Development Starts With Historical Endowments: Industrial Policy and Leadership Are Catalysts

Abstract

Ben Armstrong compares the implementation of regional economic development programs in the Pittsburgh and Cleveland metropolitan statistical areas during the 1980s. He argues that their regional economies and research institutions were then similar. He contends that the transformational policy difference occurred when Pennsylvania’s governor mandated that the presidents of Pittsburgh’s research universities be programmatic leaders while Ohio’s governor did not do the same. Armstrong concludes that Pittsburgh’s Metropolitan Statistical Area became a center of high-tech innovation as a result, while Cleveland’s did not. This author contends that disparities in regional technology resources, as well as institutional self-interest and leadership, were the critical differences. Cleveland’s institutions had to give priority to fixing their business problems. Armstrong and the author agree that economic endowments and industrial policy played roles in both regions’ economic outcomes; where they disagree is on the weights given to each.