Good News x 2

There’s more evidence Pittsburgh is firmly established as a “high tech” locale.  This past week, two Pittsburgh start-ups were purchased by publicly traded “new economy” behemoths.  Thar Pharmaceuticals was purchased by privately held pharmaceutical company Grunenthal GmbH.  Headquartered in Aachen, Germany, Grunenthal has operations in Europe, Australia and Latin America, and reports 2015 revenues of approximately US$1.3 billion.  That news was followed by Pittsburgh-based startup FacioMetrics being purchased by Menlo Park, CA based Facebook which needs little introduction.

The acquisition of innovative startups by larger, more established and better capitalized companies is one of the ways technology progresses. Acquisition of the region’s creative startups by large, established companies is one of the ways that Pittsburgh’s high tech community progresses, growing larger and establishing its bona fides in the global economy.  Here’s hoping that both acquisitions result in the establishment of local Pittsburgh offices for Grunenthal and Facebook.  Equally as important, let’s hope an additional outcome of these purchases will provide Thar Pharmaceutical’s and FacioMetrics’ founding entrepreneurs with new capital to pursue future ideas and dreams here in western Pennsylvania.

An Early Christmas Present

That’s the only way to characterize Amazon’s announcement of a software development center for Pittsburgh.  This is when it gets good, as they say: Uber, Apple, Google and now Amazon.  Reports from the leasing agent say it’s an office of about a dozen people.  Well no need to guess – all one has to do is go to Amazon’s Web site [c’mon, you know you have it bookmarked for your daily visits] and scroll down to the bottom of the landing page [which you have never visited before since it’s not the part where you buy stuff] and look for “Careers”.  Search on “Pittsburgh” and about a dozen job postings will come up.

An exciting part of this news is that the company is taking a lot more space than is needed for 12 people.  My prediction is that within 18 months it will be 120 people.  Stay tuned.  And there are still plenty of coastal high tech names that should be taking advantage of Pittsburgh’s software talent pool and lower business costs.  I’m still waiting to hear that Amazon’s neighbor across Lake Washington, Microsoft, has finally figured out it makes more business sense to hire all those CMU engineers into a development center in Pittsburgh – independent of CMU’s on-campus facility – rather than move them to Seattle.

A Sad Day, for Nice People

OK allow me to say it: it’s a very sad day with the announcement of Arnold Palmer’s death.  The last few times he was seen on TV he was clearly showing his age which made this blogger think “Whoa, we will all pass away but this is gonna be a “big one” for western Pennsylvanians when Arnold goes”.  And so it’s happened.  Always a bad morning jolt to hear that 6AM National Public Radio report with news like this.

Later, on that same “Morning Edition” broadcast, an ESPN golf analyst heaped praise on Mr Palmer for what he did to raise the status and awareness of golf in America.  What caught my ear was the report’s focus on what a “nice guy” Palmer was, in all aspects of his life including his businesses and his sport.  A couple of Palmer’s contemporaries provided short excerpts giving testimony to how Palmer would engage with people – his Army or those that became his Army as a result – many of whom were dismissed by other golfing professionals.  Of course he did.  He was from western Pennsylvania.

Recall that Mr Rogers, Fred Rogers, was from Latrobe also.  I was really sad when I awoke to news of Mr Rogers death as well.  And I cried the morning I awoke to the news of John Heinz’s death.  Heinz was one of the nicest guys in politics and in my mind, destined to be President.  In light of this 2016 campaign, heck, the last four Presidential campaigns, I don’t think nice will ever again make a national political comeback.

Nice is Pittsburgh, western PA and the Tri State region.  Growing up our family would regularly car trip to the beaches and historic sites along the East Coast and people would say “Oh of course you’re from Pittsburgh; you’re so nice.”  It’s been a bit of an economic handicap for years when the region’s leaders could never be seen to brag about all the advantages for living and working here.  But it also has made the area a desirable place for many who seek the authentic in their lives and community relationships.  It should always remain so.

And so sad to know Mr Palmer is no longer among us.  We all need a hug.

Hail to Pitt!

No.  Not for their victory in last week’s rematch of the rivalry with Penn State.  [Full disclosure: I am a proud Pitt alum.]

Kudos to Pitt and Penn State for bringing back the game that put Pittsburgh back on the college football map AND brought in revenue to everything from the RAD to the businesses and workers in the city’s hospitality industry.  With the largest sports crowd in Pittsburgh history, about a dozen people shy of 70,000, this event certainly is a milestone for Pittsburgh’s sports reputation.  I’ll be the first to admit, these attendance numbers are small potatoes compared to most every Fall Saturday in college towns from Tempe to Westwood, Athens to Oxford, and Columbus to Austin – and if you don’t recognize those towns and what schools play there well, better stick to pro sports.

But this is a great reappearance of a tradition that will pay benefits to both Pitt and Penn State in terms of alumni involvement [and contributions], an economic boost for the City, and an added entertainment feather in Pittsburgh’s leisure industry cap.  Big events are “things to do” that excite residents and visitors.  As I’ve so often said, Pittsburgh needs more party.  Kudos to these universities’ athletic departments for having the vision to resurrect a fun tradition.

A Wake-Up Call for Downtown

Recently it was widely reported that groups of young people gathering downtown at night went on a “rampage” that involved a subsequent police chase on foot.  There were bystanders injured during this disturbance, including an elderly woman who was sadly at the wrong place at the wrong time.  Simply enjoying what has become an increasingly vibrant downtown area should not be cause for even the threat of harm, much less physical abuse.  Immediate action by City government, and I am not referring to only the police, is needed.

Back in June I was downtown for Stanley Cup viewing in a Market Square restaurant.  Prior to the match I decided to wander a bit to see what new businesses were in old familiar places.  Walking along Wood Street I noted to myself, and did so later to friends, that there was a particularly rowdy group of young men in front of the McDonald’s outlet.  Being older, and less cocksure of my abilities these days. the scene made me very uncomfortable as I squeezed by.  I can understand how any number of visitors or residents, seeing that type of behavior at the relatively early pre-8PM time, would think twice about strolling downtown again.

The bottom line here is that Pittsburgh’s downtown “ecosystem” is physically compact and metaphysically still in a rebirth phase.  Everything is scrutinized under a media reported magnifying glass.  It cannot sustain incidents that result in physical harm as well as negative reports of such and still expect to develop day-and-night vibrancy.  City officials must work with law enforcement but also with the appropriate social service agencies to address the causes as well as the very presence of this behavior.  Crime is a complicated issue that results from a complex sets of circumstances.  However, that can never excuse inaction on the part of those responsible for the public welfare.

In Case You Haven’t Seen This One

In the May issue of “Conde Nast Traveler” magazine that featured their Hot List of the 60 “hottest” hotels in the world, Pittsburgh’s Ace Hotel was listed among that group, chosen by their editors.  It’s a nice piece of city publicity to have one of the “dots” on their “hot list” map be Pittsburgh.

But for those who appreciate a good written review, it was the June/July Summer issue of the same magazine that had more words on Pittsburgh as a “cool” travel destination this summer.   Some quoted excerpts, with attribution to “Conde Nast Traveler” include:

“Cool means a food scene that’s both current and cozily retro, globally informed yet grounded in place.  Where thirty and seventy somethings drink at the same perfectly aged bars.”  [Blogger’s note: If that social interaction DOESN’T happen in other places then as a society we’re in deeper trouble than many believe this election season.]

“Cool means a fanatical sports town that’s also defined by high culture …where Roberto Clemente and Andy Warhol are held in equal esteem.”

And the money shot here:

“If Pittsburgh isn’t a contender for the coolest city in America right now, someone’s got “cool” all wrong.”

Oh ya.  Just don’t get all ahead of yourself Pittsburgh.  Note that “cool”, like its cousin “hip”, can never be self-declared.  It can only be bestowed and must never be referred to by the cool one; to do so takes it all away and is the antithesis of the term.  Once you declare yourself cool or hip, you are no longer.  Walk the walk and never, ever talk the talk.  I have confidence Pittsburgh understands that.

A Good Development in the Start-Up Scene

This week a piece in the Pittsburgh “Business Times” announced that Jason Yablinsky, VP of Finance for local jobs recruitment platform company Jazz [formerly named The Resumator] is leaving that firm to become CEO of a brand new startup, SubCentral.io.  Good for Mr. Yablinsky but more importantly this speaks to the growing strength of Pittsburgh’s startup scene.

SubCentral.io has received an initial investment of half a million already and already has five employees.  Jazz itself is well on its way to greater success by all accounts and is thus spinning off talent to other ventures.  Most importantly, the fact that staff feels comfortable enough to jump from one startup to another newer [re: riskier] one means that Pittsburgh is building an ecosystem of companies that rely on similar skill sets.  When people make decisions about job locations, one consideration is always “If I have to leave a position, will there be other job opportunities for me within the same area?”  Regions around Seattle , Boston and the Silicon Valley all provide a large enough pool of jobs that people looking to build their careers are confident in accepting jobs in those areas.  Pittsburgh needs more of that and seems well on its way.

A small story with big, positive implications.  Congrats to all.

Our Employment Problem, Part 2

OK let’s start out with this: it has nothing to do with the weather.  Or even the perception of the weather. One person’s chaff is another’s wheat, you might say.  So to all those regional crepe-hangers who claim Pittsburgh’s growth is held back by its weather, I say “you need to get out more”.  Do you think higher growth locales like Chicago, Minneapolis or Boston have better weather?  Really?  OK. Now let’s get serious.

I still believe Pittsburgh and the Tri-State region’s job creation woes can be helped with more, better, increased, and improved education of its citizens.  For this piece allow me to present empirical evidence based on anecdotal reports, with a nod to a couple statistics.

In Part 1 of this commentary I referenced the “Tribune Review” article that featured a Fayette County resident working as a part-time supermarket cashier.  The gentleman is 20 years old and has already moved back to Fayette County after trying his job luck in Orlando, FL where he found he couldn’t make ends meet even in that high growth market.  But now he’s thinking of moving back to Orlando.  Let’s not “pile on” when analyzing this young man’s path however, at age 20, with no defined job skills and what would seem to be no post high school degree, his prospects in Fayette County or Orlando or just about any other economically integrated area on planet Earth are severely limited.  Changing locations will solve little if anything long term.

Also as mentioned in Part 1, the Uber Advanced Technology Center’s Director, John Bares, is seeking dozens more staff members and is recruiting candidates from California’s Bay Area.  I imagine there will be some resistance by residents of weather-perfect northern California over a move to a less benign Great Lakes climate.  But notwithstanding the list of positive traits that Pittsburgh can offer aside from climate, why, with over two dozen major colleges and universities in the region producing thousands of graduates annually, does Mr. Bares need to turn to California for staff?  The only answer is a disparity of skill levels but more specifically it is clear Pittsburgh’s institutions are not educating enough residents with skills needed in this economy.

My final anecdote comes from Austin, TX, a city that Pittsburgh is getting a lot of comparison with these days.  In the past year, Austin has seen thousands of high tech jobs created from companies as diverse as Apple (which has over 1,000 employees and has announced another 2,300 more to be hired in the next 18 months), Home Depot [financial security software development], General Motors (software jobs, not manufacturing), Athena Health [medical software] and Conde Nast (again, software programming for the publisher’s digital media).  And the reason cited by all these new entrants into Austin’s job market: the availability of talent.  Austin has a fifth the number of higher education institutions that Pittsburgh does.  But the University of Texas is a powerhouse school with large programs in engineering, computer science and artificial intelligence.  And to say UT constantly churns out graduates in those fields is putting it mildly.

So here’s the statistical comparison set, and pardon that it’s a bit dated from the 2010 US Census, specific to educational attainment for Pittsburgh’s and Austin’s Metropolitan Statistical Areas (a large city and its surrounds that are connected by employment numbers).  In 2010 Pittsburgh’s MSA had 28.8% of its population with a bachelor’s degree or higher.  Austin’s MSA had 46.6% of its population with bachelor degrees or higher.  Does education translate into economic success? I believe so.  Using per capita income as one countermeasure, US Census statistics for samples taken in 2013 have Austin’s MSA pegged at 21st in the country with per capita income at $24,500.  Pittsburgh is 90th with per capita income at $20,900.  In absolute dollar terms, not huge, but as measured on the overall ranking, and when you account for the nearly $4,000 per person difference across similarly sized metro areas of 2 million plus people, the comparison of income levels is striking.

It’s education.  Period.  As I finished this piece I had trouble developing a summary paragraph.  But later in the day I read the following in the May/June 2016 issue of “Foreign Affairs” magazine.  With credit to Jacob S. Hacker and Paul Pierson in their excellent article “Making America Great Again: The Case for the Mixed Economy”, allow me to quote verbatim.  “the most important thing that big states [defined in their piece as “countries” not US “States”] started doing was educating their citizens.  More growth commenced when people rapidly increased their ability to do more with less.  They were able to do more, in part, because they knew more, and they knew more, in part, because they were taught more.”  QED.

Our Nagging Employment Problem, Part 1

Chris Fleisher in a weekend Pittsburgh “Tribune-Review” article [go here: http://triblive.com/business/headlines/10310205-74/growth-job-region] nails it when reporting on the surprisingly stubborn low job growth in southwestern Pennsylvania.  Job creation in our region is quite simply the most important issue the region faces.  It’s not an exaggeration to state that this is the Pittsburgh region’s existential issue.

Over the past couple years since I’ve been putting my thoughts to electronic “paper” in this blog, I think it’s clear that most of my pieces focus on jobs and income.  Both must increase if the region is to continue to provide residents with the lives they deserve.  And I admit it: I am completely stymied as to why the region continues to lag woefully behind just about every other place in the country when it comes to job creation.  For all the accolades Pittsburgh now garners, in the final analysis, those count for diddly-squat if residents can’t make a good living.

It’s been widely reported that an Uber executive publicly noted that he could “hire 100 more people tomorrow if…” he could find candidates with the right qualifications.  That’s NOT a “good problem” to have.  So here we are: Pittsburgh attracts one of the world’s hottest “new economy” companies to set up a major facility and now they have trouble staffing it.  What gives?  What about the hundreds of eager computer science grads who come out of the region’s colleges and universities?  Not qualified?  Oh but then we read that Pittsburgh is still having trouble retaining young people who are leaving for higher paying areas like the big coastal centers. Really?  Is it simply that companies like Uber can come into town paying third-world salaries because Pittsburgh has a lower cost of living than Palo Alto?  I bet not. So is it just that Pittsburgh’s college grads are so much more sophisticated than those coming out of UNC who stay in the Research Triangle, or those out of UT who then stay in Austin, or those silly grads from Stanford and Cal who triple up in $4000 a month one bedroom apartments in San Francisco?  I bet not and I’m sure I’ll win that one.

You understand my confusion?  And concern.  No region holds onto all its children.  There are a million ways in this world to make your success and there is a whole planet’s worth of locales in which to do that. But if a region is not generating enough new jobs to retain those individuals for whom staying put is the easiest path, how can we possibly expect to attract and hold new residents who will by definition expand the economic and intellectual vitality of the area?

However, having said all that, I still believe there’s a solution here.  Part 2 to follow.

Something Good and Something Getting Better

Something good – really good - is that the August Wilson house in the Hill District is finally getting the long term funding it deserves as the home of what many believe [this blogger for one] is Pittsburgh’s greatest 20^th century playwright.  This is an example of the vision of many individuals being translated, transformed really, into concrete action.  Bravo. More of this please.  The Hill District has been the too-often unacknowledged cauldron of so much creativity vis a vis its music [primarily jazz] scene, journalism [The “Pittsburgh Courier”], arts [photographer Charles ”Teenie” Harris] and theatre [Mr. Wilson’s work as well as other theatre and cabaret ventures].  Let us celebrate that history to build a new one for what some of us believe can become the living room atop downtown’s front door entrance.

Getting better is the region’s air quality.  In the latest American Lung Association “State of the Air” report on the air quality in the nation’s metro areas, Pittsburgh is still at an unacceptably low level – 14^th worst in the nation.  BUT that is better than just a few, like five, years ago when we were the second worst metro area, only outranked by either Los Angeles or Bakersfield.  More importantly, there has been steady improvement in all measurement categories year over year.  Let’s keep it going.  It’s amazing that a very small number of industrial emitters, and a couple as far away as Weirton, WV, have such a detrimental effect on Pittsburgh’s air.  Still, progress is progress.  Pittsburgh got complacent for a bit when the skies brightened after decades of grey.  Let’s continue to support those who work to get our air quality into the TOP 10.

Audrey Russo Gets It!

What an exciting thing to read in the latest NEXTPittsburgh Web site edition comments by Audrey Russo of the Pittsburgh Technology Council.

Yes, yes and more yes those of us that love Pittsburgh are thrilled with all the positive attention our city has recently received from both national and international sources, some of whom, other than those ubiquitous “best of” lists, actually matter.  But there is a discomfort about this and I suspect it comes from informed Pittsburghers realizing there remains a lot missing from those rosier views of our fair city.  Audrey Russo is one of those informed realists.

Here’s the money shot quote from NEXTPittsburgh’s piece with the cumbersome title “What We Love And Don’t Love About All The National Press Pittsburgh Is Getting”:

“Despite the significant press, new Census Bureau estimates show the Pittsburgh metropolitan area lost 5,051 people last year. It’s down 3,240 overall since the 2010 census, the only one of the nation’s 30 largest metro areas to have lost population.

That worries Audrey Russo, president and CEO of the Pittsburgh Technology Council, who works to cultivate relationships with investors outside the region, because telling the city’s story isn’t enough.

“There’s not real investment happening here and let’s face it, that’s what matters,” says Russo, who acknowledges she’s “the biggest fan” of cool things happening in Pittsburgh but she’s troubled by the population loss.

Pittsburgh doesn’t need to grow as quickly or as much as Raleigh, N.C., but it needs to keep up, Russo says. “It’s not a marketing campaign—it’s not the days of New York saying, ‘We’re the Big Apple.’ The world is a different place and you can’t fool people. It’s a campaign to get investment here. It’s a matter of designing public policy to be attractive, and making sure the relationships are cultivated.””

Here’s the link to the whole article.  And thank you Audrey Russo.  There’s still a lot of hard, fun, rewarding, frustrating work to be done on building a better Pittsburgh.  Long may Ms. Russo and people like her work in and for Pittsburgh.

http://www.nextpittsburgh.com/

Local Pride and Commitment

With Jamie Dixon demonstrating that his heart has always been in Fort Worth despite all these years of telling Pittsburghers how much he loved being here and at Pitt, I found it heartening to read that local high tech success story Duolingo is showing real commitment to staying in Pittsburgh.

Even more than the fickle world of college athletics [and who can blame players or staff for chasing gold, given their limited life spans within that ecosystem] the high tech game is one where start ups have to seek environments conducive to their success.  In other words, go to where the money, personnel and support resources will do the most to ensure an enterprise’s longevity.

It was reported last week that Shadyside-located Duolingo is taking 15,000 square feet of office space in East Liberty and plans to almost double its employee count within the next year.  That’s all great news but what caught my eye in the company’s announcement was the founders’ statement: “We’re proud to be a Pittsburgh-based company and to stick to our roots despite having been advised by leaders in the space to move elsewhere.”

Moving to greener pastures of funding is absolutely the norm in the high tech start-up world. But it has all too often been the path taken by many promising new companies started and fed in Pittsburgh’s nurturing environment as soon as they bring in some Boston or Silicon Valley or Research Triangle funding.  As I’ve railed against many times in this blog, the bleeding of local talent has to stop.

Duolingo is one company proving it can make itself a success right here in Pittsburgh. They may be the billion dollar public “hit” that our high tech scene has been waiting for and finally breaks the dam to where a succession of large high tech enterprises call Pittsburgh home.

Happy 200th Birthday Pittsburgh!

And it’s a monumental event that demands recognition, especially in this blog.

Two hundred years is a long incorporation, especially in our relatively young nation.  The sweep of history not only witnessed by but also made where the three rivers converge is rarely seen by other metropolises.  So everyone who now lives in Pittsburgh, or within Pittsburgh’s orbit, or has at one time lived in Pittsburgh, or visited Pittsburgh, or is simply aware and concerned that Pittsburgh and places like it prosper and grow, let them raise their glass to the next 200 years. We’ve seen so many great things come about recently. The best is yet to come.

Here’s to Pittsburgh, the essential American city.

Where's the Commitment?

Today brought news that Cohera Medical, a growing medical device company headquartered on Pittsburgh’s North Side, is leaving town for Raleigh, North Carolina. Raleigh is the biggest city in the Research Triangle Park area which has an established base of medical and biology centered companies.  It’s where a lot of Philadelphia based pharmaceutical firms established offices when looking for a sunnier clime and friendlier tax environment.  So while this makes sense on a number of business levels, I have to say that this sort of outmigration happening once a local company is nurtured to a sustainable phase has got to stop if Pittsburgh is to economically progress in any meaningful way.

The galling element of this story is that Cohera Medical is a spin out of the University of Pittsburgh.  The company had just received a $50 million investment by New York investors KKR and I have no doubt is under much pressure to now produce on a scale proportionate to that investment.  But I must point a finger at Pitt and ask how much of a role they could have played in helping this bio-med company maintain its Pittsburgh base?  Did Pitt even try?  What of Pitt’s vaunted efforts to build enterprises in the region as an outgrowth of their medical research?

Where’s the commitment Pitt?