Last Saturday, Harold's PG column focused again on this theme:
Because manufacturing jobs are among the highest-paying in the region andA slightly more detailed (and more richly illustrated) version of his column is up at Pittsburgh's Future.
because manufacturing firms are a major source of income for many service firms,
the slow growth we're experiencing in the manufacturing sector is a serious
concern. It is critical that state and local government leaders create a more
competitive business climate to help existing manufacturers recover, and that
private investors and economic development agencies provide the capital and
technical assistance that entrepreneurs need to start and grow new manufacturing
For a couple of reasons, I remain unpersuaded. One, I usually detect the aroma of nostalgia in almost any discussion of manufacturing in Pittsburgh. Not necessarily nostalgia for steel or for industrial manufacturing, but nostalgia for the idea that Pittsburgh is a place where people make things, and that making things is the right and best route to prosperity and security. That's an important story, but it's a story, rooted in a particular history.
Turn that story around (turn around the causal arrow, in other words), and that leads to the second reason. The idea that the service sector needs the manufacturing sector -- that the former is in some respects servient to the latter -- carries a hint of the nostalgic story, but that idea is also questionable on the merits. So, two, I wonder about the extent to which the regional services economy is really dependent on a flourishing local manufacturing economy. By employment and (I believe) by economic impact, the two largest sectors of the local services economy are medicine and higher education. I can't suggest that these have no dependency with respect to local manufacturing, but I have to suspect that the relationship is weak - and more important, that local manufacturing is now more dependent on eds and meds than the other way around.
Moreover, the services sector that I know best -- legal services -- is increasingly not dependent on demand from locally-based clients. Even in Pittsburgh, and perhaps especially for a regional market like Pittsburgh, the largest law firms are looking nationally and globally for legal work. And large law firms in other urban markets are starting to locate significant parts of their back office work in the broader Pittsburgh region -- in Wheeling and in southeastern Ohio. I find it difficult to escape the impression that measuring Pittsburgh's economy and economic recovery is complicated by its diminishing regional isolation.
I'm not down on manufacturing; a mixed economy is a strong economy. And an attractive climate for new and for growing businesses of all kinds should be a key feature of Pennsylvania's and Pittsburgh's public policy. But making things takes many forms, and increasingly Pittsburgh makes things of the intangible kind -- new ideas, inventions, arts, and technologies that make their ways into medical therapies and motion pictures, among other things. If the Commonwealth is going to design public policy to subsidize growth -- and that's where Harold Miller's argument is meant to take us -- how much of our policy resources should be weighted toward manufacturing, including high-tech manufacturing, and how much should be weighted toward other things?