University of Colorado

With better jobs markets and high levels of state funding, these U.S. cities offer a lot more than just a place to go to school

College towns are no longer just sleepy hamlets where learning, sports, conversation, and partying prevail. The rise of the idea-driven, human capital powered knowledge economy has transformed many of them into economic powerhouses. Stanford University in Palo Alto and MIT in Cambridge, Mass. helped power the high-tech startup revolution. And it’s no coincidence that high tech clusters have sprouted around Austin, Texas and North Carolina’s Research Triangle.

And college towns have proven remarkably resilient over the course of the economic crisis. With their economies bolstered by universities, high levels of state funding, and jobs markets with high concentrations of “meds and eds,” the unemployment rates in college towns from Boulder to Austin, Ann Arbor to Madison have remained far below the national average.

Boulder takes the top spot in our analysis of America’s most economically vibrant college towns. Home to the University of Colorado, Businessweek named it America’s “best town for startups.” Ann Arbor, Michigan, home to the University of Michigan, comes in second. Located less than 50 miles outside Detroit, it puts the lie to the notion that geography is destiny, that older Rustbelt cities and regions cannot compete. Next in line are the high-tech meccas: the San Jose-Sunnyvale-Santa Clara metro, home to Silicon Valley and Stanford University; the Raleigh-Cary, North Carolina metro, home to North Carolina and North Carolina State Universities, Boston-Cambridge with Harvard, MIT, and a host of others; San Francisco; and greater Austin. The slides below show America’s top 20 most economically vibrant college towns.

My Martin Prosperity Institute colleagues Kevin Stolarick, Charlotta Mellander and I define college towns as metropolitan areas with high percentages of students and faculty in their populations. Our measure is not limited to smaller, more traditional college towns, but also includes larger metros like Boston, San Francisco, Washington D.C., and New York, which are home to major college campuses and large numbers of students and faculty. We measure economic vibrancy in terms of six key variables: per capita income, high-tech industry concentration, the rate of innovation (measured as patents per capita), human capital (the percentage of adults with a bachelor’s degree or higher), percent of the workforce in the creative class, and the affordability of housing.

Notes and Sources: College towns are defined as metros in the top quartiles in student share of population and higher-education faculty share of employment as per, Richard Florida, Kevin Stolarick and Brian Knudsen, “The University and the Creative Economy,” in D. Araya and M. Peters (eds.) Education in the Creative Economy: Knowledge and Learning in the Age of Innovation. Peter Lang: New York, 2010. Per capita income, human capital (percentage of adults with a bachelor’s degree and above), and housing affordability (median housing cost divided by average income per capita) are from the US Census, American Community Survey. The creative class is the share of the workforce in science and technology; business and management; arts, design, media and entertainment; education and healthcare occupations, from the Bureau of Labor Statistics. High tech industry is from U.S. Census Metro Business Patterns. Innovation is measured as patents per capita, from the U.S. Patent and Trademark Office.

About the Author

Most Popular

  1. Passengers line up for a bullet train at a platform in Tokyo Station.
    Transportation

    The Amazing Psychology of Japanese Train Stations

    The nation’s famed mastery of rail travel has been aided by some subtle behavioral tricks.

  2. An illustration shows two alleys in Detroit.
    Design

    Finding the Untapped Potential of Alleys

    “We’re starting to realize they’re just as powerful as a park or plaza.”

  3. A man bikes down a busy London street with a food-delivery box on the back of his bike.
    Equity

    The Rise of ‘Urban Tech’

    From food-delivery startups to mapping and co-living companies, technology focused on urban systems is drawing billions of dollars in venture capital.

  4. A man sits at an outdoor table at a McDonald's restaurant, next to a sign urging water conservation.
    Environment

    How Cape Town Got to the Brink of Water Catastrophe

    And how it stepped back, just in time.

  5. A birdhouse hangs from a tree branch near traffic signs in central Madrid.
    Environment

    Bugs and Birds: New Residents of a Greener Madrid

    Since 2015, Madrid’s government has been trying to increase the city’s biodiversity. Hundreds of birdhouses and “insect hotels” around the city seem to be working.