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Economic Action Plan for Pittsburgh, Pennsylvania

Introduction

Pittsburgh is one of the largest cities in Pennsylvania, known as a former steel center and a modern hub for high-tech companies. The town was famous in the early 20th century for its steel industry, ranking second in the US for steel production (Carter, 2016). However, in 1970-1980 the factories were closed, and the city had to change the direction of economic development. Today, the primary income-generating industries are agriculture, health and education services, and tourism. The environmental movement deserves special attention, thanks to which the city has become one of the most favorable for life. However, Pittsburgh still has ecological problems, including air and water pollution. This paper aims to give a comprehensive description of the city’s economic development conditions and create an action plan to deal with existing challenges and problems.

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Locale

Pittsburgh is located in Allegheny’s picturesque county, at the spurs of the mountains and the confluence of the Allegheny and Monongahela rivers, forming the Ohio River. More than 300 thousand people live in the city, and more than 2 million live on the outskirts of the town (Carter, 2016). Historically, the city’s economic development has been linked to its geographical location at the crossroads of trade routes between the Atlantic coast and the Midwest. However, the construction of more than 300 industrial steel production enterprises greatly impacted the urban character (Carter, 2016). For a long time, Pittsburgh was the second-largest steel producer in the US until the de-industrialization process began in the 1970s and 1980s, and production was stopped. This trend has resulted in many residents losing their jobs and halved the city’s population.

The city and Allegheny County have abundant natural resources, particularly minerals. After the closure of the steel mills, Pittsburgh continues to produce cars, computing, electronics, ships, aluminum, glass, oil, food, and sporting goods. Significant funds are also being invested in the development of Marcellus’ natural gas fields. Historically, the city center is home to the headquarters of many successful companies. Thanks to the effective implementation of the “Renaissance” and “Renaissance-2″ strategies, the city managed to overcome the consequences of de-industrialization, placing a stake in developing alternative directions in the economy.

Economic Situation

The most successful industry is healthcare, as the city is home to one of the most extensive medical facilities – the University of Pittsburgh Medical Center. Science is also represented at the proper level in the city thanks to the research centers of the University of Pittsburgh and Carnegie Melon University and seven dozen higher educational institutions. As part of supporting the city’s ‘rebirth’ project, many of the largest high-tech companies moved to Pittsburgh. Notably, new offices were located in closed factories buildings.

The city receives taxes from Google, Apple, Facebook, Uber, Amazon, Microsoft, Bosch, Nokia, and IBM. There are also regional offices of Bayer, RAND, BNY Mellon, Nova Chemicals, and PNC Financial Services (Carter, 2016). Thanks to such an abundance of the most significant market players, the city has ample job opportunities. Moreover, due to active economic development and the parallel implementation of programs to protect the environment, Pittsburgh has been named one of the world’s most livable cities.

Therefore, the city moved from industry to technology, becoming a role model for similar regions. It is noteworthy that more than 116 thousand people work in the healthcare sector (Carter, 2016). The area also hosts Fortune 500 companies – Craft Heinz Company, PNC Financial Services, PPG Industries, US Steel, Arconic, Alcoa, WESCO International, Dick’s Sporting Goods (Carter, 2016). Besides, the city has a developed network of shopping centers and boutiques; the cultural sector also brings income to the city budget. About 10 thousand people are employed in the arts, and almost 11 thousand work at the University of Pittsburgh (Carter, 2016). According to the most recent census, 66.0% of the population is White, 26.1% Black or African American, 0.2% American Indian and Alaska Native, 4.4% Asian, 0.3% others (Carter, 2016). European groups include Germans 19.7%, Irish 15.8%, Italians 11.8%, Poles 8.4%, and British 4.6% (Carter, 2016). Since the city was mainly inhabited in the early 20th century, the white population is primarily represented by European groups.

SWOT Analysis

SWOT analysis is an extremely convenient tool for assessing the problems and development prospects of a company. In this case, to develop an effective economic development plan for the city of Pittsburgh, the strengths, weaknesses, opportunities, and threats of its economy will be considered. It is noteworthy that scientists often mention Pittsburgh in their studies as an example of the transition from industrial to post-industrial economic model. In particular, Neumann (2018) notes that such a successful change was realized through the collaboration of Pittsburgh officials with local corporations and the media. The author emphasizes that in addition to taking real steps to reorganize the economic situation, it is essential to elaborate on branding campaigns for the re-created economies. Parkin and Hardcastle (2019) agree that Pittsburgh’s “rebirth was the transformation of a rust-belt economy into a dynamic brain belt” (p. 294). Therefore, the successful implementation of the “Renaissance” and “Renaissance-2” projects can be considered one of the main strengths of Pittsburgh’s economic development.

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Nevertheless, the same scholars highlight several weaknesses in the city’s economy. Scholars Parkin and Hardcastle (2019) note that the “Renaissance” project was widely romanticized. The city continues to experience social devastation and inequality in its metropolitan and domestic economy. Further, Bailey and Pacetti (2019) openly raise the issue of a significant increase in the income gap between whites and minorities. Researchers analyzed data over ten years and came to such a disappointing conclusion, noting that the income gap is accompanied by an increase in the employment rate among minorities. According to Teshome and Dunn (2019), a rise in jobs in 2018 came from the healthcare, construction, and manufacturing sectors. Therefore, despite the transition to a service economy, the city needs support for the development of industrial sectors, as it is home to many people who could be employed in this area.

Besides, according to statistics, despite the low unemployment rate, the labor market in Pittsburgh is now denser than during economic ups in other historical periods. At the same time, scientists note that the situation in the labor market is stable. They emphasize that after recovering from the Great Recession’s effects, urban employment has remained steady at pre-crisis levels (Teshome & Dunn, 2019). These data indicate the overall stability of the economy and the existing prospects for transformations aimed at reducing the labor market’s rigidity, increasing the dynamism of business processes, and ensuring equal conditions for the population.

Scientists also pay attention to opportunities for city streetscape planning. Many scholars point out that urban planning could further drive up housing prices and increase Pittsburgh’s overall attractiveness. In particular, Li et al. (2016) emphasize the potential for city redevelopment using abandoned land plots for green spaces, recreation areas, shopping parks, shopping centers, and residential areas. Scientists also pay special attention to the potential for residential redevelopment, mentioning the Summerset projects in Frick Park and Hazelwood as a successful example of such an approach (Li et al., 2016). Scientists emphasize that residential redevelopment contributes to the city’s intellectual growth and is more cost-effective for economic development. They identify three pillars of success – consensus between the public and private sectors, the right choice of the type of landowner, and the involvement of academic institutions.

Further, scientists raise the issue of urban improvement by ensuring equal living comfort for all citizens. Particularly, Bereitschaft (2017) notes that there is a problem of inequity in neighborhood walkability in Pittsburgh, citing examples from six streetscapes. The scientist draws attention to “fewer windows, less transparent storefronts, less well-maintained infrastructure, fewer street cafes, and overall less complexity” of streetscapes in neighborhoods with high versus low social vulnerability (Bereitschaft, 2017, p. 1233). At the same time, Yin et al. (2020) note that “the growing market demand for pedestrian and transit-oriented communities can be capitalized into higher housing values and can generate much-needed revenue for shrinking cities” (p. 20). Scientists also highlight the impact of pedestrian accessibility on property prices in ‘shrinking’ cities such as Buffalo, Pittsburgh, and Detroit. Therefore, the development of urban infrastructure has aesthetic, ethical, and economic value. Considering that Pittsburgh has already implemented many projects in this course, continued urban planning is a promising opportunity for the city’s economic development.

Finally, Pittsburgh’s main threats are related to the environment, which will be detailed below, and to the labor market. The gap between the earnings of the white population and minorities, making up more than a third of the city’s population, was already mentioned above. Another equally alarming factor is the aging population since the average age of residents of the metropolitan area has increased by 1.1 years, and this figure is 5 years older than the national average (Teshome & Dunn, 2019). This trend indicates an increase in the retirement age population and a decline in the population under 25, and this situation may further create a shortage of workers. At the same time, the aging population is partly offset by higher education levels than the national average.

Legal and Public Policy Issues

Despite its business success and leadership in providing health and education services, Pittsburgh has failed to address its environmental challenges adequately. For a long time, the city was considered an extremely unfavorable place for life because the steelworks polluted the air. Despite heavy industry shutting down 30 years earlier, Pittsburgh still has alarming air quality figures. For example, according to a report from the American Lung Association (ALA), air quality in the city continues to deteriorate due to smog and fine particle pollution (Carter, 2016). The Allegheny County Health Department contested the ALA results, saying that the air measurements were taken in the Clairton Coke Works US Steel plant area and several locations outside the city’s jurisdiction. Therefore, the department believes the data may reflect pollution from Ohio and West Virginia.

Remarkably, even under these measurement conditions, the report showed improvement over previous decades. However, alarms from ALA can negatively affect the city’s image, so the situation needs to be fully clarified. As part of addressing this issue, the Smell PGH air quality monitoring application was launched, allowing residents to report pollution incidents to local authorities. It should also be recalled that back in the early 2000s, the city began to create an environmentally friendly living space, planting tens of thousands of trees. Pittsburgh spends large sums of money each year planting and maintaining street trees, which has a positive impact on the economy. In particular, urban forests help conserve energy in the shade, improve air and water quality, and increase property values.

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Another issue of controversy is water quality in the city. This problem is more urgent than air pollution since water pollution takes place due to old infrastructure. The treatment facilities have been operating for over 60 years and require immediate replacement, while the pipes were installed more than 100 years ago (Carter, 2016). Therefore, untreated wastewater often ends up in waterways in case of floods or heavy rainfalls. The city has a combined sewerage system, which means that the sewerage pipes contain stormwater and wastewater.

The massive amount of polluted water entering rivers pose a threat to life in the city. The Environmental Protection Agency (ALCOSAN) proposal to upgrade the system will require an investment of $ 2 billion. Approval from the Environmental Protection Agency (ETA) is required to launch the construction of new treatment facilities. Notably, due to allegations of ineffective management, the Pittsburgh Sewerage and Water Administration (PWSA) became subject to restructuring and partial privatization at a previous mayor’s initiative. At the moment, the administration is under the control of the Public Utilities Commission.

Governmental Atmosphere

The executive branch of Pennsylvania is represented by the governor, lieutenant governor, attorney general, auditor general, state treasurer, and the governor’s office. Besides, the governor, with the Senate’s approval, appoints the Secretary of State and the Secretary of Education. The governor’s powers include the right to veto bills passed in the General Assembly and the right to return bills for reconsideration. Noteworthy, the General Assembly consists of a 50-member Senate and a 203-member House of Representatives. The General Assembly lays down rules and regulations for local governments, including cities, districts, counties, and towns. Democrats and Republicans are usually equally represented in the governor’s office and the General Assembly. The urban population is often more inclined towards liberal ideas, while the rural community is more conservative.

The City of Pittsburgh government is represented by the City Commission or the City Hall, which consists of three people elected every two years in city elections. Each year, the City Commission appoints a new mayor and chairman of the board. The City Commission’s responsibilities include forming city policy, approving the annual budget, and appointing members of public councils and committees. The Commission is responsible for the implementation of legislation, and can adopt laws submitted by committee members; the city administration develops legislation.

The mayor has the same duties and powers as other Commissioners, presides over Commission meetings, signs documents, and represents the city. Currently, the committee includes Dawn McNay – the mayor, Chuck Munsell – the President of the Board, Cheryl Brooks, Larry Fields, and Patrick O’Bryan – the Commissioners. Dawn McNay previously served as Director of Development for the Community Health Center for Southeastern Kansas and worked a long time at Via Christi Hospital. Besides, Lady Mayor volunteered for various community organizations; her term of office ends in December 2021. Public Committees are represented by the Parks and Recreation Advisory Board, Planning Commission, Sustainability Advisory Committee, Downtown Advisory Board, Economic Development Advisory Committee, and others. Departments include Community Development & Housing, Economic Development, Finance, and Pittsburg Parks & Recreation.

Action Plan

When proposing an economic development plan for the City of Pittsburgh, it should be considered how the project will benefit the local community and how to implement it. It is also necessary to refer to the existing development plans and recommendations. The new guidelines should complement them, relying on the SWOT analysis above. The most visible weaknesses were associated with an aging population, inequality in wage opportunities, and a more dense labor market than in similar periods of economic recovery. The latter may be due to the low dynamism of doing business and the lack of favorable conditions for entrepreneurship.

While Pittsburgh has managed to shift its focus from industry to service delivery, there is still a need to improve the business environment. Large companies that have offices in the city center characterize the region’s population as engaged in business and services. However, scholars have noted challenges for start-ups (Holstein & Eschenfelder, 2017). Since Pittsburgh is home to the famous Carnegie Mellon University and the University of Pittsburgh with robust research and scientific bases and many colleges, students and alumni often associate their activities with the organization of start-ups. The region has great potential in this direction, since many organizations, such as Alpha Lab, Alpha Lab Gear, Pitt’s Innovation Institute, organize funding and accelerator programs.

According to the SWOT analysis above, the city has good urban planning potential, which creates room for higher housing prices. Therefore, it is suggested to take into account the comments and recommendations of scientists when developing the yearly urban development plan. In particular, there is a need for redevelopment of pedestrian zones to provide more comfort for residents of less prosperous areas. It is also necessary to develop urban infrastructure, moving cafes, shops, and recreation zones to the sleeping areas.

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It is also imperative to respond to environmental threats appropriately. In particular, the misunderstanding with the ALA should be resolved. Independent research aimed at identifying the real indicators of air pollution in the city can be conducted. If the numbers are low, the City Commission should provide this data to the ALA and request a change in the report’s data. Suppose the level of air pollution is high, it will be necessary to oblige Clairton Coke Works US Steel, to carry out urgent measures and install filters. A resolution can be developed by the city administration and adopted by the City Commission.

Besides, to combat water pollution, it is imperative to accelerate the ALCOSAN project’s approval for the installation of treatment facilities. In this regard, the Commissioners can contact the governor with a request to write a letter to the ETA, which will describe the need for an immediate decision. After the installation of treatment facilities, the ecological situation in the city will change dramatically. To improve air quality, planting and maintaining green spaces within the city limits should be continued. The City Commission can be asked to take advantage of the recommendations spelled out in the old land use and growth plan of Allegheny Places and resume planting trees in the direction from the center to urban forests, parks, and embankments. This approach will strengthen the unified green urban infrastructure, which will positively impact both the environment and property prices.

The city’s main strength is the implementation of an exemplary transition to a post-industrial economy and the creation of a strong base of research institutions. In this connection, the relevant city department is recommended to develop a plan of work with scientific institutions, which will take into account the following recommendations. Scientists Andes et al. (2017) drew attention to the unacceptable difference between research topics and real employment. A small percentage of the population is employed in technology, compared to business and manufacturing. Therefore, scientists recommended that local scientific institutions shift their focus to local business and production, which have economic potential. They also suggested increasing the development of specific patents that are in demand in prominent industries. Besides, it was proposed to tackle the alignment of the workforce’s competencies and provide education following the requests of the most popular sectors. Therefore, it is possible to use the city’s scientific potential and direct it to economic development.

Conclusion

Thus, an exhaustive description of the conditions for the City of Pittsburgh’s economic development was given. Besides, an action plan was developed to implement opportunities and deal with existing challenges and problems. Under this plan, government officials need to create better conditions for running small businesses, launching start-ups, improving air and water conditions, engaging in urban planning, and paying attention to new research directions. Implementing these measures will lead to better living and working conditions in the city and will give a new impetus for subsequent economic development.

References

Andes, S., Horowitz, M., Helwig, R., & Katz, B. (2017). Capturing the next economy: Pittsburgh’s rise as a global innovation city. Web.

Bailey, L., & Pacetti, E. G. (2019). Strong recovery for whom? Trends in Dayton, Ohio, and Pittsburgh, Pennsylvania, exemplify growing earnings gaps between minority and white workers present in many US regions. Community Development Briefs, 5(3), 112-121.

Bereitschaft, B. (2017). Equity in microscale urban design and walkability: A photographic survey of six Pittsburgh streetscapes. Sustainability, 9(7), 1233-1245.

Carter, D. K. (Ed.). (2016). Remaking post-industrial cities: lessons from North America and Europe. Routledge.

Fritsch, M., & Wyrwich, M. (2017). The effect of entrepreneurship on economic development – an empirical analysis using regional entrepreneurship culture. Journal of Economic Geography, 17(1), 157-189.

Li, X., Yang, H., Li, W., & Chen, Z. (2016). Public-private partnership in residential brownfield redevelopment: case studies of Pittsburgh. Procedia Engineering, 145(1), 1534-1540.

Neumann, T. (2018). Reforming the steel city: symbolism and space in postindustrial Pittsburgh. Journal of Urban History, 44(4), 582-602.

Parkin, A., & Hardcastle, L. (2019). The Pittsburgh renaissance and the future of Adelaide. Urban Policy and Research, 37(3), 294-309.

Teshome, M., & Dunn, J. (2019). Pittsburgh employment steadily advancing.

Yin, L., Zhang, H., Patterson, K., Silverman, R., & Wu, L. (2020). Walkability, Safety, and Housing Values in Shrinking Cities: Spatial Hedonic Study in Buffalo, Pittsburgh, and Detroit. Journal of Urban Planning and Development, 146(3), 20-29.

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