Inside the big green machine: Pittsburgh has been a fertile valley for environmental firms, but the industry has its own special problems

Hailed as a potential boom sector for business in western Pennsylvania, the environmental industry is now experiencing growing pains.

The regulator nature of the industry is both a boon and a bane to those in it. "One of the barriers to commercializing environmental technologies is that it's regulatory driven. It causes the market and impedes the market," says Dr. Lawrence T. McGeehan, president of the Ben Franklin Technology Center of Western Pennsylvania.

Considering the number of Environmental Protection Agency regulations turned out and the fact that the Clinton administration is now in the White House, it's safe to assume that this cyclical pattern will continue.

The industry sector also found itself up against the recession like the rest of the world.

"We thought the industry would be completely resistant to economic downturn, but we found out that it could be affected like anyone else," says Dr. Edgar Berkey, president of the recently coalesced National Environmental Technology Applications Corp. and Center for Hazardous Materials Research at the University of Pittsburgh Applied Research Center. Prior to the recession, the annual growth rate of the industry, which makes up 2% of the gross national product, was 8% to 10%, Berkey says. But this has slowed over the past 18 months.

Furthermore, growth is not evenly distributed throughout the industry. While some segments are spreading like an oil slick in the ocean, others are leveling off simply because they are entering the mature phase of the cycle. After all, the United States has been working to clean up the environment for more than 20 years.

WHAT'S HOT AND NOT

The environmental industry can be thought of as having three major categories: technological equipment providers, service providers, and waste management facility owners and operators, says Dr. Victor A. Fishman, president of Fishman & Associates. Fishman, former executive vice president at NETAC, started his Fox Chapel-based consulting firm in November 1992 to commercialize technology-based companies.

Many experts anticipate increases for certain types of air quality and control companies as the Clean Air Act regulations near their various deadlines. Robert W. Thomson, head of environmental law and senior partner at Meyer, Darragh, Buckler, Bebenek & Eck, estimates that the impact on the industry will begin in about a year or so.

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