Puzzling Pittsburgh

The steel city has transformed itself into a hi-tech hub with an artistic twist, and has a surprising amount in common with Israel’s start-up city.

By NIV ELIS
Tech shop (photo credit: NIV ELIS)
Tech shop
(photo credit: NIV ELIS)
‘Where’d you say you were from again? Pittscock?” I wasn’t surprised that my fellow fourth-grader hadn’t heard of my hometown of Pittsburgh, when my family brought me to Israel for a few months when I was young. What was Pittsburgh to a kid in Tel Aviv? In the Israeli imagination, the US was New York, maybe Los Angeles or Chicago. But Pittsburgh? In truth, I had the same perception myself. Sure, Pittsburgh was a great place to grow up, but it was a city that had passed its peak. The steel industry that drove the Pennsylvania metropolis collapsed in the late 1970s, leaving a gaping hole in the local economy. Next to Florida, it had one of the oldest populations in the country. Students came from all over to study at the quality colleges and universities – Carnegie Mellon, University of Pittsburgh, Chatham, Duquesne – but few had good reason to stay after graduation.
So you can imagine my surprise when I started noticing articles on Pittsburgh’s revitalization, using terms such as “hip” and phrases such as “the next Portland.” You can imagine how dumbfounded I was when, at the height of the global financial crisis, the G20 chose the steel city to host its meeting in order to send a message of hope to places like Detroit. Sure, times are tough, the conference seemed to say, but your city too can work through it and come out all the better. Just look at Pittsburgh! Moreover, while I was busy living my life elsewhere, Google decided to open one of its 18 US offices in Pittsburgh.
On a recent visit, I participated in the Pittsburgh Tech Crawl, and discovered a burgeoning start-up scene and hi-tech ecosystem that reminded me, oddly, of my current home city of Tel Aviv.
The changes didn’t happen overnight. They were the result of patient, effective policy and investment, some of which mimic the very factors that made Israel a start-up nation, others of which could offer Tel Aviv some food for thought.
YOU KNOW emoticons, the ubiquitous punctuation- turned-facial-expressions that have become a hallmark of my generation’s communication? I never knew it, but they were born in Pittsburgh.
Not only that, they were born a year before I was. It was on September 19, 1982, a joke misfired on a message board thread at Carnegie Mellon University, and computer scientist Scott E. Fahlman suggested that posters note their intended sarcasm with a colon, dash and parenthesis – :-).
Carnegie Mellon and its public neighbor, the University of Pittsburgh, have been main drivers of Pittsburgh’s post-industrial economy, which locals like to say has transitioned from steel to “Eds and Meds” – education and healthcare.
In many ways, Pittsburgh was lucky that it had the seeds of the future’s next big industry already planted and growing when the steel industry collapsed.
Already in the 1940s and 1950s, business leaders had begun fretting about the post-steel economy, pushing investment toward the universities.
The focus on tech came early as well; in the ’50s, Carnegie Mellon started offering a degree in computer science, the first in the world. Pitt, meanwhile, was building up its world-class medical school.
“The groundwork had been laid many years before, and it was coincidental that the investment began paying off when the steel industry collapsed,” says Bill Flanagan, executive vice president of the Allegheny Conference on Community Development.
In the late 1970s, the steel mills that had been the heart of Pittsburgh’s industry started shutting down as higher-tech and more efficient competition elsewhere took business away; already the region was seemingly passing its peak. The population started declining as the Arab oil embargo and global recession led factories to lose business. At the turn of the 1980s, a spate of major mills closed and the city hit a crisis moment.
“The year we hit rock bottom was 1983,” says Flanagan.
The metro unemployment rate shot up to 18 percent, even higher in neighboring counties. “Fortunately for Pittsburgh, around the same time the universities and health systems really began to grow, so starting around 1983 or even before, there was job creation.”
“The groundwork had been laid many years before and it was coincidental that the investment began paying off when the steel industry collapsed,” he adds.
Though the steel industry lost some 250,000 jobs, new industries including education and health helped stanch the bleeding by creating 150,000 new ones. Significant local investment and loans programs from the region and state helped spur the recovery.
It took until the end of the 1980s to get back to pre-crisis employment levels, but the change had left Pittsburgh with an aging and significantly smaller population.
One of the unexpected perks resulting from the massive drop in the regional population in the wake of the steel collapse was an abundance of housing, which has helped keep the price of housing exceptionally low by national standards. Today, this remains a good reason to stick around. Why run off to Silicon Valley and spend a huge chunk of your paycheck on housing prices that are among the highest in the nation, when you could instead put that money toward, say, building up your new business? “We can offer things here in Pittsburgh that would be unheard of in California,” says Chris Arnold of Schell Games, a video game business with about 100 employees that spun out of Carnegie Mellon, and counts Disney and SeaWorld among its customers. The top talent from the universities stay “because they can own a house, and can send their kids to public school.”
IN ISRAEL, hi-tech came to dominate industrial production – which grew from 37% of industrial product in 1965 to 58% in 1985 and 70% in 2006, according to the Foreign Ministry – through chips and computer devices. In Pittsburgh, the manufacturing legacy left over from the steel days found its outlet in robotics.
The robotics lab at Carnegie Mellon resembles that of a mad scientist. Metallic arms of all sorts are strewn about the workspace, where spider-like robots and small vehicles resembling miniature tanks sit in various states of assembly.
Within the university, hi-tech hackers plug away at projects like LED headlights that can black out small portions of light so they don’t blind oncoming drivers.
Their sensor can even detect quickly falling snow and turn off the high-beam pixels that reflect off the bright flakes, thus decreasing light reflection and increasing visibility during inclement weather.
Elsewhere, a robotic emulator for prosthetic legs and feet – devices that roughly a million leg amputees in the US rely on – tests all the parameters of a prosthesis to find the perfect fit. Another tinkerer has built a dome of cameras to capture and analyze 3D images.
With advanced analytics, such a machine could learn to detect a huge variety of subtle behaviors, and could potentially be used for diagnosing certain mental or behavioral disorders.
CMU’s robotics lab has spun off a slew of companies such as RE2, whose robots help the US Army defuse roadside bombs and improvised explosive devices in the field.
Robotics thrive outside the Carnegie Mellon sphere as well.
4Moms, a company that designs and manufactures advanced products to aid in childcare, demonstrates how mechanical engineering can bring value to unexpected sectors. Its famous origami stroller, which has found admirers in Hollywood celebrities such as Drew Barrymore, folds up into a tiny portable pack with the push of a button. Its mamaroo chair bounces the baby in a motion akin to being held, as opposed to swinging back and forth or from side to side.
Just down the street from the Google offices in Bakery Square, a shared manufacturing hub called Tech Shop offers both hobbyists and entrepreneurs access to heavy-duty tools and machinery. For a daily, monthly or annual fee, Pittsburgh techies can tinker with metal cutters, blowtorches, 3D printers and computerized drills to build, test and develop their prototypes. Sole Power, a start-up which developed an insole that uses people’s steps to charge batteries, quickly developed its technology on the premises without having to invest in office space and heavy-duty machinery of its own.
In February, Politico Magazine launched it series on thriving American cities, with a piece on Pittsburgh titled “The robots that saved Pittsburgh.”
But a strong arts scene has also contributed to Pittsburgh’s success.
“Pittsburgh really focused investment in the arts and culture, especially downtown, to improve the quality of life,” explains Flanagan. “Nobody was thinking of this as an investment in talent attraction and retention, but that’s what it turned out to be.”
Aside from the thriving theater community, ballet, opera and symphony in Pittsburgh, the Pittsburgh Art Institute and CMU’s drama and music schools also attracted design experts, which in recent years has proven a crucial element in cutting-edge technology.
Future Interfaces Group, a research laboratory within CMU’s Human-Computer Interaction Institute, takes an interdisciplinary approach to developing user experience.
One prototype its students are working on is a smart watch that beams buttons right onto the wearer’s arm, expanding the interface beyond the watch face and onto the entire wrist. Another development, ZoomBoard, created a method of on-screen typing for tiny touchscreens.
“If you’re building a company with tech and design, Pittsburgh is a great place to do it,” says Severin Hacker, a founder of language learning app DuoLingo, which won Apple’s coveted app of the year award in 2013.
Deeplocal, a Pittsburgh start-up that also has roots in Carnegie Mellon, creates unconventional custom advertisements for some of the biggest names in the industry. Its two-story office has one open-space office, complete with a candy corner, high ceilings and games, devoting one floor to a robotics workshop.
Originally set up as a mapping company, the group took on a project to promote Lance Armstrong’s Livestrong cancer charity and Nike. It created a “chalkbot” robot, programmed to chalk spray Twitter messages about cancer survivors onto the Tour De France road.
It was a way to connect people from around the world, turning a digital connection into a physical one.
“I think it was the first project of its kind. People realized that advertising didn’t have to be a TV commercial,” says Deeplocal account director Kristin Petty.
A subsequent project involved letting people navigate Pellegrino-branded robots in Italy. Another, advertising Google Fiber high-speed Internet, involved building a system that would let Nick LeGrande of Kansas City, then 13 and suffering from a rare blood disease, throw out the first pitch at an Oakland A’s baseball game – through robots – right from his hospital.
The epitome of the arts/tech intersection is undoubtedly CMU’s Entertainment Tech Center. Situated along the Monongahela River, with views overlooking the city’s bridges and downtown, the ETC building feels more like a geeky funhouse than a campus.
A sculpture of the cartoon Simpson family sitting on their couch greets visitors as they enter. Themed hallways pay homage to Star Wars, Superman and Batman; even the bathrooms have themes. The center promotes storytelling by overlapping arts and design with technology, the combination that companies like Pixar rely on to make great movies with 3D animation.
The same is true of video games, an industry that rakes in more cash than Hollywood and the music industry combined.
The center, with its multidisciplinary students who are required to do everything from programing to improv theater, is light years ahead of the competition.
It’s been around for 15 years, whereas New York University’s Tisch School just graduated its first class of graduate students in game design this year. Schell Games is one of ETC’s more prominent spin-offs.
ISRAEL AND Pittsburgh’s shared strengths have not gone unnoticed, and the two have developed a healthy business relationship – one that seems poised to grow in the coming years.
Most notably, perhaps, is the University of Pittsburgh Medical Center, the heart of the city’s medical innovation and healthcare business. (Its human engineering research laboratory has been putting the robotics talent to excellent use, finding solutions for the disabled.) When UPMC was looking for a way to create electronic medical records, it turned to an Israeli company called dbMotion, which specializes in electronically integrating health information and spun off from Ness technologies. The collaboration went so well that UPMC ended up buying a stake in the company.
In fact, Ness, dbMotion and companies such as Retalix employ over 400 people in the greater Pittsburgh area. The Jewish Federation of Greater Pittsburgh, which has historically worked to unite Israel and Pittsburgh through cultural and philanthropic initiatives, especially in Pittsburgh’s sister city of Karmiel and the Misgav Regional Council, has made a concerted effort to turn its attention toward business ties in recent years.
“If it generates business, that’s the purpose. This is not about community goals – that’s what it’s been for the last 15 years. This is about generating jobs in Pittsburgh, and foreign direct investment in Pittsburgh,” says Gregg Roman, director of the community relations council at the Jewish Federation of Greater Pittsburgh. “I’m concerned with creating an entity that can pitch to Israelis that Pittsburgh is a place they can do business.”
The federation has conducted a feasibility study on advancing Pittsburgh’s profile in Israel, which found that local expertise in “environmental technologies and healthcare information technology, followed by advanced materials and manufacturing, financial and business services, ICT [information and communications technology] and life sciences are good matches for Israel’s hi-tech growth economy.”
IN MANY ways, Israel and Pittsburgh have built similar ecosystems. Both invest heavily in research and development, both have a network of world-class universities and research institutions, both have a manufacturing legacy, and both have seen their economies shift toward hi-tech.
But Pittsburgh has maintained two assets that have eluded Israel. For one, it has parlayed its manufacturing past into hi-tech robotics, filling a niche that overlays its blue- and white-collar workers. For blue-andwhite Israel, that should be a priority.
For another, Pittsburgh has maintained a low cost of living. The young, educated, talented entrepreneurs and engineers that have helped turn the city’s least desirable neighborhoods into hip, hi-tech communities repeat the importance of the low cost of living like a mantra.
“The cost of living here is amazing compared with New York or LA, so we can price our projects accordingly,” says Deeplocal’s Petty. “We don’t have to charge $1 million to do our projects.”
Israel, which laments its brain drain and the defection of young talent to Berlin, where Milky pudding and rent are both cheaper, could certainly learn a thing or two from the steel city. 
The writer was a guest of the Pittsburgh Regional Alliance.