Business Forum: What meds and eds have done and can do

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A recent Forum by Josh Clark raised an important issue about the role of health care and higher education in the regional economy (“Steel, health care and future wealth in our robotic region,” Feb. 14).

Mr. Clark recognized the role of “meds-and-eds” in saving Pittsburgh after the collapse of the steel industry, but concluded that this isn’t enough. “Ultimately, hospitals and universities do very little in terms of keeping capital in a city. Patients are healed and happily go home. Students receive their degrees and tend to move away to the city with the best job offer. … A city that doesn’t make things can never be a real city.”

Mr. Clark makes a good point, as far as it goes, but misses a critical fact: Pittsburgh’s health care systems and research universities do make things, and regularly sell those “things” outside of the region, sell them to buyers who pay good money. The economic impact on the region is very similar to making and selling steel.

So, what is it that our meds-and eds are selling? Ideas. Ideas of Steel.

Each of our lead institutions does this, but let me take an example from UPMC, with which I am most familiar. UPMC’s staff, in the course of their work, regularly invent things which we go on to develop, commercialize and sell.

These “things” can be a radiology management system, smartphone apps for paramedics or a digital pathology system. We also sell know-how and management services. These activities create new jobs in our region and financially support health care here. For example, UPMC has for years managed a sophisticated transplant hospital in Palermo, Sicily, one of the best transplant services in Europe.

This is great for Italy — which gets better care — great for Pittsburghers who work in the program, and good for regional health care because the fees help keep our own transplant program at the cutting edge.

Again, Pittsburghers create and deliver ideas, and the outside world pays us for them. What difference does it make whether the “products” are steel beams or research papers? The economic impact on the region is the same.

These efforts are still growing, but even now the scale isn’t trivial. UPMC’s commercialization and internationalactivities have returned about $400 million to the region and created about 1,300 U.S. jobs, over a thousand of them in Pennsylvania. That’s a good start.

There is one major difference between the “manufacturing/​export” activities of Pittsburgh’s meds-and eds and the steel industry of old. The economic benefits aren’t flowing into the accounts of an Andrew Carnegie or a J.P. Morgan, but back into our own health care and research institutions, creating jobs and supporting their services to the region.

Mark Laskow, a managing director of investment advisory firm Greycourt, is vice chair of UPMC’s board of directors. The views expressed here are his own.

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