Aug

18

Attracting research competence

August 18, 2006 | Comments Off | Joshua Gans

There is an excellent article in today’s New York Times by Austan Goolsbee (here is a link live at the time of writing this blog). He comments on attempts by Texas to build the next Silicon Valley in Texas around their universities. As he points out, the evidence is that this might build up Universities but there are no guarantees on flow-on effects to the surrounding cities or even the state.

Framed that way, trying to make some town into the next Silicon Valley by attracting the best scientists is rather like trying to start a new baseball team and turn it into the New York Yankees. If dozens of sports-mad billionaire team owners can’t do that, how easy would it be for the economic development office at the University of Texas, Arlington?

What is worse, it is a safe bet that as these development incentives become a primary motivation for financing higher education, the competition among universities for stars will start looking much more like today’s baseball scene. Ambitious state university systems will find it easier to steal the stars of another team than to develop their own prospects. As a result, salaries will go through the roof — just as in baseball.

And while everyone pays more, only a tiny number of cities will ever win the World Series. One will increasingly hear about how the costs of college are rising everywhere and that local economies have little to show for it.

Universities are immensely important and they are filled with students and ideas. Some of those students will go on to be famous. Some of those ideas will change the world. But counting on them to make you the next Silicon Valley is, alas, more like betting on my beloved Cubs to win it all.

This echoes something that I have written about before: the environment for innovation and enabling clusters matters much more than discretionary funds thrown at big-ticket projects. (Click here for more on that).


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