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.