The "P" in Pittsburgh should stand for productivity.

After all, workers in this region continue to outperform their counterparts in faster-growing, faster-moving PG Benchmarks cities. The average output per worker in Western Pennsylvania is more than $55,000, trailing only Seattle, Atlanta and San Diego in total productivity. And since PG Benchmarks began tracking the measure four years ago, Pittsburgh’s ranking has moved up from fifth and is poised at this rate to pass Seattle next year and move into third place.

That is excellent news for Pittsburgh’s economy. Productivity is an important measure because it determines a region’s standard of living. When workers are more productive, wages go up and companies are able to improve their competitive edge by holding the line on price increases. The region’s productivity, in fact, may be the light that rescues it. "That is one thing we have in our favor," said Stuart Hoffman, chief economist at PNC Bank.

Without it, "you literally are not going to survive," said Tom Murrin, dean of Duquesne University’s A.J. Palumbo School of Business Administration.

Pittsburgh’s productivity stems from several factors. Because of the region’s slow growth, employees stay in jobs longer and are more committed to them. Local schools, such as Carnegie Mellon University and the University of Pittsburgh, churn out well-trained and well-educated workers. Also, hard work is a strong holdover from the region’s industrial heritage, having outlived Big Steel’s smoke, flames and soot. Ironically, the collapse of Pittsburgh’s heavy industry probably has given regional productivity a boost.

Eliminating old, antiquated factories left Western Pennsylvania with only the newest and most efficient equipment and buildings. Manufacturers began adjusting to new technology, different plant layouts and advanced manufacturing methods. Competition in the U.S. and overseas forced big companies like U.S. Steel to build smaller, leaner mini-mills that produce less steel, employ fewer people, use smaller plots of land and are less likely to shift rising production costs to customers than the massive plants of old.

"Companies are finding if you don’t start doing these things and using more computerization, you are not going to be around," said Alan Rosinger, senior operations consultant for the Southwestern Pennsylvania Industrial Resource Center, a group that works with small and medium-sized manufacturers.

From the rubble of heavy industry emerged a more agile business base for Southwestern Pennsylvania, in effect a Darwinian "industrial selection." Manufacturing is still big, but so are fast-growing industries such as health care, software, education, environmental science and engineering. Many of these industries rely on computers and other high-tech innovations, making higher productivity easier to achieve. The leading companies in these fields are smaller, less bureaucratic and less resistant to change than the leading industrial companies of old. Take Medrad Inc., a fast-growing Indianola medical technologies company known throughout the region for its productive work methods. When Medrad automated its syringe assembly line, for example, it refused to cut employees. Success in marketing the syringes and increased productivity on the assembly line prevented job losses, and the same number of people now produce a larger number of syringes. "We are constantly looking for ways to improve," said John Friel, Medrad’s CEO.

With an eye toward increased productivity, the company changed its plant layout to make it easier for materials to move from one department to another, and it asked suppliers to do the same. If employees have problems with an item on the production floor, they place it on a shelf called "The Rack" and discuss solutions the next day with Medrad engineers. Employees are encouraged to suggest improvements and implement them. When one employee found a way to improve the process that winds Medrad’s connector tubing, he saved the company hundreds of thousands of dollars. "A lot of people think increased productivity leads to job reductions, but that is not the case for us," Friel said. Instead, Medrad has added 60 employees over the last two years and increased revenues from $125 million to $141 million. Friel expects revenues to grow another 13 percent this year. Productivity gains over the last five years have accounted for $7 million in new revenue at Medrad.

But a lot of companies are making do with fewer and fewer employees. Local manufacturers, for one, are changing their plants from top to bottom to get more from their current workers without adding new ones, Rosinger said. Operators on the plant floor now are running more than one machine at a time, grouping equipment closer together and speeding the way they set up machines for each job. Using the "pull" approach to manufacturing, companies are able to bring inventory costs down by stocking shelves according to demand instead of ordering supplies that may or may not be used.

Will increased productivity eliminate some jobs? "It may be true in the short run," Hoffman said. "But over time, the standard of living is going to grow." That means new jobs, more wealth and lower inflation. "If Pittsburgh wants to prosper over a long period of time, the workers in this metropolitan area need to be productive."