Pittsburgh needs both startups and manufacturers in its bid to modernize industry, tech leader says
90.5 WESA | By An-Li Herring
Published April 6, 2022 at 5:50 AM EDT
As manufacturing continues to evolve toward a digital and automated future, Pittsburgh-area business leaders have made the sector a central part of their strategy to boost the regional economy.
They began to campaign last year for more than $150 million in public and private investment to help to turn the Pittsburgh region into an industrial hub for autonomous mobility technology, whose applications range from self-driving cars to factory and warehouse machinery. And in December, they learned that southwestern Pennsylvania was named a finalist in the U.S. Commerce Department’s Build Back Better Regional Challenge, with the potential to receive up to $100 million in federal funds.
The competition is still underway, but if it wins the money, the Southwestern Pennsylvania New Economy Coalition said it will use it to assist local manufacturers in adopting robotics and artificial intelligence and to train workers in using such technologies.
“We're really trying to glue together the advanced technology that's coming out of the great university systems here with our legacy manufacturing capabilities, as well as adding in upskilling for new employees to get into this space,” said Mike Formica, who helped to develop the region’s Build Back Better proposal.
An engineer and entrepreneur, Formica became the head of the AlphaLab Gear startup accelerator in February. Located in East Liberty, the organization supports hardware and robotics companies.
Having led several successful advanced tech startups over the course of his career, Formica said innovations that take root at places like AlphaLab Gear and local universities have the potential to create jobs for workers up and down the income ladder, while also attracting investment that can spur more growth. But to execute on that vision, he said startups and researchers must partner with more established manufacturing companies to put their concepts to practical and economical use.
“You may have a university researcher with a great idea who doesn't know how to reach a machine shop in Butler County to build a part for him,” he said. “So we're trying to connect those dots with them, [and] likewise trying to get the guy in Butler County who has a machine shop to find new employees."
Companies at AlphaLab Gear make physical products that similarly generate business for manufacturers in southwestern Pennsylvania. For example, startup AlgenAir makes algae-based air purifiers with components from local circuit board and plastic parts makers, according to Formica. He said another company in the area assembles the purifiers.
While policymakers often focus on workforce training as a means to bolster manufacturing, Formica said companies like AlgenAir create the demand that’s also crucial to sustaining the sector locally.
“If I had 10,000 engineers or technicians today that were ready to go ahead and build parts for us, I don't have a company that needs [those parts],” he said. “So my focus has been to change the culture for startups, so that manufacturing, instead of being an afterthought, becomes a core strategic value for them. So if a company is building something, and they're designing it here and building here, they're going to also hire here.”
“Right now, that doesn't happen as much,” he said, “and that's really my big goal moving forward.”
Startups at AlphaLab Gear, in turn, depend on technology that’s already in place at many manufacturing plants to pump out product at a profitable scale, he noted.
“The phase going from a prototype to full scale production isn't as straightforward as people think,” he said.
“A startup might go ahead and leverage 3D printers … and create a product. That works when you're doing 10 or 100 of something. That's enough to get started,” he said. “But once they say, ‘Well, I need a thousand,’ you just can't … print a thousand of them cost effectively, typically.”
“And that's an area where the legacy manufacturers are really critical,” he added. “They’ll come in and say, ‘Well, I've been doing this for 20, 30, 40 years, and here's how my machines can do it really cost-effectively for you.’
“These manufacturers [are] experts in their domain, so we need them to come into the startups and effectively teach them how to make products that can be manufactured on the machines that they have in the region,” Formica said.
Companies generally become more competitive once they can produce at higher volumes, and Formica noted that as startups gain viability, they then can hire more.
For example, he said, “A robotics company that's doing well is going to need service technicians in the field. They're going to need marketing people. They're going to need engineers.”
“We picture this [work as] being very engineering-centric,” he continued, “but a mature, successful company has sales, marketing, service, administration, every job you could possibly have.
“And these are great jobs for people in the region to take advantage of,” he added, partly because robots tend to take on the “dull, dangerous, and dirty” work that people often don’t want to do.