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Report: Tech companies drive Pittsburgh-area growth, development

| Wednesday, March 26, 2014, 1:30 p.m.

Technology is playing an increasingly bigger role in Pittsburgh's economy, as tech companies attract more attention from investors and tech skills become a basic requirement of more jobs, according to a report Wednesday from a regional economic development group.

Integrated technology firms had the biggest spike in six years in the number of investment and development deals they attracted, going from 33 deals in 2012 to 51 last year, according to the annual report from the Pittsburgh Regional Alliance.

The total number of development deals increased 12 percent to 302 from the previous year. They represent $2.4 billion in capital investment spread among companies working in technology, finance, health care, natural resources and other sectors, the report said.

Tech firms accounted for 17 percent of the deals, with manufacturing (65 deals or 22 percent) being the only sector that attracted a larger slice of the pie. The figures are based on only deals that were reported in the media or otherwise became public.

The share of deals that went to startups increased from previous years. But the bulk — 60 percent — went to firms that were expanding or retaining jobs. They include a planned office campus for Chevron Corp. in Moon. About a quarter of the deals went to companies relocating here.

However, technology is the river that runs through the regional economy. Tech companies are not only attracting investors, but technology skills are fast becoming a standard requirement for even entry level jobs.

More than half of the 20,000 jobs posted on ImaginePittsburgh.com, a website for professional and personal networking in the city, required some level of tech skills, said Dewitt Peart, the regional alliance president.

“What we're seeing is that IT (information technology) is embedded in every individual sector that we have,” Peart said Wednesday.

The challenge for Pittsburgh will be in making sure that the local workforce has sufficient training to meet that demand from employers, said Audrey Russo, president of the Pittsburgh Technology Council, a trade association.

Gone are the days when IT was a single department in a large corporation. Now, companies across all sectors and jobs at all levels demand some level of technical expertise. This puts pressure on schools and job training programs to provide students with the necessary tools, she said.

“There is no job that will be untouched by the importance of this,” Russo said.

Many technology firms have relied on the talent coming out of Carnegie Mellon University and University of Pittsburgh to fill out their companies.

Netronome, a Cranberry-based maker of computer processors, has taken “full advantage of the local universities” in growing its workforce of 230, said Jarrod Siket, the firm's senior vice president and general manager of marketing.

Siket grew up in Pittsburgh and graduated from CMU in 1994, and his company has deep ties to his alma mater. The relationship with Pitt and CMU has funneled bright undergraduates to Netronome, he said. But the challenge has been filling out “the middle ground,” seasoned workers who have years of work experience beyond college.

“Not all of your growth needs are satisfied by the undergraduates,” he said.

Tech companies here are competing with Silicon Valley, Boston and Austin for those workers. Pittsburgh's challenge is to convince those people to give the city a look, as well as keep the CMU and Pitt graduates long enough to develop their skills.

“We've got to keep that talent local,” he said.

John Thornton, a 2007 CMU grad, stuck around Pittsburgh to build the company he helped found and of which he is now CEO.

The startup, Astrobotic Technology, aims to be a kind of “FedEx to the moon,” and is developing robotics that can fly packages into space. The Strip District based company, which has yet to complete an actual mission to the moon, has garnered the interest of scientists, educators and even retailers who want the marketing cache of selling products that have been to the moon, Thornton said.

The company relies on expertise at CMU, a national leader in robotics. But there are other reasons why Astrobotic stayed in the Steel City, he said.

Warehouse space is affordable and Astrobotic is in the midst of a 5,200-square-foot expansion. There is an advantage to being near aluminum maker Alcoa.

Then there are lifestyle considerations that Thornton believes many 20- and 30-somethings overlook. It has the advantages of a large city, without the severe traffic, the high expense or inconveniences of a place like California's Bay Area.

“There are a lot of things going on here in Pittsburgh that young people need to wake up to,” he said.

Chris Fleisher is a staff writer for Trib Total Media. He can be reached at 412-320-7854 or cfleisher@tribweb.com.

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