What happens when universities become drivers of urban economic development?

One of the outcomes of the importation of market-based or neoliberal style reforms into higher education over the last few decades has been attempts by various local and national governments around the world to more closely align the “outputs” of their universities with the economic needs of businesses.  Generally, this alignment has been happening in two related ways.  In one, the university’s curriculum is increasingly linked with the “soft” and “hard” skills or “competencies” that are said to be needed by businesses and corporations as universities become increasingly vocationalized.  The other alignment strategy is somewhat older and involves using universities as “research and development labs” for new products, techniques and patents.  Although university patenting has been around for some time, the coordinated linking of universities, businesses and venture financiers greatly intensified in places like the US with the passage of the Bayh-Dole Act in 1980, and then globally with similar legislation, that allowed universities to obtain and license exclusive patents on innovations produced from publically funded research. 

According to proponents of these neoliberal reform efforts, universities have been too removed from the economic needs of the nation or region and, as a consequence, have not been pulling their weight given the large amounts of public funds directed their way.  From this view, the Great Recession, or at least its endurance, is blamed on a gap between university “outputs” and business needs as well as the inability of universities to impart “entrepreneurial values” to their students.  Linking universities with economic development goals will, so the argument goes, increase national and regional competitiveness and comparative advantage, raise workers’ standard of living and economic mobility and spur more enterprise and product innovation.  Drawing upon field research and policy content analysis conducted in three so-called knowledge cities, Austin, Texas; Manchester, England and Melbourne, Australia, this paper examines how these cities have used different strategies to incorporate universities as part of their economic development strategy.  The paper also examines some of the ramifications of these strategies for both the universities involved and the larger goal of urban economic and social development.