Friday, March 14, 2008

Western PA Shrinking City Star

Johnstown is strategically shrinking in order to remain on the map:

Richard Idem Somiari exemplifies the new type of businessman Johnstown can attract.

He looks at the slow-paced town he lives in today and longs for his Nigerian hometown Port Harcourt, where oil refineries spew smoke alongside peddlers hawking wares from headborne baskets.

But then he recalls the $1.8 million in low-interest loans, grants and aid he received from Johnstown to bring his promising ITSI Biosciences company to the city's business district. He thinks of the money he is saving running his enterprise from Pennsylvania's Laurel Highlands rather than from London or New York.

"In Chile and Brazil ... life science businesses are located in three-bedroom flats. Some of them you think they are not companies, they don't have signs. They're churning out millions," Somiari said. "That's the kind of role Johnstown can play.''

In the seven years Somiari has been in Johnstown, he has watched the slow transformation.

Somiari's world view is the perspective required to rebuild the Rust Belt. Johnstown is not competing with DuBois, Erie, Pittsburgh, or Cleveland. The comparative advantage concerns the landscapes of alpha world cities and developing countries such as Brazil or Chile. The Postindustrial Heartland must offer substantially reduced opportunity costs for innovation. Places such as Youngstown can become home to America's informal innovation economy.

One more lesson from Johnstown: The game is to attract human capital, not retain it.

Update: Null Space beat me to the punch.


Brian West said...

Like Vic says, it's not a game of maintenance, it's a game of replacement. Or something.

But does Johnstown have something specific to attract businesses other than low overhead costs? Lots of American towns can boast that.

Jim Russell said...

I'm not intimate with what going on in Johnstown. Unemployment there is still relatively (statewide) high. What I suspect is in play is what is going on in Youngstown, OH.

The economic collapse was so complete as to create a frontier geography akin to what you might find in a developing country such as Brazil. Few American cities have the political space to unleash an informal innovation economy. And other cities that do, likely lack the human capital to help fuel a significant turn around.