But is there a way for legacy cities to get ahead of this game — to use the meds and eds base they already have to leverage the next generation of prosperity in a way that isn’t so dependent on federal spending? And, just as important, can these efforts create jobs at the same rate?
The answer to these two questions, as far as I can tell, is, respectively, yes and no.
To see what’s possible, let’s take a look at two legacy cities that appear to be doing pretty well compared to their peers: Pittsburgh and St. Louis. There are a lot of similarities here. Both are river towns in what can broadly be described as the Midwest. Both were important and powerful cities during the industrial era but have suffered from what would seem to be calamitous population loss. And both are leveraging their meds and eds pretty well — though in different ways that are important to understand.
Pittsburgh is often viewed as the poster child for an industrial city’s comeback. It was formerly the steel capital of the United States, if not the world, but it fell on hard times early in the game when the nation’s industrial base began to decline. At 300,000, the central city’s population is half of what it once was and now represents only about 15 percent of the region’s population. (And the region’s population, at a little over 2 million, isn’t growing.)
What Pittsburgh's Accomplished
And that prosperity is built on the back of meds and eds — especially Carnegie Mellon University, which was endowed by two of Pittsburgh’s most prominent and wealthy industrial-era families. (The University of Pittsburgh has also played an important role.) Early on, Carnegie Mellon went heavily to robotics and other tech innovations. The university opened a Silicon Valley campus and encouraged tech spinoffs by its professors. (A joke I always had when I worked at Rice, a similar university, was that if I wanted to get the president’s attention on something I would simply say that Carnegie Mellon was doing it.) It’s well positioned to take advantage of the AI revolution, with the so-called “scholar-entrepreneur approach.”
To be sure, Carnegie Mellon is somewhat dependent on federal research funding. The university has a budget of $1.2 billion a year, about 20 percent of which comes from the feds for research. But of course, one advantage CMU has is that a lot of that funding — especially for robotics — comes from the Pentagon, which is less likely to see its research budget slashed than, say, the National Science Foundation or the National Institutes of Health. But the point is that CMU has leveraged federal funding to create powerful commercial spinoffs, many of which are located in Pittsburgh.
(Alan Greenblatt/Governing)
St. Louis' Big Bet
St. Louis is similar to Pittsburgh in many ways. The central city’s population has dropped precipitously, from 850,000 at its peak to 280,000 today, while the region’s population is stagnant at 2.8 million. But, as with Pittsburgh, the main economic drivers of the region, especially meds and eds, are located in the central city and the region’s GDP continues to grow at about the national average despite the lack of population growth.
As with Pittsburgh and Carnegie Mellon, St. Louis has built a new generation of prosperity on the back of its major institution of higher education, Washington University (WashU), and its other meds and eds assets. But the meds and eds in St. Louis took a different approach by laying a huge bet on an innovation district known as Cortex.
Cortex was created by a consortium that included WashU, Saint Louis University, the University of Missouri-St. Louis, BJC HealthCare (the city’s leading “med") and the Missouri Botanical Garden, which together put up the funds to allow Cortex to buy land in Midtown St. Louis, near where all these institutions are located.
By all accounts Cortex has been a success, not only hatching new companies but attracting outposts of companies such as Microsoft and Square. But there is a cautionary tale associated with innovation districts like Cortex, and that’s the number of jobs being created.
Where Are the Jobs?
Meds and eds have traditionally been jobs-intensive operations, especially medical institutions that focus on clinical care. (They also had a strong in-person workforce during the pandemic.) And the latest Cortex economic impact report estimates that the district has created 6,000 direct jobs and 7,000 indirect jobs.
But Cortex has 4.5 million square feet of space — which means that it’s generating about one job for every 750 square feet of space it creates. That’s way below the traditional office rate of one job for every 150-200 square feet.
So it may be that the next generation of prosperity that meds and eds can generate will not be as job-intensive as the meds and eds themselves have been. Which means that it’s important for both the meds and eds themselves and their host cities to fund ways for the new wealth to be widely shared so the entire region benefits, not just those with jobs directly tied to the meds and eds spinoffs.
This piece was published by Bill Fulton on his Substack newsletter, The Future of Where. Read the original here.
