How universities can support equitable economic development


Across the country, we are seeing a resurgence of student activism. On campuses around the world, one can hear calls for racial justice, workers’ rights, divestment, environmental action and gender equity.

But there is another kind of equity that I hear less about: the equitable economic development of communities and regions surrounding many of our great universities.

Of course, most universities try to hire nearby residents for restoration and maintenance work and purchase goods and services from local vendors. But many institutions have not done enough to promote forms of local and regional economic development.

For you and me, colleges and universities are first and foremost providers of advanced learning and degrees. But for the cities and states where these institutions are located, higher education is, along with health care, a critical driver of human capital formation, workforce development, and economic growth.

It’s not just hype. Like medical centers, universities are an integral part of a thriving economic ecosystem. According to the Association of Boards of Universities and Colleges, these “institutions are the largest employers in 10 states and two-thirds of the largest US cities.” Universities also serve as buyers, business and technology incubators, patent producers, and magnets for international students.

The economic impact of universities is not limited to the United States either. A 2019 study of some 15,000 universities across 1,500 regions in 78 countries found that increasing the number of universities is positively associated with future GDP per capita growth.

In short, it is no coincidence that research universities anchor the economies of many of America’s fastest growing cities today, such as Austin, Nashville, Columbus, Raleigh-Durham and Ann Arbor and their neighbors. , such as Apex, NC; Ankeny, Iowa; and Round Rock, Texas.

In today’s information and knowledge economy, economic development is not just the distant “fourth mission” of higher education, behind teaching, research and service. It has become one of the main justifications for public investment in these institutions.

Conversely, it’s no surprise that cities that don’t have a major research university, like Detroit, lag far behind their regional counterparts that do, like Pittsburgh.

Of course, there are exceptions — some fast-growing cities, including Denver and Miami, that don’t depend on a research university to fuel growth. Some fast-growing small towns, such as Murfreesboro, Tennessee; Nampa and Meridian, Idaho also lack college-focused economies.

But in general, research universities are – or should be – talent developers, innovation instigators and start-up incubators.

Michael Porter, Bishop William Lawrence University Professor at Harvard Business School, argued that local and regional economies typically rely on clusters of interconnected businesses, specialized suppliers and service providers. Universities, he said, should play a much more conscious role in advancing these clusters by taking greater responsibility for

  • Train local labor pools.
  • Coordinate purchases from local businesses.
  • Create joint ventures with local businesses.
  • Develop real estate to promote local and regional revitalization.
  • Serve as business consultants and catalysts for the commercialization of new technologies and products.
  • Support business creation

I couldn’t agree more strongly.

I would be remiss, however, not to mention a troubling irony: a surprising number of cities with nearby university powerhouses have relatively poor educational outcomes and disproportionately low-income populations. Examples include Camden, NJ; Rochester, NY; Cleveland; Oden, Utah; and East Palo Alto, California.

Too many colleges and universities remain largely disconnected from the cities and regions they serve.

Equity, in my view, is not simply a matter of enrolling and graduating a more diverse student body. It also means assuming responsibility for the economic health of the locality and region of an establishment. It is simply not true to say that economic development is beyond the purview of higher education or that it is a recipe for wasting institutional resources.

It is inexcusable how many resource-rich institutions exist alongside some of the poorest neighborhoods in the country. Think Yale, Columbia, Johns Hopkins, the University of Chicago and the University of Pennsylvania.

If these institutions are serious about meeting their equity commitments, they must do more than simply provide payments in lieu of taxes or make modest efforts to hire and source locally. They must fulfill their responsibility to promote equitable economic development through their investments and their training and business advisory capacities.

Steven Mintz is a professor of history at the University of Texas at Austin.


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