The Problem
As the U.S. economy continues to shift away from the production of goods to the production of knowledge and ideas, the amount of human capital in a region will remain key to its success. Widely varying concentrations of human capital have contributed to increased clustering of economic activity and diverging fortunes of different places. Expanding higher education activity in struggling communities is increasingly being considered as a potential place-based policy that could spur economic growth in these areas. However, the evidence suggests that the establishment of a research university may not be sufficient to transform a local economy.
The Proposal
E. Jason Baron, Shawn Kantor, and Alexander Whalley propose that instead of establishing a new research university, lagging communities should focus on transferring productivity-enhancing knowledge to their local employers from existing research universities near their regions. To help achieve this goal, they argue for a regionally targeted expansion of the 1988 Manufacturing Extension Partnership program that would encompass a broader range of sectors.
