Former mayor of Pittsburgh advises Calgary to ‘be bold’
Look beyond oil industry, says leader of U.S. steel city’s transformation to tech
The mayor who presided over Pittsburgh’s transformation from declining steel town to a vibrant technology hub says Calgary, too, has the potential to become a hot spot for innovation and knowledge-based job growth.
But Tom Murphy — who served as mayor of the American city from 1994 to 2006 — said Calgarians must first acknowledge that the oil industry has fundamentally changed, and then develop an alternative vision for their city’s future.
“It can’t be incremental — it needs to be bold. And that means there are always going to be people opposing it,” said Murphy, hours before he was scheduled to address a crowd of 160 business, community and government leaders at Calgary’s Downtown Economic Summit on Thursday. “There will be those who say, ‘the oil industry is coming back.’ Well, we had the same conversations with people who said, ‘the steel industry is coming back.’”
Though there are obvious differences between the two cities, there are also parallels between the Pittsburgh of 30 years ago and Calgary today. Like Calgary, which is suffering from doubledigit unemployment and a downtown office vacancy rate hovering upward of 25 per cent, Pittsburgh’s economy was heavily reliant on one industry. When the bottom fell out of that market, unemployment skyrocketed, and steel mills and offices sat empty. Between 1970 and 1990, the population of the Pittsburgh metro area fell by 500,000 as young people left the city in droves.
But since then, Pittsburgh has undergone something of a renaissance, transforming itself into a technology hub that is home to offices for firms like Google, Apple, Uber, and Facebook. The population is growing again, and the city is consistently ranked one of the most livable cities in the U.S.
Murphy said that revival hasn’t happened by accident — Pittsburgh has been aggressive about rethinking itself and pursuing sometimes controversial ideas. In his first month as mayor, Murphy slashed 150 municipal jobs, then used some of the resulting cost savings to finance a $60-million bond issue called the Pittsburgh Development Fund. The fund — which still exists today to provide gap funding for small- to medium-sized real estate developments — was used by the city to acquire 1,500 acres of abandoned steel mill property and partner with the private sector to redevelop it.
Pittsburgh also worked to develop an entrepreneurial culture and keep its talented young minds from fleeing to Silicon Valley after graduation. It got a commitment from the state of Pennsylvania to invest up to two per cent of public pension funds as an incentive for venture capital firms to locate an office in Pennsylvania. Pittsburgh went from having zero venture capital firms in the city to having 17 — all of which were prospective sources of funding for local entrepreneurs and startup companies.
The city also worked closely with local universities, encouraging them to make investments in technology-related programs and find ways to commercialize research done on campus. That effort has paid off — for example, in 2015, Uber hired researchers from Carnegie Mellon University’s robotics centre to develop selfdriving car technology. Uber now has the world’s first fleet of selfdriving cars working the streets of Pittsburgh.
Murphy said transitioning to a tech economy meant Pittsburgh had to make a conscious decision to focus on the future, rather than the present. He said while that’s not easy, Calgary is already ahead of where Pittsburgh was when it began its revival.
“You have a much stronger entrepreneurial culture, your economy is much stronger than ours was,” he said. “But it’s going to take a real honest conversation to say, ‘the world is changing, and we need to imagine a different place.’”
Mary Moran, CEO of Calgary Economic Development, said honest conversation was the whole point of Thursday’s Downtown Economic Summit. Hosted by Calgary Economic Development, The City of Calgary and Calgary Municipal Land Corp. in response to the rapid increase in office vacancy rates, the summit brought together city politicians and business and community leaders all interested in building a healthy, bustling downtown core and driving economic growth.
“What I’m hoping will come out of today is a stronger vision, and hopefully some commitment from government and the private sector on where we need to be and how we can invest in the downtown core,” she said.