The news that Pittsburgh would be hosting world leaders at the G-20 summit may have produced one of the greatest "huh?" moments in recent memory. The cognitive dissonance in the Washington press corps pales to that felt by many a Pittsburgher, long accustomed as we are to bad economic news. Some of us are having a hard time digesting the positive attention being focused on the region of late.
Familiarity may breed contempt and we may be the last to fully realize the importance of Pittsburgh's transformation. After all, Pittsburgh no longer relies on a narrow range of heavy industries. Recent growth in education and health services has stabilized the local economy, and the seeds of future growth are sprouting across a wide range of endeavors -- from biotech and IT to energy and professional services. Even the local manufacturing sector has transformed itself, becoming much more productive than it ever was in the past.
Still, we know that Pittsburgh's upward trend line has been nowhere near as straight as some local boosters make it seem. The region has come a long way from the economic miasma of the 1980s, but it remains a work in progress.
Over just a few years in the early 1980s, fully half of the manufacturing jobs in the region disappeared, with most of them never to return. There was a moment when people probably questioned whether Pittsburgh could survive as a major metropolitan area -- that maybe the place which had birthed one of the greatest concentrations of industrial output in the world had become an unneeded anachronism.
But the truth is, by the 1980s the signs of decline had been clear for decades. And the place to start talking about how successful change has been in Pittsburgh is to look at how long it took for change to begin.
The competitiveness of the local steel industry had been draining away from Pittsburgh throughout the first half of the 20th century. World War II artificially reinvigorated the region's heavy industrial base, making it that much harder to shift to other industries.
Well after the war, the Ford Foundation and the Pittsburgh Regional Planning Association sponsored a comprehensive economic study of the Pittsburgh region, which was completed in the early 1960s. The message was clear: diversify or decline.
The report forecasted in remarkably accurate detail the collapse of the local steel industry and the impacts it would have on the region's industries, population and workforce. But its advice would go mostly unheeded. By the early 1980s, the local economy was not much different from what it had been a century before.
Then, as the jobs began to disappear by the tens of thousands, the region's youngest workers and would-be workers left in droves, taking with them their families and their future families. Left behind were older workers closer to the end of their careers than the beginning. The workers most capable of adapting and building a new Pittsburgh were fleeing. Overcoming that loss remains the region's greatest challenge to this day.
Seeking new directions in the late 1980s, regional leaders began to focus on air transportation and the growth of a US Airways hub. A fabulous new airport was completed in 1992, but within a decade Pittsburgh began to lose most of its airline jobs, too. The industry that was expected to "replace steel" fell far short of the task.
One lesson at this point was to stop looking for a single magic industry to "replace steel." Steel propped up Pittsburgh longer than any one industry will support any one region ever again. Growth is possible only if we become competitive across a wide range of industries.
This was a needlessly painful lesson. The planning report from the 1960s had told us what to do. It said the region should not rely on any particular industry but instead should focus on growing, retaining and attracting a high-quality workforce of varied skills. Written almost a half century ago, the report said:
... The Pittsburgh region's future depends to such a major extent upon retaining and attracting highly qualified and professional and technical people and business enterprisers, who are in demand everywhere and who command a high standard of residential amenity and cultural and professional opportunities.
It took a long time, but Pittsburgh finally began to take this advice and in recent years has seen a growth of new ventures and new industries. It has withstood the current economic downturn better than most similar metro regions and has even started gaining a reputation as a green city -- a truly remarkable turnaround for a city where smoke used to blot out the sun.
This is why the Obama administration, at a time when the world economy needs a thorough re-thinking, decided to host the G-20 summit in Pittsburgh. And this is why Pittsburghers, as we look to the future, should continue to heed sage advice from the past and remember our own hard-learned lessons.
Christopher Briem is a regional economist at the University of Pittsburgh's University Center for Social and Urban Research ( www.ucsur.pitt.edu ).