But I have been observing technology communities for a while --in the Silicon Valley, where I grew up and worked; in Boston, where I lived before I moved to Pittsburgh; and in Western Pennsylvania for the last seven years. I have some strong intuitions about what happens here. My conclusions incorporate some anecdote and some speculation. But nothing ventured, nothing gained. I believe strongly that Pittsburgh needs more risk-taking. So who am I to hold back?
If I were invited to address the Allegheny Conference, then this is what I'd say:
"Good evening, ladies and gentleman, guests and visitors. It is an honor to be asked to address this group.
I have one message, and one message only: Go home. The future of Allegheny County and the Western Pennsylvania region don't depend on your involvement. The future depends on your getting out of the way.
What do I mean by that?
The economic future of this region depends on building jobs. Jobs require new businesses to supply them. And new businesses need at least four things. They need ideas, money to build companies around those ideas, people to run those companies and the ability to move those ideas into companies, where the money and talent can go to work.
Pittsburgh has no shortage of ideas. There are two world-class research universities located in Oakland, generating incredible research in computer science, engineering and the life sciences.
Pittsburgh has no shortage of money. Don't get me wrong: Our venture capital and banking resources don't match what you'll find in Menlo Park, New York, or Boston, and we could always use more, but money is not our weakest suit.
Pittsburgh falls short, though, in the other two areas.
First, Pittsburgh doesn't have a critical mass of managers. These are people who are willing to step in and carry the ball in early-stage companies, growing them until they succeed or fail or get bought out. We have what seems to be an endless number of brilliant researchers and a fair number of "serial entrepreneurs."
But researchers are rarely equipped to operate companies, and serial entrepreneurs need chief operating officers, and VPs of this and that, and directors for the VPs to supervise, and managers below them. We can't possibly grow these people here, at least not fast enough.
So we have to persuade them to move in. But here's the catch: They're reluctant to move in unless they have some assurance that they'll have a career path -- not just that they'll have a job when they arrive, but that they can move across the street (so to speak) to a new company, when that first company falls apart, or gets acquired, or when their ambition gets the better of them. Every technology lawyer, investor and executive that I've ever talked to in Pittsburgh shares this frustration. We have the science in Pittsburgh, but not the management.
I don't have a cure-all for that problem. But I believe that the solution is connected to my last point, because solving it requires having a supply of new businesses that can absorb a supply of management talent.
I said that growth requires ideas, money, talent and the ability to move ideas into the private sector, where money and talent can take over, which brings me to our second big failing: Pittsburgh is doing a terrible job at moving ideas to where the private sector can make use of them.
Where are these great ideas? Most of them, these days, are coming out of the University of Pittsburgh and Carnegie Mellon University. How do they get out into the private sector? The universities have patent and other intellectual property (IP) rights to technology developed by their researchers, so the universities have to spin off companies and license IP to them, or license IP to existing companies.
And right now, that's where the problem lies: Like the vast majority of research universities across the country, Pitt and CMU aren't being aggressive enough in getting research results out of the lab and into the private sector. I hear this time and time again -- from lawyers Downtown, from entrepreneurs both in Pittsburgh and elsewhere, and from researchers at the universities.
A small number of universities have had some big successes in this area. Stanford, MIT, Columbia, Wisconsin.
Pitt and Carnegie Mellon are understandably reluctant to leave an extra dollar on this table. But they should. If there's an economic upside to what's coming out of Oakland, then for the good of the region, as well as for themselves, Pitt and CMU shouldn't try to keep all of that upside for themselves.
Here's an analogy: My own alma mater is located in New Haven, Conn., which has been a depressed urban community for a long, long time. My college spent years during the 1980s and early 1990s saying that the best thing that it could do for New Haven was to be a fabulous university. That was code for: The university should look out for the university, and the city should look out for itself.
About a decade ago, Yale changed its tune and started making direct investments in the city, partnering with New Haven in a variety of ways, including helping to build a modest technology sector. The city isn't "well," but it's a lot better.
Pitt and CMU can use their technology transfer policies in the same way: Invest in the region, and let the region profit. Both in the short term and the longer term, a healthier region will be better for the universities.
Let me be clear that I'm not knocking the hard-working folks who run technology transfer offices at Pitt or at CMU or elsewhere. They're doing what they're told, which is to generate revenue for the university. And generating revenue means making sure that in each deal, the university's risk is minimized and its upside is well-protected.
But that's not the way a new technology economy works. Remember: low risk means low return. Instead, whatever the universities now expect in terms of equity requirements, royalty rates, or other returns, they should leave upside on the table for the entrepreneurs and future investors.
Don't negotiate every deal like it's the next home run. Play small ball: Instead of making a few big bets with the expectation that they will all pay off, make a lot of small bets and expect that a lot of them will fail. The odds in your favor will be better overall: The more bets you place, the greater the likelihood that a few of them -- new companies and licensees -- will do well. And the odds in favor of the private sector will be better, too.
A new technology economy grows from the bottom, not from the top. Right now, Pittsburgh is trying to grow from the top. That's why you're having this meeting. It's growth from the top. So change has to come from the top.
And with all due respect to the history of the Allegheny Conference, that's why I'm telling you to go home. It's why I'd send a similar message to the University of Pittsburgh and to Carnegie Mellon, both of which are remarkable universities filled with amazing researchers. Private sector CEOs and top management at the universities need to join forces and -- let it go. They need to turn their technology loose.
Pittsburgh's CEO culture is deep and strong. The top folks are talented and have enormous respect for one another, and they spend a lot of time doing what CEOs do well: strategic planning. We have consortia and greenhouses, alliances and councils and conferences.
Strategic planning, though, doesn't grow companies or jobs. There's so much planning, and so much CEO involvement and control, that the money and the talent and the ideas can't find each other.
What I'm talking about is cultural change as well as economic change. Both kinds of change are difficult, and they can't happen overnight -- even if people agree that it should.
In fact, I would be delighted to be proven wrong, to be shown compelling evidence that top-level strategic planning of the sort that Pittsburgh engages in can and does lead to sustained economic growth. Because then the hard work of change could be avoided. But I'm skeptical. I don't think that such evidence exists.
So feel free to prove me wrong. But if I'm right, and if the changes that I'm describing don't happen, then I'm convinced that Pittsburgh will remain what it is today: a city of enormous promise. Enormous, but unfulfilled, promise.
Michael Madison, an associate professor at the University of Pittsburgh School of Law, can be reached at email@example.com . He's also the author of a blog about Pittsburgh, pittsblog.blogspot.com , where an earlier version of this essay appeared, and a blog about law and technology, madisonian.net