Wednesday, May 11, 2011

The Cleveburgh Dividend

Perversely, Cleveland is trying to be more like Pittsburgh. I suppose such a development is better than the zero-sum thinking that usually dominates the regional rivalry. Via the Null Space Twitter machine, Federal Reserve Bank of Cleveland president Sandra Pianalto spells out what is wrong with Ohio:

“We don’t have world-class universities in Ohio,” she said, adding Ohio State University, Case Western Reserve University and the University of Cincinnati are all “moving up” as research institutions, but haven’t yet matched the contribution that Carnegie Mellon University provides Pittsburgh.

Place envy is the wrong way to frame a conversation about economic development. I suggest looking at what Pittsburgh doesn't do well and, at least as far as Cleveland is concerned, figure out how to compliment your neighbor instead of coveting his assets. Pittsblog to the rescue:

Pittsburgh is an amazingly innovative place. There is no shortage of innovation here, no shortage of ideas, and no shortage of innovators. What Pittsburgh needs more of is the will to move innovation *quickly* into the commercialization pipeline.

What if Cleveland focused on commercializing Pittsburgh innovations instead of investing in CMU Lake Erie? Part of Pittsburgh is already in Ohio. Parts of the state can and do leverage the close proximity of Pittsburgh and its universities.

Failing to acknowledge points of regional collaboration generates bizarre geographic arbitrage opportunities. For example, Cleveland is subsidizing TechBelt air travel by supporting an airline hub:

It was a new experience for Lorain resident, Elsie Kral, too. She lives just 20 miles from Cleveland Hopkins Airport, but drove across the state line 120 miles to Pittsburgh's airport for her trip to Vermont. She saved $300. Kral said it was worth it even with her time, gas and tolls. ...

... The trip to Vegas in August may be cheaper out of Pittsburgh, but it connects in Cleveland.

"It's crazy isn't it?" Kral remarked.

Kral isn't going to Vegas, but a connection in Cleveland saved the Northeast Ohio woman money too. To save $300, Kral drove from Lorain to Pittsburgh. Then, she flew to Cleveland and then to Vermont.

"It doesn't make any sense at all," Kral said.

At least Cleveland didn't lose its hub like Pittsburgh did. Parochial pride is a killer. Cleveland should take advantage of the shortsightedness in the Pittsburgh market. The commercialization pipeline for CMU innovation needn't be in Silicon Valley or Boston. One could build it in Cleveland and both cities would be the better for it.


Anonymous said...

That's a funny comment to make considering OSU receives more research funding than Pitt and Case receives more than CMU according to the NSF.

Jim Russell said...

I was surprised that OSU is not considered to be in the same class as CMU. I don't know enough about Case to comment.

Anonymous said...

Here's the link to the most recent table on research funding that I could find from the NSF site. Note OSU is #10 with $703 million, and Pitt is #17 with $596 million. Case is #38 with $416 million, and CMU is #84 with $211 million.

So how exactly have OSU and Case failed to match the contribution of Pitt and CMU to the local economies when they are the ones bringing in more money?

Jim Russell said...

Pianalto mentions educational attainment and patents. Also, note the omission of Pitt (the centerpiece of Pittsburgh's eds & meds economy).

More NSF dollars doesn't necessarily spillover into a better regional economy. But the relationship is between CMU and the Pittsburgh economy is unclear in this article.