Pittsburgh’s advanced technology economy has been idling in neutral, some experts say, but a new study believes it doesn’t have to be that way.
Pittsburgh ranked ninth among 35 metro centers nationwide that could become booming innovation centers, according to a new report by the Brookings Metropolitan Policy Program, part of the Brookings Institution, and the Information Technology & Innovation Foundation, a science and technology think tank.
The ranking was based on census and other data analyzed by the two Washington, D.C.-based nonprofit agencies.
The study identified an “epidemic of regional division” that has hollowed out America’s heartland and small cities, shifting population centers and crippling small businesses while rewarding innovative metro centers such as Boston, San Francisco and San Jose with entrepreneurs and skilled workers as people move for opportunities in high tech.
Developing a federal policy to identify and nurture areas of the country that have the bones to become the next Silicon Valley would expand economic growth and more evenly distribute wealth across the country, the study argued.
“The nation’s tech-driven spatial divides have reached emergency status and won’t resolve themselves on their own,” said Mark Muro, study co-author and Brookings Metro senior fellow and policy director, in a prepared statement.
“It’s time for the nation to push back against these trends and conduct a major experiment to see if we can help eight to 10 promising metros emerge as really dynamic anchors of growth in the nation’s heartland.”
Madison, Wis., was ranked first in the study. Tucson, Ariz., ranked just ahead of Pittsburgh at number eight.
Just five of the top innovation metro centers in the U.S. accounted for more than 90% of the nation’s innovation sector growth from 2005 to 2017, according to the study. Other parts of the country have been left far behind, making geographic polarization a “grave national problem.”
“For much of the 20th century, market forces had tended to reduce wage, investment and business formation disparities between more- and less-developed regions,” according to the study. By the 1980s, “That trend began to break down as digital technologies and innovation moved to the center of economic activity.”
Growth in wages and number of jobs were among the factors that defined innovative sector economies.
Leaving the solution to market forces alone won’t work. What’s needed is a surge of research and development funding for the most promising areas, which would cost the federal government about $100 billion over 10 years, according to the report.
A 2017 Brookings Institution study identified academic and research resources in the Oakland corridor where the University of Pittsburgh, UPMC and Carnegie Mellon University are located, but these assets had fallen short in creating jobs and startup companies. That’s despite other factors that include a cluster of companies pioneering the use of artificial intelligence and self-driving cars in the Strip District.
And progress since the Brookings report three years ago has been slow.
Pittsburgh is no closer to its place in an advanced technology economy than it was then, said Dietrich Stephan, chairman and CEO of Neubase Therapeutics Inc., a pharmaceutical startup company based in Oakland. He was not involved with the Brookings study.
“I firmly believe Pittsburgh is second only to Boston and San Francisco in terms of innovation base,” said Mr. Stephan, a serial entrepreneur and former head of the Pitt’s LifeX startup business accelerator. “I have seen no progress building the infrastructure, expertise and capital necessary to drive that innovation to the marketplace.
“There’s no reason to whitewash this: we are sitting on a diamond mine,” he said.
Citing the number of companies pioneering uses of artificial intelligence in the Strip District, Rich Lunak, president and CEO of North Side-based startup company accelerator Innovation Works, said more work is needed until Pittsburgh realizes the benefits of a new economy.
“There is a tremendous amount of untapped potential,” he said. “We have momentum, but I don’t think we’re totally capturing the full opportunity.”