pittsburgh steering committee 11.7_final

INNOVATION ECONOMYPittsburgh’s

PROJECT TIMELINE

Phase I: Project Steering Committee Development

Phase II: Industry Assessment and Target Cluster Identification

Phase III: Situational Assessment and Ecosystem

Phase IV: Strategy Development and Recommendations

Phase V: Implementation and Outreach

Q1 2016

Q2 2016

Q3 2016

Q4 2016 - Q1 2017

Q1 2017

60+ INTERVIEWS20+ university and research professionals

15+ government, ecosystem, capital, and community organizations

20+ industry executives across industries and firm sizes

Key Analyses Completed

Industry cluster analysis

Technology competencies across industry and universities

Population and Talent

Entrepreneurial activity

Productivity & employment multipliers

Geography of firms

Real estate dynamics

SETTING THE CONTEXT

1 2 3

1

2 3

Next generation technologies are maturing and creating new markets.“

Mobile Internet

Automation

Internet of things

Cloud Technology

Advanced Robotics

Autonomous Vehicles

Genomics

Energy storage

3D printing

Advanced materials

Advanced oil and gas

Renewable energy

DETROIT, MI circa 1920

SILICON VALLEY, CA circa 1935

healthcare(approx. 48,000 jobs)

health IT

finance & insurance

IT & software

business services

(2-3 major companies; 3,500 jobs)

(approx. 10,000 jobs)



INNOVATION AND PROSPERITYNashville health IT component industries

$12.6 billion

106,000 jobs

per capita income, San Jose and United States

120

100

80

60

40

20

2000 2005 2010 2015

thou

sand

s, U

SD

San Jose

United States

INNOVATION AND PROSPERITY

Stellar research institutions Concentration of talented and diverse workers

Ecosystem of firms, entrepreneurs, & intermediaries Accessible risk capital

Collaborative networks Quality places

PITTSBURGH’S STARTING POSITION

1 2 31

2

3

Pittsburgh has come online at a transformational period, but its scientific strengths are table stakes in the new globally

competitive environment

“

Automation

3D Printing

Advanced Robotics

Autonomous Vehicles

Genomics

17.5 concentration of

robotics publications (LQ relative to US)

5th University of Pittsburgh ranking of NIH dollars

PITTSBURGH University Strengths

University of Pittsburgh

Academic Program Rankings

5th - Women’s Health 8th - Drug and Alcohol Abuse 9th - Pediatrics

16th - Medical Research 18th - Biomedical Engineering

Carnegie Mellon University

Academic Program Rankings

1st - Computer Science 2nd - Computer Engineering 5th - Engineering 8th - Electrical Engineering

8th - Mechanical Engineering 11th - Materials Engineering 11th - Civil Engineering

• Heart, Lung, and Blood Vascular Institute • McGowan Institute for Regenerative Medicine • Relationship to UPMC • Energy Innovation Center

Institutional Strengths• National Robotics Engineering Center • CyLab • Swartz Center for Entrepreneurship • America Makes

Institutional Strengths

PITTSBURGH University Strengths

All Pittsburgh Universities: R&D Funding and Scholarly Activity

2.3 concentration of total R&D funding (LQ relative to US)

3.5 concentration of medical sciences R&D funding

(LQ relative to US)

8.3 concentration of computer sciences R&D funding (LQ

relative to US)

4.1 concentration of total

publications (LQ relative to US)

17.5 concentration of robotics publications (LQ relative

to US)

4.5 concentration of critical care publications (LQ

relative to US)

Construction, Drilling, & Industrial Treatment

Semiconductors, Fuel Cells, & Electrical Connectors

Milling & Machining Tools

Protective Electrical Switches & Relays outlying network clusters

Medical & Surgical Devices

Biopharma & Biochemistry

Polymers & Coating

Data Storage Devices & Infrastructure

Data Analytics, Software, & Networking

Image Analysis/Processing, Optical Sensors, & Displays

core network clusters

INNOVATIVE CAPABILITIES NETWORK

LEADING INDUSTRY CLUSTERS

higher growth

more specialized

Energy

Computing, Networking & Information Services

Corporate Services

Automation & machinery

Metals & metals processing

Engineering services

Chemicals

Health Services

Finance & Insurance

Electronics

Medical Technology

by location quotient and job growth, ’09-‘14

SIGNS OF TURNAROUNDproductivity (value-added per worker) in Pittsburgh metro, relative to U.S.

0%

20%

40%

60%

80%

100%

120%

140%

Total Private Sector

Corporate Services

Energy Metals and Metal Processing

Chemicals

98%

127%119% 119%

108%

Automation

106%

STRENGTH OF FOUNDATIONSsupportive philanthropic investments

Network of Accelerators

Center forENERGY

Life Sciences Machine LearningRoboticsComputational

Finance

Translational Research Funding

STRENGTH OF FOUNDATIONSsupportive philanthropic investments

Community and philanthropic efforts have begun to democratize entrepreneurship and helped connect university startups with

the broader community

“

added 20 employees

second round of funding (~$15M);

grew to 35 employees

revv

STORY

60 employees

GE Center for Additive Technology Advancement

GOOGLE Bakery Square

UBER Advanced Technologies Center

Pittsburgh has sprung ahead based on technological leadership from its anchors and a growing entrepreneurial culture. The task over the next decade will be to translate these strengths into city-wide

employment and business generators

“

What are Pittsburgh’s challenges?

Pittsburgh MSA

Advanced Industries

Advanced Health and Business Services

20012002

20032006

20082009

2010

60

70

90

100

110

120

130

140

80

20042005

20072012

20132014

2011

Em

ploy

men

t, in

dexe

d to

200

1

INDUSTRY CLUSTER PERFORMANCEemployment base since 2001, selected industries

INDUSTRY CLUSTER PERFORMANCEtechnology clusters lack size to drive growth in wrap-around services

33%

percent of total private sector activity in leading

industry clusters

0.95advanced industries LQ

1.24advanced business and

health services LQ

0

4

8

12

16

Corporate and Financial Services

Advanced Manufacturing

Health and Life Sciences

Information Technology

Induced

Indirect

Direct

INDUSTRY CLUSTER PERFORMANCElow multipliers in manufacturing suggest weak supply chains

JOBS PER AN ADDITIONAL $1 MILLION IN OUTPUT:

INDUSTRY CLUSTER PERFORMANCEIT within the Pittsburgh manufacturing supply chain is weak

LQ FOR COMPUTER/INFORMATION SERVICES WITHIN MANUFACTURING:

United States average 1.0

PGH supply input level 0.75

INDUSTRY CLUSTER PERFORMANCE

The employment base for much of the economy is still disconnected technology. The gulf between Oakland and the surrounding

community isn’t just geographic

“

INDUSTRY CLUSTER PERFORMANCEproductivity within key clusters is low

0%

20%

40%

60%

80%

100%

120%

Total Private Sector

Medical Technology

Electronics Manufact.

Financial & Insurance

IT

98%

57% 57%

82%90%

Health Services

93%

PRODUCTIVITY (VALUE-ADDED PER WORKER) IN PITTSBURGH METRO, RELATIVE TO U.S.:

INDUSTRYmachine tools

medical devices

polymers & coatings

electrical switches

spectrometry

data processing

ACADEMIC

chemical filtration

antigens & antibodies

peptides & nucleic acids

biological sampling

semiconductor

INDUSTRYmachine tools

ACADEMIC

medical devices

polymers & coatings

electrical switches

spectrometry

data processing

chemical filtration

antigens & antibodies

peptides & nucleic acids

biological sampling

semiconductor

medical filters & prosthetics

image analysis

diagnostic sensors

pattern recognition

United States average

Computer science research funding 8.7

1.0

COMPETENCIES AND ALIGNMENTresearch funding and industry employment, relative to US average


Computer science research funding 8.7

1.0

COMPETENCIES AND ALIGNMENTresearch funding and industry employment, relative to US average

Software industry

Data processing industry

.65

.37

COMPETENCIES AND ALIGNMENT


Pharmaceuticals research funding 3.6

1.0

research funding and industry employment, relative to US average

COMPETENCIES AND ALIGNMENT


Pharmaceuticals research funding 3.6

1.0

research funding and industry employment, relative to US average

Medicinal manufacturing .31

Pharmaceuticals preparations .11

HIGH-GROWTH ENTREPRENEURSventure capital deals in peer cities, 2005-2014, millions

27th/40growth entrepreneurship

5.3%of all firms are new in 2013

vs. 8.0% of U.S. firmsSalt

Lake City

Pittsb

urgh

Phoenix

St. Louis

Indianapolis

$1,800 M

$1,400 M

$1,000 M

$600 M

$200 M

Deals < $10 million

Deals $10-50 million

HIGH-GROWTH ENTREPRENEURS

There aren’t enough examples of home runs to create a risk-taking culture. Entrepreneurs still think a few million dollar exit is a big deal“

Entrepreneurship in Pittsburgh in many ways is within its first cohort. Version 1.0 was about developing the capacity to generate

lots of startups. Version 2.0 will be about growth and employment generation

“

DEMOGRAPHICS AND WORKFORCEpercentage change of metro population, 2009-2014

-3%

0%

3%

6%

9%

12%

15%

Austin

Colum

bus

Indianapolis

Portland

Pittsb

urgh

Cleveland U.S.

DEMOGRAPHICS AND WORKFORCErapid decline in mid-career workforce

-18%

-12%

-6%

0%

6%

12%

18%

Pittsburgh urban core

Pittsburgh MSA

United States

Total 25 to 34

35 to 44 45 to 54

55 to 64

POPULATION GROWTH, 2009 TO 2014:

DEMOGRAPHICS AND WORKFORCE

Everyone thinks the only workforce gap is among millennials, but that’s not true, a real gap exists within mid-career workers.

They are extraordinarily important but increasingly hard to fill

“

DEMOGRAPHICS AND WORKFORCEsupply and demand of IT workers

0

1,000

2,000

3,000

4,000

Current Supply

Future Demand

Grad

BA+

Sub-BA

Departures

Source: Allegheny Conference

DEMOGRAPHICS AND WORKFORCE

Pittsburgh has worked to become a good culture and food city, and while that’s essential, high-value graduates are looking for

career pathways“

FIRM GEOGRAPHY AND PLACEMAKINGadvanced manufacturing births and existing companies, 2009-2013

FIRM GEOGRAPHY AND PLACEMAKINGhealth and life sciences births and existing companies, 2009-2013

FIRM GEOGRAPHY AND PLACEMAKINGinformation technology births and existing companies, 2009-2013

FIRM GEOGRAPHY AND PLACEMAKINGcorporate and financial services births and existing companies, 2009-2013

FIRM GEOGRAPHY AND PLACEMAKINGclass A office space vacancy rates

0%

3%

6%

9%

12%

15%

18%

20002001200220032004200520062007200820092010201120122013201420152016

PGH MetroPGH City

FIRM GEOGRAPHY AND PLACEMAKINGindustrial space vacancy rates

0%

3%

6%

9%

12%

15%

18%

20002001200220032004200520062007200820092010201120122013201420152016

PGH Metro

PGH City

NEXT STEPS FOR PITTSBURGH

1 2 31 2

3

INDUSTRY AND TECHNOLOGY

Thin supply chains

Weak industry/university connections in bridging technologies

Limited connectivity between small and large businesses

Unrealized opportunity for broader workforce in new technologies

CONCERNS CURRENT EFFORTS


CONCERNS RECOMMENDATIONCreate industry-university technology convergence and collaboration centers

Target strategic gaps in supply chain

Create a matching fund for industry-university applied research projects targeted to SMEs

Develop a First Customer program

Connect business support services and manufacturing with new technology platforms

Thin supply chains





CONCERNS BEST PRACTICES

Oregon’s Signature Research Centers

Thin supply chains




INNOVATION ECOSYSTEM

Too little growth capital

Institutional gaps for post-seed sized firms

Pittsburgh still isn’t “known” for entrepreneurship






CONCERNS RECOMMENDATIONCreate a Pittsburgh Initiative for Growth Stage Entrepreneurs

Supportive Actions:

Assist in launching venture development corporations

Support hiring, management, and customer acquisition

Create a connected support system from early to growth-stage companies






Accelerator Corporation, Celdara Medical, Virtual Incubator Company

WORKFORCE DEVELOPMENT

Disconnected workers not involved in the tech economy

Lack of mid-career workers

Weak retention of college-age students in high demand fields






CONCERNS RECOMMENDATION

Create a Pittsburgh Talent Alliance

Supportive Actions:

Coordinate hiring practices and requirements across occupations

Develop career-oriented pipeline of talent

Collaborate with higher education to address talent shortages

Create a comprehensive branding and attraction strategy for mid-career workers






West Philadelphia Skills Initiative

PLACEMAKING

Disconnection between downtown and Oakland

Nine-to-five culture downtown

Weak connection between nodes of innovation in different corridors

Limited flex space for growing firms


PLACEMAKING

CONCERNS RECOMMENDATIONS

Establish a Pittsburgh Innovation Neighborhoods Initiative

Supportive Actions:

Build and fund greater connectivity between distributed innovation anchors to each other and neighborhoods

Connect the “ecoinnovation district” with adjacent neighborhoods

Coordinate with the BIDs to address workforce and entrepreneurship issues

Map and value physical and innovation assets





PLACEMAKING






PROJECT TIMELINE

Phase IV: Strategy Development and Recommendations

Phase V: Implementation and Outreach

Q4 2016 - Q1 2017

Q1 2017

Address feedback add needed recommendations and develop out recommendation memos to share with stakeholders (Early December)

Address second round of feedback and develop implementation strategies around narrow suite of priorities (Mid January)

Hold stakeholder meeting to review final findings and recommendations (2017 Q1)

Release final product with stakeholder group (2017 Q1)

INNOVATION ECONOMYPittsburgh’s

pittsburgh steering committee 11.7_final

Government & Nonprofit