Pittsburgh Evolves into a Technology Hub

By: Sumeet_Manhas

Steel is the first thing that comes to mind when many people think of the city of Pittsburgh. Nicknamed "The Steel City" and "Home of the Steel Curtain," this once global hub for manufacturing created the infrastructure needed to make the United States what it is today.

Fast forward several decades and the city began to lose its image. Steel production continued to fall in favor of imports. Homes lost their value, and businesses slowly left the once famous city. Since then, it's been a journey for the city to find itself an image, but luckily it has.

Technology has begun to become a focal point for the city as it reinvents itself. If Silicon Valley is our tech city of the west, then Pittsburgh is the tech city of the east. Companies have formed and thrived, producing technologies and intellectual property that are used throughout the industry.

Humble Beginnings

Located on a major river, Pittsburgh was the perfect place to manufacture steel. In 1875, Andrew Carnegie began steel production. Eventually, Mr. Carnegie partnered with Henry Frick to create Carnegie Steel Co. in the early 1900s.

Steel was manufactured and still is today, but the city fell on difficult times during the mid-1970s through the '80s. International competition allowed people to import their steel, decreasing the demand for local supply. This, in turn, drove prices down and eliminated many of the existing jobs.

Now, there isn't a steel mill within the city limits. Retail, technology companies, and financial services have taken the place of these once-great steel mills.

Today's Technology Boom

Looking at Pittsburgh today, we see a prominent city once again. Not for steel, this time it is technology leading the way. More specifically, robotics and artificial intelligence. Laying the groundwork for these tech companies to thrive is a top tier education system. The University of Pittsburgh, Carnegie Mellon University, and Duquesne University produce top tier talent that enables technology companies to flourish.

For example, Carnegie Mellon University has been building technology for self-driving cars over the past few decades. Pittsburgh's tech companies believe that self-driving vehicles have an essential role in our future's mobility. Advances in safety and successful ventures of self-driven cars in the general public have helped move this once lofty theory along.

Taking it a step further, 23 startups have come out of the University of Pittsburg in the last fiscal year. Anchor institutions such as these have allowed Pittsburgh to become what we know it as today.

Wealth Creation

With significant technology innovations, increased wealth and more substantial incomes follow. Also, housing and surrounding property values as a by-product will benefit. One way these companies attract money is through venture capital firms.

SoftBank Group Corp in 2017 led investments into firms located in Pittsburgh with $93 million. Another company called Duolingo came out of Carnegie Mellon University and is valued at around $700 million. Companies such as these can provide value through remaining in the city and even going public, attracting more investments.

Booms such as this are nothing new. Look at cities such as San Francisco and Seattle, for example. Major tech companies have taken root and as a result, pushed home prices and rent prices up. Over the last five years ending in 2017, housing prices in Pittsburgh are up 36%. However, with median costs of around $170,000, it's failing to attract swarms of investors.

Another impact that may not be seen is the local mom & pop shops within the city. While many name brand companies take root, these smaller shops may not benefit from this shift in business. Younger people move into the neighborhoods, which creates less demand for brick & mortar shops, thus forcing people out of business.

A shoe store named Sam's Shoes that's been around since the 60's is facing pressure. Sam Arabia, the current owner, stated,

               " They're all Google employees. They shop online, not like old customers."

Serving the Newfound Wealth

As a result of this newfound wealth, the financial industry needs to build on the base the technology has built. Many of these individuals are coming in with high paying salaries and retirement needs. Also, as people make wealth through income and properties, knowing how to protect those assets adequately is vital.

Technology bringing individuals in is essential, but retention of those individuals is equally important. Establishing a family's real sense of belonging will allow the city to grow.

There are many individuals and firms that claim to provide value for their clients, but there is only a handful that has won national awards for doing just that. One of Pittsburgh's top wealth management firms ranked by Barron's is Fragasso Financial Advisors.

Now a member of the Barron's Financial Advisors Hall of Fame, Robert Fragasso, is one of the nation's leading financial advisors. To be on the Hall of Fame1 list, the advisor must appear in 10 or more Barron's annual Top 100 Advisors. This is the latest of many awards Fragasso's team has won while serving the city of Pittsburgh.

It's financial institutions such as Fragasso Financial Advisors that will help serve the community. Also, being an established firm within the city means the advisors have seen Pittsburgh, and it's surrounding townships, evolve into what it is now. Technology or steel, retirement needs, and financial guidance are still a need that must be fulfilled.

The great city of Pittsburgh may be known for many things. From old Three Rivers Stadium to the very steel that built this nation, this city continues to adapt and evolve, remaining one of America's greatest cities. Thanks to top tier universities, companies, and ideas are bringing added value to the entire Pittsburgh area. As a result, wealth continues to pour into the city, building it back as a worldwide powerhouse. 

1 Barron’s listings are based on data compiled by many of the nation’s most productive advisors, which is then submitted and judged by Barron’s. Key factors and criteria for each award include assets under management, revenue produced for the firm, regulatory and compliance record and years of professional experience.

By Sumeet Manhas

© 2019 Copyright Sumeet Manhas - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.