Andy Warhol once said that “shopping is much more American than thinking”. If that is true, then Mr Warhol’s hometown of Pittsburgh is not very American. The city, located in south-western Pennsylvania, spends $3bn a year on university, corporate and government research and development, and each year produces more than 33,000 graduates.

But that was not always the case. Four decades ago, Pittsburgh’s economy was in tatters, with its population shrinking by 35% between 1970 and 1990. Relying heavily on its steel industry, the city learned a painful lesson. Its lack of industrial diversity left it vulnerable when steel mills began to close and thousands of people lost their jobs. Pittsburgh’s once sprawling metropolis was left depressed.

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Surveying the wreckage, local authorities worked with business and university representatives to implement a strategy aimed at redistributing the balance between business sectors in the city. “In 30 years we went from an economy where 50% of employment was depending on one sector, to an economy where we have five main industries, of which none represents more than 23% [of the total],” says Dennis Yablonsky, CEO of the Allegheny Conference and the Pittsburgh Regional Alliance, both local economic development agencies.

When the strategy was implemented, some considered the sectors chosen as the ‘engines’ of Pittsburgh’s job-growth to be wildly optimistic. But that optimism has reaped dividends. “There are 1600 tech companies and 500 biotech companies in the Pittsburgh metropolitan area. Virtually none of those existed three decades ago,” says Mr Yablonsky.

Incubating talent

At the heart of the Pittsburgh revival story lies a strong research funding backing and a score of incubators helping local businesses to grow. “At the end of 1990s, I was aware there was a stream of research funding in south California and that it creates the environment for companies to grow. And I found out that Pittsburgh actually receives more biomedical research money than California. I checked it and it turned out to be true,” says Thomas Petzinger Jr, executive vice-president of Knopp Biosciences, a Pittsburgh-based pharmaceutical company that works on treatments for Parkinson’s disease and sclerosis.

 

Capturing design in 3d

Students of Pittsburgh’s Robert Morris University (RMU) excel at producing busts of their patron. But they don’t produce them out of reverence, but rather because they can, thanks to three-dimensional printing. The School of Engineering specialises in this technology, which uses printing in layers to produce solid objects of digital models. Observers say the technique could turn around US manufacturing, as prototypes can be developed quickly and cheaply. 

“We have been working on that technology for years. What has recently changed, however, is that we can use 3D printing not only to produce objects made of plastics, but also steel and ceramics,” says Arif Sirinterlikci, the school’s director of Engineering Laboratories. 

And the school celebrated another triumph in August 2012, when it became the part of a winning team to create the National Additive Manufacturing Innovation Institute, a public-private research centre tasked with accelerating additive manufacturing technologies. A $70m grant was assigned to a group of five colleges, 40 companies and 11 non-profit organisations from Pennsylvania, Ohio and West Virginia. The project is seen as a step towards closer co-operation of institutions based in the area commonly called the ‘rust belt’ due to the decline of its manufacturing industry that started in 1980. 

“We hope to bring back manufacturing, but in a way that, thanks to technological advancements, gives us a competitive edge,” says Jerry Paytas, vice-president of research and analytics at Fourth Economy, an economic development agency. 

At the end of 2010, Knopp sealed a licensing agreement worth up to $345m with Biogen Idec, one of the biggest players in the biotech industry. Such multimillion-dollar deals show that “Pittsburgh is a good place to do business and make investments”, says Mr Petzinger.

For Henry Thorne, co-founder of 4moms, a company that combines baby products with robotics, Pittsburgh was chosen as the business's home because of the funding offered. “I moved here in 1992 because the city offered a funding programme for entrepreneurs. At that time I was based in Michigan and over there such a thing was unheard of,” he says.

After 20 years in operation, Mr Thorne’s company received $43m in funding (including $20m from Bain Capital Ventures secured in August 2012), sells its products in 24 countries and counts actress Jennifer Garner among its clients.

Nice prices

Pittsburgh’s economy is not the only thing that has reached a healthy state in recent years. Residents also enjoy the fact that Pittsburgh has one of the lowest costs of living among major American metropolitan areas. Property prices in the city are 25% lower than the national average.

“We have just bought an architectural masterpiece. We would not be able to afford it anywhere else,” says Elijah Wiegmann, who together with his wife Leah works at 4moms. Although the couple, both in their late 20s, used to live in Philadelphia and Ms Wiegmann is originally from New York, they are both quick to emphasise that moving to Pittsburgh does not mean settling for less in terms of culture. “We are self-proclaimed hipsters. We love places such as San Francisco and Portland, but not necessarily renting a one-bedroom flat and scrambling for money,” says Mr Wiegmann, while his wife adds that Pittsburgh gives all the benefits of living in the big city, but without being quite so overwhelming.

Cultural revolution

Pittsburgh has a newly revitalised cultural district, which prior to its development in the 1990s was known more for strip joints than theatres. Trendy bars can now be found in districts such as East Liberty and Shady Side, nature trails are located in close proximity to its centre and the city has a number of sporting venues that are home to major clubs, such as the Steelers American football club and the Penguins ice hockey team. That, together with good job prospects, has gained Pittsburgh a string of awards, including the Economist Intelligence Unit’s title of the most liveable city in the US, the top-ranked large city in fDi's 2011/12 American Cities of the Future ranking, and National Geographic Traveller’s inclusion in its Best of the World 2012 ranking.

Such international plaudits recognise Pittsburgh’s achievements of the past few decades. Yet such laurels would count for nothing if the city’s residents did not embrace these rapid changes. “People who live here see this city every day. It is hard to step back and think about how this city looked 10 or 20 years ago,” says Mr Yablonsky.

Recent events have also endorsed Pittsburgh’s revival story. “In 2009 we organised a G-20 meeting and we were chosen as a host precisely because of our economic success,” says Mr Yablonsky. He adds that the event resulted in more than 7000 media stories about the history and quality of life in Pittsburgh. In 2012, the city welcomed high-profile guests again when it hosted the One Young World summit, a prestigious gathering of young leaders from around the globe. The community of future trailblazers was addressed by former US president Bill Clinton and ex-United Nations secretary-general Kofi Annan, among others.

Bringing talent back

Yet such an influx of the world's brightest young minds to Pittsburgh remains something of a novelty. “When the steel industry collapsed there was an almost catastrophic outflow of young workers. There was a generation of ‘no opportunity’ in Pittsburgh,” says Mr Petzinger.

Although financial incentives since the 1980s have been attracting entrepreneurs, finding skilled workers or persuading them to move to Pittsburgh has proved to be difficult. “When I was recruiting people in the late 1980s, the standard response was ‘I do not want to move here’. Attracting talent was a challenge then,” says Mr Yablonsky, who at that time was managing Carnegie Group, a software solutions company.

To attract skilled employees to his Carnegie Group, Mr Yablonsky says that he “started a ‘boomeranger’ strategy”. The main premise of that initiative was targeting people who had links with Pittsburgh, either because it was their home town or where they went to school, and persuading them that Pittsburgh was a perfect place not only to work, but also start a family. “Eventually our company grew to total of 250 people, out of which ‘boomerangers’ constituted one-third of the total head count,” says Mr Yablonsky.

Now Mr Yablonsky applies that strategy in his role in the city's economic development agencies and says that a lot of businesses in Pittsburgh recruit their employees by searching for ex-Pittsburghers. Mr Yablonsky himself could be described as ‘boomeranger’. Born in Pittsburgh, he worked for many years in Cincinnati, Ohio before returning.

Some of the returning residents come from even further afield and are attracted to the city not only by headhunters, but also by Pittsburgh’s welcoming atmosphere. Mila Sanina, a social media editor at Pittsburgh Post-Gazette, a local daily newspaper, moved to the city from Kazakhstan. While still a student at the University of Pittsburgh’s Graduate School of Public and International Affairs, she worked for broadcasters CNN in Atlanta and PBS in Washington, DC, but made a decision to “boomerang back” to Pittsburgh.

“I really like the city and my current employers were willing to help me with my work visa. I did not receive [this much] attention and understanding anywhere else,” says Ms Sanina, stating that Pittsburgh has become “her American home”. According to Ms Sanina, in recent years Pittsburgh residents have become enthusiastic about their city, but instead of self-praise they manifest that in a ‘can-do’ attitude.

Andy Warhol, whose career was intrinsically connected with New York, never moved back to Pittsburgh. Then again, he was probably oblivious to the fact that Pittsburgh would evolve to offer such excellent job prospects in industries such as biosciences, robotics and shale gas extraction. And, at the time of his death, the Pittsburgh arts district was still awaiting its much-needed renovation.