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Arizona State: University research helps communities, but not as much as you’d think September 14, 2006

Posted by Tom in Economic Development, Education, Workforce.

Arizona State University is conducting a number of studies under the umbrella of the Productivity and Prosperity Project. One of them, by economist Kent Hill, looked into the question of whether university research – the research funded by large grants – helps local economies. His answer: Yes, but just a little…and it really depends on what communities the research is taking place in.

Hill does explain that brain drain concerns can be stemmed by university research:

“Some research findings, especially those that are revolutionary and have the potential to create new industries, are difficult to transfer to industry without frequent face-to-face contact between university and industrial scientists.”

Cutting-edge research, Hill says, may be very difficult to write down and transmit through global lines of communication. It’s the kind of knowledge “embodied in the intellectual capital of the discovering scientist” that has to be shown, not told. And as mobile as the U.S. workforce is, people still generally like to settle down in one place. “Even though U.S. residents are highly mobile, there is still a tendency for graduates with advanced degrees to remain and work in the local area,” Hill writes.

That may be because of the relationships that students build in school — relationships that have value in the workplace after graduation — or because graduates have created families that tie them to a particular area. This tendency is even stronger when the city is a large metropolitan area. A large metropolitan area offers greater job opportunities for graduate’s spouses as well as a wider variety of appealing lifestyle amenities.

On the subject of local impact:

Hill finds that university research programs do have local economic impacts, even in today’s global economy. After reviewing case studies, university records of income earned from the licensing of university-owned patents, and econometric evidence, Hill concludes that “The evidence shows conclusively that university research programs have local economic impacts.”

But while Hill does find concrete evidence pointing toward the local economic impacts of university research, he writes that those local economic impacts “are highly skewed across universities and, on average, are modest in size.”

“University research is most likely to generate large local economic impacts when faculty are on the cutting edge of revolutionary commercial technologies, when graduate programs in science and engineering are top-notch, and when the university is located in a large urban area with an existing concentration of industrial R&D and high-tech production. These conditions are difficult to replicate,” writes Hill.

The quality of the university’s research programs, Hill says, is an important condition for local economic impacts because “the most compelling reason for technology-based firms to locate near universities is to facilitate tacit knowledge transfer from faculty who are on the leading edge of scientific breakthroughs.” And top-notch research programs are most likely the ones that attract cutting-edge scientists.

Lots more to pull from this article, but let me just suggest that you read it yourself.



1. Scottsdale - September 18, 2006

Its really amazing how much ASU has grown over the years, I was on campus the other day and barely recognized it. I only graduated in 2002 so thats saying a lot.

Its interesting that the economic impact is so skewed. Dont tell that to the people over by Papago who are getting their new Bio Center. I think that was finally approved.

I know lots of people didnt like ASU spreading out all over the place and thought that it took away from the university experience. Im in between.

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