What lessons should we learn from Pittsburgh?

 I didn’t go to Pittsburgh on the Chamber trip, but I followed along digitally and I’ve spent a lot of time there too.

The rejuvenation that appears to have occurred there is impressive:  Tom Eblen writes well about it the Herald Leader.  I definitely love the impact that philanthropy has had on the city and the focus on urban design, arts, and greenspace.  It sounds great to hear about the impact that higher education and health care have had on the city.  (Read more: http://www.kentucky.com/2010/05/16/1266700/eblen-pittsburghs-transformation.html#ixzz0o6F5K4kv)

But, what did it take to get there?  The city has lost so many people it is only slightly larger than Lexington.  Yes, you heard me right:  a Census challenge was conducted in Lexington recently, and the result revealed that Lexington is home to 300,000 people.  Pittsburgh has slightly more than 310,000.

Plus common sense screams that all Pittsburgh is doing is riding the last bubbles:  eds and meds.

I wrote this last September:  “Higher education is being exposed as completely unable provide value for the people who consume it.  Full time workers ages 25-34 with bachelor’s degrees saw an incredible 11% decline in their real earnings between 2000 and 2008. Yet at the same time costs for college rose 23% at private schools and 36% at public institutions.  (Source: U.S. Census/ Businessweek http://www.businessweek.com/magazine/content/09_39/c4148btw988167.htm)”

The same goes for health care.  As wages drop, as unemployment spirals upward, as corporations slash mercilessly to improve the bottom line, and as medical costs escalate, advanced health care will become a luxury.  The millions of people who have been hired as aides and assistants – generally at fairly low wages – will see the once “sure thing” of employment evaporate.  High skill, high wage medical professionals will see opportunities decline – at least in this country – leading perhaps to an exodus to other places.  Mammoth heath care facilities, huge users of increasingly expensive energy, will begin to resemble the steel mills of the 1970s, hulks whose usefulness has vanished.

What does this mean for the cities and regions who have so far used the growth of these two “industries” to shelter somewhat from this economic upheaval?   The first thing it means is that those places need to have the courage to look realistically at their economies and admit their vulnerabilities.  Yet I assume most will cloak themselves in arrogant pride that they have found the secret to civic survival in the 21st century:  “eds and meds.”

Listen to the head of the University of Pittsburgh Medical Center (UMPC):  “The cities of the future, of which Pittsburgh will be one, will be driven by companies like UPMC and sophisticated universities that take intellectual property and translate it into services and commerce,” predicts Jeffrey A. Romoff, chief executive of UPMC.

I disagree:  cities of the future will be those that can meet their needs locally, those that substitute prosperity for consumption, and those that have minimized their vulnerabilities to global economic and environmental shocks.  Further, Romoff’s vision for the future is what should have been happening for the last 100 years, but didn’t.  Finally, what would that vision mean to the 95% of us who cant take intellectual property and translate it into services and commerce?  We do we fit?

Folks, eds and meds will end the same way as the tech bubble, the housing bubble, the credit bubble, the tulip bubble, and the spam bubble (ok, I made this one up).  Local resilience is the only path to quality of life in the 21st century.”

I bring this up because it appears that once again, bright people in Kentucky are wringing their hands over trying to catch to where the world has been.  See, Pittsburgh hasn’t done anything new, they’ve merely been riding the crest of a bubble.  They haven’t done anything new, because the law of diminishing returns says there isn’t anything new to be done in the old system.

Tom Eblen writes what I think is on many people’s mind on May 16: “As I listened to the presentations, I kept thinking: What are Kentucky’s core strengths that could be reinvented for a modern economy? For example, how could the horse industry follow the bourbon industry’s lead in reinventing itself? How could more investment in research universities create Kentucky’s technology industries of the future? How could more school reform provide the workforce those new industries will require? Most of all, I thought: What are the big, transformational ideas for Lexington and Louisville?”

This line of thinking assumes that our future will be an upgraded version of the present.  Yet the stark facts – if one chooses to admit them – are that the world around is changing more rapidly than ever. The future we assumed we were going to get has been cancelled.  If we in Kentucky only try to capture what other places have done, then we lose in the future even worse than we’ve lost in the past.

The “big, transformational ideas” for Lexington (and Louisville) are right in front of us.  We can leapfrog over the end of the 20th century mode of thought, and create independent, resilient cities.  Independent of distant food and clothing, independent of oil, independent of the lose-lose global economy and resilient in the face of energy and climate shocks. By doing this, we can become the world’s model, and for a time create the wealth so many desperately seek.  And then when things get rough, we will have the ability to withstand the shocks better than any place else.   And even if times don’t get rough, then we will be doing the things that we should be doing anyway and our quality of life will only get better.

Kentucky’s “core strengths” are its fertile land, ample water, and bright minds.   Let’s use those to make Lexington a truly 21st century city.

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