Steel City vs. Silicon Valley
In 1890, when my great-grandfather returned from San Francisco to take over the family farm on Shady Side’s Ellsworth Avenue, the value of Allegheny County real estate ranked sixth in the country. With its river connections, access to coal and access to Wall Street, Pittsburgh was becoming America’s most vital manufacturing center.
Entrepreneurs such as Andrew Carnegie were accumulating great wealth; the Mellons were the venture capitalists of the day. Western Pennsylvania had its own wealth-producing valleys 100 years before the Silicon Valley of today.
At the same time, Gov. Leland Stanford, who made his money from the railroad on which my great-grandfather returned to Pittsburgh, founded a university on his horse farm south of San Francisco.
Ten years later, Andrew Carnegie started Carnegie Technical Schools to educate children of factory workers in technical studies.
In the 1930s, a Stanford professor of electrical engineering, Fredrick Terman, began to promote a local technology industry in tandem with his small, academic department. One of the legendary mentors of the 20th century, Terman fostered the creation of companies by Stanford students whose businesses began to unleash the power of computing in the world economy, Hewlett, Packard, Litton and Varian.
At the time, industry around Stanford was tiny compared to places in the East such as Pittsburgh, but it flourished after World War II. A Stanford professor, William Shockley, who had invented the silicon transistor, started a semiconductor company that by 1976 spawned 45 other companies, including the world’s dominant maker of microprocessors, Intel. Only five of these companies formed outside Silicon Valley, as the area around Stanford came to be known around the world.
While the Silicon Valley built its computer industry after the Second World War, Pittsburgh launched an urban Renaissance yet remained committed to old industries already filling its river valleys.
Westinghouse sought to build a bridge to a high tech future but made an unlucky bet on nuclear technology. Carnegie Tech, however, focused faculty talent on computers, channeling many people like me into interesting careers following the growth of computing worldwide. That is why, like thousands of other Carnegie Mellon alums, I work in Silicon Valley but root for the Steelers and Pittsburgh.
Silicon Valley is informal but very competitive. Imagine New York with palm trees. Engineers and business people work 60-hour weeks. They are the lucky ones. Just to afford housing, low-tech workers hold jobs that fill 80-hour weeks. People there seem friendlier than Pittsburghers. However, they are friendly in the way flight attendants are friendly until the plane lands. Try to relax on a leisurely bicycle ride. You’re passed on the road by packs of whippet-thin cyclists on $5,000 bikes.
In Pittsburgh, frequent job changes look bad on your resume. In Silicon Valley, a long list of former employers adds to an applicant’s appeal. Working at the same company for five years or more suggests that your co-workers left you behind when they left to start their new company. In Regional Advantage, Anne Saxenian suggests that Silicon Valley workers have little company loyalty. Their loyalty is to the next big thing. When the next big thing was the personal computer, these job hoppers quit mini-computer companies like Hewlett-Packard and went to Apple.
Very few native Californians hold professional jobs in Silicon Valley. Most of the nerds and business people come from elsewhere, including many other countries. Chinese and Indians run many new businesses. I see the irony here. The Spanish named the Native Americans of 1492 “Indians” and put them to work. Now, the real Indians arrive to put us native Americans to work. Full disclosure: I descend from a Madame Montour. I am 0.6% Native American.
Silicon Valley literally grew in a green field. There was no other industry for the semi-conductor industry to displace. The industrial culture of the valley rose around the computer industry alone. Pittsburgh’s much older industrial culture doesn’t accommodate new industry as well. Now that Silicon Valley has an entrenched industry, I don’t know how it will accommodate tomorrow’s hot industry, biotech.
Between the two regions, diversity and speed of change describe the most significant, long-term differences.
In Silicon Valley, people greet each other with, “What’s the next big thing?” Over 150 years, Pittsburgh has focused on a few basic industries: glass, steel, and medical care. During that same time, San Francisco leaped from the Gold Rush to banking to semi-conductors to computers to Internet services, always looking for the next big thing.
In Pittsburgh, the canonical greeting is “How about those Steelers?” Indeed, the names of football franchises say it all. Our team carries the name of a commodity. Their team recalls the 49ers, the original pursuers of the first big thing. A team called the San Francisco Semiconductors wouldn’t capture the spirit of the place!
I loved the Pittsburgh of the 1950s, but it’s dead. Let’s get past the denial stage of grieving and build new industries. It took 100 years for the vibrant, innovative industrial culture of Pittsburgh to run down. It took 50 years for Stanford to grow Silicon Valley from some scientific ideas. Austin, Seattle and Raleigh-Durham took comparable times to grow their industries.
Nearly 40 percent of Silicon Valley residents are between 20 and 40 while the equivalent Allegheny County cohort is 26 percent. On this point, The Economist reports a hopeful future for Pittsburgh. Its analysis deserves a fuller hearing. While we may never boom again, more students from our 34 universities are staying. In the meantime, we may find old codgers clinging to power too long while the new generation waits to step into place.
In the past 25 years Pittsburgh has tried many straight-forward steps: environmental cleanup, business-friendly university policies, state support for technology transfer, high-tech support groups, greenhouses and captive venture capital funds. They are important, but they don’t address the elusive cultural issues the generation gap presents. Here are some out-of-the-triangle ideas:
* Overcome geography with the Internet. What you’re in between is as important as what you are. New York traded between New England and the South. Pittsburgh created commerce between New York, New Orleans and everywhere in the West. San Francisco moved goods and labor between Asia and the gold fields. Silicon Valley and Raleigh-Durham are not actual cities. They are regions surrounding cities. Pittsburgh may have a geographical disadvantage now. However, in the new, flat world created with the power of computing, western Pennsylvania can center itself between any places it may choose, such as Bangalore, Boston, San Francisco and Shanghai.
* It’s OK to send some of our older companies to New York where Carnegie and Frick went a century ago. Existing industrial cultures tend to suppress the growth of new ones. Many top-tier high technology cities — Austin, Seattle, Raleigh-Durham and San Diego — started with modest wealth and small industries.
* Embrace university students who come to Pittsburgh so that they will settle here. Give them unused tickets to cultural events. Encourage them to live off-campus and integrate into neighborhoods. Register them to vote for the future of the Pittsburgh region.
* Welcome immigrants, too. The above chart shows a startling disparity between the two places; whites are actually a minority in Silicon Valley. People who travel to Silicon Valley find a job and work hard when they get here. They also tend to become entrepreneurs more often than natives do. Many come from fast-growing places with which our people can connect.
* Entertain young people. In “The Creative Class,” Richard Florida argues that young, creative people require an appealing environment for work and play. Moreover, the most appealing things are not high culture entertainment or spectator sports. Young people want interesting neighborhoods, nice restaurants, outdoor recreation and other young people. Pittsburgh has those things and a 26-year-old mayor besides.
* Enough with the sports stadia already! Nobel Laureate Herbert Simon, a loyal Pittsburgher, suggested that we had to lose the Pirates in order to get on with our re-birth. Sports teams are luxuries, not wealth generators. Austin does fine without a baseball team.
Do these suggestions make you angry? That’s the next stage of grieving and the start of real recovery.