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Sunday, April 13, 2008

Green is the way to economic growth here in Pittsburgh

Over at technology + politics I posted about today's post-gazette column by CMU's Harold Miller titled "Regional Insights: What can keep people from leaving Pittsburgh?" Mr. Miller's post wasn't really about people leaving Pittsburgh - it was more about how to attract the types of people from other regions and countries who will make Pittsburgh's economy more diverse, attractive, and dynamic than the one we have today. In my response over at t + p I proposed five initiatives that we need here to solve this conundrum. Several of them involve making Pittsburgh a leader in the green economy and showcase for world class transit oriented development. Here are my remarks from t + p:


One thing we have not heard are some specifics how to address these challenges. Credit is due to Mr. Miller for pointing out a study released by the American Assembly last fall titled "Retooling for Growth" and for discussing the need to make our region more entrepreneur friendly. Also worth checking out is the Brooking report titled "Restoring Prosperity: The State Role in Revitalizing America's Older Industrial Cities." These reports are well written and I recommend reading them, however, not all challenges faced by the regions covered in these reports can be solved by a one size fits all strategy.

So what should we do for Pittsburgh? Well, first, we need someone at the helm of local government who realizes that economic development and growth in startups could be a "rising tide to lift all boats." We missed out when the citizens of Pittsburgh voted against their economic interest by electing boy blunder Luke Ravenstahl as mayor over local entrepreneur and public policy professor Mark DeSantis this past November. Additional ideas, in no particular order, include the following:

  1. Aggressively expand our light rail throughout Allegheny County with the goal of attracting Transit Oriented Development
  2. Make up for the risk averse venture capital community by creating more entrepreneurial support programs and competitions like Tech Stars and the Pittsburgh Tech Council's EnterPrize competition.
  3. Create zones or districts where people will shop, dine, work, and live. The key will be placing these districts near public transportation and areas that have parking.
  4. Decide on which segment of the green economy to focus on as a region. Right now it looks like the Pittsburgh region is building a strong concentration of biofuels companies (Steel City biofuels, United Oil, GTECH, Thar, Fossil Free Fuels, CCI).
  5. Our local leaders, officials, and celebrities need to step up to address the lack of diversity issue as well as the racism and xenophobia that exists throughout our region. As Senator Barack Obama demonstrated, an honest and real dialog about this complicated and controversial issue can be achieved - but not without the critics over analyzing the remarks and turning the debate into an issue of the speech itself instead of the actual problem.
Here are some more details on these initiatives:

1. Extend commuter rail lines throughout the region to spur Transit Oriented Development. If planned properly, new rail and additional light rail lines like the one we have here in the South Hills could lead to revitalization of business districts and the development of new employment centers. Here in Mt Lebanon, where I was recently appointed to the Economic Development Council, we are working to create a world class transit oriented development zone that should serve as the blueprint for not only the rest of Allegheny County but other struggling rest belt cities. Cleveland is well ahead of Pittsburgh in this regard and seems to have turned the corner on leveraging Transit oriented development.

2. Make more capital available to new entrepreneurs through the fostering of a risk taking culture. This past week I participated in the first phase of the Pittsburgh Technology Council's EnterPrize competition. EnterPrize has been around for a while and has a whole list of past winners who have achieved success following their participation in the competition. As someone who has worked for startups in the past and is currently a founder in a new startup here in Pittsburgh, it seems that securing investment in this town is much more difficult than others. One solution is having more competitions like EnterPrize in Pittsburgh, but I think the root of the problem is the risk averse culture that is present in not just the general population but also the investment community.

The best way to get around this is to make sure that we don't let our Google's move away to regions like DC (Clearspring Technologies) or the west coast. It is sort of a chicken and egg problem. VCs like their investments to be close to them, so when investors here in Pittsburgh are reluctant to give up the cash, someone else on the east or west coast is. If we can convince more startups to stay home or come here from other regions then we will eventually have more Freemarkets and Fore Systems in Pittsburgh, which will give us more Glen Meachems types, entrepreneurs who make Pittsburgh their permanent home while putting their new wealth to use through angel investments in the next potential

So how do we deal with this problem effectively? We have a lot of vacant office space around town. Why not turn some of these spaces into shared work spaces for startups? Innovation Works has already initiated their new AlphaLabs program which, along with a $25k investment, will offer 6 months of consultation, mentoring, and office space for soon to be announced startups in the Pittsburgh region. We have applied to this program and I hope to report on it's effectiveness if we are accepted and choose to participate.

3. Create more places where people can live, work, play, AND get around. In conjunction to #1 above, green houses and town homes near public transportation, parks, bike trails, or the workplace is the key to creating that entrepreneurial culture and buzz that attracts the types who are going to move to Pittsburgh. We need something besides strip malls and lifestyle center developments. New green or even LEED certified offices close to new urban housing developments and mass transit, like the TRID project in Mt Lebanon, will attract folks from outside the region who are looking for something new and cutting edge.

4. Focus on a niche in the green energy economy and then run with it. Pittsburgh is becoming a haven for biofuels companies. Here is a list of the companies that are here:

Steel City Biofuels
United Oil
GTECH Strategies
Thar Technologies
CTI
Fossil Free Fuels

It is great that we are building a concentration of biofuels companies in Pittsburgh. The key question is this though - what is our local government doing to assist these businesses and utilize their existence? Another thing we talked about on the DeSantis campaign policy team was a commitment on the behalf of city government to collaborate with private technology startups in an effort to both reduce the costs of government while simultaneously stimulating economic growth and job creation. GTECH Strategies has been doing work with the local government on cleaning up brown field sites and rehabilitating blighted urban neighborhoods, but more has to be done with regards to taking advantage of our concentration of biofuel companies. In my mind, this is a perfect opportunity for Pittsburgh to become a model for the rest of the world through the creation of infrastructure that will allow all of the dirty fuel burning diesel trucks and buses in our region to burn cleaner and cheaper fuels produced and refined right here in our own backyard. Now that is sustainability everyone could appreciate.

5. So last but not least, what can we do to attract more international immigrants? Our universities already attract a large number of international students but the problem is keeping more of them here. Why are they leaving? Part of the problem has been mentioned above - they are going to places where there are more startups and good paying jobs, but I believe the core problem is the racism and xenophobia that makes parts of Pittsburgh seem like you are back in 1960 rather than the 21st century. There is indeed racism here in Pittsburgh, and its not just among whites and blacks. The further you travel from the city's east end the less welcoming the residents are of foreigners.

A typical example of what I am talking about here is when a Spanish firm bought local amusement park and icon Kennywood last year. The xenophobia that came out in the post-gazette comments was ridiculous. I thought I was reading comments from 1907 rather than 2007. Our local leaders and celebrities need to step up here. It is fine to highlight the mayor's hiring of minorities but until our leaders address the issue and give foreigners a seat at the table, the majority of citizens of this region will continue to be closed minded One of the few bright spots in the region was the election of D. Raja, or "RAJA", as one of Mt Lebanon's five commissioners this past fall. In an area that has as little diversity as Mt Lebanon (one person on Blog Lebo bothered to ask "whats the big deal about diversity?") this was a promising development.

Also, instead of ignoring areas where the influx of foreign immigrants are moving to in our region, like my old neighborhood of Beechview, we need to embrace these trends and capitalize off of the influx of new citizens. Beechview looks like many of Pittsburgh's other eighty something neighborhoods on the outside but in it's core is a unique neighborhood with a growing concentration of Mexican immigrants. The city and county need to invest in these neighborhoods by, for example, making them centers for international culture through encouraging and incentivizing foreign born business owners to locate there.

There is more to come but I hope you will leave your thoughts as this has to be a collective and collaborative effort from all of us, the bloggers, entrepreneurs, academics, and those in government.

1 comment:

Samantha Jacoby said...

Green energy is taking America by storm--especially biofuels. Getting local governments to support renewable energy investments is certainly key to the industry's success. Some of you may be interested in attending Renewable Energy Finance Forum-Wall Street, which has sessions on biofuel investing, as well as all of the other renewable energies. This executive-level focused event has industry-leading speakers from BP, Morgan Stanley, UBS Investment Bank, GE, JPMorgan, Boeing, Google, First Solar, SunPower, Abengoa Solar, Acciona, etc. You'll certainly have ideas bring back and use locally.

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