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Your independent source for Harvard news since 1898

John Harvard's Journal

Pillars of the Economy

May-June 2003

As deteriorating local-government finances collide with expanding — and property-tax-exempt — campuses, Boston-area research universities reported jointly on their collective size, stability, and importance to the metropolitan economy. At a Greater Boston Chamber of Commerce briefing on March 11, Harvard, Boston College, Boston University, Brandeis, MIT, Northeastern, Tufts, and University of Massachusetts Boston unveiled Engines of Economic Growth, an analysis of their collective impact at the outset of the twenty-first century; the text is available at www.news.harvard.edu/gazette/daily/0303/10-econ_impact.html. (Harvard had previously profiled its own economic impact on Greater Boston. Investing in the Future, released in 1999, highlighted its multi-hundred-million-dollar payroll and purchases, and role in building the "human and intellectual" capital that underpin the region's medical, technology, and financial-services businesses; see "The Academy and the City," November-December 1999, page 77).

In a summary, the institutions' presidents quote John Adams's language from the Massachusetts Constitution, written in 1780, urging "legislatures and magistrates" to "cherish the interests of literature and the sciences" and institutions of learning. Today, they proclaim, "Greater Boston's eight research universities...are the region's special advantage: an enduring and stable economic engine, constantly changing and developing as new knowledge is gained and new technologies and industries are created."

The report itself aims to support those twin messages: that universities are critical sources of economic "infrastructure," and that they must grow and develop new facilities to sustain that critical contribution. Thus, the report argues, Greater Boston's position in the modern global economy is very much rooted in the quality, speed, and outcome of local decisions.

The report emphasizes the universities' role in the development of skilled workers through their degree-granting and continuing-education programs. Their roughly 118,000 degree candidates make them a magnet for talent, as well as centers of learning for local residents. Similarly, they attract outside research funding, principally from the federal government: that now runs about $1.5 billion per year, plus another $1 billion deployed at affiliated hospitals and research centers. Those funds fuel academic projects and collaborative ventures with local industry.

Proximity to skilled graduates and the concentration of research attracts business investments, such as pharmaceutical research centers now being built in Boston and Cambridge by Merck and Novartis, respectively. Through licensing, direct support, incubator space, faculty involvement in startups, training in entrepreneurship, and real-estate development, the universities encourage commercial use of academic discoveries and the birth of new enterprises.

Engines of Economic Growth also examines the universities as a major regional industry in themselves. At the end of 2002, they employed, all told, more than 50,000 people — including 2,000 hired during the two previous years, even as metropolitan Boston shed some 58,000 jobs due to the downturn in financial services and technology. Local purchases total more than $1.3 billion per year. Construction on the eight campuses — for laboratories, housing, and other facilities — might total as much as $850 million annually in the next four years, an important counterweight to moribund commercial projects.

Looking ahead, the report returns to its sponsors' introductory theme. Despite "increases in productivity" resulting from use of information technology, research remains a "space-intensive activity. Real growth in the universities' research enterprise will over time require the development of additional space." Even allowing for renovation and more intensive development of existing properties, "universities will sometimes need to build new facilities outside the historic boundaries of their campuses." To that end, both the institutions and the economy of their home communities would "benefit from the creation of a framework that simultaneously respects local concerns and allows the institutions to respond quickly to emerging needs and opportunities."