Should-Read: Noah Smith: How Universities Make Cities Great

Should-Read: Noah Smith: How Universities Make Cities Great: “Abel and Deitz find that university research expenditures have a strong effect on the number of educated people in a region—over four times as strong as the effect of degree production…

…Skilled workers come to do research at the university itself. But most of the effect comes from private-sector activity in the surrounding economy. When a university spends a lot on research, ideas and technology leak out to surrounding businesses in myriad ways. Universities cross-license technologies to the private sector. Academics consult for local businesses. Grad students, researchers, and professors start local businesses of their own. Companies establish research centers and hire smart people away from their Ph.D. programs or campus jobs. Some universities provide forums for local entrepreneurs, inventors and academics to meet each other, exchange ideas and offer employment.

High-productivity technology businesses therefore tend to cluster around universities, in order to take advantage of the rich flow of ideas and skilled workers. That, in turn, draws smart educated people from other regions, boosting productivity and raising wages even for less-educated locals.

The policy implication is clear. In order to boost local economies, universities should stop seeing themselves only as educators, and start seeing themselves as platforms for local economic activity. Cleveland State University researchers Richey Piiparinen, Jim Russell, and Charlie Post call the former a “consumer university” model, and the latter a “producer university” model. They apply the distinction to explain the diverging performances of Cleveland and Pittsburgh. Cleveland’s colleges, they say, are still too focused on educating locals, while Pittsburgh’s—especially Carnegie Mellon—have taken an active role in boosting the city’s technology industry…