Universities and Colleges as Economic Drivers

2. The Diversity of University Economic Development Activities and Issues of Impact Measurement

31 2 THE DIVERSITY OF UNIVERSITY ECONOMIC DEVELOPMENT ACTIVITIES AND ISSUES OF IMPACT MEASUREMENT THOMAS GAIS AND DAVID WRIGHT aBstraCt Drawing on a national scan of higher education economic development activities as well as a state-level study of the economic roles of campuses in a large public university system, this chapter describes the many ways in which colleges and universities promote and foster economic development. Higher education economic development activities are diverse, involving many different economic processes. The chapter describes how 1) these activities are often combined in complex combinations; 2) the activities interact with and are contingent on each campus’ environment; and 3) the activities and their probable impacts may change over time. These characteristics pose challenges for measuring the effects of higher education institutions on their surrounding economies. The challenges suggest the value of using a combination of methodologies, including program evaluation techniques, comparative site analyses, expanded import-export analyses , and careful comparative studies of the coevolution of campus activities and their surrounding economies and communities. 32 gaIs aND wrIght INtroDuCtIoN Higher education’s traditional role and strengths lie in educating students and producing new knowledge. Increasingly, though, higher education institutions apply these functions, and take on additional roles, to generate economic growth and prosperity in the institutions’ communities, regions, nations, and, in some cases, other countries. In part, this transformation has been fostered by a growing recognition of the economic realities associated with a “flat world,” where the global location of production, income, and economic growth is determined by competitive advantage (Friedman, 2005). In this flattened world, innovation has become one of the driving forces behind a nation’s economic competitiveness; as such, higher education has, in itself, become a competitive advantage—one that has helped bolster the success of economic giants such as the United States during the last half of the twentieth century (Lane, 2012; Carnevale & Rose, 2012—chapters 1 and 6 in this volume). As Joseph Stiglitz (2010) put it, “The [nation’s] long-run competitive advantage lies in America’s higher-education institutions and the advances in technology that derive from the advantages that those institutions provide” (p. 194). Despite the growing awareness of higher education’s role in economic development activities, the resulting impacts are not easy to assess and many attempts to do so have been fraught with problems (McHenry, Sanderson, & Siegfried, 2012—chapter 3 this volume). Many economic impact studies focus on summing the spending and re-spending of dollars. However, such studies do not capture the full scope of an institution’s economic engagements. Indeed, these activities are often complex and sometimes nonlinear, and their effects may be contingent on local context, the cumulative effects of prior actions , and technological timing. To better understand the economic roles performed by universities and colleges necessitates a mixedmethods approach to trace their processes and products. The purpose of this chapter is to provide an overview of the myriad ways in which colleges and universities serve as economic drivers and the obstacles associated with some of these activities. First, we describe the several ways in which colleges and universities promote and foster economic development. Second, using this broad picture as a backdrop, we consider some of the methodological and theoretical Diversity of University Economic Development Activities 33 issues involved in measuring the effects of the university or college on their surrounding economies. a typoLogy oF CoLLEgE aND uNIvErsIty ECoNomIC aCtIvIty Higher education’s engagement with economic development comes in myriad forms and fashions. In this section, we present a typology of the economic development activities of colleges and universities. Our perspective on the range of economic development activities undertaken by institutions of higher education was influenced by two studies commissioned by the State University of New York (SUNY) and conducted by the Rockefeller Institute of Government. The purpose of the studies was to inform SUNY’s strategic planning process and its efforts to strengthen the role that public higher education plays in fostering New York State’s economy—an issue that became particularly salient following the onset of the Great Recession (see Johnstone, 2012—chapter 10 this volume). The first study focused on assessing the different ways that higher education institutions and systems around the country contributed to economic development in their region. The Institute assembled data on higher education and research programs in all fifty states, reviewed the literature in the field of universities’ economic development impacts, and conducted case...