Powering Up Pittsburgh

There is another new "innovation task force" on the runway:  "PowerUp Pittsburgh."

From the Mayor's Office:

The purpose of PowerUp Pittsburgh is to accelerate the commercialization of tech innovation activities to create jobs, particularly in underserved neighborhoods around Pittsburgh. It is a collaborative strategy that will bring together a wide range of participants to ensure that community resources – research and innovation, grant funding, government policies, corporate and philanthropic dollars – are aligned to take commercialization activities from the Oakland hub to spokes across the city.

The strategy will include:

• The creation of PowerUp Pittsburgh, including a university-funded director position to coordinate the broad regional effort;
• The creation of a dedicated Director of Innovation position at the URA to serve as a liaison to innovation, technology, and new economy based companies;
• The formation of the Pittsburgh Innovation Economic Panel;
• Efforts to enhance tech transfer at the Universities;
• Coordinated regional applications to numerous federal programs;
• And an effort to leverage the Oakland technology economy with numerous physical incubation spokes in Pittsburgh neighborhoods, including a major spoke in Hazelwood.

From the Post-Gazette:

Mr. Ravenstahl said he envisions a "hub-and-spoke" system with research and entrepreneurship in Oakland -- the city's university and hospital corridor -- spilling into other neighborhoods. The initiative complements his efforts to extend a spate of residential and commercial development and other improvements, the so-called Third Renaissance, from Downtown into the neighborhoods.

From Essential Public Radio (formerly WDUQ):

William Generett, Executive Director of the Pittsburgh Central Keystone Innovation Zone, said Pittsburgh has done well recently. “One thing that disturbs me is how bad our African American population is doing here”, said Generett. “African Americans make up about 27% of the city’s population and our data shows this group is one of the poorest African American groups in the country. So a lot of our work today needs to be connecting the group to the benefits of the innovation economy.”

It's my nature to be skeptical of things like this.  I was skeptical of the Mayor's tech task force, launched with a lot of fanfare last December.  I think that the last ten months -- even the launch of "PowerUp Pittsburgh" -- confirms that the skepticism was warranted.  I won't be quite as critical here.  I hope that something good comes out of PUP.  But here are reasons to be skeptical -- again:

1.  The name.  It sounds like a sports drink.

2.  The players.  Pittsburgh loves to appoint the usual C-level suspects to run task forces.  The leaders of this one?  Ravenstahl, Nordenberg, Cohon, Yablonsky.  Heard of these guys before, have you?  Where are the new folks?

3.   The strategy.  In the innovation economy, you can't pick winners.  You've got to create fertile territory, make lots of resources available (money, innovation talent, and management talent) and place a lot of bets.  And the "you" in that equation is rarely "the government."  "The government" should mostly make the place attractive to the money, innovation talent, and management talent, which means having a public services infrastructure that is robust, well-managed, and not - er - essentially bankrupt.  (That's a hugely simplified picture, but this is a blog, not a policy paper.)  Once the table is set, let the economy do its thing.

4.   The payoff.  The innovation economy is not a jobs driver.  In the PG, the Mayor is quoted:

Speakers at Thursday's news conference didn't give any specific goals for job-creation, but Mr. Ravenstahl said he expects to see vacant storefronts used for business start-ups and research ventures.

"That will kind of be the litmus test for me -- which neighborhoods are experiencing jobs, which neighborhoods are experiencing opportunity," he said.

If that's the litmus test, then the PUP is setting itself up for failure.  The innovation economy is an ideas and new ventures driver first, and a jobs driver only second - and only over the long term.  There are references in the news coverage to finding and unleashing the next Steve Jobs -- in Pittsburgh.  That's an awesome vision.  Yet Apple Computer (now Apple Inc.) was hardly a US jobs behemoth in its first incarnation.  Within five years of its founding, Apple had 1,000 employees; a similar number in Pittsburgh today would make a huge impact here.  Where did Apple employees work?  They weren't all in Cupertino; in fact, a large number of them weren't.  Apple had manufacturing facilities in California, Texas, and Colorado -- and India, Ireland, and Singapore.  And its growth wasn't sustained.  After Jobs was forced out, the company came perilously close to crashing and burning in the mid-1990s.  It's on top of the world today -- outsourcing much of its manufacturing to China.  The US jobs are, on the whole, at the high end, not the neighborhood and store-front (or garage and warehouse and wet lab) jobs that start-ups typically generate.  Apple is proposing to consolidate its management and marketing at a new Cupertino headquarters.  The expected employment at the new facility?  13,000 people.  Let us hope that Pittsburgh finds a Steve Jobs today - and ends up with 13,000 people in a beautiful office building 35 years from now.

Several years ago I gave a presentation at a University of Pittsburgh Faculty Senate plenary session on innovation and tech transfer.  The Chancellor -- who in my view has done amazing things for Pitt -- sat in the front row.  I put up a big slide of an old wagon wheel -- a metaphor for a hub-and-spoke industrial system.  I said that this was old, out-dated thinking.   I followed that with a graphic of a network:  lots of nodes and hubs, lots of connections criss-crossing, with no clear center.  I said that this was the future of technology-based economic development:  growth that comes from the bottom up (and from the sides in, and out), not from the top down.  The university needs to understand and play its many roles in that networked system:  taking in and supporting high quality faculty and students, taking research dollars (across many units of the university, some in partnership with state and especially federal governments, some in partnership with industry), and distributing faculty effort, trained students, and research itself (some via patenting and licensing, some via industry partnerships, some via good old-fashioned sharing of disinterested basic research).  And then circulating all of these things, in lots of different combinations; the university is not a linear production enterprise.  Apple Inc. is the long-term *output* of a diverse innovation economy; it is not the *input* to a diverse innovation economy.

Among the biggest impacts that a giant not-for-profit such as Pitt can have in its own backyard isn't via research in/research out -- but via local spending:  employment, employment taxes, local procurement (space and materials), and payments in lieu of the real estate taxes that the university is not required to pay.  If PUP really wants to make a difference in the city's neighborhoods, it would work on getting Pittsburgh's tax-exempt not-for-profit giants to work at pumping dollars directly into the city's and region's tax coffers.