Talking to Tom Murphy and Bill Flanagan / Pittsburgh, the mother of all “Cities of Transformation”

00:00:00: Then I went down to the Mon Valley, where the steel mills were closing and workers losing their jobs.

00:00:05: And got there.

00:00:06: reaction in the industrial towns was why are they doing that?

00:00:11: Why is it focusing on high technology?

00:00:13: There's nothing for us no future there for us.

00:00:17: That was real tension.

00:00:21: Can you imagine how he must have done?

00:00:24: well You understand my father quit school at eighth grade.

00:00:30: It is my DNA to come from the very working class.

00:00:36: So you knew the mentality?

00:00:38: I know exactly the mentality and i knew that it had a change.

00:00:43: Pittsburgh

00:00:44: City of Transformation.

00:00:46: Today, Ralph talking with Thomas Bill Two men at heart in an impressive transformation In Pittsburgh.

00:00:54: The mother of all cities Tom Murphy served as mayor of Pittsburgh for twelve years.

00:01:02: Others claim he was

00:01:03: much more

00:01:04: than that, not just an ordinary politician but a city

00:01:07: manager

00:01:08: – A man who with the help dedicated colleagues succeeded even in the face resistance and turning his city into decline to model sustainable transformation and future viability.

00:01:22: At his side is Bill Flanagan, professional community development Someone who, for over forty years has told Pittsburgh stories in a way that resonates.

00:01:34: Making it the role

00:01:35: model of

00:01:36: other cities around the U.S and all over the world.

00:01:39: Someone

00:01:40: who knows

00:01:40: what strategies

00:01:41: are needed to

00:01:42: shape the future – To make a city strong again And speak powerfully about.

00:01:48: how did Pittsburgh do this?

00:01:51: An engaging conversation About smelly fish in a bank safe

00:01:56: deposit box

00:01:57: Innovation-driven universities, the strengths and weaknesses of influential communities.

00:02:05: A bike

00:02:05: pass

00:02:06: all the way to Washington –

00:02:08: The

00:02:08: power of steel in cultural DNA And the advantage of having extensive expertise In the field of power

00:02:17: distribution Thanks

00:02:18: to Nikola Tesla.

00:02:20: Thank you Tom!

00:02:21: And thank you Bill for your expertise in development

00:02:25: For your

00:02:26: insights into Pittsburgh's fascinating transformation, Your appetite

00:02:31: for risk

00:02:31: and the perseverance it takes to win others over.

00:02:36: This podcast offers a valuable insight for those who want to take responsibility

00:02:42: for their

00:02:43: city future.

00:02:45: Don't look

00:02:46: to blueprints

00:02:47: learn from others

00:02:48: but

00:02:49: follow the path that suits you because every City

00:02:53: has its

00:02:53: own assets.

00:02:55: Ask yourselves two

00:02:57: key questions.

00:02:59: Where

00:02:59: can we win and

00:03:01: what

00:03:02: do we have to do

00:03:03: to unlock our potential?

00:03:05: And you will be a City of Transformation!

00:03:21: Pittsburgh Duisburg podcast.

00:03:30: Thank you!

00:03:31: My guests in the studio are Tom Murphy, the former mayor of Pittsburgh and Bill Flanagan, The Best Storyteller

00:03:40: of Pittsburgh.

00:03:41: Nice to hear that.

00:03:42: And Tom... To begin with you I've been for some years in Brussels in Belgium and there were people who told me.

00:03:49: There is a guy from Pittsburgh coming to Belgium and really talking about the situation of an old steel city running down, finding a new path.

00:04:03: And somebody told me this guy is just

00:04:08: crazy!

00:04:09: He's so excellent... ...and he gives us a new perspective in Belgium with also many cold cities.

00:04:18: I was curious that after some years being away from Belgium I meet you today, here in this podcast studio.

00:04:26: That's funny!

00:04:30: When i was mayor we had particularly a relationship with Sheffield England and Dortmund Germany.

00:04:36: the three of us would meet pretty regularly because we were all on the same boat.

00:04:41: We're old industrial cities that tried to figure out the future And what we did which have not done as much in Europe, generally I think is that we embrace the universities as economic drivers of their region and for years.

00:05:00: We thought it was a place where kids would go educated when they do research but never really thought about what it meant to be an economic driver.

00:05:11: so you need build whole new infrastructure into city availability venture capital you know, facilities that support young smart people who don't have a lot of money but are trying to start new company.

00:05:27: And so we began doing it and its really paid off after twenty-five or thirty years.

00:05:33: uh...it was big partnership among all the other people.

00:05:35: initially there were in conversation about A.I There's an AI strike force at Pittsburgh the Pittsburgh community to embrace AI as an economic driver of the region.

00:05:52: So, Shefffield and Dortmund had great universities but they weren't using them in the same way.

00:05:58: we were... They didn't have that kind of partnership.

00:06:01: And I think you spoke in Belgium also at a university how important these universities

00:06:07: are.

00:06:07: Yeah, and back then you were not thinking of the Universities as economic engines right?

00:06:13: You didn't have... so the universities do what they do innovation research in community needs than to build infrastructure support that or people will go someplace else where I mean, that's what was happening in Pittsburgh.

00:06:30: People would go to the university have a great idea and move to California or Boston because there is no opportunity here.

00:06:38: Bill...I experienced you this morning as big storyteller of Pittsburgh.

00:06:43: You are a colleague of mine.

00:06:46: So i worked at Radio Reporter for National Public Radio in Germany And you came with CBS TV, when I remember right?

00:06:55: In the early

00:06:55: nineteen eighties.

00:06:57: Yes forty years ago.

00:06:58: Forty years ago.

00:06:59: where are you coming from originally?

00:07:01: well originally i'm From Delaware The state of Delaware but I had been working at a television station in northeastern Pennsylvania Which is cold hard-cold country as we would say stay here.

00:07:11: So I'd worked up there for three years and then I got A call asking me to come To Pittsburgh and report For cbs Here.

00:07:17: so that's what I did in nineteen eighty two as a business reporter for KDKA television.

00:07:25: You know, yesterday when I arrived in Pittsburgh... ...I went by boat Sunday day wonderful and passed the conference center And then it came to my mind.. ..I've once been here this town many years ago.

00:07:38: that was two thousand nine In fall i think it wasn't September And Barack Obama, the then President of

00:07:46: the United States.

00:07:47: You were here for G-Twenty?

00:07:48: I was there for the G-twenty as a much younger reporter and said oh my goodness!

00:07:54: Time has gone time has changed.

00:07:56: Obama is the president, M. Sarkozy the president of France

00:08:01: just got out of jail.

00:08:03: yeah... How important this G-Tventy summit Was this Tom

00:08:11: Pittsburgh?

00:08:11: Well, it was significant.

00:08:12: I mean It was really the culmination of so much work that had gone into Pittsburgh trying to find a way forward re-inventing The economy really transforming the place and And that was part of why President Obama brought the summit to Pittsburgh.

00:08:26: He it was the middle of the Great Recession.

00:08:28: the whole world was in recession and he wanted To find a community to host the Summit.

00:08:33: That would have a good story to tell an optimistic Story to tell that you can't find away back.

00:08:38: and it was his

00:08:38: finance crisis crisis which erupted.

00:08:41: Yeah,

00:08:42: enormous financial crisis in the United States and Pittsburgh had weathered that storm relatively well And so President Obama wanted to really use that as an example of the world.

00:08:52: So he brought the G-twenty here to Pittsburgh.

00:08:55: It was a seminal event.

00:08:57: not only it sort someone outside the region saying hey we actually did Pull it off, you know.

00:09:02: We've been successful.

00:09:03: we really transformed this community But it also sent a message across the country and around the world that wait a minute there's something Happening in Pittsburgh.

00:09:13: It's a positive place.

00:09:14: you should come check it out.

00:09:15: And in fact the ten years after the summit right up until the pandemic we hosted about seventy city visits from chambers of commerce all over The United States who brought delegations to Pittsburgh To find out what?

00:09:29: We had done What our story was and probably an equal number of delegations From around the world.

00:09:34: so the G-twenty really put Pittsburgh on the map, and it had A lasting benefit that lasted really into the pandemic

00:09:40: have been the story teller for all these delegations, I presume?

00:09:44: Well, I was fortunate enough.

00:09:45: I always asked to be the president of a local organizing committee... Okay!

00:09:48: ...for the G-Twenty, the Pittsburgh G-twenty partnership and so then as a result afterwards that the delegations would come And I would often meet with them.

00:09:57: Tom met with many of them As well in years following the g-twty because everybody wanted To hear this story.

00:10:03: how did Pittsburgh do it?

00:10:05: So i came in.

00:10:08: When I became mayor in ninety-two, Pittsburgh was unclear what Pittsburgh's future is going to be.

00:10:14: Totally unclear?

00:10:15: It wasn't the middle of disruption... Well

00:10:18: through the eighties, Pittsburgh were losing as much as fifty thousand people a year who are leaving the Pittsburgh region.

00:10:26: They weren't moving into the suburbs they were moving to Texas and so we're trying to figure out where Pittsburgh will go.

00:10:33: How was there mood at this time when people angry coming to me and say, hey you want to be mayor.

00:10:38: Well I was thinking there were one big inferiority complex uh...and two a sort of low level depression about Pittsburgh.

00:10:49: in part it depended on how our football team did but also dependent on.

00:10:54: You know that's not good news.

00:10:56: Pittsburgh was managing decline.

00:10:59: we had lost population for twenty years Not just the city but whole region And so we were trying to figure out what the future was going to be.

00:11:09: So when I became mayor, I had worked a lot with the technology community prior to becoming Mayor with this state legislature and it did a lot of different legislative things that support an

00:11:22: experience in the political.

00:11:23: Yeah but it was very controversial.

00:11:25: why?

00:11:25: When I announced I was ready for May or three hundred union people came and picketed my announcement because they wanted to keep the steel mills.

00:11:34: whether threatening you?

00:11:35: Well, yeah.

00:11:36: They didn't want me to be mayor.

00:11:38: they wanted politically

00:11:39: threatening.

00:11:39: They wanted me to Be...they wanted to keep the steel mills with the idea that they might open someday and And they sought high technologies anti-union at a time.

00:11:48: Yeah My view was there's hundreds of acres of property in Pittsburgh.

00:11:54: thousands really are That are sitting their vacant.

00:11:57: we need to move on with our lives And that was not a universally popular...

00:12:02: Was it only your political threat, as they say?

00:12:05: Or also personal threats.

00:12:07: A little bit dangerous for you too?

00:12:10: I never thought of them like this!

00:12:13: Fast forward to now it probably would have been, but back then I never thought of that as personally dangerous.

00:12:17: But there were protests and demonstrations?

00:12:20: There was a lot civil disobedience in more than the eighties before Tom became mayor.

00:12:26: They'd go into bank branches here at Pittsburgh And carry large bags of change Into the bank Then drop all over the floor

00:12:36: Or they would rent security boxes and stick dead fish on them

00:12:43: In the safe deposit boxes and let them rod in the bank because nobody can open the box.

00:12:48: So that there was a lot of Conversation in Pittsburgh about what?

00:12:54: The future wasn't people I mean is it's true.

00:12:58: I mean Lockheed Valley Senate six hundred years ago.

00:13:00: by changes Is the most difficult thing And you know so there were a lot Of people that wanted to keep the status quo, but I said we got to move forward.

00:13:10: and so You know, I was mayor for twelve years and won two other elections after being Mayor.

00:13:16: So people generally approved.

00:13:18: but it was very difficult moment about buying the steel mills making choices where you're going to invest money a public money lots of public money.

00:13:30: everybody has an idea what they oughta do so that In a lot of Europe you don't, you have ceremonial mayors.

00:13:36: We we had the strong mayor system and in Pittsburgh it's particularly strong.

00:13:42: You really Have a council but The Mayor has enormous power to get stuff done And play politics To get your five votes on Your city council Come with you.

00:13:53: But generally that wasn't real difficult.

00:13:56: Both of you.

00:13:57: did you have any idea?

00:14:00: In which direction this City could go at this time.

00:14:04: Yeah, I mean i was betting the form on on Carnegie Mellon University.

00:14:09: okay

00:14:10: is what I would

00:14:11: do.

00:14:13: it's comes because when I wasn't in legislature prior to becoming mayor The president then of C. Carnegie Mellen university a guy named dr Richard Saret said To me you know we can be the economic engine of Pittsburgh and

00:14:30: It's prophetic.

00:14:32: I didn't understand it, right?

00:14:35: Yeah.

00:14:35: And he would mention a half-a-dozen people that went to Carnegie Mellon and moved to Boston in California started very successful large companies employing hundreds of people.

00:14:47: so we began when i was in the legislature then became mayor began focus our infrastructure.

00:14:55: So When We Buy The Steel Mills We talked to the universities about locating facilities there, right?

00:15:02: And so that's a whole focus on the university.

00:15:07: And initially was not... A lot of people didn't see it and then it was controversial.

00:15:16: Yeah, it was a big risk.

00:15:18: I can

00:15:18: imagine because in my home country and Germany universities during the nineteen nineties there were isolated towers of academics you know?

00:15:26: No

00:15:26: no that's what i saw when i was in germany You got your... The Universities did not engage with the community?

00:15:33: Not at all.

00:15:33: yeah they determined them.

00:15:35: In United States is the ivory tower Ivory Tower The university occupy their ivory Towers.

00:15:40: They don't Engage

00:15:42: And to be honest and I'm old enough I could say this care anymore, right?

00:15:48: Is that CMU got it right away.

00:15:51: The University of Pittsburgh which and just to give you a frame the University of Pittsburg until Trump started to cut research dollars Got about a billion two hundred million dollars per year.

00:16:01: Carnegie Mellon got about four hundred million Dollars a Year.

00:16:04: And for every ten startup companies in Pittsburgh none Of them were coming out of Carnegie Mellen university.

00:16:10: The University of Pittsburgh did not have an entrepreneurial culture.

00:16:15: They didn't make it easy for their employees to start companies, they didn't encourage them too.

00:16:22: and you know the large companies that are doing research with CMU or university at Pittsburgh.

00:16:30: Like we were a leading transplant center, lots of drugs are being developed around that.

00:16:34: There was no effort to get those companies—those large pharmaceutical companies —to think about investing in Pittsburgh and opening research here or building the manufacturing facility whereas CMU is very focused on.

00:16:49: they created an entrepreneurial program at Carnegie Mellon University with several Jack Thorne and several other successful entrepreneurs, older retired taught there to help kids think about creating a business plan.

00:17:05: And then they would sort of begin to connect into them in the investors.

00:17:10: Yeah we really had to recover our entrepreneurial spirit in Pittsburgh.

00:17:13: You know, Pittsburgh had been the steel city for a hundred years from the time that Andrew Carnegie brought The Bessemer Converter From Sheffield England In eighteen seventy five and set it up here to begin mass producing Steel.

00:17:25: So we were the Steel City of the world For basically the mid-eighteen seventies until the Mid nineteen seventies.

00:17:31: Successful

00:17:31: high demand

00:17:32: Unbelievable.

00:17:33: everybody could work in the mill.

00:17:34: Why go to college if you are young boy?

00:17:37: You would Go straight into the Mill.

00:17:38: you made enough money.

00:17:39: you Could support a family.

00:17:41: That was the culture here.

00:17:42: Of course, you're gonna go and work in The Mill when you get out of high school.

00:17:45: that Was the way?

00:17:46: The community operated.

00:17:47: no challenge

00:17:48: from Asia.

00:17:49: I mean

00:17:51: yeah.

00:17:51: from the eighteen seventies to nineteen seventies.

00:17:53: You know largely Pittsburgh really was.

00:17:54: it was a king-of-the-world When it came when it came to steelmaking And so that really infused the entire Culture and So this became a very.

00:18:03: we were founded by entrepreneurs In the eighteen seventies.

00:18:05: right hj Heinz Andrew Carnegie George Westinghouse that was what built pits.

00:18:10: but we lost that entrepreneurial spirit because in the corporate environment it was secure.

00:18:16: It became reneged.

00:18:18: Yeah, you had a great opportunity.

00:18:20: You didn't have to take risks To the same extent.

00:18:22: and so what happened when Tom became mayor?

00:18:25: And even before that When he were in the legislature is how do We reignite That entrepreneurial spirit.

00:18:30: How do we rebuild that?

00:18:32: And you know, You did the Benjamin Franklin partnerships when your in legislature and effort to get this state To invest start-ups across Pennsylvania In early eighties It was really beginning of trying to rekindle that entrepreneurial spirit.

00:18:46: So

00:18:46: Ben Franklin partnership would be yours listeners might Another young legislator, Republican and Democrat.

00:18:55: We were able to work together with a Republican governor And we started what is called the Ben Franklin partnership which The state puts about fifty million dollars A year into early stage financing.

00:19:11: So these is prior to venture capital, but somebody has an idea or develop something in their garage and they need take it the next level And we would invest them up to two hundred thousand dollars.

00:19:24: It really got people thinking about start-up companies, and how do you keep startup companies in Pittsburgh?

00:19:31: And it was amazing to me when I thought that there would be a big game changer.

00:19:37: Most of the people at Pittsburgh just continued doing what they were doing.

00:19:42: right now It's sort of like an AI strike force.

00:19:46: Right Now When we talk about conversation with women who started that as the whole thing could have been Lots of people aren't embracing it right now in Pittsburgh.

00:19:58: It's a big conversation and so

00:20:01: they are afraid

00:20:02: about What do we how?

00:20:04: Do we have to change the?

00:20:05: take advantage off it, right And always isn't that?

00:20:08: changes is huge risk.

00:20:10: So when we make a decision to invest in universities We're making a huge risk taking a you might not work You know and so literally your putting hundreds of millions of dollars at risk Tibet that you that there's a certain arrogance in it, and then this is certainly humility.

00:20:29: Right?

00:20:29: And to invest in...in the future?

00:20:32: thats not clear!

00:20:34: There were two Pittsburghs at the time The old Pittsburgh with steelworkers losing their jobs Losing their identity.

00:20:42: history of life On the other hand this entrepreneurial spirit as university.

00:20:47: So

00:20:48: I would see them elections.

00:20:50: It was really interesting.

00:20:52: I could look at Pittsburgh, there's ninety neighborhoods in Pittsburgh and where one were people that got what my message was?

00:21:01: Where the old Pittsburgh...I didn't do so.

00:21:06: well!

00:21:06: Interesting,

00:21:07: I remember.

00:21:07: I covered the story when they created The Pittsburgh High Technology Council and it was a few leaders at that time who kind of had this same vision.

00:21:16: And he created what became one of the first technology trade associations in the United States.

00:21:21: It was around nineteen eighty-four.

00:21:23: so as any good reporter What did i do?

00:21:25: Like i went downtown to the duking club and i covered the news conference all these fancy people you know with These big plans for This technology council.

00:21:33: then i went down To the mon valley where steel mills were closing and where the workers were losing their jobs.

00:21:38: And I got there reaction, and the reaction in the industrial towns was why are they doing that?

00:21:44: Why are they focusing on high technology?

00:21:47: There's nothing for us!

00:21:48: There is no future here for us...and it was real tension.

00:22:00: Well you have to understand my father quit school at eighth grade.

00:22:05: So yeah,

00:22:06: it is my DNA to come from the very working class.

00:22:12: You know he worked in a mill for fifty-one years From eighth grade up until we retired.

00:22:16: so you knew the mentality.

00:22:19: I Know exactly the mentality and uh And i knew that had to change.

00:22:23: But i understood The pain That We would cause and changing them.

00:22:27: Is It People That Worked In A steel Mill Very Component Skilled Workers Were Telling Them Now They Need to learn how use a computer.

00:22:36: And this is before the steel mill became so.

00:22:39: that human challenge on this was, How do you bring people who have rooted in tradition for one hundred years?

00:22:47: Their families now basically say That's gone and we need them.

00:22:52: So many people left Pittsburgh.

00:22:55: I mean, they didn't see a future for themselves.

00:22:58: My challenge was to get people... ...to see the future in Pittsburgh that doesn't look like the old Pittsburgh

00:23:05: And which is not real at this time?

00:23:07: You are losing something and it's real But what you're gaining isn't

00:23:13: clear.

00:23:14: Well, and if you saw those steel mills.

00:23:16: I mean they were enormous miles and miles along both sides of the river just unimaginable fifty

00:23:22: miles

00:23:23: And had been there for a hundred years?

00:23:25: So just Unimaginable that something like that could ever go away or not come back.

00:23:31: That was a huge mental hurdle.

00:23:34: so my one of my enduring memories Of growing up when i got to be sixteen it couldn't get a driver's license.

00:23:41: we hit One car at My father to let me use the car.

00:23:44: He swung shifts, so he would work four-to-twelve one week and twelve days in the next.

00:23:50: So if I got the car when it was working for a twelve, I needed to pick him up, right?

00:23:58: And so I dropped off my date and i was sitting at the gate.

00:24:02: The whistle blew in.

00:24:03: thousands of men come running out.

00:24:05: that is such an enduring you know...the whole street Carson Street has lined with bars and half of them are running into the bars.

00:24:13: but that's my enduring image of Pittsburgh.

00:24:15: we..I had us when I was mayor by that whole mill.

00:24:19: did your father still experience this face?

00:24:23: Pittsburgh history was turning down off the steel mills.

00:24:28: Was he still alive when this happened?

00:24:30: Yeah, yeah

00:24:32: and my father growing up.

00:24:33: I mean II you know.

00:24:34: I didn't know what I was gonna do out of high school And uh, they made it about that.

00:24:38: he kept saying to me these are going to be here.

00:24:40: He could tell that they weren't making Investments.

00:24:44: he would say.

00:24:45: I mean one of his sayings wasn't we're holding this place together with chewing gum and paper clips And he could see the investment wasn't being made.

00:24:57: So in the seventies, he had retired in seventy-seventy one before the mills really started to collapse.

00:25:07: In the end you've found a new way for Pittsburgh with AI and robotics.

00:25:13: It took twenty years.

00:25:15: That's the other thing.

00:25:16: We were no overnight success.

00:25:18: Tom talks about.

00:25:20: they're starting to Benjamin Franklin partnerships in the early eighties.

00:25:23: You one could say it was the end of the nineties when finally we began To feel that we had made it.

00:25:30: and then by the time of the G-twenty In two thousand nine, right?

00:25:33: It was a celebration And and it was being recognized outside the region.

00:25:37: But it was twenty years of hard work.

00:25:39: so g-twentieth was he enter for story of a very painful story.

00:25:42: End

00:25:43: of the chapter?

00:25:43: Yeah,

00:25:45: it was a very difficult... You know you look and people compliment Pittsburgh about changes that they don't understand.

00:25:52: The human cost And political challenges we faced in making these changes.

00:25:58: That's their stories.

00:25:59: If your going to embark on this I say leaders today need three attributes They have to be curious Need them to be nimble and they have to have an appetite for risk.

00:26:13: And it's very hard, for political leaders... To

00:26:18: tell this to the people?

00:26:19: They're basically saying that if we don't work anymore then we've got a change in our direction.

00:26:24: That is a hard conversation with people.

00:26:27: If you were mayor of Duisburg where I'm coming from Where there are situations when people feel that steel stories also come more or less But working for us will be reduced more and more, twenty five thousand today.

00:26:47: I don't know how many

00:26:49: with AI and computers mean.

00:26:52: it just is gonna continue.

00:26:55: So what do you say then?

00:26:58: Okay You could refer them to Pittsburgh because they made.

00:27:01: They had a kind of similar situation.

00:27:04: Well,

00:27:04: we haven't made it yet We're still on the road.

00:27:07: I mean our population is other than Pittsburgh.

00:27:10: now with the city itself as populations growing virtually The rest of the region continues to lose population.

00:27:17: Hmm so where?

00:27:19: Okay But by every measure were not a boom ton.

00:27:24: but many companies are here Amazon

00:27:27: Google yeah

00:27:29: bush

00:27:29: Because, because of Carnegie Mellon University.

00:27:33: That is our competitive advantage.

00:27:35: They're all here.

00:27:36: they wouldn't be here because of our climate Or or because

00:27:40: of the rivers Pittsburgh Steelers

00:27:43: are there for you?

00:27:44: Or The baseball team their hair.

00:27:46: because Carnegie Mellen university Is arguably the pre-eminent research University in the world right now.

00:27:53: so that's a key.

00:27:54: then You would advise people in this book take your university serious Give them a kind of entrepreneurial spirit,

00:28:01: but the university internally This is complicated.

00:28:05: The University internally needs to have an entrepreneurial culture.

00:28:09: what I said about the University at Pittsburgh It's Carnegie Mellon.

00:28:12: And Carnegie Mellen had, twenty-five years ago that entrepreneurial and they built on it in the university of Pittsburgh did not have them.

00:28:21: The mayor

00:28:22: mentioned President Syart.

00:28:23: Richard Syart I actually interviewed him around this same time.

00:28:26: you were probably working with him back in the eighties and i still remember the conversation because he said You know This University was Built by Andrew Carnegie to train people To work In the mills.

00:28:37: what we Have decided is That cannot be our future going to reposition this university, to be an economic driver.

00:28:44: To be a globally significant University and we're gonna make the necessary investments to position Carnegie Mellon for the long-term and for success And to be real resource of community beyond educating students.

00:28:58: That was conscious decision by Board of Trustees and President that University.

00:29:03: change way they were doing business which eventually made them an important partner for the mayor and other elected officials.

00:29:10: in

00:29:14: from

00:29:35: these successful entrepreneurs to what, and of course was the right a business plan.

00:29:42: And it would be reviewed in at end.

00:29:45: if they liked the business plan They would connect The person In this case is woman To people that are willing to invest in It.

00:29:53: mm-hmm.

00:29:54: so there Was a fledgling There.

00:29:57: key all This venture capital?

00:29:59: There was A Fledgling Venture Capital.

00:30:02: So Bill Nuland and a couple people started on their own.

00:30:06: They had lawyers in other business, they were willing to take risk with it to invest potential startup companies.

00:30:15: We did legislation like the Ben Franklin partnership that required our pension funds which are billions of dollars state To invest up to two percent of their assets into venture capital firms if the firm's located in Pennsylvania on a matching, and they would match the money.

00:30:32: And they didn't need to do The Deals just in Pennsylvania but they got it.

00:30:36: give us first look.

00:30:36: so we went from having no venture capital firms headquartered in Pittsburgh to heaven seventeen I think its down for now So really focused at very intentional way To build sort of infrastructure that was necessary to support with Carnegie Mellon, which was in these companies that they were creating.

00:31:00: We're going go to Silicon Valley or Boston because That's eighty percent of the venture capital in the country is invested in those two places.

00:31:09: And what I would say too, because you're absolutely right University of Pittsburgh for a whole lot reasons much slower to the game and but i wouldn't stay on last decade or so they've almost followed the Carnegie Mellon model and formula.

00:31:23: now when life sciences health care space your beginning to see some spin-outs investment surrounding university at pittsburgh.

00:31:31: But it began happening at Carnegie Mellen back then nineties, where are we now?

00:31:36: We're twenty-five years later and Pitt is really beginning to have a similar kind of an impact.

00:31:44: Could you say that Pittsburgh in a way was privileged term because all these foundations as Heinz and Mellon Carnegie and whoever and multi billionaires well,

00:31:58: I mean we are were actually a very wealthy town.

00:32:00: I mean if you Actually look at per capita wealth of this region versus other parts in the United States where it We tend to rank Very high.

00:32:07: but The trouble with a lot Of that money is That It's not really risk-taking Money?

00:32:14: Not

00:32:15: a venture capital kind of A culture.

00:32:16: And so they sit on a Lotta wealth then They don't put it To work.

00:32:20: But the Other aspect of that Is yes there was enormous wealth created here by the Industrial Revolution and a lot of that was donated to Philanthropies, to foundations for the good of the community.

00:32:33: So you have museums and theaters and sports and so on but not enough venture coverage?

00:32:38: Well

00:32:38: even today where I think one of the top accumulations of capital in Foundations & Philanthropeys In The United States On A Per Capita Basis We Still Have A Huge Amount Of Money Here.

00:32:49: And That Money That Sits Inside The Foundation is being invested in economic development, in culture and all the rest of it but not as venture capital because they're non-profit organizations that really can't do that kind investment.

00:33:03: So where's the venture capital coming from?

00:33:05: The venture capital when we require the pension funds?

00:33:09: I think thats going away.

00:33:10: now.

00:33:11: a lot of venture capital firms located companies there are successful, I think of Dick Simmons.

00:33:18: Successful business people that created their own venture capital funds.

00:33:22: Bill Newland is another one.

00:33:25: So these are people that grew up in the early days Of making and venture capital investments And they liked it.

00:33:34: you know They like to risk-taking them.

00:33:37: so then and they were able to generate other money?

00:33:40: So Pittsburgh i would say Pittsburgh does not have as much venture capital.

00:33:45: probably we did in the late nineteen nineties two thousand.

00:33:51: but We have a fair amount of venture capital.

00:33:53: Probably other than Silicon Valley and Boston, probably still at the top twenty places in America in terms of venture capital investments.

00:34:02: And there are more and more VC firms that are active here from all over the country, but the downside to then.

00:34:07: we've seen this again and again in Pittsburgh great idea invented at The University seated by the Ben Franklin partnership or some other non-profit here in town.

00:34:15: they get to the skill where they need the venture capital investment now They go to California Now they got a Boston right?

00:34:21: Then the money tells them well you gotta move to boston or california.

00:34:26: So that was an enormous challenge year for decades and continues to this day.

00:34:32: There's still a lot of pressure on the founders, to move the company out of

00:34:35: Pittsburgh.".

00:34:37: You asked about The Foundations?

00:34:38: The foundations were critical partner in sort of reshaping philosophy.

00:34:45: what Pittsburgh is going.

00:34:47: I mean, we have an outsized cultural and entertainment industry in Pittsburgh at large part because of the foundations.

00:34:58: We wouldn't have that.

00:35:00: And then In the early nineties they began to fund community development corporations which are historically.

00:35:05: They had not done that.

00:35:07: but than these our Community Development Corporations That do smaller developments Do housing maybe some commercial development in the neighborhoods of Pittsburgh.

00:35:16: So it's

00:35:17: not only about museums and theaters?

00:35:19: Yeah, so they played a really critical role on those investments at helping to take neighborhoods—and then job training and helping.

00:35:32: So if you drive around Pittsburgh, you go to East Liberty.

00:35:35: East Liberty is a neighborhood where Google's located and sixty percent of the property in east liberty.

00:35:40: when we took an interest, we being the city doing redevelopment with a home depot.

00:35:47: Sixty percent was taxed in Lincoln.

00:35:50: I mean, essentially people were given away property in East Liberty.

00:35:53: Now it's one of the high-rent districts at Pittsburgh because Google has fifteen hundred jobs there and other companies have located their.

00:36:01: that wouldn't happen without The foundation supporting neighborhood development corporations.

00:36:07: they're

00:36:09: a kind of patriotism also here in Pittsburgh The Pittsburgh patriotism fighting for the neighborhoods.

00:36:15: Yeah, we are.

00:36:17: it is our strongest strength and weakness.

00:36:20: And weakness

00:36:21: because it's really hard to change.

00:36:24: Okay To change in the direction of

00:36:28: Of progress.

00:36:28: so I read a neighborhood organization when like after i got my master's degree?

00:36:32: I came back was director on the neighborhood organization In Pittsburgh working class changing neighborhood racially.

00:36:42: And so then I worked with all the other neighborhood organizations and when they became mayor, many times there were my adversaries.

00:36:49: why?

00:36:50: Because i was trying to push them into a future that day couldn't conceive.

00:36:55: They would doing five or ten houses year.

00:36:58: in fifty houses we're going vacant.

00:37:00: their neighborhood So will lose half our population.

00:37:04: We go from six hundred thousand people To three hundred thousand.

00:37:08: when I'm becoming mayor, we have tens of thousands of vacant houses.

00:37:14: That looks desperate then!

00:37:16: So i am talking about...I can take you to blocks and still today go the blocks of houses that are all vacant.

00:37:29: it was like after World War II in a way right?

00:37:31: It's kind of devastation for many neighborhoods at Pittsburgh.

00:37:36: But do you see as chance to overcome this situation?

00:37:39: You have so much potential now.

00:37:42: I experience here during my very short visit.

00:37:45: Yeah, i mean...I think we're optimistic in the long term and the short-term!

00:37:50: There's a lot of still conversation going on

00:37:53: But you have institutions like NRAC this National Robotics Engineering Center We can learn from.

00:38:01: in Germany.

00:38:04: There's been strategic investment, a lot of it because of Carnegie Mellon again.

00:38:08: Whether you have the National Robotics Engineering Center or the Software Engineering Institute was one of very first federal institutes that was attracted... That was a strategic decision to bring major Federal software engineering center to Pittsburgh in hopes would boost entire software and computer development activity create real cluster here.

00:38:28: so there've be some really smart, strategic decisions that were made along the way.

00:38:33: That's kind of helped us to create a foundation now... ...that we can build on.

00:38:37: and thats kinda what we're seeing with Artificial Intelligence and everything that is happening.

00:38:40: And they pick up the Software Agent Institute way before my time.

00:38:43: but uh.. ..That happens because there was great And so all we're talking about is about partnerships, really.

00:38:51: That was a great partnership between federal elected officials local elected officials the business community All focused on getting The federal government to invest hundreds of millions of dollars into software engineering Institute.

00:39:07: It was very competitive.

00:39:08: other cities wanted it and we were able to get in laid the foundation, I think for us to become in many ways in Carnegie Mellon particularly.

00:39:21: The world-class software development area and so that investment was really important.

00:39:28: Short question AI.

00:39:29: you talked about artificial intelligence.

00:39:32: it's consuming So much energy.

00:39:34: is consuming

00:39:35: Literally, figuratively.

00:39:36: A lot

00:39:38: of human energy and a lot natural energy.

00:39:41: I'm getting worried about what's going to happen with my electric bill.

00:39:44: It

00:39:45: can energize us... It energizes you and electric bills in the sense it's becoming.

00:39:49: It

00:39:50: energises me both ways, OK?

00:39:52: No, that was interesting.

00:39:53: I actually went to a presentation today by construction economist who just moved to Pittsburgh from Chicago.

00:39:58: when they're setting up an office here in Pittsburgh consulting on the construction economy he said is looking at this phenomenon of data centers that are popping everywhere into country being driven by artificial intelligence boom He says yeah but... And thats true.

00:40:12: there'a lot mid-sized markets now everybody chasing AI.

00:40:15: But he said, what Pittsburgh has that very few of the others have.

00:40:20: is boundless energy supplies.

00:40:22: You know, we're sitting on top of the largest natural gas reserve in the Western Hemisphere.

00:40:26: This was where Westinghouse and Tesla electrified world with alternating current.

00:40:31: We have deep expertise in electrical distribution.

00:40:35: So Pittsburgh has a tremendous opportunity because our expertise and our resources to really not just ride this wave but lead it.

00:40:47: if were smart And I think what Tom was talking about, do we really own the AI opportunity and energy aspects that it's going to take to power or not?

00:40:56: That is kind of a question before community now.

00:41:01: It requires a lot investment in the electric.

00:41:06: who is paying for electricity.

00:41:09: The other thing worry me every week there an announcement of new data center proposing But they're not the end users.

00:41:19: They are largely hedge fund investors betting that this is...

00:41:25: Okay, it's not Amazon?

00:41:26: It's Google?

00:41:27: No these are largely companies buying this, betting that they can

00:41:31: sell

00:41:33: the time and I think there at some point going to be a bubble.

00:41:38: I'm not aware of any end-user opening in the data center in western Pennsylvania right now.

00:41:43: Maybe, uh...I am behind at times but

00:41:46: no i think it's a really reasonable issue to be looked at.

00:41:49: and all this actually is fascinating.

00:41:51: hearing this economist that we got into whole discussion about latency.

00:41:55: Latency is the delay between the time.

00:41:58: The AI Is produced until it reaches?

00:42:00: The computer or the end user where the action has taken based on the data and It actually as a function of distance right, And he we got into this discussion.

00:42:09: Well if you have a quarter of a millisecond Of latency how much is that worth then?

00:42:13: and so How close to these end users Have To be to the data centers That are being built here for truly to Be A competitive advantage?

00:42:21: and He basically said he's an economist.

00:42:23: he Said I don't actual No, but he said it's one of the most important questions.

00:42:27: How close do we have to have these facilities and these end users together?

00:42:32: To really unlock all the potential?

00:42:34: The advantage Pittsburgh has is a course deep understanding of AI to begin with thanks to Carnegie Mellon And lots and lots of energy that other regions in the United States don't

00:42:43: have.

00:42:44: so just recently This is a question for Germany We've torn down half a dozen coal fired power plants in Western Pennsylvania over the last few years.

00:42:56: And those properties now have been bought by hedge funds that propose restarting energy, not coal but converting to furnaces like natural gas and then building big AI centers on one of them east of Pittsburgh about thirty or forty miles East of Pittsburgh might be largest country.

00:43:17: right know that's proposed But it is a hedge fund doing not an end user, or Google.

00:43:25: And then there's another one right up the river of not in Pittsburgh where it was a power plant that had just blown out six months ago and now they're proposing to put a big AI center on that site.

00:43:38: We have huge amount energy production here because of the steel mills so we have a huge surplus of energy though some of them has been eliminated but But there's still a huge surplus of energy here, so we would be in place that people go.

00:43:56: And then the other piece is – and I think the legislature needs to deal with it but the gutless wonders they are probably won't how the energy costs will spread around?

00:44:09: If the data center goes into Springdale which is in Duquesne Light's thing do all pay for Right,

00:44:17: that becomes the question.

00:44:18: Does data center just plug into grid and compete with rest of us for power in cost or is it responsible to produce its own energy?

00:44:27: And supply them if they don't need at all.

00:44:29: Some are proposing doing this but others aren't.

00:44:32: It's

00:44:32: an open fact!

00:44:33: So risk and opportunity

00:44:35: right?!

00:44:36: That moment when people are sorting out AI But

00:44:40: back here where you asked about how well positioned we were I think the Pittsburgh store is.

00:44:47: we've laid a great foundation to have many options, lots of different things and offer tremendous opportunity for young people.

00:44:57: But the work isn't complete but it's going to depend on whether you make smart decisions about how they move forward from here because there are still a lot more work

00:45:09: left to do.

00:45:11: Imagine students in Germany who listen to this podcast, they hear about Carnegie Mellon and the important role that university played.

00:45:18: And said okay I want to go to Carnegie Mellen perhaps like it's a fellowship or whatever.

00:45:24: How is the situation at the moment?

00:45:26: doesn't make sense for them?

00:45:28: To apply for visa?

00:45:29: I

00:45:33: mean, it changes by the day in America right now.

00:45:36: You know but for me there's a lot of things i disagree with Trump on But biggest thing i disagree With him is that i have believed For twenty years and america's competitive advantage as our innovation Is that we Have been The most innovative country In the world And that innovation is largely driven by us being able to attract the best and the brightest around the world.

00:46:01: Sixty percent of graduate students at Carnegie Mellon University are Asian, to give you an example okay?

00:46:08: That's all probably going change!

00:46:10: The other thing we as a federal government invests billions – forty-fifty billion no more or maybe a couple hundred dollars per year in innovation through NIH and the Department of Defense, there's huge money.

00:46:26: Nothing in the world compares to a lot of that.

00:46:31: we've invested into it And so it makes no sense to sort of eat your seed corn, right?

00:46:40: Is what we're doing.

00:46:41: In the long term will have a huge impact on our ability to compete.

00:46:45: If you go back to the nineteen eighties when this steel industry is collapsing and watch what happened in the regional economy here.

00:46:51: It transformed service economy but Ed's and Meds health care suddenly came into its own.

00:46:57: Well timing was such that federal government began invest heavily in healthcare-related research and scientific research throughout the nineteen eighties.

00:47:06: And Pittsburgh, Carnegie Mellon & Pitt captured way more than their share of that federal investment And they went after the international students who began to come into Pittsburgh from all over the world and take advantage of that resource.

00:47:20: It really was a combination of both, that enabled Pittsburgh rebuild its economy and diversify it's economy in where we are today and delay foundation.

00:47:30: so what Trump administration is doing calls into question Whether that's the formula for the future or whether we're going to have a real struggle because our economy was really built on so much of that investment and so much international talent.

00:47:46: And I don't think we have an answer to their question, but...

00:47:49: Next year you've metham election.

00:47:52: your thoughts about it at this moment?

00:47:54: The

00:47:54: federal elections.

00:47:55: The federal election?

00:47:56: Metham?

00:47:59: I think if the plain field were equal the democrats would win the redistricting that's going on, might skew at it.

00:48:07: I don't know enough about that to

00:48:10: know.".

00:48:11: I think there is a latent dislike for Trump much more so than existed before because of some his decisions.

00:48:19: If you see this picture from The White House which was for me a long time kind of unsaturable house in American republics?

00:48:30: Yeah, I think that.

00:48:31: And Epstein and a whole host of reasons people might sour on Trump but he is controlling the process to an unprecedented extent.

00:48:43: I mean, the advantage of United States has in their midterm elections.

00:48:47: They're not national elections next year and so that means it'll play out in every state.

00:48:53: And the question is how much influence can the federal government exercise over how those elections happen?

00:48:58: In all fifty states?

00:48:59: a guess we will see but left to their own devices my guesses there could be serious interest in change among many voters.

00:49:08: So let me just say as a moderate Democrat though The Democratic Party Left Me.

00:49:13: I don't blame Trump for winning.

00:49:15: The Democrats have lost contact with much, and you've heard a lot about this but i'm coming from my working class background.

00:49:26: the democrats probably became elitist too urban Hedgefront

00:49:35: elite from New York, from

00:49:36: Austria.

00:49:37: Yeah it just is not real.

00:49:40: the Democratic Party isn't real and the Republicans were very clever in looking for their wedge issues.

00:49:47: I mean why would transgender conversation be a major conversation when we're talking about one-tenth of the population in America, right?

00:49:58: But Republicans have very cleverly taken that issue and turned it into huge conversations.

00:50:06: It has no meaning to anything other than people!

00:50:10: I mean its important for those who are there.

00:50:12: but if you think of the hierarchy on economy and tariffs and everything else

00:50:17: coming back something nice.

00:50:19: Pittsburgh Steelers yesterday.

00:50:22: You saw the game?

00:50:24: Oh, Saw The Game!

00:50:25: Yeah absolutely

00:50:27: yeah.

00:50:27: I watched it up and watch the game.

00:50:29: okay

00:50:30: what we've discovered here in Pittsburgh In the last two games is that for whatever reason when they get to halftime the defense just goes home.

00:50:39: They don't come back out from second half Have a twice in a row.

00:50:45: You know that the NFL has granted the Pittsburgh Steelers rights for Germany.

00:50:50: Great news, for all the NFL fans in Deutschland!

00:50:56: In Germany they have a partnership with Dortmund and Dortmund as very famous football club.

00:51:04: The colors are black

00:51:08: and yellow.

00:51:08: That is great.

00:51:10: Well, the Steelers are a fantastic organization.

00:51:12: It's one of the best brands in football.

00:51:15: if you're going to attract any team To be the German Team I would go for The Pittsburgh Steelers because they it's just A very well-run Organization and it really has built an unbelievable brand here In United States.

00:51:26: i think They still sell more steelers merchandise across the country than then Any other NFL teams so?

00:51:32: So its been a Very lucrative business.

00:51:34: You got to understand that.

00:51:35: the Steeler's or about football.

00:51:37: We don't have cheerleaders We don't have a covered stadium, we're about football.

00:51:42: American football right?

00:51:44: American football.

00:51:45: perhaps it would be nice for you to go to Germany To see the sealers there and perhaps to go Doosburg Right A kind of partner town.

00:51:54: I've been to do spark i mean a long time ago but i was there.

00:51:56: You remember?

00:51:57: yeah It's lovely community as i remember it right.

00:52:01: Yeah, i'm gotten as close as cologne And Düsseldorf & Leverkusen But they didn't get all The way to do sport

00:52:06: and do spoke business innovation company.

00:52:09: This economic development company is visiting you very often because they see as something like a blueprint perhaps for this book.

00:52:21: People need to hear the story and then they need a react in In the context of their cultural from spark.

00:52:27: I mean, I don't know The university i don't where there been what?

00:52:31: They're thinking about?

00:52:33: or the political leadership right?

00:52:35: it all is going to entail some risk though

00:52:37: perhaps you can invite them too Carnegie Mellon To get even more from this spirit.

00:52:42: why think that on the very right way Right-to be an engine for the future?

00:52:47: well You have to find the right answer for do spark Right.

00:52:50: I mean, we did what?

00:52:51: We didn't?

00:52:52: Pittsburgh.

00:52:52: that was adjusting to a period of time in American history and in our region In our state economics on all kinds of dynamics And a set of assets That we had here in Pittsburgh that we could leverage.

00:53:03: and i think part Of any region needs To do is examine itself What are our assets but potentially world-leading or globally competitive?

00:53:12: how Do we unlock that potential?

00:53:14: that Was what A lot of the strategic discussion was Here in The eighties and nineties.

00:53:18: where can and what will it take as a community to unlock that potential?

00:53:23: And then, that's what Mayor Murphy and so many others really set out to do.

00:53:28: I think its'a different conversation...

00:53:30: In every community!

00:53:33: That would be key you'll think about.

00:53:35: Every city has their own assets.

00:53:38: You need the focus.

00:53:41: i'd give u a clear example.

00:53:43: This was my first love for William Allen most proud of Not the stadiums or stuff like But the riverfront trails, we have twenty-eight miles of river front in Pittsburgh and there was less when I became mayor.

00:53:56: There was less than a mile of public access to the rivers

00:54:00: And now you can run?

00:54:01: You could go all the way into Washington DC.

00:54:05: three hundred so.

00:54:07: So iIwasa runner and a bike rider an eye was An eye had run on these trail through The old abandoned seal mills on the River.

00:54:17: you know, long before I ever thought i'd be mayor of Pittsburgh and when I became a Mayor of Pittsburgh that became really driving force for me.

00:54:27: And again this is not everybody shared the vision.

00:54:30: so when Alcoa major international company or PNC bank one of the biggest banks in America proposed to build buildings on the riverfront...I say gotta move your building's back A hundred feet to give us.

00:54:45: and they somehow, they thought people that ride bikes are gonna be security threats.

00:54:50: They didn't want the trails because nobody could envision a continuous bike trail in Pittsburgh.

00:54:56: we never had it.

00:54:57: now We do.

00:54:58: if you anybody tried to take it away there'd be a revolution.

00:55:03: And so That's a simple little thing.

00:55:05: but nobody did it.

00:55:07: then Nobody sort of saw.

00:55:09: It was really amazing to me how few people saw the opportunity on the riverfront.

00:55:14: You have to have a vision and you have be determined?

00:55:17: Very determined, I mean.

00:55:18: so i could go all in stories about companies that didn't want the trail.

00:55:24: just tell them about the Steelers.

00:55:28: So we buy the steel mill where my father worked for fifty one years and were developing it in The University of Pittsburgh Medical Center.

00:55:36: And the Steelers come and say, We want to build a world-class sports medicine facility headquarters for the Steeler's In four practice fields Along this riverfront.

00:55:46: It is bound on the riverside and then a railroad tracks active railroad tracks behind them.

00:55:52: so I think they will work with you.

00:55:54: They come back their design their buildings all along the river.

00:55:58: Everybody wants to be next to water, right?

00:56:01: And we said no you can't do that!

00:56:02: We get a Riverfront and it's going to go on the way into Washington

00:56:06: D.C.,

00:56:07: so we need that

00:56:07: trail.".

00:56:09: The president of the Pittsburgh Steelers and President University at Pittsburgh met with him over lunch in the Duquesne Club where they were going for dinner...and the Raider had come up asking us if he could keep it down.

00:56:21: because move this thing onto a suburban hospital they own instead of putting it there.

00:56:30: And so anyhow, the long and short of that we put to trail.

00:56:33: They moved their buildings but the Steelers big objection was That can only build four eighty yard football fields if you took property for the field.

00:56:44: So that means If your in within twenty yard line which is called red zone.

00:56:49: The Steelers haven't practiced them yet Because

00:56:53: a football field is one hundred yards and there was only room for eighty yards.

00:56:57: So, there's four eighty yard practice fields in but the trail is on the riverfront.

00:57:02: And so I year or so later The president of the Steelers whose office this at the corner Overlooking he calls me what evening it says you know?

00:57:10: I'm looking out at the trail.

00:57:11: I see all these families and old people with everybody use each real.

00:57:14: we did the right thing didn't We?

00:57:16: we did that.

00:57:17: It took awhile For him to learn.

00:57:20: You know Tom Murphy, the guy in Belgium who told me some years ago there is an incredible guy.

00:57:26: There's an incredible mayor of Pittsburgh.

00:57:29: He was right.

00:57:31: Thank you very much and Bill Flanagan people will say he was a best storyteller.

00:57:35: They are also very right.

00:57:37: Oh well thank you!

00:57:38: Thank both of you.

00:57:39: It was pleasure.

00:57:40: That was City Of Transformation

00:57:43: The Duisburg

00:57:43: Podcast Today with Tom Murphy & Bill Flannigan from Pittsburgh.

00:57:48: Thank you very much, Tom.

00:57:49: Thank You very much Bill for your valuable experiences and insights which show how we can successfully change City of Transformation a production of Duisburg business and innovation.

00:58:02: DBI.

00:58:03: We develop the economy together.

00:58:05: we make duisburg strong DBI!

00:58:08: We are here for you on LinkedIn Instagram or our website And in this podcast.