The Struggle is Real, for Federal Contractors That Is – Part III |
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The Struggle is Real, for Federal Contractors That Is – Part III

It’s a Burgh…It’s a Plane…

On the (Rise, Fall, and Subsequent) Rise of Pittsburgh’s Economy

In previous installments, we discussed multiple issues federal contractors face in employing a diverse workforce: from the limited supply of qualified applicants to more systematic developments like growing automation in nearly every industry. Additionally, we have delved into a couple of outstanding national programs that could be emulated ranging from the prestigious Honors College at the University of Maryland to Lake Area Tech Community College in upstate South Dakota.

What is apparent from our previous discussions is that no single element of economy like government, industry, colleges, or the workforce can solve this problem alone. For better or worse, each of these segments of society will need to work in concert for this need to be overcome.

Today, we thought it would be interesting to take a closer look at how one American city is accounting for difficulties of moving beyond the old manufacturing economy and attracting/maintaining a qualified, diverse workforce to meet the needs of today. In a search for best practices among municipalities, there is no better place to start than what is antiquatedly referred to as the “Steel City.”

 

G(r)-8 to be Here!

When it was announced that President Obama choose Pittsburgh to host the 2009 G-8 Summit, the White House Press Corps actually “broke out laughing” according to accounts. Part of the issue may be media elitism, but Pittsburgh certainly developed a tough reputation toward the end of the 20th Century. There is little doubt now, however, that Pittsburgh is a beacon for what a post-industrialized municipality can become with the right public policy and some practicality.

The National Bureau of Economic Research published a research paper in 2014 examining what is called “intergenerational mobility” of American cities. The NBER defines “intergenerational mobility” as the “measure [of] the degree to which a child’s social and economic opportunities depend upon his parents’ income or social status.” If we are advocating the goals of regulations like affirmative action, this is essentially what we desire: a pathway for disadvantaged youths to improve their economic standing relative to their parents. Meritocracy does not work without a ladder.

Professor Chetty and the other authors of the report make the interesting observation that “there is substantial variation in intergenerational mobility across areas within the U.S. The U.S. is better described as a collection of societies, some of which are ‘lands of opportunity’ with high rates of mobility across generations, and others in which few children escape poverty.”

The city may be the best unit of measurement for outcomes like “intergenerational mobility” because so many of the most important policy proposals are instituted and effectuated at the local level. For example, according to the study, “Pittsburgh is ranked second in terms of upward mobility among large metro areas, while Cleveland – approximately 100 miles away – is ranked in the bottom 10.” Well, I suppose we can strike “climate” from our list of differentiating factors.

To go from the economic doldrums of the 1980s to 2nd in the country in intergenerational mobility is a significant accomplishment for Pittsburgh. The simple question so many rival cities of Pittsburgh are asking is: “How?”

 

 A Brief History of Pittsburgh’s First Two Centuries

Founded following American Independence, Pittsburgh grew out of the former village that surrounded Fort Pitt. The first half of the Pittsburgh’s 19th Century was known as its “Iron Age” where the economy was primarily commerce (as one of the gateways to the west) and the production of iron and coal. Starting in the 1860s, pushed by demand from the Civil War, the city began to transform itself into the “Steel City” that it has been known as ever since. Industrialists like Andrew Carnegie, George Westinghouse, and the Mellon family brought about large-scale industrialization that dictated life in Pittsburgh for the next 100 years. The population grew at more than twice the national average from 1870-1910 from 86,000 to 533,000 residents.

It is difficult to assign blame for the collapse of Pittsburgh’s steel industry that begun midway through the 20th Century, but depending your political leanings, it was a combination of labor strife, overextension of industry, and the beginnings of modern globalization. The falling trend continued until 1988, when the city bottomed out, shedding 56,000 jobs or 61% of its workforce.

Given the trends of American manufacturing, ‘more of the same’ was obviously not the prescription. So how did city officials alleviate what ailed their beloved Pittsburgh?

 

If You Greenlight It, They Will Come

When the New York Times wrote up a discussion of why Uber decided to test their self-driving technology in Pittsburgh, the facetious answer was “not much.” That is a bit pithy, if not unfair, toward the foresight and judgment of Pittsburgh’s local officials. Often, the best action for local government is to step back and stay out of the way.

The same Times article quotes Pittsburgh’s mayor Bill Peduto. “It’s not our role to throw up regulations or limit companies like Uber…You can either put up red tape or roll out the red carpet. If you want to be a 21st-century laboratory for technology, you put out the carpet.” And for many of these research and development firms (others have moved to Pittsburgh following Uber like Intel, Volvo, and Apple), the red-carpet treatment is as simple as not burdening their work with costly, tiresome regulations that hold back the growth that will create good-paying jobs for most. Back to the Uber example, “[e]xcept for the mayor and one police official, no other top city leader has seen a self-driving Uber vehicle operate up close.” A little trust can go a long way.

Yet, it is a lot more than just getting out of the way of industry. It’s not just the city’s lax regulations, but also that its universities are producing the necessary talent that these companies need. “Many of Uber’s employees were hired directly from Carnegie-Mellon’s computer labs and the state’s approach to the technology – called greenlight governing – effectively encouraged investment in the field. Uber estimates its investment will reach $1bn over the next few years.”

It works as a self-reinforcing loop to grow and retain new industry. Technology companies move in because a city has the necessary talent and so long as the local universities continue to grow and develop programs to produce the skills needed, these local students will not flee the city like previous generations because there is quality work available in their hometown.

Let’s not just limit ourselves to cars. Because of the outstanding program at the Robotics Institute of Carnegie Mellon University, the automation research and investment has expanded upward.

 

“Good Morning Ladies and Gentlemen, This is Your Autopilot Speaking”

Hands-off regulation may be necessary, but not sufficient, in creating a municipal ecosystem that can help today’s companies grow. For Pittsburgh, the computer science program at Carnegie Mellon University proves the point. What good is a city to build in if there is no qualified labor? Carnegie Mellon meets this need as much as anyone could hope.

In fact, the robotics program is so successful that Boeing is investing an estimated 8-figure amount to form a joint-venture with an offshoot of the school, called the Near Earth Autonomy. As the Near Earth Autonomy’s chief executive officer Sanjiv Singh, puts it. “Sometimes it makes more sense to fly than to drive, because you can just hop over things…demand for air travel is increasing, and the number of pilots is decreasing. When you think about disasters like Puerto Rico, where so many of the roads are washed out, autonomous aircraft could help to deliver supplies and bottled water.” That’s likely only the beginning! Just imagine the possibilities for personal travel.

According to the Near Earth website, they are working on projects ranging from “Sensor Suites” that will “perceive the world in 3D,” to “Motion Planning” which develops algorithms for optimized flight paths for autonomous flying vehicles, to “GPS Denied Navigation” which will help the robo-planes “fly indoors, under a tree canopy or underground.” Quite the impressive set of objectives. With Boeing’s large investment, there’s no reason to presume Near Earth Autonomy will not pursue even larger objectives in the future.

 

 

 

Soon, the Terrible Towels Will Wave Themselves

Just a hands-off regulatory approach would not have brought the growing automation industry to Pittsburgh to the envy of most other municipalities. Like discussed above, it took a combination of factors to turn Pittsburgh into the Phoenix of the Mid-Atlantic. Change is difficult always as people are accustomed to the way things are, and have been. It was only with the desperation of the late eighties could attitudes drastic alter to embrace STEM companies that differ so much from the other industries that dominated the city in the previous two centuries.

Pittsburgh now has its own STEM-Field of Dreams. And in contrast to the era of the Robber Barons of the 1800s, today’s combination of educational-private partnerships preparing the local labor force, plus a friendly regulatory scheme has led the city to become 2nd in the nation in intergenerational mobility. The benefits are trickling down (economists love when that happens), and there is real chance that the next generation Pittsburgh STEM employees will be the most diverse yet.

It evident from this example that in order for a city like Pittsburgh to grow and redefine itself for the 21st century economy, all aspects of the working community needed to reform and work together in concert like never before:

  1. Government lowered burdensome regulations impeding new sectors of the economy,
  2. These new tech companies planted roots in the city while investing millions of dollars locally,
  3. Educational institutions like Carnegie Mellon amended their programs to provide for the needs of these new local tech companies,
  4. And lastly, the working people of Pittsburgh ‘kept calm and carried on’ as they say, embracing the challenging and acquiring the new skills that would get them those good-paying jobs

It makes you think America will be fine in the 21st century, so long as we all stick together.

 

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