8 Russian officials visit city to study economic turnaround

| Thursday, June 30, 2011

Mayors of three Russian cities are part of a delegation from the country that began a three-day visit on Wednesday to learn about Pittsburgh's shift from a steel town in decline to a technology hub.

The eight visitors sat at steel baron Andrew Carnegie's boardroom table at the Heinz History Center as they met with Allegheny County Executive Dan Onorato and discussed projects to restore old industrial sites. Later they learned about Carnegie Mellon University's Project Olympus incubator, which helps move research on campus into the business world.

The Russian mayors and other civic leaders coping with high jobless rates and a need for new industries visited Detroit to learn about efforts to revive the auto industry before coming to Pittsburgh. The Pittsburgh office of the Small Business Administration arranged the visit.

The two-city tour was organized under the U.S.-Russia Bilateral Presidential Commission, which President Obama and Russian President Dmitry Medvedev created last year to help improve relations.

In the Soviet era, many population centers were formed around a single industry or plant -- but those "mono-cities," as the Russians call them, have struggled in recent years as the economy faltered and factory technology fell behind the times.

Sergey Veber of Pikalevo said an aluminum factory in the city was restarted following an economic crisis, and the plant and related businesses now employ 3,500 to 3,700 people. Still, officials are having trouble modernizing the factory, "so that it can function in the modern market," he said through an interpreter.

In Pittsburgh, he wants to learn about how another city made a fresh start, and steps the government took to help small businesses and factories.

Valery Pintayev of Baikalsk, on Lake Baikal, the world's oldest and deepest lake, said leaders there are trying to make environmental improvements at a paper factory that is the primary industry. He and the others are "trying to create new jobs, and to see what new businesses would function" in their cities.

If the businesses they create in their cities "don't make it to the international market, they won't go anywhere. They won't have success," said Sergey Sorogin of Sokol, a city built around the timber industry that is trying to diversify into electronics and other companies.

A year ago, his region had 7 percent unemployment, but that has declined to about 2 percent as the government has provided funding for small and medium-sized businesses, Sorogin said.

Because the country is not used to open markets, leaders need to determine "where the government needs to step back and let the market grow for itself," he said.

Carl Knoblock, SBA director for the region, said the Russian city leaders' visit was a natural for Pittsburgh because it struggled through the same problems decades ago.

In addition to providing education and advice, "I look at this as a potential opportunity to export to them, and to have businesses come here," he said.

The Russian mayors said they look forward to seeing advanced manufacturing and robotics demonstrations, learning about new medical technologies and hearing specifics from Pittsburgh business and civic leaders about how new businesses were created. Russian economic development officials and representatives of a small business group also are visiting through the SBA program.

During the Detroit leg of their one-week trip, someone talking about economic recovery told the Russians: "If you want to know how the story ends happily, go to Pittsburgh," said Harvey D. Bronstein, the SBA's senior international economist. "I told them, that's where we're headed."

Additional Information:

Main attractions

Some stops on the tour by the eight-member Russian delegation, which ends on Friday:

-- McGowan Institute for Regenerative Medicine, South Oakland

-- Pennsylvania Pure Distilleries, maker of Boyd & Blair vodka, Shaler

-- Kerotest Manufacturing Corp., South Oakland, maker of metal and plastic valves for natural gas and other industries

-- Pittsburgh Life Sciences Greenhouse, South Side

-- Carnegie-Mellon University Entertainment Technology Center, South Oakland

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