Thursday, December 14, 2006

Burgh Diaspora Joins Century Club

For the 100th post, I thought I'd look at the origins of this blog and how the theme has developed. I kicked off the blog proposing a closer look at what I called the "Pittsburgh Nation." I still think that the key to the region's economic development is connecting with the Burgh Diaspora. However, that goal does not mean enfranchising all the expatriates. My 99-post journey reveals to me that I am looking at a subset of Pittsburgh's far flung demographic, what UNESCO calls "Diaspora Knowledge Networks":

The implications of brain gain politics for managing a Nation’s human capital in the sense that management procedures are no longer restricted to efforts aimed at mobilizing resources located within State boundaries but imply, to the contrary, efforts aimed at reaching out over those boundaries to skills and resources located in other national contexts.

I've argued that Pittsburgh needs to look beyond its own region, to assets of mobile human capital that maintain some affiliation with the area. But I was thinking about all the people who left Pittsburgh, mainly the exodus of the 1980s. Diaspora Knowledge Networks (DKN) do not concern people pushed to move by an economic shock. These networks (DKN) are comprised of well-educated people pulled to places of innovation and creativity.

Jon Udell helped to clear up my original misconception, using the more precise term "intellectual capital" instead of the ambiguous "human capital" I've written:

When I met with Jeff Sandquist I had just finished this podcast with Jim Russell. It’s a story about migration and the mobility of intellectual capital, refracted through Jim’s experience with the Pittsburgh diaspora. Neither Microsoft’s nor any other vendor’s technologies are discussed. I’m certain that the ideas Jim lays out in this podcast will inspire new business models for social software, but it’s all rather speculative.

For now, the issue of development is about "Diasporas of Highly Skilled and Migration of Talent." Networking this community is task enough. I do think that the Burgh Diaspora should formalize the pathways of chain migration that already exist, but tapping into the "mobility of intellectual capital" is the best way to build "New Pittsburgh."

Tuesday, December 12, 2006

Homophily Pittsburgh

Last Sunday's New York Times Magazine surveyed the "Year in Ideas." Among the innovative concepts explored is homophily:

“Similarity breeds connection,” the sociologists Miller McPherson, Lynn Smith-Lovin and James Cook wrote in their classic 2001 paper on the subject, “Birds of a Feather: Homophily in Social Networks,” and “the result is that people’s personal networks are homogeneous.” This year, other academics have cited homophily in elucidating everything from why teenagers choose friends who smoke and drink the same amount that they do to “the strong isolation of lower-class blacks from the interracial- marriage market.” Researchers at M.I.T. even published “Homophily in Online Dating: When Do You Like Someone Like Yourself?” which showed that you like someone like yourself most of the time, online or off. So much for “opposites attract.”

My experience as a blogger is a strong example of this phenomenon. I'm busily connecting with like-minded people, represented by the list of links to other blogs and sites I check daily for updates on topics I find interesting. There are a number of sites that exploit how we connect with other people (more or less looking for a reflection), efficiently fostering the linkages we seek.

While social software allows us to network faster, it doesn't encourage us to network better. Instead of reinforcing held ideas, you might branch out to explore the frontiers of yourself and your peer group (choosing quality of interactions over quantity of interactions). The goal is to improve the results of your non-F2F interactions, promoting creativity and collaboration in the process.

Monday, December 11, 2006

England Takes First Look at its Diaspora

The United Kingdom is auditing its diaspora. The great outmigration has gone unnoticed thanks to strong immigration, until now. The British Institute for Public Policy Research published a report that concludes "large scale movements in and out present some important opportunities for the UK as well as challenges for policymakers." The BBC takes a closer look at the British Diaspora phenomenon:

Dhananjayan Sriskandarajah, co-author of the report, said that the scale and spread of the British expat diaspora was probably being driven by the UK's economic strength.

A strong economy was attracting economic immigrants - but also encouraging Brits to broaden their opportunities.

"Britain is truly at the crossroads of the global movement of people," said Dr Sriskandarajah.

"Two-thirds of Britons who leave do so to seek employment abroad - and are replaced by skilled professionals from elsewhere in the world.

"When the going is good, Brits get going."

Ironically, significant outmigration is characterized as an indicator of a strong economy. That wasn't the case for Pittsburgh during the 1980s, but the best and the brightest were (and are) the most able to seek better opportunities elsewhere. The crux of the problem is that many Western Pennsylvania towns and cities are unwilling to cultivate immigration flows.

Regardless, the Institute's report on the British Diaspora is another example of a public policy direction Pittsburgh should mimic. The Burgh Diaspora deserves more study and Pittsburgh should endeavor to formalize the migration flow and emerging network.

Downsizing Pittsburgh

For a city once at the top of the urban hierarchy, shrinking is hard. Those who stay behind, remember what the place used to be. But is a declining population necessarily a bad thing? Youngstown, Ohio is currently asking itself that very question:

If Youngstown has made peace with its smaller self, however, its policy makers are still grappling with the key question: What does it mean to manage shrinkage in an intelligent way? Volumes have been written about how to implement “smart growth.” But what about smart decline? Youngstown may emerge as something of a national laboratory for ideas on how to cope with urban contraction. It’s not that the town’s civic leaders want to be in that position — they simply see little choice. “We’re on our way to accepting some obvious things about what the city is and isn’t going to be,” says Jay Williams, Youngstown’s 35-year-old mayor. “It was unrealistic to think we’ll be a 100,000 person city. But why not be an attractive city of 80,000 or 85,000 that offers a quality of life that competes with other cities across the state and across the country?”

Youngstown learning to love shrinkage is an urban novelty, enjoying some blogosphere fame as well as some attention from the New York Times. But looking more closely at the tale of renewal reveals a familiar story:

Lately, though, a new generation of civic leaders has come of age in Youngstown. Mayor Williams, a home-born banker who also worked as the city’s community development director, was just five years old on Black Monday. Several key positions are in the hands of outsiders whose thoughts aren’t haunted by ghosts of the mills. Anthony Kobak, Youngstown’s planner, arrived from Cleveland in 2000. So did David Sweet, the president of Youngstown State University, who had previously been dean of the urban affairs program at Cleveland State.

A year later, Sweet asked Hunter Morrison to join him. “Many of the politicians and the business leadership who were here when things collapsed either retired, moved or died,” Morrison says. “One thing that happened in the 2010 planning process is people looked around and said, ’You know what? The boss is dead. We don’t have to ask permission anymore.’ ”

Mayor Williams and his cadre of urban scientists moved into a vacuum. Youngstown has developed into a frontier geography, a fringe space, where novel ideas thrive. Cleverly, the city used the anxiety about population loss to engage citizens, activating them in the process. People are talking, but there appears to be little opposition to the renewal scheme of downsizing the city.

As word gets out that all the old bosses have left Youngstown, developers will smell opportunity. I must admit, I'm intrigued:

“Here’s the pitch,” Anthony Kobak says. “Look how easy it is to get out of the city and into the country. We’re right off the interstate. Our housing stock is incredibly affordable. We’re an hour from two international airports. Perfect for telecommuters, retirees, anyone trying to get out of the rat race. It’s just amazing what’s here."

Reads like a perfect place for Globalburgh to set up shop. I'd prefer the Mon Valley, but airport access is vital for global connectivity.

Wednesday, December 06, 2006

Silicon Valley Burgh

In the Winter 2007 issue of the Pittsburgh Quarterly, CMU West Dean Jim Morris advises that Pittsburgh bury the past and head boldly into the future. The point of resonance for the Burgh Diaspora is accepting the going along with the coming:

It’s OK to send some of our older companies to New York where Carnegie and Frick went a century ago. Existing industrial cultures tend to suppress the growth of new ones. Many top-tier high technology cities — Austin, Seattle, Raleigh-Durham and San Diego — started with modest wealth and small industries.

Instead of mourning the loss of Mellon Financial to New York City, celebrate the expansion of Westinghouse and the emerging alternative energy economy. We have witnessed over the last few days the outmigration of the old and the inmigration of the new, positive news for Pittsburgh. As far as I'm concerned, the Pens and Pirates should be next. Of course, I couldn't endure the exit of the Steelers.

The Steelers connect Pittsburgh with its Diaspora, the framework for Morris' suggestion that Pittsburgh "overcome geography with the internet." Connectivity is an emerging metric for gauging economic development. The New Pittsburgh is already thriving in cities around the country. There are Austin Burgh and Raleigh-Durham Burgh, homes to Cool Pittsburgh. Fittingly, Morris offers just the kind of outsider's insider perspective that Pittsburgh so desperately needs.

Tuesday, December 05, 2006

Turkish Diaspora


A key feature of economic policy for developing countries is facilitating the mobility of its people. This perspective is a radical departure from the days of decrying brain drain and attempts to disrupt international migration patterns. Turkey is no exception, seeking to position itself as a major player in the emerging knowledge economy:

The government must play its own role well and get public policies right: The stabilization of macroeconomic conditions must continue, the legal and regulatory framework to encourage entrepreneurship and rapid growth of successful small businesses must be put in place and reform of the public sector itself must continue.

Taking advantage of the knowledge economy requires full participation in the international economy. Essential elements are an outward orientation that encourages an increasingly diversified range of high value exports, better efforts to attract foreign direct investment and stimulating international mobility of highly qualified people.

Such advice applies equally well to Pittsburgh, and any other Rust Belt community. A recent post at Pittsblog suggests an insular and inward-looking (omphaloskepsis) approach to any economic bad news. Like Turkey, Pittsburgh is having a hard time breaking with its nostalgic past, struggling with an identity crisis.

As I've often written, Pittsburgh must look beyond its region for guidance. Furthermore, it should promote the mobility of its citizens. The answer is not within the Good Ole Boys network currently running things, as the Border Guard Bob fiasco indicates.

Monday, December 04, 2006

Service Science Pittsburgh


A couple articles of note in the Sunday New York Times. The first piece is a portion of an interview with I.B.M.’s vice president for technical strategy and innovation. This is another call for higher education to create the kind of workforce today's and tomorrow's employers need. IBM, along with a list of top-notch research universities, is developing a curriculum called "services science":

"A small but growing cadre of academics at universities across the country thinks that IBM is onto something and is ramping up the new discipline of services science. “The economy now consists of 70 percent services. It makes sense that we should concentrate on that,” says Henry Chesbrough, adjunct professor and executive director, Center for Open Innovation, Haas School of Business, University of California, Berkeley.

In a 2003 study on the impact of academic research on industrial performance, according to Chesbrough, three product-based sectors had experienced tremendous impact while two services-based sectors — financial services and transportation — saw little impact. With the biggest growth in the economy coming from services, not products, he concludes that “we can and should apply scientific and academic research to services.”

IBM itself has experienced the dramatic transition to a services-based revenue stream. “In the early1980s, services amounted to less than 10 percent of our revenue. Now, services account for over half our revenues,” says Morris.

In the general U.S. economy, the services sector employs 75 percent of the labor workforce, Morris notes, referencing various published sources. And don’t think that this is just a U.S. phenomenon: In Brazil, Russia, Japan, and Germany, services employ over 50 percent of the workforce. As the workforce shifts to services, “the world is experiencing the largest labor force migration in human history, driven by global communications, low-cost labor, technology innovation, and more,” Morris points out. In sheer magnitude, the shift to a services economy rivals the shift from agriculture to manufacturing at the dawn of the Industrial Age.

When you see large-scale labor migration, there is usually an associated economic transformation. Technological innovation drives the global shock. The drag on this economy is the lack of socialization necessary to get the most out of our new toys, thus IBM's demand for a new discipline in higher education.

The Long Tail blog discusses the second article, which I see as linked to the interview about service science. US intelligence is struggling to the power of information and knowledge exchange of blogs and wikis. The problem is the lack of a transparency culture. The CIA is stuck in yesterday's economy of intellectual property and other corporate secrets. The intelligence workers do not know how to thrive in an open information environment.

I think this is a useful allegory for Pittsburgh. The region needs to open up to new ideas, with the power brokers releasing their stranglehold on policy formation. Turf wars may have once served a useful purpose, but that time is over. Pittsburghers must learn how to collaborate.

Friday, December 01, 2006

Job Mobility Portals

The European Union (EU) is attempting to formalize its immigration flows. Years of a Fortress Europe policy have resulted in a large population of undocumented migrants, straining social services. The plan is to embrace labor mobility instead of trying to block it:

Mr Frattini proposed establishing EU "Migration Support Teams" to help African countries manage migration.

He also announced plans to create "European Job Mobility Portals" in African countries which would provide information for local people about job opportunities in Europe.

The new measures are expected to help "step up the dialogue and co-operation on migration issues with Africa", he said.

Some African officials and aid groups have warned that attracting skilled labour will cause a brain-drain in Africa.

Mr Frattini insisted his plans would not result in a shortage of educated talent in Africa.

"We can avoid the brain-drain by enhancing our assistance to the countries of origin, by promoting initiatives to have a brain circulation rather than a brain drain," he said, quoted by the AP news agency.

Pittsburgh could do the same thing, setting up job mobility portals domestically and internationally. The region should help its talent and youth relocate along established lines of communication. Pittsburgh would attract other economic migrants aiming to tap into the network of labor mobility.

In other words, Pittsburgh would become a staging area for entering the global economy.

Pittsblog lists a few organizations already in Pittsburgh who could help facilitate the desperately needed inmigration. Pittsburgh does have a migration problem, but it mostly ignores the networks best positioned to address the current economic slump. The reason is a lack of policy leadership.

Thursday, November 30, 2006

Celebrating the Burgh Diaspora: Pittsburgh Day

Scots all over the world celebrate St. Andrew's Day. Like the Irish on St. Patrick's Day, the Scottish Diaspora enjoys a spotlight during the displays of national pride. The time has come to cheer, instead of jeer, Scotland's global emigrants:

But there's something unique about Scottish identity; not just a distinctive culture but particular values were taken abroad. They are recognised everywhere, sometimes in jest but more often with respect. It's not just jokes about thrift but an image of venerating education, probity and hard work that the name conjures up. That is something to take pride in and build upon. As a global brand Scotland has its unique selling points. We would be daft to let it pass by.

Excuses are made that the timing falls between Hogmanay and the Festival - both big and important in themselves. For sure progress has been made - yesterday MSPs endorsed a Bill to make St Andrew's Day a voluntary national holiday - but much more could and should be done. While Dublin is at the epicentre for Ireland and the Irish around the world on St Patrick's Day, the same cannot be said about Edinburgh on St Andrew's Day.

Yet it's a huge opportunity not just to promote Scotland but the Capital around the world. It's our day and our chance to parade on the global stage. Truly celebrating St Andrew's Day offers an opening to bring our people together wherever they may be and allow our country and identity to be portrayed to countless millions around the world. As well as the bonding with our kinfolk of old, there's a chance to promote a modern, vibrant Scotland to visit and invest in; with Edinburgh at the heart of it.

I think Pittsburgh has a global brand worth promoting, something not lost on CMU or UPMC. Scotland is making a concerted effort to reach out to its diaspora, a development model Pittsburgh should emulate.

Pittsburgh intends to celebrate its 250th birthday in November of 2008. The City should pick a day for Pittsburghers around the world to reconnect with their heritage on an annual basis. Boston is synonymous with Patriots' Day, a state and municipal government holiday with the Boston Marathon as the centerpiece.

As long as there isn't an effort already in place, let this post serve as the launch of a "Pittsburgh Day" campaign.

Wednesday, November 29, 2006

Freelance Pittsburgh


The Mobile Class needs a champion (and a good cupcake). Sara Horowitz could be that person:

The conventional wisdom is that, for better or worse, trade unionism is in irreversible long-term decline, at least in the world's leading economies. In America, for example, only 12.5% of the workforce now belongs to a union and a mere 7.8% of private-sector workers, down from one-third in 1960. Most forecasts predict that this trend will continue, perhaps until unionism is confined to museums and history books. But Sara Horowitz is determined to prove them wrong.

Ms Horowitz is trying to reinvent the trade union to meet the needs of today's workers—specifically, the fast-growing army of freelancers who flit from one employer to another. These workers have largely been ignored by the traditional trade unions, which are wedded to the shrinking band of workers who expect to spend the bulk of their careers with one employer, particularly in the public sector, where over one-third of workers are still unionised. In 2001 Ms Horowitz launched what is now called the Freelancers Union. Today, with 37,000 members, it has already become the seventh-largest union in New York state, and could soon be far bigger. In the next few weeks it will open a branch in Connecticut, with three more states to follow by next spring. After that it has plans to expand into the rest of the country, and perhaps even beyond.

While mobility increases economic opportunity, the windfall often comes at the price of rights. Newcomers do not enjoy the same strength of voice as the natives. Furthermore, those willing to move to improve are often scapegoated as the source of a region's woes.

Anything that could help increase the mobility of labor would strenghten the hand of the worker. Unions often have been in the position of anti-immigrant, fearing outsiders willing to toil for less pay. The result is a poorly developed legal regime that protects economic migrants, unions pitted against the very workers it should be helping.

The Freelancers Union is a bit like a diaspora network, tapping into the resources of a large and talented group. And also akin to immigrant groups, cities such as Pittsburgh could position themselves to attract this type of employee.

The Freelancers Union is looking to expand. Why not in Pittsburgh?

Tuesday, November 21, 2006

China Burgh

I'm thrilled to see a series on China in the Pittsburgh Post-Gazette. I appreciate the opportunity to learn about how Pittsburgh is connecting with an emerging geopolitical and geoeconomic powerhouse:

China is the first gold rush of the 21st century, the place to go if you are adventurous and want to get rich fast. For Mr. Martin and his 27-year-old business partner, Pittsburgher Josh Weiner, their get-rich-quick scheme centers on persuading distributors, restaurateurs and bar owners to put imported beers in the hands of young, status-conscious Chinese professionals looking for ways to flaunt their wealth in this city of 19 million.

Mr. Weiner is among the thousands of foreigners, including many Pittsburghers, hustling to make money from the most dramatic international story of our time -- Red China's embrace of freewheeling U.S.-style capitalism.

At least 20 big Pittsburgh-area companies -- from PPG Industries to Alcoa to H.J. Heinz to Allegheny Technologies -- have offices or operations in China, joining about 49,000 other American firms hoping to capitalize on China's massive growth while avoiding the pitfalls of working in a country where the ways of doing business are opaque and complex.

Chris Briem notes the likely economic windfall for the Pittsburgh region if Westinghouse is allowed to service the rapidly growing energy markets in India and China. The Post-Gazette series details the opportunities in China. Either country represents the potential for high-return investments, even for beer distributors.

Pittsburgh should continue to explore ways to increase its global connectivity. Pittsburgh might tap the Indian Diaspora, a network with strong links to Pittsburgh. This is also a selling point to keep Westinghouse in the region when it expands its operations. Pittsburgh could be developing as a global energy player, thanks to being a leader in clean coal burning and nuclear technologies and the innovations in green architecture.

Monday, November 20, 2006

Listening to the Burgh Diaspora


I never tire of reading or hearing about the ubiquity of Steelers Fans around the country:

I've never been to a city that didn't have a Pittsburgh bar. I travel a lot for my job and in the last year I have been to Orlando, Houston, Phoenix, Sedona, The Grand Canyon, Chicago, Nashville, New York City and San Francisco. I have seen Steelers fans, Roethlisberger jerseys and that beautiful three-diamond logo in all of these places.

While The Grand Canyon was one of the most spectacular sites I've ever witnessed, seeing someone holding a Terrible Towel while looking at the canyon at sunrise was truly a sign from God.

Everywhere I go I see black and gold. So distinctive. So eye-catching. It always makes me smile. Like a homing beacon beckoning my inner Steelers soul.

Regional Polish Diaspora

Since joining the European Union, Poles are aggressively exploring their newfound labor mobility. Meanwhile, Poland struggles to find workers and now looks to the East to replace the recently departed. Perhaps Poles will return home some day, but right now the Polish Diaspora is emerging as a political and economic force across Europe:

A Polish nurse is running for Parliament in Iceland. A British labor union is establishing a special section for Polish immigrants. The Catholic Church in Ireland is going through a revival as Poles flock to Sunday services.

New Polish-language newspapers are flourishing in Britain and Belgium, France and Sweden, Ireland and Germany, catering to Polish craftsmen, engineers, teachers, nurses, plumbers, architects, maids and drivers. These newspapers are the lifeblood for newcomers seeking to find cheap housing, ferret out Polish food shops and meet teachers to learn their new language.

This is the “second” Poland, a diaspora of 800,000 Poles estimated by officials here to have left the country since it joined the European Union in May 2004. The exodus is believed to be one of the largest migrations by Europeans since the 1950s, when a wave of Irish crossed the Atlantic to escape poverty.

I hope to help the Burgh Diaspora build a similar network, the "lifeblood" of Pittsburgh's substantial Mobile Class. The Pittsburgh migration is somewhere between the more mature "Return to Ireland" movement and the relatively new mass exodus of Poles from Eastern Europe.

That Pittsburgh expatriates have not connected and organized as Poles have done is an opportunity squandered.

Friday, November 17, 2006

Global Resilience Pittsburgh

Pittsburgh should aim to increase regional resilience. Esquire magazine recently named Enterra Solutions CEO Stephen DeAngelis as one of the "Best and Brightest" for 2006. DeAngelis suggests that increasing connectivity is the best way to deal with global forces that disrupt economies:

This fall, Enterra teamed up with Oak Ridge National Laboratory, a Department of Energy site outside Knoxville, Tennessee, to form the Institute for Advanced Technologies in Global Resilience. America, the institute reasons, will protect itself best not by throwing up firewalls and digging moats but by becoming more connected, hyperconnected. The tighter and more far-reaching the network, the stronger its ability to absorb a vertical hit 'like September 11, Hurricane Katrina, or an outbreak of avian flu' and minimize the ripples spreading across the country. The more resilient we become, the faster we respond and the faster we recover.

Pittsburgh could do a better job of promoting global connectivity. Peter Taylor and Robert Lang produced a report for The Brookings Institution titled, "U.S. Cities in the 'World City Network'." Of the American cities that rate worldwide, Pittsburgh has the lowest global connectivity.

Pittsburgh's orientation is domestic, the top 10 cities as follows: Washington (DC), Cleveland, Dallas, Philadelphia, St. Louis, Charlotte, Boston, Minneapolis, Indianapolis, and Kansas City. The most important international city is Rotterdam. I'm guessing that the Burgh Diaspora has a lot to do with Pittsburgh's connectivity profile. Regardless, Pittsburgh does suffer from a relative lack in global connectivity, which may undermine its economic resiliency.

Thursday, November 16, 2006

Enfranchising the Diaspora

A number of countries are attempting to build bridges between the homeland and their diaspora communities. But embracing the movement of people is proving difficult for government policymakers. The rooted often view migrants with a great deal of suspicion. In other words, people don't trust outsiders, particularly those between places.

While mobility often results in domestic anxiety, there is great potential for development. The difficulty is figuring out how to tap into migration. One response is providing transnational populations with a political voice in the host country:

Latin American states have taken the boldest steps in recognising the essentially transnational character of contemporary migration: many of "their" migrants live simultaneously in the host country and the country of origin, through frequent travel, cheap communications, active cultural and social associational life, and consumption habits.

In response, several countries in the region (El Salvador is one example) now have a ministry dedicated to the affairs of the diaspora, offer dual nationality and have even amended their constitution to enable diaspora communities to directly elect their own representatives to sit in the legislature. These states understand that if migrants are to scale up their contributions to the development of their home regions, the originating states need to maintain a meaningful social contract with them.

In the United States, there are a number of transregional communities cut off from their hometown. Pittsburgh could formalize its relationship with the economic refugees scattered around the United States. What we need is a mayoral candidate who has the vision to mobilize this tremendous resource of human capital.

Wednesday, November 15, 2006

R2I Pittsburgh

During my conversation with InfoWorld's Jon Udell, he broached the subject of the Return to India (R2I) Movement, a diaspora experience worth investigating. Save the tech boom in Bangalore, there are a number of similarities between the Indian Diaspora and the Burgh Diaspora. However, I'm not convinced that Pittsburgh expatriates harbor a similar burning desire to return to their homeland.

Nonetheless, perhaps the Pittsburgh region would benefit from Pravasi Bharatiya Divas:

Pravasi Bharatiya Divas aims at bringing the expertise and knowledge of the Indian overseas community to India and integrating it into India's development process. Pravasi Bharatiya Divas is focused to highlight networking opportunities and collaborating them to confer a mutual developing platform. Generating this synergy to excel together towards a bright India along with the Indian overseas community is what Pravasi Bharatiya Divas 2007 proclaims with its head held high.

Think of Pravasi Bharatiya Divas as a government sponsored festival in the homeland that celebrates the diaspora. Some Indians might be enticed to return, while others seize the opportunity to do business. At the very least, Pittsburgh could signal to its own diaspora that it is ready to foster a relationship.

Monday, November 13, 2006

Economic Policy Pittsburgh

The best Pittsburgh can do to stimulate the regional economy is to push on a string. In the face of globalization, economic policy is increasingly impotent. Even investment in innovation is unlikely to generate the desired return:

The truth is, China and India are increasingly attractive places for companies to do research and development (using ideas, perhaps, that were originally developed using U.S. tax dollars). Money is following as well, with U.S. venture capitalists investing more than $400 million in Chinese and Indian companies in the third quarter alone, according to the National Venture Capital Assn. There's a growing sense that at a time of scarce resources, the U.S. may not be getting enough bang for its buck from R&D spending. "The question about funding basic R&D for health care is the same as for funding other basic R&D," says Robert B. Reich, Labor Secretary under Clinton and now at the University of California at Berkeley. "How long can and should the U.S. continue to subsidize the rest of the world?"

Venture capital does not understand regional or national loyalty. Public dollars spent in Pittsburgh can and will flow overseas, with local tax payers left wondering if they will ever see any results. Politicians are unlikely to offer voters a choice that can help improve the economy, with foreign nationals reaping the benefits.

The counterintuitive approach is to embrace all kinds of regional capital outflows, more intensely linking Pittsburgh to the global economy. Pittsburgh should look for investment opportunities wherever they may be, which is likely well beyond the Three Rivers.

Sunday, November 12, 2006

Pittsburgh 3.0

Just when I thought I understood Web 2.0, along comes the New York Times to tell me I've been talking about Web 3.0 all along:

Web 2.0, which describes the ability to seamlessly connect applications (like geographic mapping) and services (like photo-sharing) over the Internet, has in recent months become the focus of dot-com-style hype in Silicon Valley. But commercial interest in Web 3.0 — or the “semantic Web,” for the idea of adding meaning — is only now emerging.

The classic example of the Web 2.0 era is the “mash-up” — for example, connecting a rental-housing Web site with Google Maps to create a new, more useful service that automatically shows the location of each rental listing.

In contrast, the Holy Grail for developers of the semantic Web is to build a system that can give a reasonable and complete response to a simple question like: “I’m looking for a warm place to vacation and I have a budget of $3,000. Oh, and I have an 11-year-old child.”

Under today’s system, such a query can lead to hours of sifting — through lists of flights, hotel, car rentals — and the options are often at odds with one another. Under Web 3.0, the same search would ideally call up a complete vacation package that was planned as meticulously as if it had been assembled by a human travel agent.

If Web 2.0 is a revolution of any sort, a thought that might elicit a laugh from cutting-edge website developers, it is the transformation of content consumers to content producers. At least, that's how I see it. Web 3.0 would add value to all these consumer inputs.

While we wait for a smarter search engine to cut through all the noise, research librarians already have a good understanding of how to quickly and effectively search a large catalogue of information. Also, online communities of collaboration do an efficient job of sifting, with amateurs honing expertise in a specific subject matter. In other words, somebody out there knows exactly where to look to find the perfect answer you need.

Thursday, November 09, 2006

Can Pittsburgh Change Course?

Pittsburgh needs to start thinking about itself in a global context. When local columnist Dan Simpson voices concern about China's growing presence in Africa, Pittsburghers should take note. The problem is figuring out how Chinese oil interests in Sudan affects a local in East Liberty. Teasing out these connections would give someone cause to read the Pittsburgh Post-Gazette for international coverage instead of heading to the websites of the New York Times or Washington Post.


Aggregated Globalization Scores








The big news yesterday was the resignation of Donald Rumsfeld as Secretary of Defense, signaling a dramatic shift in US foreign policy:

Beyond the immediate issue of Iraq -- and Afghanistan, where the Taliban have re-emerged as serious menace -- are larger questions of how the United States will fight the longer term battle against terrorists, rogue nations and nonstate actors that many analysts believe have supplanted traditional nation state warfare as one of this century's biggest threats.

Rumsfeld's answer to that call was dubbed "Transformation," which he described in a 2002 speech as a necessary response to the events of Sept. 11.

"Our challenge in the 21st century is to defend our cities and our infrastructure from new forms of attack while projecting force over long distances to fight new and perhaps distant adversaries," he said. "Our goal is not simply to fight and win wars, it is to try to prevent wars."

But many analysts said that despite the cutting edge rhetoric and early successes such as the tight integration of U.S. Special Forces with Northern Alliance fighters in Afghanistan, Rumsfeld focused too much on gee-whiz technology and heavy air power instead of human intelligence and boots on the ground.

"All of 'Transformation' was about building a force that was superb at fighting the Soviet Union in the Sahara Desert," Hammes said. "Unfortunately, that's no longer the kind of war we are in or will be in for the next 10 to 15 years."

Part of that emphasis came from a concern shared by Rumsfeld and others in the administration about China, which they saw as an emergent military threat and a "near peer" to the United States, said Thomas Barnett, author of "The Pentagon's New Map" and "Blueprint for Action."

"The fixation on China, which was strong with this administration when it came in and certainly remained strong with the China hawks under Rumsfeld and with Rumsfeld himself became the excuse for over-feeding the war force and starving the occupation force," he said. "The Air Force and the Navy probably get happier than they need to be ... and the Army and the Marines are left hanging."

Gates, a former director of the CIA, might bring a different perspective to that equation, in the view of some analysts -- with possible ramifications in Iraq and beyond.

Optimistically, Rumsfeld stepping down signals a change in how we view China, an ally in the promotion of globalization instead of an enemy competing for resources. To the extent that Pittsburgh is linked to the global economy, this would be a significant paradigm shift. In this sense, Pittsburgh might view China as an opportunity.

The change in course would be away from protectionism and fears about economic globalization. While quaint, Pittsburgh's predominantly parochial mindset stands in the way of regional development and progress. Withdrawing from Iraq and the rest of the world would be a grave mistake.

Friday, November 03, 2006

Resilience Pittsburgh

Pittsblog pinch hitter Chris Briem served up a dish of optimism about Pittsburgh startups. While Briem stopped well short of joining the cheerleading squad, the part of the article that caught his eye piqued my interest:

Like all such pieces it captures a lot of big issues that it nowhere near has enough space to treat appropriately. So skipping a lot of the economic development story there, I do have to say I appreciate Max Kings quote at the end..

``It's remarkable to see how resilient the people are.''

If you are interested, my own comments on a similar theme were in this oped a few years ago: It was twenty years ago today.

The point is that Pittsburgh now demonstrates significant economic resiliency and is now better prepared to deal with structural shocks like the one that occurred during the 1980s with the collapse of the industrial complex. Briem's commentary highlights what I view as a tension in development circles between the paradigms of sustainability and resilience.

I'll say upfront that regional stakeholders should promote resiliency, not sustainability. The difference between the two perspectives concerns economic cycles. Sustainability would lessen the boom and bust, promoting small and more manageable growth. Resiliency allows a region to ride out the bust, emerging better positioned to take full advantage of the boom phase.

Shocks to the economic system are inevitable, at least in the near term. I suppose advocates of sustainability would claim that their approach can mitigate all types of shocks, but that strikes me as unrealistic. Meanwhile climate change, terrorism, and political turmoil pose constant threats to increasingly integrated markets around the world.

Thursday, November 02, 2006

Globalization's Mobility Imperative

The emerging discontents of economic globalization are America's middle class. During the reign of the United States as global superpower, capital flowed abroad and flourished in frontier marketplaces:

On Oct. 28, 1998, the US Congress established a commission that brought together highly respected experts to examine the effects of the country's trade deficit and the withering away of industrial labor. Donald Rumsfeld, the current US defense secretary, then-US Trade Representative Robert Zoellick, Anne Krueger, the number two at the International Monetary Fund (IMF) and Massachusetts Institute of Technology (MIT) Professor Lester Thurow provided their assessment of the situation at the behest of the president.

Things were going swimmingly for the Americans until the end of the 1970s, the commission report concluded. Family incomes grew virtually at the same rate in all sections of the population during the first three decades after World War II, with those of the poor growing slightly faster. The lowest fifth of US society saw a 120 percent increase in incomes, the second fifth 101 percent, the third 107 percent, the fourth 114 percent and the fifth 94 percent. It was as if the American dream had manifested itself in statistics.

But then the trend reversed, and not just in the United States. Japan had awakened, and global trade had shifted directions. Capitalists left their home turf and went looking for suitable locations to invest in. Direct investment abroad - which had been more or less in harmony with exports until then - rose dramatically.

Until then, investment abroad had served mainly to boost the export of German, US or French products. But then factories themselves began to be relocated, mainly to cut manufacturing costs. Production for the world market became increasingly global itself, which led to a redistribution of capital and labor. Global production increased by a solid 100 percent between 1985 and 1995. But direct investment abroad increased by 400 percent during the same time period. Capital's new mobility began to make the other factor of production, labor, restless, too.
To the extent that labor can chase capital defines the ability to join the ranks of the middle class. In other words, those who refuse to move in order to improve will lose. Stories of brain drain voiced around the United States indicate strong systems of education, empowering people to relocate in areas of prosperity.

I suspect relocation will increasingly mean leaving the country with global integration being the primary metric of economic success. Venture capital flowing out of Silicon Valley presage this landscape. The winners of that game are members of a diaspora, moving deftly between clusters of innovation.

Tuesday, October 31, 2006

Great Lakes Pittsburgh


As posted at Convergence, the Brookings Institution has released the report on revitalizing the economy in the Rust Belt. The region is broadly defined, save including Canada, which presents a data mismatch (at least that is the rationale offered). I support the expanded conceptualization of the mega-region:

The Great Lakes region of the United States is a unique economic, social, and cultural area made up of all or part of 12 states, including the western portions of New York, Pennsylvania, and West Virginia; northern Kentucky; all of Ohio, Indiana, Michigan, Illinois, and Wisconsin; and eastern Minnesota, Iowa, and Missouri. Home to 97 million people, this region is defined by a shared geography and natural resources, a dynamic political and economic history, and strong principles of social organization that together have shaped its growth and development. One of the largest industrial production centers and consumer marketplaces in the world, this highly urbanized “mega-region” is a vital global hub of economic activity and growth.

The report buys into the understanding of 10 mega-regions in the United States. The Great Lakes area is culturally Midwest with economic activity along the corridors of I-70 and I-80. The Brookings report indicates that a transmegapolitan identity could be cultivated thanks to a shared geography.

Lagging behind the apparent economic integration and cultural affinity is the political infrastructure. Brookings is calling for political cooperation among the many regions with ties to the Great Lakes. I'm not optimistic that the interregional cooperation is forthcoming given the lack of intraregional consolidation in the Rust Belt. "Merely" coordinating the large number of political entities of Allegheny County looks like mission impossible.

Sunday, October 29, 2006

Real Estate Migration


Dominicans are on the move. That alone isn't news, but their secondary migration from New York City to Reading, PA is the subject of a recent New York Times article. The story is about relocating far enough outside the big city in order to afford a first home:

Reading, an old industrial town once known for its textile mills, has had a significant Latino population since Puerto Ricans seeking jobs came in the years before World War I, according to Jonathan Encarnacion, the executive director of the Centro Hispano Daniel Torres, a local nonprofit organization.

Mexicans and others have also come in recent years, but the Dominicans are unique in that most — some estimate 90 percent — of them come not directly from the Dominican Republic, but from the New York City area, what social scientists call secondary migration. “We saw a spike after Sept. 11,” Mr. Encarnacion said. “Ask them why they come here, they say, ‘We wanted to get away.’ ”

But many places are “away,” and they chose Reading in no small part for the modestly priced houses. The average house in Reading has risen from $47,000 in September 2004 to $73,000 in September 2006. In New York City, those numbers are called down payments.

This somewhat remarkable migration pattern is part cheap real estate and part chain migration. Pittsburgh has one variable of the equation, affordable housing. Missing is a core community to ease the transition to a new place. Without an established network, one of Pittsburgh's greatest assets will fail to attract any substantial human capital.

Positive publicity will not help Pittsburgh attract new people without tacit knowledge of the region.

Saturday, October 28, 2006

Boomerang Burgh



Null Space highlights two articles about Pittsburgh found in some of the nation's major newspapers. The second one starts out with a member of the Burgh Diaspora disparaging his hometown:

A while back I was sitting in a cafe near a couple of freshly minted techie types. I happened to overhear -- OK, after a while I strained to overhear -- as one explained to the other how he'd loathed his Pennsylvania hometown for its stodgy work ethic, its Middle American attitudes and so on.

He summed up by breezily remarking, "Another generation of steelworkers would have to die before I'd go back to Pittsburgh."

If Pittsburgh is going to rebrand itself, setting the record straight, these cafe ambassadors are key. Many Pittsburghers do not want to return. The romantic notions may not extend beyond regional comfort food and the Steelers. This is likely the first and last impression of Pittsburgh for the audience, other young knowledge workers.

That concern aired, anyone fresh out of college will express some disdain for their hometown. No region is immune to this perspective. Anywhere but Pittsburgh is another case of the grass being greener over the horizon. The author of the newspaper article expresses an appreciation of Pittsburgh's history and character that many young people who left the region will eventually embrace.

If Pittsburgh does experience some significant return migration, the demographic will trend towards the more mature workers.

Immigration Law Pittsburgh

While Iowa continues to stumble along with addressing the People Drought, North Carolina is embracing a solution:

As immigration policies continue to make it harder to import and naturalize foreign workers, more businesses -- from small restaurants to large multinational corporations -- are turning to lawyers for help. As a result, more law firms are expanding their immigration practices, adding immigration consulting and defense work to the more traditional range of processing applications for visas and "green cards," permanent-resident status.

Corporate immigration lawyers are particularly pervasive in the Triangle, where large foreign companies such as Royal Bank of Canada, GlaxoSmithKline and Bayer need help shipping workers to and from the corporations' home countries. Local technology firms also fuel demand as they plumb for software and biotech professionals from Europe and Asia and open foreign offices.

"Global mobility is the business trend," said Steven Smalley, a Raleigh partner with Ogletree Deakins Nash Smoak & Stewart of Atlanta. The company's Raleigh-based immigration practice has expanded to more than 50 lawyers and paralegals from a handful in 2001. This month, it took the practice global by partnering with Emigra Group, a Vienna, Va.-based immigration consulting firm that operates in nine countries.

I doubt many politicians running for office this November could add attracting foreign nationals to their platforms, so solutions to the knowledge capital shortage will likely stay in the private sector. When demographics force the issue, we can look to North Carolina for guidance on how to promote and manage international migration.

Regardless, any region should embrace the business trend of "global mobility." I haven't heard of any politicians discussing this. I also haven't seen many economic plans that put this trend at the core of their vision. Meanwhile, the talent to manage immigration is pooling in the Piedmont.

Friday, October 27, 2006

Human Capital Conflict

In the semi-arid Front Range, water scarcity is a big issue. Poor access to any resource can starve a regional economy, and human capital is no exception. Tapping Convergence again, I notice that the Iowa gubernatorial debate includes the dire prospect of a People Drought:

Whoever becomes governor will need to shift gears, so that drawing people to Iowa becomes not just the ancillary part of an economic-development strategy, but the core of it.

As the anti-immigration fervor heats up, a number of states are facing a massive labor shortage in the near future. Foreign workers will fill some of the slots, but Europe and Canada will be in direct competition with the United States for increasingly rare talent. If you think your region is suffering from brain drain now, just wait a few years and see how bad it gets.

The demand for knowledge capital will only increase. Regions will compete for people just as they now compete for businesses that promise job opportunities. Labor mobility is far from frictionless. The ability to bring the work to the employee should be a competitive edge. Otherwise, be prepared for another large-scale guestworker program. With diversity comes the needed youth.

Thursday, October 26, 2006

Balkanized Pittsburgh

I stumbled upon a goodbye to Pittsburgh published on the web. I wanted to make sure I wasn't rehashing a tired story, throwing the title into a Google search. The results added to my snowy day melancholy. A great number of Pittsburghers have made a public goodbye. I don't know if this is remarkable or not, but I read quite a few of them.

Returning to my tale of interest, a former member of the Indian community in Pittsburgh relates an important part of the diaspora community:

Carnegie Mellon has several Indian students, like any other place. Even though everyone has his or her own life, we operate as a community to a good extent. We are a really small community, the college campus hardly the size of a usual engineering college in India. Fortunately, we don't have a caste system of IITs vs others, metallurgists vs computer scientists and the more blatant, Northy vs Southie divisions. People are so much into their research and courses that they don't have time for petty ego trips. Meeting other desis tend to be pleasant and the norm is that you try to be friendly with your fellow citizens. You can literally walk into anyone's apartment and will be asked to stay over for dinner.

I've made a few comments about Pittsburgh being a divided city. Beyond the Burgh, there are no North Side vs. South Side divisions. Members of this diaspora cross the rivers all the time. Often you have to leave a place before learning to appreciate a larger sense of place. There is a "desi" experience for Pittsburgh expats, but it hasn't been articulated as richly as the wealth of details available about the lives of the Indian Diaspora.

If there is a greater Pittsburgh identity, a well-integrated region, it is in the minds of the Burgh Diaspora.

Wednesday, October 25, 2006

Pioneer Pittsburgh


If you want to Save Our City, first you have to Save Our Brewery. The Burgh Diaspora to the rescue:

An East Liverpool, Ohio, businessman turned social entrepreneur is offering to help save a bankrupt Pittsburgh icon.

Craig E. Newbold, 58, who operated a successful computer consulting business in the Seattle area, said he has offered Pittsburgh Brewing Co. a line of credit up to $500,000 to help preserve jobs in the region.

"I was impressed with his (Pittsburgh Brewing President Joseph R. Piccirilli) interest in saving the brewery and keeping that icon in Pittsburgh," said Newbold, who was raised in the East Liverpool area and worked in Pittsburgh and McKeesport.

Newbold is an archetype of the entrepreneur pioneer returning home, bringing his experience abroad with him. Newbold's success in Seattle allows him to inject fresh ideas into the Pittsburgh region. Ideally, he is forging the path for other members of the Burgh Diaspora to complete the loop of brain circulation.

Pittsburgh is ripe with investment opportunities for people with enterprise know how. But most of this knowledge capital is spread throughout the United States. Whatever Pittsburgh needs, there is an expatriate out there who can fill that niche.

Tuesday, October 24, 2006

Venture Capital Geography


Pittsblog already tagged the Sunday New York Times article about Silicon Valley venture capital not straying more than 20 minutes from home. I'm not so much interested in the rule as in the exception:

Sequoia makes its preference for the 20-minute rule almost explicit, telling applicants whose companies are at the “seed stage” (receiving less than $1 million) or “early stage” ($1 million to $10 million) that “it is helpful if the company is close to our offices” because they “require very frequent contact.”

Kleiner Perkins has only one office, the one in Menlo Park. Sequoia has reached out to entrepreneurs more considerately, providing five offices. But only one of the five, the one in Menlo Park, is in the United States. The others are in China (two), India and Israel.

If you have a brilliant idea for the New New Thing and want Sequoia to provide its funds and blessing — using the same golden touch provided not long ago to Google’s founders — you would be much better off in Beijing, where Sequoia has an office, than in Boston, where it does not.

Why does Sequoia have an office in Beijing but not in Pittsburgh or other American cities? China, India, and Israel are countries where former Silicon Valley entrepreneurs are now incubating start-ups in the places where they were born. These countries provide unique growth opportunities. There is little reason or ability for these companies to relocate to the United States. In other words, the 20-minute rule is untenable.

That isn't the case domestically. If you want Silicon Valley venture capital, you'll have to move there. My point is that this money moves along an established network of trust. Investments in far off countries demonstrate that the risk isn't about a lack of proximity for the start up to the funder. If a bunch of entrepreneurs living in Silicon Valley decide to move back to their homeland in Pittsburgh (if there is such a notable group), they can still tap their contacts in California. I wouldn't be surprised to see a venture capital firm open an office in Pittsburgh if there was sufficient demand for it.

Monday, October 23, 2006

Integration Pittsburgh


The Convergence blog spotlights a mega-region (25+ million people) development project that includes Pittsburgh. The Brookings Institution is spearheading the Great Lakes Economic Initiative. The centerpiece innovation is fostering a new geographic identity, the Great Lakes MegaRegion. The map to the right is the result of the debate to define the boundaries.

The defining characteristic of this mega-region is the industrial urban center struggling to transition to the emerging knowledge economy. Chicago is the glaring exception and serves as the gateway to other mega-regions around the world.

Excluded are the working class towns of Buffalo, Rochester, and Syracuse. The argument is that these cities are tied to the Northeast MegaRegion, with New York sitting atop the urban hierarchy. A line was also drawn at the Canadian border because of the incongruent data available. Toronto is a global city on par with Chicago and the surrounding Canadian hinterlands share the struggles of the Rust Belt. I would welcome a transnational conception of the Great Lakes mega-region.

Of interest to this blog are the number of diasporas emanating from this area. People from places such as Cleveland, Buffalo and Detroit are scattered all over the country seeking economic opportunity. The story should sound familiar to Pittsburgh, many cities facing the same plight. There is a wealth of human capital for this mega-region to tap and we have the technological means to do so.

I like the sound of it: The Great Lakes MegaRegion Diaspora Project.

Wednesday, October 18, 2006

Emergence Pittsburgh


The definition of Pittsburgh is expanding, even if the population of Allegheny County continues to shrink. We need new data to keep up with globalization. State-centric metrics mask global flows of capital. What is emerging is a network of cities, places that have more in common with each other than they do with their host countries.

Geographer Peter Taylor is busy generating the numbers we need to understand the developing world system:



1. The globalisation premise is that contemporary social change is proceeding at an unprecedented rate and key processes behind it are operating at a global scale and are fundamentally trans-state in nature.

2. The data deficiency premise is that although there has never been as much data for describing the world as exists today, the vast majority are collected for states and are about states and as such facilitate international comparisons but not the study of trans-state processes.

3. The organisation lacuna premise is that while many social scientists have recognised the problem and have had to either make do with international data or have created their own project-specific data, there has been no centre acting as a clearing house for the critical research issues that arise from the mismatch between a trans-state world and state-based data. The Loughborough Global Observatory aspires to fill this lacuna and be that clearing house.

Our mission is to provide a service to the world wide social science community as the centre with information about access to trans-state data.
The research underpins new maps of the world that stress the importance of global cities as the primary economic engines, supplanting the nation-state.



Pittsburgh makes the cut in the above map of the global urban hierarchy. This is a visual of the global connectivity of cities, a measure of 'extra-territorial' service activity. Pittsburgh is a 5th-tier city, the lowest rung measured. You can find the city key here (bottom of page).

While a more precise understanding of regional assets is useful, we should also measure global integration. How we can best do this is up for debate, but taking stock of Pittsburgh's interregional relationships is just as important (if not more so) as any regional economic indicator. With this in mind, I dream of a day when Pittsburgh counts its Diaspora when assessing the well-being of the region.

Tuesday, October 17, 2006

Churn Pittsburgh

You either move up, or you move out, with the latter being much more likely. Large corporations and businesses are contributing to the trend of increasing labor mobility. The Future of Work is ever shorter tenures at one firm and the never-ending quest for better employment opportunities:

Job tenure has decreased markedly in all age groups over the last two decades - but only among men. Both boom and bust contributed. Economic growth encourages job-hunting, job hopping, and job-shopping. Recessions foster downsizing and bankruptcies. Jobs are mainly obtained through nimble networking. This is especially true at the higher rungs of the income ladder.

Still, the median figure for job stability hasn't changed much since 1983 in both the USA and the UK. Moreover, some jobs - and employment in some states - are far more stable than others. Transformation across all professions took place among workers younger than 32 and workers with long tenure.

The job stability of the former decreased markedly. By the age of 32 they had already worked for 9 different firms, according to figures published by "The Economist". The job security of the latter has vanished as firms, until less than 2 years ago, succumbed to a "youth cult" and inanely rid themselves of precious social and professional capital.

Another phenomenon is the emergence of a Hollywood-like star system among ultra-skilled workers - both technical and executive. Many of them act as freelancers and get paid with a mixture of cash and equity. They regard themselves as a brand and engage in brand marketing on a global scale.

The game is to attract and retain "ultra-skilled" workers while turning over (churning) the low-level position with younger and cheaper labor. But there are problems with this approach to faster, better, and cheaper.

First, even low-level employees serve as important repositories of firm tacit knowledge. Despite attempts to homogenize the worker bees and make their every move visible to management, considerable human capital is lost in the churn. Transforming relationship-dependent services into a flowchart of interchangeable parts is both expensive and difficult.

Second, the churn approach under-utilizes workforce skills, the phenomenon I term "over-educated, under-employed." Employees are often bored and disengaged, yet better versed in the day-to-day operations than their managers. Corporations might benefit from real-time, frontline decisions, but the current hierarchal business model does not support such innovation.