Pittsburgh Technical Council

Come as You Are. Pittsburgh is NERDVANA

Come as You Are. Pittsburgh is NERDVANA

Article Published: May 6, 2014

By Jonathan Kersting, Associate Publisher

Everyone knows that Austin and Portland “keep it weird” and Boulder is the “Berkeley of the Rockies.” Taglines aside, they welcome and engage their technologists, makers, hipsters, engineers, musicians, programmers, researchers and anyone else passionate about the intersection of technology and creativity. At this crosshair sits a special place ~ a true state of Nerdvana.

The Austins, Portlands and San Franciscos of the world created their unique brands of Nerdvana by mashing up scenes infused with diversity, creativity, music, universities, technology, inclusiveness and really good restaurants.

Speaking of the latter, all of these ingredients are baking together in Pittsburgh. Never mind what the rest of the world thinks that they know about the Steel City, Pittsburgh is downright geeky with a special state of Nerdvana all its own. Pittsburgh may not have the slogan to tout it, but it has the data to prove it.

The Pittsburgh Technology Council conducted a groundbreaking study this winter entitled “Inclusion, Innovation and Integrative Design: Pittsburgh’s Creative Clusters.” It is the first study of its kind to benchmark Pittsburgh’s transformation into a thriving city built on innovation and creativity.

With a few notable exceptions, the report says the region does, indeed, possess all of the tasty ingredients necessary to build a sustainable ecosystem for its creative sectors. We’ve been in Nerdvana all along.

The report was produced as part of the PTC’s Creative Technology Network in partnership with Carnegie Mellon University, with support from the Claude Worthington Benedum Foundation.

“If we are going to be vital, we better understand our resources,” said Audrey Russo, President and CEO of the Pittsburgh Technology Council. “Let’s benchmark against those areas that are prosperous. Dare we compare ourselves to San Francisco or San Jose or Austin? Yes, we dare.”

Nerd out on this: According to the report, as of 2012, more than 176,000 people have occupations related to the creative clusters, a number expected to exceed 200,000 people by 2020. Collectively, these people earn $19.6 billion, which is 20 percent of the region’s overall workforce. From an industry perspective, more than 11,000 creative sector establishments directly employ more than 280,000 people.

The report’s lead researcher, Dr. Kevin Stolarick of the Martin Prosperity Institute, provided intriguing insight and high-level findings at the PTC’s Creative Technology Summit.

A data cruncher at heart, Stolarick describes himself as the right side of Dr. Richard Florida’s brain. Florida is well known as one of the most prolific theorists of American urban studies, arguing that the world’s top creative centers are anchored with diverse cultures.

Stolarick said the report set out to recognize and define something that has not been defined, noting that the report accounts for both the industry and individual components.

“You can’t organize the creative class,” admitted Stolarick. “You can only connect them!”

He said Pittsburgh has done incredibly well developing as a creative/innovation center. In fact, the report shows that Pittsburgh is growing faster than the rest of the country in many key areas tied to innovation and creativity. One could say that Pittsburgh is in bloom. However, something is in the way, according to Stolarick. The sobering fact, he said, is that Pittsburgh struggles with diversity and competing cities are also on a growth clip.

“Pittsburgh has dramatically improved since 1979, but the world has changed, too!” said Stolarick. “Relative to the rest of the world, it’s still an uphill climb for Pittsburgh.”

“This is an important study. It provides a database portrait of our creative economy. It tells us about the steps we need to take,” said Thanassis Rikakis, Vice Provost for Design, Arts and Technology at Carnegie Mellon. “We know that the best ideas come from tolerant areas. We are set up to lead, but have work to do. We want to advance the creative economy.”

TIME 2 Geek Out – Pittsburgh’s In Bloom. Get a whiff of Some Creative Spirit

Here are initial findings of the “Inclusion, Innovation and Integrative Design: Pittsburgh’s Creative Clusters” study. There are challenges and opportunities for Pittsburgh’s Nerdvana. The foundation appears to be set. If you want to nerd out on all of the data, go to http://createpgh.com.

Pittsburgh is Still a City of Makers

Pittsburgh’s Design cluster has grown to employ more than 50,000 people and, with a location quotient (LQ) of 1.34, remains firmly planted in southwestern Pennsylvania (a location quotient of 1.34 indicates that the design cluster is 34 percent more concentrated in Pittsburgh than in the nation at large).

Two key sub-clusters, engineering and manufacturing, employ the majority of workers in the design cluster.

With more than 17,000 employees, Pittsburgh’s engineering sub-cluster has achieved an annualized growth rate of more than eight percent, in comparison to a national growth rate of just .64 percent for this sub-cluster. Pittsburgh’s engineering cluster has a location quotient of 2.042, meaning the industry is more than twice as concentrated in Pittsburgh as in the nation. This is one of the strongest location quotients across all of Pittsburgh’s clusters and sub-clusters.

The manufacturing sub-cluster fared well through the recession, growing at an annualized rate of 1.3 percent from 2005 to 2011—compared to a national decline in this sector of 2.03 percent. The industry continues to have a high concentration in Pittsburgh, with a location quotient of 1.25 (25 percent more concentrated in Pittsburgh than in the nation).

Pittsburgh’s Creative Industry Support Cluster is Growing at 14 Times the National Rate

To support the development of a thriving creative economy, five sub-clusters are considered to be essential components of a region’s economy, including R&D Organizations, Post-Secondary Institutions, Services, Consulting and Associations.

In Pittsburgh, these industry clusters have a LQ of 1.24 and employ more than 161,000 people. The cluster experienced an average annual growth rate of 7.9 percent from 2005 to 2011, far faster than the national growth rate of .57 percent.

Technology Talent is Growing Far Faster in Pittsburgh

Pittsburgh is home to nearly 35,000 people working in software- and hardware-related professions, an occupational cluster that is expected to add more than 6,000 regional employees by 2022. This occupational cluster has been growing at four times the national rate.

Pittsburgh Falls Short on Inclusiveness; Jeopardizes Growth

Pittsburgh has almost all of the essential components to build a 21st-century economy, but the one notable exception is its inclusiveness of people of color, of foreign-born decent and same-sex partnerships.

Diversity issues face many mid-sized regions like Pittsburgh, but against the 19 benchmark regions, Pittsburgh ranked 20th for number of foreign-born residents, 18th for the concentration of the gay and lesbian community, and 13th for the percentage of population that is non-white.

Considering the pivotal roles that each of these populations play in the creative economy, Pittsburgh will be hard-pressed to transition to the next level without identifying and addressing the root causes of these inequities.

For example, in the technology sector, immigrants continue to play a vital role in the formation of new businesses. In Silicon Valley, 50 percent of all technology businesses have been identified as having at least one foreign-born founder (America’s New Immigrant Entrepreneurs: Vivek Wadhwa), which compares to 25 percent of all technology businesses having a foreign founder across the United States.

This is an important consideration given that the average location quotient for high technology businesses in the benchmark regions is 1.2, versus .94 for Pittsburgh. Said differently, technology businesses are 20 percent more concentrated in the benchmark cities than in Pittsburgh. To move Pittsburgh closer to the average of the benchmark cities, diverse populations, including a larger share of foreign-born entrepreneurs, will be an essential component of any growth strategy.

Interconnectivity: A Marker for Innovation

First-of-its-kind regional research indicates that Pittsburgh’s creative industry clusters must continue to promote industry spill-across and spill-overs (cross-sector collaborations) to increase innovative productivity. While some clusters, including Communications and Creative Industry Support Services, demonstrate high levels of interconnectivity, the majority of the sectors still exhibit a tendency toward intra-cluster work habits.

The Social Media sub-cluster demonstrated the highest level of interconnectivity among all industry clusters and sub-clusters, followed closely by sub-clusters including: Marketing, Graphic Design, Mobile Applications and Software Development.

Other Findings

Wages in Pittsburgh: At $43,000, the Pittsburgh region’s average wages ranked 15th among the 19 peer regions. With this said, at 18.8 percent, our wage growth from 2006 through 2011 earned Pittsburgh the top slot for wage growth among the benchmarked regional cities.

The Recession and Pittsburgh: Pittsburgh fared far better than the benchmarked cities from 2006 through 2011 in terms of job growth, ranking fifth in overall job creation (Pittsburgh achieved a .6 percent growth rate, versus the peer average of negative 1.7 percent).

Ethnic Integration: Pittsburgh is still relatively segregated according to racial and ethnic backgrounds, with those communities failing to be represented proportionally across the region’s census tracks. In this category, Pittsburgh lags behind the national average and ranks 16th in comparison to the benchmarked cities.

Human Capital Flight: Despite the rumors of our demise, Pittsburgh’s utilization of talent in universities is no better or worse than the average metro region, but among the benchmark cities, Pittsburgh ranks 19 out of 20.

Regional Assets: In terms of attracting families and young people alike, Pittsburgh has several strong assets. The region has the second-strongest student:teacher ratio among our peer cities within primary and secondary institutions.

Pittsburgh has significantly more bars and restaurants per 100,000 residents, ranking fourth against our peer cities.

Regional Educational Attainment: Pittsburgh has the lowest percentage of population age 25 and above that has completed less than a high school degree. (Just 8.9 percent of our population attained less than a high school degree, versus 14.4 percent for other U.S. metro regions and 12.8 percent for other benchmarked cities.)

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