How Universities Can Support Equitable Economic Development

Across the country we are witnessing a resurgence in student activism. On campuses far and wide, one can hear calls for racial justice, worker rights, divestment, environmental action, and gender equity ringing out.

But there’s another kind of equity that I hear less about: The equitable economic development of the localities and surrounding many of our major universities regions.

Sure, most universities try to hire nearby residents for food service and maintenance jobs and purchase goods and services from local providers. But many institutions have not done nearly enough to promote forms of local and regional economic development.

To you and me, colleges and universities are first and foremost providers of advanced learning and credentials. But to towns, cities, and states where these institutions are located, higher education is, along with health care, a primary driver of human capital formation, workforce development, and economic growth.

This isn’t just hypo. Like medical centers, universities are integral components of thriving economic ecosystem. According to the Association of Governing Boards of Universities and Colleges, these “institutions are the largest employers in 10 states and two-thirds of America’s largest cities.” Universities also serve as purchasers, business and technology incubators, patent producers, and magnets for international students.

Nor is the economic impact of universities confined to the United States. A 2019 study of some 15,000 universities in 1,500 regions across 78 countries found that increases in the number of universities is positively associated with future growth of per capita GDP.

In short, it’s not an accident that research universities anchor the fastest of many of today’s growing American cities, like Austin, Nashville, Columbus, Raleigh-Durham, and Ann Arbor and their neighbors, such as Apex, North Carolina, Ankeny, Iowa , and Round Rock, Texas.

In today’s information and knowledge economy, economic development isn’t simply higher ed’s distant “fourth mission,” behind teaching, research, and service. It has become among the primary justifications for public investment in these institutions.

Conversely, it’s no surprise that cities that lack a major research university, such as Detroit, lag far behind their regional counterparts that do, like Pittsburgh.

To be sure, there are exceptions – some fast-growing cities, including Denver and Miami, that do not rely on a research university to fuel growth. Some rapidly growing smaller towns, such as Murfreesboro, Tenn., Nampa and Meridian, Idaho, also lack university-driven growing.

But in general, research universities are – or should be – developers of talent, instigators of innovation, and hotbeds for startups.

Michael Porter, the Bishop William Lawrence University Professor at Harvard Business School, has argued that local and regional generally rely on clusters of interconnected companies, specialized suppliers, and service providers. Universities, in his view, ought to play a far more self-conscious role in advancing these clusters by taking greater responsibility for

  • Training local labor pools.
  • Coordinating purchases from local businesses.
  • Undertaking joint ventures with local firms.
  • Developing real estate to promote local and regional revitalization.
  • Serving as business consultants and catalysts for the commercialization of new technologies and products.
  • Supporting business startups

I couldn’t agree more strongly.

I’d be remiss, however, if I failed to mention a troubling irony: A surprising number of the cities with university powerhouses nearby have relatively poor educational outcomes and disproportionately low-income populations. Examples include Camden, NJ, Rochester, NY, Cleveland, Ogden, Utah, and East Palo Alto, California.

All too many colleges and universities remain largely disconnected from the cities and regions that they nominally serve.

Equity, in my opinion, isn’t simply a matter of enrolling and graduating a more diverse student body. It also entails taking responsibility for the economic health of an institution’s locality and region. It’s simply not true that economic development is outside higher ed’s purview or a recipe for squandering institutional resources.

It’s inexcusable how many richly resourced institutions exist alongside some of the nation’s poorest neighborhoods. Think Yale, Columbia, Johns Hopkins, the University of Chicago, and the University of Pennsylvania.

If these institutions truly want to live up their equity commitments, they must do more than merely provide payments in lieu of taxes or make modest efforts to hire and source goods nearby. They need to meet their responsibility to promote equity economic development through their investments and their training and business consulting capabilities.

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

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