Ben Chinitz Redux
It is hard to read any local news, or any national news about Pittsburgh these days, without someone touting just how big a transformation has been going on here. There is the inevitable story about this new business, or that new business, and it is easy to believe that those stories can be aggregated and extrapolated, and that we are really a hotbed of new entrepreneurship. The thing is.. this is a big region, and for sure there are stories of smart innovative folks doing neat things. The question is whether the region as a whole is really doing well. Remember, the plural of anecdote is not data, so you have to move well beyond any one story.
Over 50 years ago, so literally more than half a century, the economist Ben Chinitz wrote on the hard to quantify, but generally accepted, observation that being an entrepreneur in Pittsburgh was hard, or at least rare. We basically were not generating new small businesses. See: Benjamin Chinitz: Contrasts in Agglomeration, American Economic Review, Papers and Proceedings, Vol. 51, 1961, pp. 279-289
His theory was that the nature of the steel industry here actually inhibited the level of entrepreneurship that might normally take place. One sentence from his paper oversimilifies his thesis but gets to the rub of it: ".. you do not breed as many entrepreneurs per capita in families allied with steel..." (p. 284)
But now.. today, what is the state of entrepreneurship in Pittsburgh? It is actually not much easier today to measure 'entrepreneurship' than it was a half century ago. But there is some data that is pretty current. So I took some data that the economic census has data on establishment births. This counts as at least a generic measure of new business creation. The data is from the Statistics on U.S. businesses, and specifically the Metropolitan Statistical Area totals for 2010-2011:
I basically filtered the data for, the 30 largest metropolitan areas (ranked by employment) and then quickly computed the ratio of new establishment births between 2011 and 2012 to the number of establishments in 2011. That gives a somewhat depressing benchmarking that looks like this.
So Pittsburgh is decidedly last, even now 50 years after Chinitz was one of the first to talk about this foreboding Pittsburghism so openly. Can we still look to the impact of industry structure and the nature of big steel writ large? Seems a stretch even if that legacy extends long past the contraction of the local steel industry. Should we be looking for new explanations? And what does it say about all the recent Pittsburgh buzz?
To be clear, this is just an elaborate factoid, one that clearly is not the whole picture. But it certainly is worth keeping in mind when yet another 'What lessons does Pittsburgh have for us' type of headline.