Cities and metropolitan regions generate the overwhelming majority of economic activity in the United States. But since the 1980s, the federal government has reduced direct per-capita aid to local governments, according to the Urban Institute. The upshot is many towns and cities are left to fend for themselves.
Anchor institutions — especially universities and hospitals — are increasingly being called on to play an outsized role to address the needs of surrounding communities. Many are responding at a time when others are retrenching.
For example, the University of Southern California implemented a program to increase employment from neighborhoods surrounding its campus. Duke University launched an affordable housing initiative to help low-income university employees buy a home near campus. The University of Chicago led efforts to redevelop a commercial corridor in Hyde Park with stores, restaurants, a hotel and an office building that hosts hundreds of university employees.
In Philadelphia, Drexel University employs 9,500 people and has an annual economic impact of $2.4 billion. The university contributes $68 million in tax revenues to city and state coffers. Even more valuable is Drexel’s commitment to its surrounding neighborhoods, which are part of a federal promise zone that the university helps lead, as well as significant investments Drexel is making in affordable housing, public education, job training and health care.
The broader effect of higher education in the Philadelphia region is a major economic force considering it is home to more than 100 colleges and universities and approximately 360,000 students. In addition to the pathbreaking research and innovation taking place on many campuses, the region awards 90,000 degrees a year to students who come from across the country and world. Almost two thirds of the graduates stay in the region, which is one reason Philadelphia has the fastest growing millennial population among the 30 largest cities in the country.
Most of those graduates go on to become productive taxpaying citizens, consumers and civic volunteers. Research shows a college degree leads to higher wages, lower rates of unemployment, and better health outcomes.
The majority of jobs created since the economic crisis of 2008 have gone to college graduates. That shows no signs of changing as technology continues to disrupt entire industries and create new ones. By 2020, 65 percent of all jobs will require a bachelor’s or associate’s degree, according to a study by Georgetown University’s Center on Education and the Workforce.
Unlike so many corporate headquarters that have merged or left town as a result of the disruption, colleges and universities have deep roots, continue to grow and have become even more invested in their surrounding communities.
At Drexel, our aspiration is to be the most civically engaged university in the country. Our Dornsife Center for Neighborhood Partnerships offers numerous community programs supporting adult education, community health and family support. The Dornsife Center operates a free legal clinic; community garden; and provides resume preparation and career counseling, and breast exam screenings among other services.
Last December, Drexel was awarded a $30 million grant from the Department of Education as part of the Promise Neighborhoods Program to provide support services at seven area public schools, including early literacy, science education and engagement with parents. We also recently opened a pre-school on campus.
At the same time, we are trying to position the area around our campus to tap into the digital and creative economies. Last year, Drexel announced a joint venture with a major developer to build a $3.5 billion mixed-use project on 14 acres of land owned by the university. The plan calls for approximately 8 million square feet of office and retail space, academic labs, apartments and public parks built over 20 years.
The development will strengthen the university while also providing more job opportunities for the surrounding community. Indeed, the developer has also agreed to commit nearly $6 million to support local minority businesses, employ local workers, provide job training, and preserve and add to the housing stock.
Despite the stepped-up efforts of many universities, funding from states and the federal government has continued to decrease. This is shortsighted. Universities are economic engines that drive many of the innovations and advancements that have long given this country a competitive advantage. As anchor institutions, colleges and universities are needed now more than ever.