Powered by Innovation: The Inventors Pittsburgh Is Banking On

The fate of Pittsburgh hinges on how we address issues of growth, jobs and inequality and whether we harness the power of innovation to improve the city for all of us.

Xunjie Zhang walks faster than you. He walks faster, perhaps, than anyone else on Earth, and he has a video on his laptop to prove it.

He presses Play. There’s Xunjie in San Francisco, one of the few American cities whose hills can rival Pittsburgh’s. On Lombard Street, he glides up the gradient with ease, burning the slowpokes, the amblers and the gotta-get-there techies. Lesser pedestrians stop and watch him in awe.

“We thought this would be kind of a geeky thing,” says Xunjie, “but it turned out to be quite the opposite.” His thin, dark-haired figure disappears over the hill. His cameraman can’t keep up.

XUNJIE ZHANG MODELS THE BIONIC SHOES POWERED BY ARTIFICIAL INTELLIGENCE THAT HE DEVELOPED AS FOUNDER OF NIMBUS ROBOTICS AT CARNEGIE MELLON UNIVERSITY’S SWARTZ CENTER FOR ENTREPRENEURSHIP.

The founder of Pittsburgh-based Nimbus Robotics, Xunjie builds bionic shoes powered by artificial intelligence. The shoes learn a user’s movements, making constant calculations on hills, sidewalks and stairs. The effect, he says, is not unlike an airport’s moving walkway — users walk two-to-three times faster than normal with no additional effort.

“Imagine a world where everything’s within walking distance,” says Xunjie. “Augmented walking can make mobility safer, more reliable and more sustainable for millions of people.

Self-driving cars, in other words, are so 2016. In Pittsburgh, we’ve entered the era of self-walking shoes.

It’s a natural next chapter for the Steel City. We are, after all, the case study in Rust Belt revival — the city that changes the world when the world least expects it. We’re Silicon Valley’s grittier, scrappier, cheaper little sibling, where anyone with a good idea and a decent work ethic can start their own business and buy a cheap house.

It’s brilliant branding. And certainly, there’s some truth to Pittsburgh’s tech prowess: Witness the runaway popularity of the language app Duolingo; the multi-billion dollar investments in Argo AI and other autonomous-car companies; and Astrobotic’s scheduled moon landing. Last year, we even made the shortlist for Amazon’s second headquarters — a fact that, regardless of your thoughts on Jeff Bezos’ behemoth, says something about the way Pittsburgh has changed.

But despite the acclaim for Pittsburgh-the-tech-town, its future is far from assured. For one, it’s losing residents: From 2009 to 2014, when places such as Portland, Oregon, and Columbus, Ohio, grew by nearly 5 and 7 percent, respectively Pittsburgh didn’t grow at all. In fact, only one comparable city shrank faster: Cleveland.

Meanwhile, for many Pittsburghers, the tech boom has yet to improve their quality of life. In the Strip District, home to Pittsburgh’s “Robotics Row,” the average household income from 2012 to 2016 was $92,000. In nearby Crawford-Roberts? Just $18,000. Throw in rising rents and uneven opportunity, and you’ve got a recipe for two Pittsburghs: One, a burgeoning tech hub that hypes its cheap housing stock; the other, a postindustrial steel town left to plead for affordable apartments.

The story of Pittsburgh today, it turns out, depends largely on who’s telling it. What Pittsburgh’s tomorrow will look like hinges on whether and how we address issues of growth, jobs and gross inequality. And while technology alone won’t solve our problems, experts say there’s a better path forward for Pittsburgh’s innovation economy — a path that, like Xunjie Zhang’s shoes, can lead us toward a tomorrow where nothing’s out of reach.

KELAUNI COOK FOUNDED BLACK TECH NATION IN 2018 TO HELP BLACK TECHNOLOGISTS MAKE GAINS IN A PREDOMINANTLY WHITE INDUSTRY. | PHOTO BY JONATHAN WRIGHT

It’s a bright, clear, early autumn day on Forbes Avenue, and an autonomous cooler cruises the business district. Deployed by a startup called Starship Technologies, the rover passes the Carnegie Museums, where the annual Thrival Festival is getting underway. It turns toward the hospitals at UPMC, crosses the Cathedral of Learning’s shadow, and doubles back to Schenley Plaza, where students from two top-ranked universities lounge in the sun. The cooler rolls to a stop, opens its hatch, and delivers its contents — lunch — to a group of twenty-somethings who barely look up from their phones.

Welcome to Oakland: an atom-smasher of science and scholarship, health care and human creativity. Though the neighborhood comprises just 3 percent of Pittsburgh’s land area, it accounts for 10 percent of its residents, 29 percent of its jobs, and a third of the entire state’s research-and-development output from universities. It’s dense, it’s vibrant and it’s a city planner’s dream.

“It’s definitely something we haven’t bragged enough about,” says Sean Luther of these few square miles. “Most cities have one research institution if they’re lucky. The fact that we have two is unique. And the fact that Pitt and Carnegie Mellon are so tightly integrated — and, frankly, not competitive with each other — is probably the single most exciting thing about Pittsburgh.”

As executive director of the Pittsburgh Innovation District — the loosely drawn quarter containing Oakland and its surroundings — it’s Luther’s job to grow the district and connect it to the rest of the world. On one hand, says Luther, it’s an easy sell: “Companies want to do business with globally significant academic partners, and they want to do it in cities that are authentic, urban and dynamic. Pittsburgh checks all of those boxes.” On the other hand, though, the city’s innovation economy still struggles to compete with others in the same tier.

For example: The analytics firm Aretian calculates cities’ “innovation performance” based on how much business activity stems from their innovation districts. Pittsburgh’s performance is 6 percent — well below that of comparable cities like Portland (17 percent) and Detroit (41 percent). Aretian credits this “unusually low” figure to the fact that our world-class research often gets applied someplace else. Pittsburgh creates value, writes a spokesperson for the firm, “but fails to capture it locally.”

In other words, Pittsburgh is missing out. In fact, according to a 2017 report by the Brookings Institution, the city has fewer high-tech industries than it did 20 years ago. A drop like that holds the whole city back, given that jobs in those industries tend to pay well and create, on average, 2.2 additional jobs in downstream sectors. “If the region had the same share of high-tech employment as university research,” the report notes, “it would employ 9,000 more in the software industry and 5,500 more workers in drug development, not to mention tens of thousands of workers in related jobs.”

PHOTO BY TERRY CLARK

Instead, half the city’s college graduates flee to where wages are higher, the jobs more plentiful, the tech industry more inclusive. African Americans with bachelor’s degrees leave faster than they’re moving in, citing the lack of a black middle class and more than a little racism. “I’m constantly trying to get people to stay,” says Kelauni Cook, founder of Black Tech Nation. Launched in 2018 to build an ecosystem of black technologists, Black Tech Nation helps members make headway in an overwhelmingly white industry. Still, says Cook, few black techies feel like they belong. “I tell them, ‘If you leave, it’ll be that much harder to get other black techies to move here.’ But I don’t blame them — there’s so much inequality across the sector. Sometimes I wonder whether to stay here myself.”

Meanwhile, Pittsburgh’s losing more than talent: The tax dollars expatriates take with them would otherwise fund schools, social services, infrastructure and more. As a result, the gulf between techies and everyone else widens; “startup” becomes synonymous with displacement; and the city turns to ballot measures to help cover basic things such as caring for young children and maintaining public parks.

Faced with this reality, the Brookings report outlined two scenarios for Pittsburgh’s future. In the first, a few people flourish in research and tech roles; the rest flounder from paycheck to paycheck while automation comes for their jobs. “In this scenario,” the report warns, “income and unemployment will vary significantly depending upon the neighborhood.” Sound familiar?

But in a second, more hopeful scenario, Pittsburgh’s broader economy thrives. The walls between research and industry come crashing down, creating abundant, attainable high-wage jobs for locals and transplants alike. A more diverse tech industry builds products that improve life for all. A reliable tax base funds affordable housing, better transit, and workforce and anti-poverty programs. More neighborhoods prosper. Every Pittsburgher benefits.

By doing nothing, we choose the first scenario by default. That’s why Luther, Cook and countless others from Pittsburgh’s universities, incubators and nonprofits are working toward the second, aiming to keep tech jobs here by building a more vibrant, well-funded startup community — and by bringing more Pittsburghers into the innovation economy’s fold.

ELEKTRO, BUILT BY WESTINGHOUSE ELECTRIC CO., DEBUTED AT THE 1939 WORLD’S FAIR IN NEW YORK, ESTABLISHING PITTSBURGH AS AN INNOVATION HUB. A REPLICA OF ELEKTRO IS ON DISPLAY AT THE SENATOR JOHN HEINZ HISTORY CENTER.

“I have a very fine brain,” said the glistening, golden, 7-foot robot. “It works just like a telephone switchboard. If I get a wrong number, I can always blame the operator.”

The audience roared. They’d come to New York to see “The World of Tomorrow,” and Elektro the Moto-Man delivered. Looking a bit like the lovechild of Star Wars’ C-3PO and Pittsburgh’s Steely McBeam, Elektro could walk, talk and move his head and arms. The record player in his chest made him a witty raconteur, and in true Great Depression style, he even smoked cigarettes while he wowed the nation’s kids.

Built in Ohio by the Pittsburgh-based Westinghouse Electric Co., Elektro’s appearance at the 1939 New York World’s Fair helped establish Pittsburgh as an innovation city — a place where industry and cutting-edge research could, when combined, shape the world to come. Already, Pittsburghers had invented the Ferris wheel, the alternating current and the drive-in gas station; soon, they’d invent a vaccine for polio and help win the Second World War. There was nothing, it seemed, the Steel City couldn’t do.

Until steel collapsed, and Pittsburgh entered its 40-year flatline. Unemployment hit 18 percent. Half the city vanished. Elektro himself fell on hard times, too, appearing in a film called “Sex Kittens Go to College” — which featured the robot, a striptease and a chimpanzee — before disappearing altogether. The dream of Pittsburgh-the-tech-town was dead.

Almost.

DAVE MAWHINNEY SWARTZ | CENTER FOR ENTREPRENEURSHIP

Though Pittsburgh had barely a pulse, it clung to the one thing it had long done better than anyone. In 1986, a hulking, heavily modified Chevrolet van drove itself across Carnegie Mellon’s campus, becoming one of the world’s first fully autonomous vehicles. Slowly, signs of life reappeared: In 1999, the Wall Street Journal dubbed Pittsburgh “Roboburgh,” a nickname that never quite caught on. A decade later, the Obama Administration held the G20 summit here to showcase the city’s reinvention, followed a few years after that by the White House Frontiers Conference: a modern-day world’s fair spotlighting Pittsburgh’s robotics and health care revolution. The city had come full circle: Even Elektro, whose mangled remains were eventually found in a barn and a basement, had been polished and put back together.

“What we’re seeing today is a maturation of technologies that were born here decades ago,” says Dave Mawhinney, executive director of Carnegie Mellon’s Swartz Center for Entrepreneurship. “That’s why Pittsburgh has the best artificial intelligence and robotics ecosystem in the world: We have the talent, we have the track record and we have the know-how.”

Mawhinney would know. As he strolls the center’s sunlit corridor, he points out one potential game-changer after another. There’s Xunjie, tweaking the latest Nimbus prototype. There’s TalkMeUp, a chatbot that gives real-time communication feedback, helping users nail a job interview or land a new client. There’s Zensors, which turns ordinary video cameras into sensors that can count available parking spots, determine the length of airport security lines, and alert a building’s management when rooms need to be cleaned. In all, some 70 teams of students, staff and alumni use the center’s workspace, tackling everything from edtech to artificial organ engineering.

“Every year, 3,000 of the smartest people in the world show up at Carnegie Mellon. That’s what’s so exciting about this place,” says Mawhinney. The challenge now, he says, is helping students — and the rest of Pittsburgh’s entrepreneurs — seed their businesses and bring their breakthroughs to market.

Historically, that’s been a tall order for a city far from coastal moneymen. In the early 2000s, Pennsylvania as a whole garnered just 4 percent of the country’s venture capital — a figure that has since fallen by 80 percent. Between 2014 and 2016, Pittsburgh’s venture capital funding was 30 percent lower than the national average, notes the Brookings report.

MARK THOMAS, PRESIDENT OF THE PITTSBURGH REGIONAL ALLIANCE, WANTS PITTSBURGH TO BUILD AN ENVIRONMENT FOR STARTUPS THAT IS CONDUCIVE TO GROWTH.

But economic development experts say things are turning around. Mark Thomas is president of the Pittsburgh Regional Alliance, an arm of the Allegheny Conference on Community Development that helps companies expand in or relocate to the region. Formerly a senior vice president at the New York City Economic Development Corporation, Thomas was named to the role in June.

“One of the first things I learned after that announcement was that investors and venture capital firms in New York City all view Pittsburgh as a place where there’s great technology and great opportunities for investment,” he says. “So we’ve passed that threshold — Pittsburgh is definitely on people’s radar.”

The headlines bear him out. During the first nine months of 2019, Pittsburgh’s tech startups raised more capital than they did in all of 2018 combined, reports the Pittsburgh Business Times. It’s common, now, for several startups a year to raise more than $1 million — a feat that would have been unthinkable just a few decades ago. And the more success stories Pittsburgh boasts, the more attractive the city looks to investors.

Still, says Thomas, the region has some work to do. “When you look at the places that have $1 billion or more in venture capital flowing — and Pittsburgh brings in maybe a quarter of that annually — they all have robust ecosystems in place to support their startups. Here in Pittsburgh, there hasn’t necessarily been an intentional effort to build that. So we have an opportunity to be really thoughtful in how we create better conditions for inclusion, better conditions for growth, and the right environment for every talent at every level to ensure there’s a path for them into the workforce.”

To that end, a number of incubators, accelerators and networking groups around town are helping homegrown startups stay and grow in Pittsburgh, where they’ll hire locally and boost adjacent industries. The Founder Institute, a global accelerator, lists 400 startup-support engines in Pittsburgh, each with their own programs and ethos. There’s Work Hard Pittsburgh, a cooperatively owned incubator in Allentown. There’s IncubateHER, a Chatham University-based program for women. Meanwhile, Black Tech Nation has grown to include 500 black technologists in Pittsburgh and beyond, says Cook, and the group plans a major expansion next year.

Even city government has gotten in on the game. Launched as a pilot program in 2016, PGH Lab connects startups with local authorities to test their products and develop a proof-of-concept. “Companies submit a proposed solution to an urban challenge, and PGH Lab facilitates whatever they need to run their pilot — whether it’s permits, data or access to particular buildings or people,” says Annia Aleman, the city’s senior civic innovation specialist. In some cases, she adds, a startup’s solution is so successful that the city signs on as a paying customer. Last year, PGH Lab’s efforts to promote entrepreneurship earned it an award from the International Economic Development Council.

All of this, experts say, is essential to creating tech jobs and keeping them in Pittsburgh. “Candidly, every other state, region and city around the country right now is courting Pittsburgh’s talent,” says Rich Lunak, president and CEO of Innovation Works, which helps startups grow through networking events, early stage investments and first-customer programs. “That’s why it’s so important to support startups at the formation stage, when they’re most mobile and wondering whether to put down roots. We’ve seen that once they set up shop in Pittsburgh, get some initial seed investment, and start to hire employees, very few companies decide to leave.”

So far, says Lunak, the support seems to be paying off. A decade ago, Innovation Works got about 200 applications a year from companies seeking assistance. Now it’s closer to 800. And as more of the region’s startups become large regional employers, it creates a snowball effect: More entrepreneurs feel empowered to launch startups of their own. “It’s a world of difference from where Pittsburgh used to be,” says Lunak. “It’s just been phenomenal.”

Back at the Swartz Center, Mawhinney agrees. “As a city, we’ve jumped an order of magnitude,” he says. “If you think of the tier-one startup cities as being the Bay Area and New York City, then Pittsburgh’s right there in the next tier with Boston, Austin and Seattle. That’s why more people want to stay here now: Our cost of living is dramatically lower, but in terms of amenities and quality of life, we can stand toe-to-toe with anybody.”

Mawhinney pauses, letting an obvious rebuttal linger unsaid.

“OK,” he concedes after a moment, “the weather’s not that bad. Come on — you get four moderate seasons.”

And now it gets a Fifth Season.

FIFTH SEASON WILL RELY ON ROBOTICS AND THE INTERNET OF THINGS TO MAKE ITS VERTICAL FARM IN BRADDOCK SUCCESSFUL, SAYS CEO AND CO-FOUNDER AUSTIN WEBB. | PHOTOS COURTESY FIFTH SEASON

Next to U.S. Steel’s Edgar Thomson Works in Braddock, where sparks in the sky signal that Pittsburgh — with its history, its problems and its potential — endures, it will always be 65 to 34 degrees inside Fifth Season’s warehouse. Or at least it will be when CEO and co-founder Austin Webb gives the go-ahead and the company’s climate-controlled, 60,000-square-foot vertical farm comes online.

“The [processed] carbon dioxide from Edgar Thomson comes right into our grow room,” says Webb. The robots take it from there: A mostly autonomous system handles the planting, growing, harvesting and packaging of fresh produce. On 30-foot-tall racks that line the facility, Fifth Season hopes to grow a half million pounds of spinach, lettuce and other leafy greens next year — a goal investors have backed to the tune of more than $35 million.

It’s a winning proposition — but only if Fifth Season succeeds. Other vertical farming efforts have floundered at this scale. Historically, says Webb, “there’s been an inability to make the economics work. Vertical farms were just too expensive. We realized we could improve on that by using robotics and the internet of things.”

Founded as RoBotany in 2016 and incubated at Carnegie Mellon’s Swartz Center, Fifth Season is exactly the kind of startup that experts hope to see more of: One that can translate Pittsburgh’s tech talent into a profitable, locally owned, job-creating industry. Though its farms rely on robots, Fifth Season anticipates needing some 40 to 50 employees to oversee operations in Braddock — roles that don’t require a bachelor’s degree. In fact, says Webb, the company has already hired graduates of the Manchester Bidwell Corp.’s training program. “These are jobs in a manufacturing-type environment that people here are already comfortable with,” he says. “We’re planning on hiring from the community wherever we can.”

Whether Fifth Season and Pittsburgh’s other startups can make good on that promise remains to be seen. It won’t be easy — 90 percent of startups fail, and talent still leaves town in droves. Then there’s the fact that we’re competing with every other city that’s pinned its hopes to innovation, which is basically all of them. It might seem far-fetched, even impossible, for Pittsburgh to come out on top.

But then again, Pittsburgh’s known for doing impossible things. Just ask Xunjie Zhang as he speeds past — that is, if you can catch him before he summits a hill and disappears.

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