Sunday, June 06, 2010

Competing With Others, Rather Than Ourselves

At long last, there are signs that our region is beginning to recover from the long recession. Thanks to over two decades of economic diversification, the Pittsburgh Region lost fewer jobs than most major regions last year, and the early signs of recovery are very positive: in April, we had the largest monthly job growth of any major region in the country.

However, we can’t take a strong recovery for granted. The fact that other regions suffered so much more than we did means they’ll be competing aggressively to attract new jobs. Despite the many accolades our region has received, we have a number of significant competitive weaknesses compared to other communities, such as high state business taxes, crumbling infrastructure, and a proliferation of municipalities and civic agencies.

Indeed, fragmentation and lack of coordination among governments and civic agencies is one of the major impediments to solving our other problems. We have over 1,000 different governmental entities in the region – more units of government per person than any region in the country. We have at least a dozen separate organizations focused on technology businesses, nine tourist promotion agencies, five workforce investment boards, and dozens of other agencies working on infrastructure issues. All too often, instead of working together to compete with other regions, we’ve fought among ourselves over who will get the biggest slice of a stagnant economic pie.

Yet this is fundamentally one economic region – 20-30% of the jobs in each county are filled by people who live in a different county in the region. We are only diversified on a regional basis; for example, most of the high-paying manufacturing jobs in the region are located outside of Allegheny County, but most of the higher education and health care jobs are in Allegheny County. Our communities have far less clout in Harrisburg and Washington speaking on their own than working together; the City of Pittsburgh is only the 60th largest municipality in the country, and Allegheny County is only the 30th largest county, but the Pittsburgh Region is the 22nd largest region in the nation.

Is it possible for such a fragmented region to work together? One of the best examples of multi-county, public-private partnerships that has existed here was the Southwestern Pennsylvania Growth Alliance, which was created in 1989. Through the Growth Alliance, county commissioners and business CEOs from each of the 10 counties in the region worked together to get state legislation to facilitate cleanup of old industrial sites and to have the federal Environmental Protection Agency force upwind states to stop sending air pollution to southwestern Pennsylvania.

In 1998, under the leadership of Armstrong County Commissioner James Scahill and Dietrich Industries Chairman William Dietrich, the Growth Alliance assembled the first-ever regional priority list of economic development projects. Most of the projects were for industrial site and building development, since a study commissioned by the Growth Alliance showed that the region did not have the infrastructure needed for business expansion. Elected officials and business executives from all 10 counties traveled to Harrisburg together to present the region’s priorities to Governor Ridge, and three months later, he provided over $60 million for capital projects in all 10 counties, 50% more funding than any other region of the state received that year. Subsequent rounds of public-private regional priority-setting more than tripled the funding coming to the region for major economic development projects. Those projects became homes for many of the manufacturing and technology jobs the region celebrates today.

Another outstanding example of regional cooperation was the creation of the Regional Enterprise Tower in 1998 when, under the leadership of Paul O’Neill, Alcoa generously donated its historic former headquarters building to the Southwestern Pennsylvania Commission (SPC) for use by non-profit agencies. The Regional Enterprise Tower has provided the opportunity for dozens of regional economic development and civic agencies to come together in the same building, facilitating informal coordination meetings, enabling small agencies to gain access to meeting rooms and high-speed internet access that they couldn’t otherwise afford, and creating a “one-stop” location for businesses and citizens seeking help.

Unfortunately, the Southwestern Pennsylvania Growth Alliance ceased to exist several years ago, even though our region’s needs for federal and state support have continued to grow. Some civic agencies have left the Regional Enterprise Tower, preferring to find “better” office space than to foster civic collaboration, and now SPC is putting the building up for sale.

If we’re going to address the major challenges facing our region – fixing our roads and bridges, keeping our rivers clean, growing new businesses, and training our children for the jobs those businesses create – our elected officials, business leaders, and civic agencies all need to work together. No one municipality, county, or agency can do it alone.

And if we’re going to get state and federal help in addressing our challenges, the public and private leaders from the entire region need to once again create a regional list of investment priorities and advocate for them together. One of those priorities should be preserving and strengthening the Regional Enterprise Tower; another should be preparing a regional network of high-quality sites and buildings for business location and expansion; a third should be ensuring adequate capital for new startup businesses. Investing strategically now will ensure the region can successfully compete for job creation projects in the years ahead.

(A version of this post appeared as the Regional Insights column in the Sunday, June 6 Pittsburgh Post-Gazette.)


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