Small businesses keep Pittsburgh open during the G-20 Summit

Its safe to say that it looks like a bit of ghost town in Pittsburgh today.

A lot of the businesses that operate in Downtown Pittsburgh actually made the decision to close for the next two days. You can't blame them given the traffic mess and security measures in place.

An interesting observation though - the business that have stayed open and are keeping the city running are the small business, closely-held or run by families.

Believe or not these companies are up and running today for the same reasons they are still up and running during the recession. Flexibility, responsiveness, decisiveness. These types of companies tend to be more nimble than the larger ones in Pittsburgh. So whether its the G-20 Summit - or a global economic meltdown - they can make quick and decisive choices to keep their businesses going and Pittsburgher's working.

So if no one else has said it to these business owners - thank you. For the next two days, but also for the past, present and future of Pittsburgh.

Lessons for the G-20 and my discussion with Philly Inquirer's Mike Armstrong

I had the pleasure of speaking with the Philadelphia Inquirer's Business Editor Mike Armstrong on Tuesday. We had a great discussion that focused on building economic strength through family owned and small businesses, and how the leaders assembled for the G-20 Summit should take note of what has driven Pittsburgh's revival.

Mike shared his thoughts on our conversation via his blog, PhillyInc., and his corresponding column in the Inquirer on Wednesday. I enjoyed our discussion and hearing Mike's insight on the Summit, Pennsylvania businesses and the role of small businesses in our economy. He aptly captured the theme of our discussion and continues to cover the Summit.

Pittsburgh has held up well under the media scrutiny leading up to the next two days. But all to often discussions of our revival have focused on big business. As Mike and I discussed, Pennsylvania has a long list of successful and innovative family owned, closely held and small businesses that are the backbone of the State's economy.

My thanks again to Mike Armstrong for taking the time, and hope we can speak again in the near future.

As the G20 Summit arrives, let’s enjoy the spotlight Pittsburgh

For anyone living or working in Pittsburgh this week, things are just a tad hectic.

OK, maybe that’s a bit of an understatement. The traffic issues alone are promising to cause disruptions for downtown workers. Many are waiting for the protests and thinking about Seattle in 1999. All of it may leave some Pittsburgher’s wondering if it’s really worth it to host the G-20 Summit.

My answer to that is a confident yes.

Leading up to the Summit there’s been a great deal of discussion regarding our fine city and its people. The media has asked if we should continue to be called the Steel City and talked about how Pittsburgh stands as an example for other cities around the word. The common thread has been a positive picture painted of Pittsburgh and its people.

The Summit offers all of us the opportunity to showcase what we have accomplished with hard work and sacrifice, equaling a reversal of fortune for Pittsburgh and the city’s economy. This positive spotlight only helps further the goals of our region’s businesses and people.

However an important element that the media should not leave out is the large role that family-owned and closely held businesses have in our regions economy. Pittsburgh’s strength is found in these business and entrepreneurs that transformed our economy and ensured we would recover from the fall of steel.

Make no mistake, this is a moment for Pittsburgh to shine and be recognized for its accomplishments. To me, a few traffic jams is a small sacrifice.

Are we still the Steel City? Christian Science Monitor, "Sparkling Pittsburgh, latest G20 host, needs new nickname "

I enjoyed this post by Laurent Belsie of the Christian Science Monitor on the media outlet's "The New Economy Blog" today. He also shared a a great video done by the CSM about Pittsburgh and its revitalization ahead of the G-20 Summit.

Laurent notes that Pittsburgh, in terms of its businesses, economy and how its transformed itself is, "more software than smokestack these days," and points to how, "Pittsburgh has come a long way in cleaning up ... and is working hard to build its reputation as a leading American green city." Great comments that also accurately reflect what is going on in Pittsburgh.

So with so much of our legacy tied to the steel industry, does "Steel City" still aptly describe Pittsburgh? Its a fair question and even sort of fun to debate. Have we transformed as a city and an economy so much that steel is no longer relevant to Pittsburgh?

Yes and no, but in my opinion we should keep Steel City for the very reasons that many argue we should embrace a new moniker.

So many of the family owned and closely held businesses in Pittsburgh and the region trace their roots to the steel industry. While there have been new and successful examples of new industries taking hold here, Pittsburgh's steel past, and our successful transition from it, are something for us to be proud of as residents.

In truth, the work ethic and skills "forged" in the steel days have been a driving force behind Pittsburgh's transition. The same entrepreneurial spirit that built the steel industry and associated businesses, found new and better ways to prosper in changing times.

Steel City acknowledges our past, sure. But it also describes the hard working, strong and resolute people of this region - almost all of whom see themselves mirrored in the hard nosed, blue collar playing of what team? Yeah, the Pittsburgh Steelers.

Steel City reminds us of not only who were were, but who we are...and where we are headed. My vote is to keep it.

G20 take note: Adapting to new markets and economies, the CentiMark example

An overwhelming theme to the discussions taking place during the G20 Summit in Pittsburgh is how to help countries and regions, cities and towns, companies and people, respond and recover from the global economic crisis.

The focus is not just on recovery - but a recovery that is sustainable. Many cities around the world, and right here in the U.S. (Detroit) are faced with economies that seemed transformed overnight. Core industries that long could be relied on as large employers have scaled back or even disappeared.

It’s an all too familiar problem for Pittsburgh, one that was covered in a NY Times story back in January '09. In a great quote from the article, Sabina Deitrick, an urban studies expert at the University of Pittsburgh, noted, “If people are looking for hope, it’s here. You can have a decent economy over a long period of restructuring.”

How, Pittsburgh, and its closely held and family owned businesses (that comprise the majority of Western PA's business community), overcame the problem is a lesson for the G20.

A great example of a company that adapted and rose to the challenge can be found in our case study section - CentiMark Corporation.

From its inception in the late 1960’s to today, CentiMark has been an unqualified success. In the fragmented commercial and industrial roofing business, the company today generates over $400 million in revenues. Along the way, the company has continually expanded its product offerings, enhanced its collective skill sets, and nimbly navigated through economic changes. Interestingly, CentiMark got its start in Pittsburgh just as the steel industry collapsed. The company is clearly one of our region’s great success stories.

CentiMark also illustrates the benefits of being a long-term employer in the region. Tim Dunlap, President and Chief Operating Officer and son of the founder, believes that the company’s success is a direct reflection on its employees.

“First and foremost, we have good employees. We have many long-term employees that have been with us 10, 15, 25, even 30 years, and they have been instrumental in CentiMark’s growth.”

-Tim Dunlap, President and Chief Operating Officer, CentiMark

Adaptability, identifying new opportunities, being a long-term employer and champion of the region. This is the formula that has been successful for Pittsburgh. G20 take notice and look around you on September 24 & 25, the answers may be closer than you think.

Take the money and run? Sony, tax incentives and Pittsburgh

I alluded in an earlier post to Pittsburgh's past efforts to attract big business through tax breaks and other financial incentives. While these efforts are seemingly well intentioned, the reality is they often fail to bring in companies that are long-term employers, fully committed to Pittsburgh's economic development and success.

A recent example of this is Sony Corp's closing of its Westmoreland County plant in early December, 2008. The Pittsburgh Tribune-Review had an insightful editorial about the closing when it was announced.

When Sony came to the region, it was viewed as the successful result of state economic development efforts aimed at attracting large companies to the region. This was the case - in the short term.

But Sony ran into the financial issues that many large companies have in the economic recession - and faced some tough decisions. The result is hundreds of lost jobs for the region, over $33 million in state incentives wasted, and another example of how large companies that are incentivized to come to Pittsburgh often leave when there are hard choices to be made.

As the Tribune editorial pointed out, "the company cannot be blamed for a poor business climate,"certainly the economic recession has had similar effects all around the globe.

But as our political and economic leaders meet in Pittsburgh for the G20 Summit, they must debate the measures taken in cities like Pittsburgh, and others like it around the world, to create strong, stable and SUSTAINABLE economies.

In the case of Pittsburgh, the economic success and sustainability is once again exemplified in its family and closely-held businesses and entrepreneurs. These are the businesses and leaders that have kept Pittsburgh strong in the downturn - even as the large players like Sony have left.

Case Study: Perfect storm opens new horizons - Butler Gas Products Company

The story of how Pittsburgh's transition and economic success was driven by entrepreneurs and small-businesses is not just a theoretical concept. The region offers a number of solid case studies that help tell the true story of Pittsburgh's economy.

When I talk Pittsburgh and business issues with people in and out of the region, I am always surprised to hear how many people believe that the city has a whole new crop of companies that have led the transition from steel to the new economy. The truth is that small, family owned businesses with roots servicing the steel industry have found creative ways to identify new lines of business, new markets, and new ways to grow. A great example of this innovation is Butler Gas Products Company.

The company offers a compelling case study. As late as the 1970s, 95% of the company’s revenues were dependent on the steel industry. The founder and family figurehead was in uncertain health and looking to retire, but no successor had been groomed. His subsequent death left the company facing a significant inheritance tax bill.

Yet today, Butler Gas remains rooted in the Pittsburgh area, generating revenues, taxes, employing workers, and serving its customers and the community. Its story is a testament to the entrepreneurial spirit: a son, pressed into service, develops a passion for business and leads the company into the future. It can be done: it just takes guts.

A larger profile of the Butler Gas Products story is available here. It is a company I am always eager to discuss when talking about Pittsburgh, the economy and the real world issues that are being discussed during the G20 Summit.