What a new innovation index tells us about Pittsburgh

Pittsburgh believers point to its rise and its size. Detractors point to demographic headwinds weighing it down. Both have a point.

Look first at the booster narrative. In the 1980s, superstar robotics engineers at Carnegie Mellon University led a series of breakthroughs and commercialized technologies, leading to the “Roboburgh” nickname at the height of the dot com boom 1990s. The big tech offices of Google and Uber, homegrown heroes like Astrobotic, Gecko Robotics and Duolingo, and subsectors in artificial intelligence and life sciences all draw their roots to academic wins. 

More recent Pittsburgh cheerleading, like the 2022 Heartland of Talent report, has relied heavily on the region’s relative gains in college graduates and so-called creative class workers. 

Along with this rise comes with the frequent caveat of its size. Of the country’s better known innovation hubs, Pittsburgh has among the smaller populations. Any evaluation of its economic output should be put in that context, goes the thinking. In this way, Pittsburgh stands strong.

All these themes appear in Technical.ly’s second annual State of the Pittsburgh Tech Economy report, which was released today. It’s part of our deeper dive into the communities we follow closest.

Inside the report, we look at Technical.ly’s brand new Map of Innovation Ecosystems, which we released Monday. The map is designed to help get started in any of the country’s most vibrant tech and startup hubs. It also includes the first go of our Innovation Index, which measures the regions we track on six indicators that are informed by the Ecosystem Stack we developed from our reporting. 

Pittsburgh’s rise and size are on full display. 

It has top-tier research and development and is among cheapest places to live of the 24 regions we indexed. (Close observers might note that our index this year only incorporates the region’s top R&D spender, the University of Pittsburgh; the region is rare in having a second institution in the top 75, Carnegie Mellon.) 

The city has only a middling rating for business ease, however, and too few large tech employers to have much density in software developers. Its startup ecosystem value, as measured by our friends at the Startup Genome Project as a total of exits and valuations in the frothy 2021-2023 period, is respectably sized.

Put it all together and Pittsburgh notches one of the lower Innovation Index scores, at 3.7 — or 60 times less than the country’s undisputed innovation leader of San Jose. 

But something happens when the index is normalized for population size, or scored per one million residents. Pittsburgh climbs four spots, and many big population regions fall. On this per capita measure, Pittsburgh’s innovation economy is a peer of Washington DC. and outperforms Los Angeles, Chicago, Houston, Miami and Nashville.

Lists take you only so far, and Pittsburgh does face headwinds. Pennsylvania has been among the country’s slowest growing states, and the western half fares worse, in part because it’s inefficiently transited to the commonwealth’s mid-Atlantic economic engine. 

Even in the heady millennial boom of the 2010s, Pittsburgh barely grew, shocking into action a slate of regional planning efforts. 

The innovation economy’s rise has stemmed the tide: In its annual report, the Pittsburgh Technology Council now includes six separate industries into its assessment of the region’s tech economy. But only so many jobs can be called “tech” before it loses its meaning, and importing international college students may not be a solution forever. 

It’s why one of the region’s most exciting developments is the New Economy Collaborative, a $62.7 million Build Back Better infusion from the federal government into workforce development and advanced manufacturing in Western Pennsylvania. Rather than importing talent through heralded university programs, it intends to make local talent and employers more competitive. Whether it will be a story for the boosters or the detractors is still being sorted out.