Monday, May 16, 2011

Cleveland And Pittsburgh

The remarkable Rust Belt turnaround continues. As the Great Recession continues to ravage large swaths of the Sun Belt, the industrial dinosaurs of the North have emerged as lean and mean. The Cleveland upswing:

“The fundamentals of the region are better than people thought five or 10 years ago; we've finally reached bottom,” Mr. Waltermire said, embracing the notion that Cleveland appears to have shed the last of its dying industry and is following the same path of recovery as Pittsburgh.

There, the sweeping away of the steel industry in the 1980s has allowed new-economy businesses and the young workers attracted to those businesses to be the face of the Pittsburgh economy.

Mr. Waltermire used Akron as an example of the transformation he's seeing. There, total employment has grown over the last decade, the only metropolitan area in Ohio to see such growth, he said.

“Akron hasn't been the rubber capital for 10 years,” he said. “The diversification, while painful, is paying off.”

Whatever Rust Belt cities were doing, many observed it wasn't working. But regions don't turn on a dime. It's more like a supertanker changing direction. The course correction starts well advance.

Critics, cynics, and skeptics aren't patient enough. The typical time frame is one term in office for a politician. Whereas urban planners think in decades. When any city blossoms, those seeds were sown long ago.

Interestingly, Cleveland is beginning to embrace its journey by admiring its rival in Pittsburgh while touting the success of neighboring Akron. Life is elsewhere. Despite the size differences, Akron and Pittsburgh have a lot in common. Go ahead and lump Rochester, NY in with that group. These manufacturing centers are now more "college towns" than anything else. You can see that in the educational attainment rates.

Three important facts emerge that from the preceding discussion of what has happened in Akron and Rochester in the last twenty years. First, in both places, clusters of industry emerged around core technology at the end of the 19th century which grew and prospered in the 20th century. In both cases, a troika of major international firms emerged around these technologies. Second, by the 1980s, these companies had run into competitiveness issues related which stemmed, in part, to their apparent inability to innovate. Companies in both places took actions designed to address this concern including acquiring portfolio companies, building new research capabilities in different areas of technology and moving some innovation activities to places thought to be more cutting edge. Finally, community leaders in both places engaged in very similar interventions designed to use local universities as a base from which to engage companies in an effort to improve innovative capabilities in place.

I understand the Pittsburgh transformation in similar terms. To what extent has this occurred in Cleveland? I don't know the answer to that question. Like Detroit, Cleveland may have missed that window of opportunity. That doesn't mean all of Northeast Ohio can't benefit from Akron talent and innovation. Likewise, Youngstown can hitch its wagon to Pittsburgh's.

However, Cleveland's transformation already may be in the pipeline. Over the last two months, I've been looking at the city's talent migration profile and I see a variety of promising trends. There is no reason to panic about the 2010 Census. The supertanker is coming around.

1 comment:

Paul Wittibschlager said...

Cleveland has been doing well for quite a while. Current job openings from by category.
Cleveland, then Pittsburgh:

Engineering 399, 320
Healthcare 508, 489
Info. Tech. 450, 324

The numbers get larger for Cleveland as you move the geographical search point between Akron and Cleveland (where it belongs.)

The lion's share of Third Frontier money coming out of Columbus comes to the Cleveland region, the other regions don't even come close. There are complimentary centers of R+D in the region: CCF & CASE's biomedical, Akron U's polymer, Kent's LCD/flexible electronics.