mead cohen berger shevtsova garfinkle michta grygiel blankenhorn
The Shape of the Economy to Come
Why Pittsburgh Didn't Become Detroit

In the early ’80s, Pittsburgh looked like it was headed for the kind of ruin we associate now with Detroit. The steel industry, central to the city’s economy, was collapsing, 17.1 percent of the city was unemployed, and people were leaving the cities in droves. But the city didn’t become Detroit, as Glenn Thrush’s latest contribution to the Politico series on urban reinvention explains:

Improbably for a blue-collar town that seemed headed for the scrap heap when its steel industry collapsed, Pittsburgh has developed into one of the country’s most vibrant tech centers, a hotbed of innovation that can no longer be ignored by the industry’s titans. Carnegie Mellon is Google’s biggest rival in the race to build a driverless car, partnering with GM to build a robot Cadillac that has been humanlessly tooling around Route 19, just outside city limits. In 2011, Google opened a posh, 40,000-square-foot office in an old Nabisco factory in the city’s East Liberty neighborhood, ramping up last year to 350 people, with more on the way. Bill Gates and other Silicon Valley moguls have invested millions of dollars in Aquion Energy, a start-up spun out of CMU that is developing next-generation batteries and producing them in nearby Westermoreland County, not China. Apple, RAND and Intel also have outposts in town and Disney, which has tapped the university’s computer and robotics talent for years, is partnering with the school to improve cinematic graphics and to develop hominid robots that can gently hand objects to people by predicting the movement around them.

Now the city’s population is growing both larger and younger and unemployment is lower than the national average at 6.6 percent (Detroit is 9.3 percent). The rest of Thrush’s piece explores how the city managed to reinvent itself and turn around its economy. Thrush notes several factors: good natural resources, Carnegie Mellon University itself, and institutions and infrastructure that managed to weather the worst of the initial crash.

But one factor that stands out from Thursh’s account is the relatively small number of key city leaders and visionaries who moved the city away from trying to seize the last rents of a dying system into actively planning for the future. Thursh goes so far as to trace this to one actor who looms large in his account—Red Whitttaker a professor of robotics at Carnegie Mellon whose successful work using robots to study the Three Mile Island disaster “set into motion a spectacular, three-decade cycle of innovation, investment and expansion.” But the piece mentions other people as well, and the commitment they had to their home city—many could have moved away but chose to stay to help rebuild it—paired with the free hand they were given to innovate is perhaps the key to the whole story.

Many of the particular projects that have been successful in Pittsburgh may not be exportable elsewhere, but that general principle of commitment joined to innovation is. Our economy is hyperdependent on innovation, and the cities that spend time nostalgically pinning for the 1950s style Fordist economy, trying to preserve the blue model for a few years longer, or heaping regulations and taxes on key economic actors, will be left behind by cities that give entrepreneurs more room to operate. Not everyone can be an entrepreneur, but entrepreneurs can lay the groundwork for broad regional renewals. Read the whole thing.

Features Icon
show comments
  • Anthony

    “But one factor that stands out from Thursh’s account is the relatively small number of key city leaders and visionaries who moved the city away from trying to seize the last rents of a dying system into actively planning for the future.” Very important factor and absolutely important to sustainability.

    • rheddles

      Fred Terman.

  • Anthony

    This article is fundamentally wrong in it’s analysis. Team Mead is conflating two good things. High tech sector growth in Pittsburgh has been great, and they are right to note that Carnegie Mellon University has been crucial. This phenomenon, however, has not been the main driver of job growth. The healthcare industry – which is big in Pittsburgh – has, by far, been the primary economic engine. This is somewhat problematic. As Professor Mead has noted, rising healthcare costs have been great for healthcare providers and workers, but bad for consumers.

    Here is the article that Via Meadia should have posted.

    “Health care—which adds thousands of jobs in hospitals, nursing homes, and doctors’ offices each year—is at the center of this recovery. The sector pulls in federal Medicare dollars to serve the region’s aging population and research grants from the National Institutes of Health. It offers middle-class positions to nurses, technicians, accountants, computer programmers, and other professionals. UPMC may not replace the steel industry, but it has taken over the old U.S. Steel building downtown, and its logo looms large atop the city’s skyline.”

    • Anthony

      Anthony, Thrush’s article emphasizes health care engine as factor but certainly attempts to highlight impact of tech transformation for Pittsburgh’s 300,000 plus residents.

      • Anthony

        High tech is great, but in terms of job creation, which is what is needed when it comes to revitalizing a declining city, it doesn’t even come close to healthcare, at least in the case of Pittsburgh. Read this quote from the wikipedia article on Pittsburgh.

        “The largest employer in the city is the University of Pittsburgh Medical Center,
        with 48,000 employees. All hospitals, outpatient clinics, and doctor’s
        office positions combine for 116,000 jobs, approximately 10% of the jobs
        in the region. An analyst recently observed of the city’s medical
        sector: “That’s both more jobs and a higher share of the region’s total
        employment than the steel industry represented in the 1970s.”[87]”

        • Anthony

          Economic stagnation is real and question of “jobs” and growth not limited to Pittsburgh. I understand your contention and am not comparing sectors only attempting to balance article’s Detroit/Pittsburgh reference.

    • Andrew Allison

      Anthony, I think you are being a bit hard on the good professor. Isn’t the major thesis that Pittsburgh has been resurrected by embracing the future rather than grimly hanging on to the past? There’s also the question of the extent to which the high-tech infrastructure and investments that came with it contributed to the growth in healthcare jobs. All in all, Pittsburgh is a shining example of what can be done when a city’s primary economic engine runs out of gas.

    • Kavanna

      The health care aspect is underrated and did play the largest role in Pittsburgh’s revival, as did the great expansion of the financial industry, the latter similar to NYC since the 1980s. Both are problematic.

      And, yes, there is an elephant in the room no one will talk about. I don’t mean just race, but intense racial division as well. These were largely absent in Pittsburgh’s case.

    • Enemy Leopard

      Anthony is entirely correct here. Pittsburgh is a large hospital, abutted by a number of large universities, with the surrounding support services and residential areas sharing in the benefits of these huge, bureaucratic, and, in the Meadian vernacular, blue institutions. The most significant battle in the city, every year, is between UPMC (the University of Pittsburgh Medical Center), which owns a massive and highly regarded regional hospital chain, and Highmark, a large health insurance company that employs tens of thousands in the Pittsburgh area and which recently bought a smaller regional hospital chain. The fate of these two blue behemoths is almost infinitely more important to the regional economy than Carnegie Mellon’s robotics labs, Google’s office in East Liberty, and the technology sector as a whole.

    • free_agent

      Heh… you mean “seizing the *first rents* of a *rising* system”, don’t you?

  • John W Berresford

    I was living in Pennsylvania in the late 70s and early 80s and remember Pittsburgh’s bottom and the start of the recovery. What I recall was that the City Fathers decided to emphasize (a) science education, (b) health care, and (c) tourism. The only possible flaw is that a & b are heavily dependent on government funding, which may not always be there. But it turned out to be an excellent plan (unlike most central planning). The City Fathers get special credit in my opinion for realizing 2 things that went unspoken: (1) steel was dead (there must have been huge temptation to keep saving it, a la Detroit); and (2) even if this plan works, the new Pittsburgh will be less than half the population of the old Pittsburgh — we’ll never be the 10th biggest city in the country again, but (again, if the plan works) we’ll be a sustainable mid-sized city.

  • BobSykes

    And, most importantly, it stayed majority white.

  • Stephen Colby

    Last paragraph: “Many of the particular projects that have been successful in Detroit may not be exportable elsewhere” Did you mean Pittsburgh?

  • Herb Suhl

    There is an elephant in this room that nobody is polite people cannot discuss.

    • free_agent

      The version I heard was that while whites had been fleeing Detroit for years, the riot of 1967 caused the middle-class blacks to start fleeing as well. I suspect that Pittsburgh had a considerable middle-class population even at the bottom of its troubles.

  • free_agent

    You write, “seize the last rents of a dying system”. I’ll have to remember that phrase.

  • Bretzky1

    Having lived in Pittsburgh from August 2008 to July 2012 while attending graduate school, I can say that the headline isn’t complete. It should say, “Why Pittsburgh Didn’t Become Detroit, at Least Not Yet”.

    There are parts of Pittsburgh that look just as bad as anything you might find in Detroit (though, thankfully, with far less crime). It’s a city built for 700,000 people that now has less than half that number. There are entire neighborhoods in Pittsburgh that have the feel of a post-apocalyptic movie set. And while there’s little prospect of those neighborhoods ever being revived, the city simply doesn’t have the money to begin tearing down the large number of vacant, rotting structures that sit on land that could potentially be sold or given away to entrepreneurs to redevelop.

    I also doubt that many of the successful technology businesses that might arise in Pittsburgh will stay there very long beyond the point that they are able to stand on their own feet. The regulatory environment in Pennsylvania, though better than it was 20 or 30 years ago, is still quite far behind more economically dynamic states, like Georgia, North Carolina, Texas, Virginia, and Utah.

  • geonomist

    Where’s mention of the shift of the property tax off buildings, onto land? The levy on locations spurred owners, as the reduced cost for improvements lured developers. Even a real estate lobby funded report by the U of Maryland gave credit to the property tax shift — which has worked wherever tried (hello, Detroit, are you there?). More at

© The American Interest LLC 2005-2016 About Us Masthead Submissions Advertise Customer Service