Gown Towns Thrive

Yesterday I was in a meeting with several people involved with local real estate development and they were asked what the top business priority is for their county (Guilford, NC) going into 2017. Their response, as has been the case for every year in recent memory, was that job growth will continue to be the most critical issue for their businesses. In the course of answering the question quite a few of these people referenced other cities in North Carolina that seem to be thriving – Raleigh, Cary, Charlotte and “even Wilmington” – were the names I remembered. What stuck out, to me, was that no one mentioned Winston-Salem.

Now let me state up front that I’m not prepared to offer any statistics that compare the jobs situation in Winston-Salem to those in Guilford County’s two cities, Greensboro and High Point. But I will say that if you were to poll most people who pay attention to business in the region, they will tell you that Winston-Salem’s economic recovery from the nuclear annihilation that has befallen this region’s traditional economy is further along than its neighbors to the east. For some reason, though, leaders in Greensboro and High Point seem to ignore what’s going on just 30 miles to their west (and in all fairness the reverse is also true), and as a result no one seems to know why there’s a difference between these two very similar neighbors.

A personal theory is that there are a lot of complex and interwoven factors at play here, but one big one is the presence of Wake Forest University in Winston-Salem. The university, and in particular it’s medical school, has been a partner with the city and local companies as the city moved away from it’s traditional tobacco manufacturing base toward a “knowledge economy” with a niche in the area of medical research. Starting over 20 years ago Winston-Salem’s civic and business leaders recognized the need to re-position the city’s economy and Wake Forest played a significant role in those plans. The results are plain to see in the city’s Innovation Quarter, which is booming and is primed for exponential growth over the next 10-15 years.

30 miles to the east Greensboro actually has more schools, including NC A&T and UNCG, but they don’t seem to have had the same effect on the city’s economy. Yet. We’re starting to see much more activity there, including the Union Square Campus that recently opened and is already bearing economic fruit for the city and there’s PLENTY of potential for even more growth. As long as the city’s leaders continue to keep their eye on the ball there’s a very good chance this will happen, as it has in other college towns.

This article in the Wall Street Journal has a lot of data showing how cities in the US that have strong colleges, especially those with research programs, have recovered from the decline in the manufacturing sector over the last two decades. Here’s an excerpt:

A nationwide study by the Brookings Institution for The Wall Street Journal found 16 geographic areas where overall job growth was strong, even though manufacturing employment fell more sharply in those places from 2000 to 2014 than in the U.S. as a whole…

“Better educated places with colleges tend to be more productive and more able to shift out of declining industries into growing ones,” says Mark Muro, a Brookings urban specialist. “Ultimately, cities survive by continually adapting their economies to new technologies, and colleges are central to that.”…

Universities boost more than just highly educated people, says Enrico Moretti, an economics professor at the University of California at Berkeley. The incomes of high-school dropouts in college towns increase by a bigger percentage than those of college graduates over time because demand rises sharply for restaurant workers, construction crews and other less-skilled jobs, he says.

And here’s the money quote as it relates to local economic development efforts:

Places where academics work closely with local employers and development officials can especially benefit. “Universities produce knowledge, and if they have professors who are into patenting and research, it’s like having a ready base of entrepreneurs in the area,” says Harvard University economist Edward Glaeser.

Let’s hope our local leaders take full advantage of what our colleges have to offer, for all of our benefit.

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