the fourth-worst job growth among the top 40 regions. In fact, the region never recovered all of the jobs it lost in 2002-2003 before the current recession hit. As a result, the Pittsburgh region has fewer jobs now than in 1999, whereas most major regions still have more, even after losing thousands of jobs this year.
The real lesson for our future doesn't come from the past several decades, but from what happened here a century ago. Pittsburgh was once a place where entrepreneurs came to start companies, find investors and produce products sold worldwide. Companies such as Alcoa, Heinz, PPG, U.S. Steel and Westinghouse didn't move here because of economic development recruitment efforts. They were started here by entrepreneurs, and they grew to become not only major employers themselves, but to spawn thousands of jobs in supply firms, too. The companies' decisions about expansion and hiring were made in headquarters located in Pittsburgh, not in other cities.
Back then, our economic assets were natural resources such as rivers and minerals. Today, Pittsburgh's biggest assets are technology and innovation. The transformation of Carnegie Mellon, Pitt and UPMC over the past three decades into some of the leading centers for research in the world has given our region one of the key ingredients for successful economic development in the future.
But innovations don't turn into jobs without a second ingredient: entrepreneurs. Although we have some great entrepreneurs in the region today, we don't have nearly enough modern-day Andrew Carnegies and George Westinghouses who take big risks and devote themselves to bringing an idea to life.
Over time, Pittsburghers came to define success as working for someone else, rather than starting and growing a business. As a result, our region now has some of the lowest rates of entrepreneurship and new business formation in the country.
A third key ingredient is investment capital. No matter how good the idea or talented the entrepreneur, if a startup business can't get the money it needs to grow, it will be forced to close or move elsewhere. Alcoa, for example, is here today because 120 years ago, inventor Charles Martin Hall couldn't find capital in his home state of Ohio, but received the $20,000 in seed capital he needed from Alfred E. Hunt and a small group of investors in Pittsburgh.
Similarly, many of our rapidly growing technology firms are here today because of the early stage investment they've received through individuals and organizations such as Blue Tree Allied Angels and Innovation Works. But we don't have nearly enough angel investors in our region to support the levels of entrepreneurship we need for the future.
Although Pittsburghers can be justifiably proud of our high rankings on quality of life, we should be embarrassed that we rank near the bottom on lists of places to start a business. Attracting entrepreneurs and helping them find investors should be a central and visible piece of our region's economic development strategy. It's not enough to have our technology-based organizations working on it; it has to be a priority for all of our elected officials and civic leaders, as well as the average citizen.
There is no better time to focus on entrepreneurship than now -- there are likely hundreds of potential entrepreneurs among those who've lost their jobs here over the past year, and thousands more across the country, as well as dozens of budding entrepreneurs each year at our colleges and universities.
Let's encourage them to start a business here as enthusiastically as we welcomed our G-20 visitors.
Harold D. Miller is President of Future Strategies LLC, and Adjunct Professor of Public Policy and Management at Carnegie Mellon University. He publishes www.PittsburghFuture.com, an internet resource on regional economic development issues, and contributes to regional indicators at www.PittsburghToday.org.
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