Pittsburgh Technical Council

Pittsburgh: We need to be more "braggy"

Pittsburgh: We need to be more "braggy"

Article Published: July 21, 2014

AudreyBy Audrey Russo, President and CEO, Pittsburgh Technology Council

It’s the time of the year when the Council compiles the update of our region’s technology and innovation performance. When Steve Case recently came to Pittsburgh for his #riseoftherest awarding SolePower a $100,000 grant, he repeatedly noted that what he discovered here needs to be shouted to the world. His words were “Pittsburgh, you need to be more braggy.” At the Council, we do just that through all our means of engagement. While we work on the many voices of the tech community, it’s important that you know how well (or not), we have performed as we look at data from the 2014 State of the Industry (SOI) Report.2014-SOI-Report -Cover

The Council’s 2014 SOI Report reveals that the technology industry is one of the main economic engines of SWPA. There are more than 10,000 technology establishments within the region which employ almost 300,000 people, accounting for more than 23 percent of the area’s overall workforce. The $20.7 billion annual payroll of these companies represents more than 34% of the region’s total wages.

For those of us who have been in Pittsburgh for the last five years, you can see the impact of this growth. The city of Pittsburgh is almost at full capacity for office space. East Liberty and Lawrenceville have blossomed into distinct neighborhoods filled with residential, retail and commercial spaces. The focus on alternative modes of transportation is a top priority for the region, as is the importance of diversity and inclusion. All of these considerations are part of the equation to attract and retain people who work in these sectors.

While the investment activity has been relatively active, digging beneath the aggregate numbers we find that fewer than 10 companies received significant funding (> $20 million) while the remainder, have received predominantly seed investment, not growth capital. This continues to be one of the PTC’s main focuses: to attract growth capital investment in these start-up companies. 

Information Technology  In the region, there exists nearly 1,000 software companies who employ almost 12,000 people with a total annual payroll of $1 billion. During the three-year period of 2010–2012, total wages in this sector grew more than 23%. In the two-year period 2012–2013, 21 regional information technology companies raised a combined $127.05 million in venture capital investment.

Life Sciences  Nearly 400 life sciences companies employ almost 16,000 people with a total annual payroll of more than $1.28 billion. Wages within this sector grew 9.7% during the three-year period 2010–2012. In the two-year period 2012–2013, 18 regional life sciences companies raised a combined $125.76 million in venture capital investment. 

Advanced Manufacturing  While manufacturing across the U.S. continues to experience reductions, in SWPA there are 822 advanced manufacturers who employ more than 22,300 people, with a total annual payroll of more than $1.3 billion, an increase of nearly $100 million over the prior report period. While the number of jobs remains flat, salaries and production have increased, demonstrating the use of technology to drive efficiencies.

Energy Technology  The region’s energy industry comprises more than 1,100 establishments, employing approximately 37,000 people with a total annual payroll of $3 billion. Many of these companies are new to the region, with either outposts in SWPA or corporate headquarters. The aggregated energy technology cluster posted the highest growth rate in the total annual payroll category (35% over the three year period
2010–2012) ever recorded in this report, since it began publishing in 1999. Additionally, the wages for this sector remain one of the highest out of all the clusters reported.

University Research and Development provides our region with highly trained people who are involved in some of the world’s most promising solutions. 

  • The region has shown steady growth in university research and development expenditures, with more than $1.4 billion in spending in 2011, an increase of 36% over the four-year period 2008–2011. Sources of funds include federal, state and local governments.
  • The University of Pittsburgh was ranked 10th among 954 colleges and universities nationwide, with R&D expenditures in 2011 at more than $899 million. In 2013, the university ranked fifth in the nation for the number of awards from the National Institutes of Health, with 963 awards accounting for a total of nearly $408 million.
  • Expenditures at Carnegie Mellon’s Software Engineering Institute, the region’s lone federally funded research and development center, reached nearly $108 million in 2011, a 33% increase from 2008.
  • Altogether, seven regional universities accounted for 9,867 science, engineering and health field graduate students in 2011.
  • Three hundred twenty-two licenses & options were executed in 2013 with gross license income of nearly $12 million. This activity resulted in 209 patents being filed, with 96 patents issued. Twenty-two start-up companies were formed from this university-based activity for this review period.

Aggregated Venture Capital ActivityPittsburgh MSA 2012-2013
(Data from Dow Jones VentureSource)

In the past two years, 61 small businesses in the Pittsburgh MSA raised more than $343 million in 70 venture rounds. 

In February 2013, the National Venture Capital Association named Pittsburgh as one of the top 15 cities in America for startups.

At the Council, we will continue to focus our energy on connecting investors from around the world with the intention of capital investment which facilitates the growth of these companies. At the same time, we know that connecting technology companies with potential customers is even more important, as demonstrated market traction very often attracts investment activity. We are going to continue to grow our “braggy” strategy to support the continued growth of the technology industry in our region. Hopefully you will as well.

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