`Little People' Make a Difference. SMOKESTACK INDUSTRIES

THE revolution in Glassport, Pa., is as quiet as the smoke that used to pour out of its mill. There is no new building to point to. No large corporation has moved in and turned this river town around. Instead, in the abandoned wire mill that was once the biggest employer here, 14 small companies have set up shop in this Pittsburgh suburb.

``The big corporations are gone,'' says Bob McKeown, owner of one of the town's new small companies. ``It's going to be the little people'' who lead the recovery.

As Glassport and the rest of the industrial Midwest rebound from a deep recession, the region is also diversifying. And that is a very hopeful sign, economists say.

``There seems to be less of a reliance on manufacturing for employment growth,'' says Robert Dederick, an economist with Northern Trust Company in suburban Chicago. ``There's less of that classic vulnerability.''

``I think we are less vulnerable,'' adds Stuart Hoffman, chief economist at the Pittsburgh National Bank. ``When the national economy went down easy, Pittsburgh and other parts of the Midwest went down quite hard. ... In the decade of the '80s, we have made that transition to a more diversified economy.''

The diversification is more pronounced in some areas of the Midwest than in others. In and around Pittsburgh, it is dramatic.

``We are coming back,'' says Jake Haulk, senior economist with the Pittsburgh-based Mellon Bank. During most of the decade, the Pittsburgh area's service sector mushroomed while its manufacturing base shrank.

But in 1988 the area saw its first year-over-year increase in manufacturing employment since 1979. And this growth is less dependent than ever on the up-and-down fortunes of the steel industry, economists say.

Glassport's industrial incubator is a good example.

The 14 companies now operate out of what was once a single plant that produced aluminum-coated steel wire and other products for the Copperweld Corporation. In the 1970s, Copperweld employed more than 500 workers here, the largest employer in town. But in 1983, citing competitive pressures, the Pittsburgh-based company closed the plant, throwing the last 194 workers out of a job. Glassport's already sagging fortunes slid further.

A year later, with help from local, state, and federal funds, the Southwestern Pennsylvania Economic Development District bought the property and started the Glassport Industrial Center. The plan: Offer financial and business assistance to help entrepreneurs get started and fill the plant within 10 years.

``People were a little hesitant and skeptical,'' recalls Ron Stuart, the center's project manager.

Yet today the facility is 90 percent full. The new companies range from a machine shop, to a maker of vinyl replacement windows, to a planned Carnegie Mellon University research facility on magnetic levitation. Only one company is steel related.

These new companies are still small, employing a total of only about 200 workers.

``It's not the heyday of 600 or 2,000, but we are employing someone anyway,'' says Mr. McKeown, whose Ball Transfer Systems employs two people. The company produces steel-ball assemblies for conveyors on a mini assembly line.

``What you are seeing is going back to the grass roots,'' Mr. Stuart says. Instead of relying on a single company to provide 2,000 jobs, mill towns will increasingly rely on 100 companies, each employing 20 people, he says.