Speeches & Statements

The University as a Catalyst for Urban Revitalization

• Date: 10/07/2008
• Author: Luis M. Proenza (President, The University of Akron)
• Location: Wayne State University, Detroit, Michigan

• Thank you for the kind introduction.  It is my pleasure to be with you today and take part in this symposium, as we explore opportunities for using universities as catalysts for urban revitalization. 

  Let me begin by congratulating our host Wayne State University for creating mutually beneficial partnerships with the community as a catalyst for the region's social, cultural, economic and educational enrichment.

  Let me also recognize the work of the School of Architecture at University of Detroit Mercy, under the leadership of Dean Steve Vogel, for its work in urban revitalization to better serve metropolitan Detroit. 
   
  Indeed, as urban universities, we have much that we need to learn from each other, because I think you will agree that we live in interesting times, though that is an understatement of our modern age. 

  To use a phrase coined by MIT's Chuck Vest, ‘seismic rumbles of change' are transforming traditional paradigms - to say nothing about the interrelationships among academia, industry and government. ¹
  
  And that is because the primacy that America has long enjoyed around the world is increasingly being challenged by the very same forces of technological innovation that America itself unleashed. 

  For example, like our industry counterparts, universities are themselves facing increasing challenges of global competition in an environment where flexibility, adaptability and just-in-time delivery of our "products" are imperative.

  "Thirty years ago, the United States could lay claim to having 30% of the world's population of college students.  Today, that proportion has fallen to 14% and is continuing to fall." ²
  
  "Other countries are building world-class research and educational institutions and are graduating increasingly qualified science and engineering students at a faster pace than ever before." ³

  We know, for example, that only 10% of U.S. students are pursuing degrees in Science, Technology, Engineering and Mathematics (STEM), whereas comparable numbers in other countries are much higher: 60% of students in China and India are pursuing STEM degrees.

  Thus, universities are being challenged like never before and will need to explore opportunities that will create innovative new educational processes and campus cultures that are congruent with the new realities.

  Yet, as early as 1995, Raymond Gilmartin, the former chairman, president and CEO of Merck & Company, Inc., wrote about "the Challenge of Change" in higher education, when he cautioned colleagues at his alma mater that he saw higher education making many of the same mistakes that healthcare had made in the decade before - in the hope that we could learn from their experience! ⁴

  Moreover, you no doubt are aware of various reports such as that of the Spellings Commission on the Future of Higher Education, or of the National Council of State Legislatures' "Transforming Higher Education," among others.

  In short, new realities are forcing us to the inevitable conclusion that higher education is an industry (and I use this word advisedly)...an industry in transition.

  The story is familiar. A long-established industry leader loses ground to overseas competitors or to a few home-grown upstarts who innovate while it continues to stubbornly and senselessly follow its traditional approach deep into the depths of diminishing returns.

  And so, what I want to do today is to explore with you some issues we should entertain and approaches we might take to ensure the future success of our universities.

  All of us in higher education are really venture capitalists - academic venture capitalists. Our decisions are the basis for whether or not our universities earn a return on investment and thereby succeed.

  Think about it!

  To get us started, let me offer four basic concerns that I think are worth raising, especially in light of the new realities facing higher education.   

  I then will focus on the special role of urban universities and on an exciting national urban agenda that is emerging for us.

  Concern number one: Since universities presently capture only 13% of the U.S. R&D economy, can they afford to ignore the other 87% of the U.S. R&D marketplace? Can they afford to ignore the even larger global marketplace for research, of which the total U.S. share is but 44%?  In short, universities have significant opportunity to gain market share, and not just in research - remember, they have but a small fraction of the post baccalaureate marketplace; not only are there for-profit providers, industry itself spends significant monies in pursuit of an improved workforce.

  Second, if medicine is increasingly focused on evidence-based approaches, shouldn't universities seek to have evidence-based educational approaches? If you consider the fact that educational R&D is an infinitesimally small fraction of educational expenditures, you will know that they have not advanced the science of education nearly enough. Clearly, with P-12 education still under attack and in need of reform, you can well imagine the power of any knowledge that can demonstrate what actually works in education! You can bet that this will be a huge opportunity. ⁵

  Third, since focus and differentiation are respected elements of competitive strategy, and since no university can afford to be truly comprehensive in today's environment, what opportunities are there for universities to create greater differentiation among themselves, either as individual institutions or through creative alliances that shape new dimensions of competitive and comparative advantages?

  And fourth, with so many colleges and universities - over, 3,600 by one recent count - they should not be afraid to ask what will be the academic equivalent of mergers and acquisitions, of managed health care plans, and of the emerging private-practice corporations? What new and innovative forms of outsourcing will be considered? What alliances and coalitions will emerge to consolidate and expand market share? And what comparative and competitive advantages will be expressed as a new generation of research universities emerges in the years ahead, as indeed it surely will?

  These are basic issues, yet many in higher education ignore them all too easily, only at our peril.

  Having served for several years on both the Council on Competitiveness and PCAST, the President's Council of Advisors on Science and Technology, let me now take a moment to share a few comments on what many of us are beginning to call "a national innovation ecosystem" . . .

  . . . that system of loosely interrelating elements, of which universities are a part, that has enabled us to make new discoveries, capture their value in the marketplace, enhance productivity and thereby increase our standard of living.
  
  The themes of American competitiveness should now be familiar to us. They have been articulated by the Council on Competitiveness in its "Innovate America" report, by the National Academies in the "Rising Above the Gathering Storm" report, and by the President's American Competitiveness Initiative, among many others which you can readily find at the Innovate America.org website.

  If for some reason you have missed any of these, I urge you to make them a part of your consciousness because they make a compelling case for the changes we must make as a nation and as universities to better address the challenges that America now faces.

  Indeed, the principal finding from the "Innovate America" report of the Council on Competitiveness is this: "Where we once optimized our organizations around efficiency and quality, today we must optimize our entire society around innovation." ⁶

  Think about it: "Where we once optimized our organizations around efficiency and quality, today we must optimize our entire society around innovation."

  Since universities arguably are barely getting on the efficiency and quality bandwagons now, how can we leapfrog into the innovation agenda? Of course, confronting the four basic issues I raised earlier is a good starting point, but university innovation will not occur in a vacuum.  It requires a close and deep collaboration between universities and industry and it requires a willingness to experiment with new models and new alliances.

  The economic clout of this collaboration provides an exciting agenda that has been emerging for many years and more formally in the last three years. It relates to the cities that we live in and the neighborhoods that surround us. What we already do and can yet do with our cities and their larger metropolitan regions can be powerful. 

  Consider these statistics:

  • Of the more than 3,600 colleges and universities across the nation, "...just over 1,900 - more than half of the national total - are located in the urban core;" ⁷
  • 83% of students nationwide are attending colleges and universities in urban core and fringe areas; and ⁸ 
  • 85% of all jobs are in urban core and fringe areas. ⁹

  And these urban institutions account for 68% of the economic activity generated by colleges and universities; and if we include those located in the urban fringe of our cities, the total rises to more than 87%. ¹⁰

  In other words, nearly 90% of the economic power of our colleges and universities is expressed in our cities and their immediately surrounding areas.
  
  There are thousands of universities employing hundreds of thousands of people, educating millions of students, and spending billions of dollars, all in the urban core and fringe.
  
  So it is easy to understand why Neal Peirce said, ". . . universities could and should be a resource, a secret asset, for the health and growth of great cities...there is an appetite out there for attuned universities, truly engaged with their communities." ¹¹
  
  Indeed, urban universities generate the innovations that give cities and regions a competitive advantage, and they do this in several ways: 

  Urban universities create new knowledge and economic value through research and tech transfer. 

  Urban universities develop highly skilled talent, and
  
  Urban universities create environments on and near campus that help attract and retain highly skilled talent.

  Quite simply, urban universities are a major economic force in, of and for our cities.

  They are key anchors for urban revitalization and regional economic development. 
  

  According to a paper published by CEO's for Cities, "...these so-called ‘anchor institutions' represent ‘sticky capital' in cities.  They cannot easily pick up and leave the community.  So they have special importance to the re-making of the city and its future, and they have special reason to want to be instrumental in shaping their city's future..." ¹²

  Also serving as anchors in this revitalization are the state and federal governments, which are becoming better partners. 

  In my home state, the Metropolitan Policy Program at Brookings Institution and Greater Ohio have undertaken an initiative of revitalizing the state's core communities and reinvigorating their economic competitiveness. 

  Entitled "Restoring Prosperity: The State Role in Revitalizing Ohio's Core Communities," the initiative's "...principal finding is that Ohio's political, corporate, and civic leaders must take stock of the state's core communities, their assets, their challenges and their role in the economy and life of their regions, the state and the nation." ¹³

  Indeed, Ohio's challenges are critical.  The percentage of losses in manufacturing jobs is greater there than in the nation as a whole.  Median household income trails national levels and Ohio's growth in population has stagnated at one percent, while the nation experienced 7% growth. ¹⁴
  
  The report concludes that "Ohio's best chance to alter its trajectory is to leverage its assets where they are found - in metropolitan regions.  It is metropolitan areas - networks of urban, suburban, and rural areas inextricably linked by social and economic ties - that concentrate the assets that drive prosperity: Innovation, Human Capital, Infrastructure and the Quality of Place." ¹⁵

  At the same time, through the National Association of State Universities and Land-Grant Colleges Commission on the Urban Agenda, which I presently chair, and in partnership with my colleague, Nancy Zimpher, president of the University of Cincinnati and chair of the Coalition of Urban Serving Universities, we are working to attract substantial federal investments, and states are reviewing changes to allow more innovative approaches by universities.

  This past summer, we convened workshops designed to create a higher education urban agenda that consists of three strands of activity:
  
  1. Talent development;
  
  2. Strengthening community; and
  
  3. Health services.

  Let me focus on just two of these: talent development and strengthening community.

  As you know, talent development in our inner cities is one of the most pressing national problems; and workforce development is the most often-cited priority for business and industry. Our urban agenda would seek to address this issue through the special roles of our urban universities.

  Let me suggest an analogy that I think can lead us to explore an almost entirely untapped area. All of us know of the great strides that industry has made by relentlessly focusing on and refining its materials and component supply chains. Yet, although everyone in business will tell you that their most important challenge is that of a skilled workforce, I know of few companies that have discovered the parallel of the human capital supply chain, in which talent inventory is managed with a supply-chain-like discipline.  And I know of even fewer universities that are exploring this obvious opportunity.

  Think of it: it is estimated that 95% of all technology transfer happens when people move from one place to another - when the material of human capital arrives at a company! It is further estimated that companies spend an average of $1,000 per year per person in enhancing the skills of their workers.

  So what would happen if industry gave as much attention to the human capital side of their supply chain?  Companies could save substantial time and money by converting talent acquisition to a more proactive approach: forecasting demand for human capital and even matching up that capital with specific jobs.  Quite simply, our economy could save about $150 billion and increase its return on investment by as much an order of magnitude.

  In fact, at The University of Akron we have a saying: that "our expertise creates the new materials for the new economy" meant to have the double meaning of materials and human capital - and we take both meanings most seriously.

  So, I think that we should develop a serious academic approach to the concept of talent supply chain management by continually expanding and upgrading career opportunities through education and job training. 

  As it pertains to the second strand of our urban agenda, strengthening community, we have devised a new version of the 3 R's to describe the activities of the new metropolitan university - "Revitalization," "Relevance," and "Regionalism."  I will address the first two - revitalization and relevance; regionalism simply refers to the fact that economies are no longer local; they are regional in scope and often transcend state and even national boundaries, with problems that require state and federal solutions.  For example, key challenges at this moment - particularly in Ohio - are the housing market, the overall economy and the shift in eminent-domain requirements.

  When it comes to urban revitalization, universities can and do play key roles.  At The University of Akron, our own innovative revitalization program is the University Park Alliance, which has leveraged some $13 million in grants from the Knight Foundation and already garnered more than $200-million from other investors to help create a place to attract and keep innovative talent that we - and Akron - need. In the next five years, we hope that these investments will reach upwards of a billion dollars in the 1,000 acres surrounding our campus.

  We call the University Park Initiative our New Landscape for Living, which seemed a logical transition from our University's own initiative, the $500-million New Landscape for Learning, with 12 new buildings, major additions or renovations to 17 other facilities, and extensive landscaping adding nearly 30,000 trees and 34 acres of open space.
  
  And the transformation will continue as we complete construction on a multi-use complex that will include an on-campus stadium and new residence halls, open-space improvements, and parking facilities; the renovation of the recently acquired historic Quaker Square hotel and shopping complex; and plans for additional educational buildings in the near future.

  And in partnership with the City of Akron, One Community, the Knight Foundation and others involved in the alliance, we are helping to bring free wireless Internet access to all of University Park.  We will start by expanding access to the University's existing wireless system later this year.  We also are committed to providing substantial programming, training and hardware resources to help bridge the "digital divide" in University Park.

  Our vision is the create a vibrant mixed-use environment that blurs the boundaries between the university and the community, is pedestrian friendly and in which everything that happens is somehow about learning and health and wellness.

  In realizing this vision, having great partners is essential.  Over the last several years, Summa Health System, one of the premier healthcare systems in the country, along with their private development partners have invested or made plans to invest more than a half-billion dollars in University Park.

  In addition to The University of Akron, Summa and the City of Akron other University Park Alliance members include the Akron Metropolitan Housing Authority, Greater Akron Chamber, Akron Public Schools, University Park Development Corporation and Akron Beacon Journal.

  Private developers have recognized the market potential for university-related projects that generate innovation and that can drive the revitalization and transformation of their region.  As universities, we need to adjust our perspective and our business practices to get deals done. 

  Indeed, there is power in focusing on a small but strategic geography like University Park, and not every project needs to cost millions to have an impact.  Our biking initiative cost less than $50,000 but has done a lot to transform the image and actuality of University Park.  Make a Difference Day in University Park cost less than $20,000 but built enormous goodwill; a great student experience and brought us state-wide recognition. 

  Such community engagement also improves trust, and service by students and faculty in the target geography is a key part of our work and strategy.  In fact, University of Akron students provide more than 15,000 service hours annually to University Park organizations.

  Beyond University Park, we continue our efforts on the Innovation Corridor with Lorain County Community College, west of Cleveland, our partnership with several regional economic development organizations, and our efforts to attract additional federal funding as we help lead advocacy efforts of national groups like the Urban Serving Universities.
  
  These collaborative efforts are examples of how university-community partnerships provide the key to our economic future.  

  As urban universities, we must acknowledge that the competitive and comparative advantages of our campuses are inextricably linked to the vitality of their surrounding communities. We must move beyond the traditional land-grant focus toward the necessary application of all disciplinary knowledge for the public good - in other words its relevance!

  In his book, "The Rise of the Creative Class", Richard Florida refers to colleges and universities as "...a huge potential source of competitive advantage."  And he says that colleges and universities are today " a basic infrastructure component...and far more important than traditional infrastructures such as...the canals, railroads and freeway systems of past epochs..." ¹⁶
  

  I suggest that we must engage in relentless innovation, in education generally and higher education in particular.

  We must do so because in today's knowledge-based economy, education is society's infrastructure.  Education unleashes the power of innovation by creating the human capital - the talent supply chain - that shapes our industries and our society. 

  Innovation requires interaction among great talent, and that interaction most frequently occurs in quality urban locations.  The need and ability to create these locations near our universities helps to attract and retain the talent.  This is a key competitive advantage that urban universities provide for their cities and regions.  In fact, one or more vibrant urban cores are absolutely necessary for a competitive regional economy. 

  As real estate investors and developers, you, too, can be catalysts for innovation.  By taking advantage of the market opportunities near our growing urban campuses, you help us create the quality environments so vital to our regional economies.  You help us attract, develop and retain the talent we need to be globally competitive innovators.  And given the marketplace demand for living in quality urban places, you will take advantage of a key emerging trend in real estate: the demand for living and doing business around urban universities.

  Yes, we do live in interesting times.  And, to meet the challenges of global competitiveness, we must continually redefine the nature of our universities. 

  Whether we like it or not, the national call for accountability, affordability and accessibility, as well as the national innovation agenda require that we seek new performance standards for the excellence of our universities - standards that do not presume that only selectivity, size and expense define excellence - something that both Michael Crow at Arizona State University and we at The University of Akron are calling a new gold standard of university performance, a fresh and definitive standard for a new great American university, a university appropriate to our times.

  These are its principles:

  • Unlike others, we shall not be measured by how many students we exclude, but rather by how much value we add in enabling the success of our students.
  • Unlike others, we shall not be measured by the isolation of our disciplines, but by their integration as applied in solving the problems of today.  
  • Unlike others, we will not be measured by the barriers we erect between ourselves and our communities, but by the collaborative impact that we create for each other and for our common future.

  In all candor, as I said before, this will not be something that is easy to do. 

  But if necessity is the mother of invention, then let us begin. 

  And so I say to you: be cheerful and plunge ahead!

  Thank you!

  
  References

   

  1. Massachusetts Institute of Technology News Office, "Vest Urges Continued Support for US Science," February 15, 1995 
  2. The Report of the New Commission on the Skills of the American Workforce, Tough Choices or Tough Times, National Center on Education and the Economy, Executive Summary, P.4
  3. Council on Competitiveness, Innovate America, 2005
  4. Gilmartin, Raymond V., "The Challenge of Change for the Liberal Arts College - Some Parallels from the Health Care Industry," Union College, October 16, 1995
  5. Reference Nation at Risk, 1983
  6. Council on Competitiveness, "Innovate America," National Innovation Initiative Summit and Report, 2005
  7. Neal Peirce, "Wake-up Call for Academia." The Washington Post Writers Group, 2002
  8.  NNCES, NSOPF.  2004 Study of Postsecondary Faculty
  9. Cited at Council on Competitiveness Regional Innovation Summit, 2005
  10. Peirce, Ibid
  11. Peirce, Ibid
  12. Maurasse, David, City Anchors: Leveraging Anchor Institutions for Urban Success, CEOs for Cities, September 2007
  13. Metropolitan Policy Program at Brookings Institution, "Restoring Prosperity: The State Role in Revitalizing Ohio's Core Communities," 2008
  14. Metropolitan Policy Program at Brookings Institution, Ibid
  15. Metropolitan Policy Program at Brookings Institution, Ibid
  16. Florida, Richard, The Rise of the Creative Class, 2003, p. 292
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