Why do Rust Belt rivals Cleveland and Pittsburgh have diverging economies?
"Economic restructuring success and failure: Detroit compared to Bilbao, Liverpool, and Pittsburgh," 2014
The article "Why do Rust Belt rivals Cleveland and Pittsburgh have diverging economies?," in the Cleveland Plain Dealer, references a report (Pittsburgh v. Cleveland: Winning in Football (Finally), Losing in Economic Development (Still). A story told in Graphs -- not yet online) by Richey Piiparinen, of the Levin College of Urban Affairs at Cleveland State University. From the article:
Experts have provided a variety of explanations for the diverging economies, from policy differences at the state level, to the relative strength of each city’s anchor institutions, including its universities, to the exposure each has had to the global economy.But what’s certain in Piiparinen’s mind is that a more holistic, less siloed approach to economic development is called for in Cleveland, and it should begin with innovation, centered around research and development.“Cleveland is not where it needs to be,” Piiparinen writes in his report that looks at several economic criteria. “The solution? Not to copycat Pittsburgh, but reflect on its incremental success. This means looking at trends and making sense of them. But doing so coolly, discerningly.”
It is an interesting question. Both have experienced significant deindustrialization and corporate consolidation, although Pittsburgh still has more major corporate headquarters for firms in industry, IT and banking. Both have recovered from industrially-related environmental degradation.
Both have a set of universities that aren't national leaders, but hold their own, including strong engineering programs, which are particularly good for ancillary business development.
Both have renowned medical centers, although UPMC's transplantation expertise has attracted patients, especially wealthy ones, from around the world. Both have engaged philanthropic communities that do innovative things.
Some of the difference is racial--Cleveland is more black--and political--Cleveland has been a bit more radical ("How the 'People's Mayor' saved public power," The Intercept) and was the first large American city to have a black mayor, in Carl Stokes.
As far as the center city is concerned, Cleveland still has more population, about 100,000 more residents than Pittsburgh. But the Greater Pittsburgh area has more population, by a few hundred thousand, although both areas have shrunk since 1960, although population has leaked out of the central city to the counties. (Detroit has the same issue.)
Piiparinen says that while Pittsburgh's education and medical institutions are more successful than Cleveland's, part of the difference is that Cleveland is still more manufacturing based (actually producing stuff, rather than coordinating functions), but Pittsburgh's primary reason for economic success compared to Cleveland is fossil fuel extraction through fracking.
According to another article cited, "Industrial Policy and Local Economic Transformation: Evidence From the U.S. Rust Belt," from Economic Development Quarterly, Pittsburgh has been better at coordinating and focusing on economic development policy at both the local and state levels. (Interestingly, Ohio has the Battelle Memorial Institute, which is an expert organization when it comes to technology-based economic development.)
This is accentuated by a better developed venture capital system in Pittsburgh, in part anchored by greater R&D at Carnegie-Mellon and the University of Pittsburgh, especially in IT.
So Pittsburgh is superior because:
- Universities with more R&D and spillover business development, especially in IT
- UPMC is more successful than Cleveland Clinic*
- a better system (venture capital) for funding new businesses, especially health-related IT**
- fracking.
Labels: building a local economy, creative economy, economic development, urban design/placemaking, urban revitalization
posted by Richard Layman @ 4:59 PM&Permanent Link
6 Comments:
I think the essential answer is your last one -- it is temporal. It's sort of like smaller New England cities, every 10 years a new one is hot. In the 80s it was Burlington. 90's was Providence. 2000 was Portland.
I wold definitely push back on UPMC; Cleveland Clinic is a far larger and superior operation. they basically invented celebrity medical trips with heart surgery. Now you can saw the clinic has been distracted from its historic mission of WD (world domination) by engaging in a turf ware locally with UH and also in terms of its worldwide expansion of clinics.
I'd agree generally PIT has better financing situation and you can't discount the enormous pipeline work in the last 10 years as well which has brought a lot money in.
I'd say finally the busieinss development people are very weak in cleveland and have no real interest in bringing in jobs. You can contrast that with Beachwood and the 271 suburbs where they are a lot more aggressive. The "health line" was a complete waste of money.
At the National Trust conference in Cleveland in 2002, there was a simultaneous conference on revitalization that we could also attend.
I did attend a session on Euclid Avenue ? streetcar opportunity.
Since they couldn't get the money for a streetcar, they ended up doing the HealthLine.
But I get angry when planners use examples to illustrate their point, when their evidence is very misleading.
HealthLine is a perfect example. All the development in the University Circle area since the bus line is touted as being spurred by BRT (as opposed to how fixed rail drives development).
My response is always: the university and the medical institutions would be growing regardless.
(But then, you see less knowledgeable people use the HealthLine example in other cities, about why BRT is superior to fixed rail.
Similarly, DC makes money off Capital Bikeshare because tourists don't know how to use it, and they rack up large ancillary fees, which normal members do not. But the success of the DC system on that score was used by cities like Seattle to justify what they were doing with bike share--of course, the Seattle system collapsed because it didn't have those kinds of temporary customers racking up fee revenue.)
Probably branding a bus line the HealthLine with livery, and making it semi-express was all they had to do, with some enhancements at the stations.
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If you don't have aggressive business development, then the difference won't be merely temporal... it would be interesting to compare CMU and CWU, and Pitt and the others, like CSU.
Pitt, CMU, and Duquesne all have engineering departments. Do engineering schools generate more business development than business schools/IT?
Speaking of Pittsburgh, another misleading example is "East Liberty proves you can get name brand retailers in distressed areas."
When it was a function of proximity to Squirrel Hill and Shadyside, the most expensive neighborhoods in Pittsburgh, and the lack of any real substantive build out opportunity there for retail. Without EL, they had no choices.
(Although separately it did help generate a separate momentum for EL.)
2. I was on a webinar about EL and Union Market, and they used UM as an example of "distressed areas" getting revitalized.
They got very defensive when I responded about how the area was steps away from higher income areas, had no residents, was only commercial, and was activated by the creation of the NoMA Metrorail.
It basically had little relevance to any weak market city.
About healthline, the other thing planners do is not give hard numbers ususally. They say "ridership rose 40% over previous numbers."
About 15,000 daily riders, pre covid. That's actually pretty good for the size of Cleveland, but it's not super duper stellar.
Two very granular points:
1. CMU is far superior to CWRU in engineering and computer sciences. And yes, there is a lot of spin off money there.
2. The Cleveland Clinic was a classic slumlord, driving down prices on the east side generally to acquire an enormous campus.
I'd be more impressed with the health line is it was part of an integrative system or system-think --as you have often identified. But is mostly a shiny thing.
And this is the problem with best practices. Far too often it just turns into imitation rather than trying to understand the process that got it there. So you've got to ho have that, but you need another axis (your Big Hairy Project) where you can look for real transformation.
(as they say in the place where they teach MBAs, just draw a box).
Battle is an interesting model, but I'm guessing the biggest chunk of their revenue is just running national labs.
And cleveland is poor. I remember calculating at some point in 1995 that the entire tax base of the city was smaller than NW DC. Much smaller. Even today it is about the same size as the Arlington County budget.
Yes about Battelle I think. It's no Fraunhofer.
2. And excellent point about Cleveland's abject poverty.
3. I don't know enough about CC's history but I did know about CMU versus CWRU.
4. I hadn't thought of this but the Mellons were early venture capitalists. Although in his book Richard Florida said Pittsburgh was lagging c. 2000. Obviously it's since recovered.
At the NTHP conference in Pittsburgh the director of the Pittsburgh History Center did a brilliant presentation including a video on the city's more than 200 year history of innovation.
Still you had Gunds, banks, Peter Lewis. But the Ratners and Rockefellers moved on? (Do you remember the Firest City stores? There were some in Greater Detroit.)
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