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The Unsung Heroes of Economic Development

January 12, 2018

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The Unsung Heroes of Economic Development

January 12, 2018

It's safe to say that most people don't think of East Tennessee State University, Milligan College, King University or Northeast State as economic development tools. That's too bad because they are. And, if the truth be told, they have as much development potential as industrial parks and shell buildings. Under the right conditions, they could be even more important.

 

Several well-researched studies show towns with a college or university are faring much better in the recovery from the Great Recession. Research universities like Stanford and MIT are credited with spurring the development of Silicon Valley and the greater San Francisco and Boston areas.  It's a seemingly simple formula: Entrepreneurship plus technology equals the path to commercialization. The challenge is to expand the scope, localize it and make colleges and universities full economic development partners.

 

Most of these studies focus on the nation's top universities because they are the low-hanging fruit in the often-tedious task of measuring economic growth and mapping it to its roots. But if you take an objective look it's not hard to see the broader economic footprint of colleges and universities. The next step is looking for untapped potential and getting past the idea that economic development is only about bricks and mortar or luring new businesses to the region.

 

The traditional metric comes in three parts. The first is the obvious day-to-day operations of the institutions that create demand for goods and services. Next, higher education adds to the inventory of educated people which ups the supply of human capital. And then there's innovation by students and faculty. It's there you find untapped potential for tomorrow's economy, because with careful nurturing that innovation attracts entrepreneurs and innovators.

 

ETSU is no longer the working man's college of yesteryear. And although it still lives in the shadow of some of the state's larger universities, it has grown and continues to grow as a powerhouse in the medical field and is recognized well beyond the local public awareness orbit.

 

Here are just a few examples of how it stacks up against its peers: The Quillen College of Medicine is already ranked eighth in the nation for rural medicine training. The College of Public Health is ranked 31st in the nation. The College of Nursing Master of Science and Nursing Practitioner Program weighs in at 20th in the nation, and the Quillen College of Medicine is ranked 20th in the nation for producing doctors who go into family practice.

 

And now the merger of Mountain States and Wellmont will be a catalyst for a much larger role for ETSU and the region in health care services, education, and research. On the front-end, the new Ballad Healthcare has pledged at least $85 million to grow academic and research opportunities and support post-graduate healthcare training. ETSU and Milligan will be the primary institutional recipients, but the economic and public benefits are much wider.

 

Healthcare already accounts for the region's largest employee headcount. It's not unreasonable to speculate that health care education, innovation, and services could be what manufacturing and coal were to the region decades ago. Nor is it unreasonable to think that the region's healthcare development potential can mature and grow as a powerhouse development sector much like it has in the Nashville metro area. One big difference between Nashville's health care sector growth and Tri-Cities' potential is Nashville has more of an entrepreneurial culture. Risk-takers are admired there, and that has attracted a sophisticated capital infrastructure to support those risk-takers. Our area isn't there yet, but it could be.

 

While healthcare is ETSU's shining star, it's not the university's only star program. Even less recognized is the potential of other local higher education institutions to enhance and grow the region's economy. But since ETSU is the largest, it creates the biggest impact that has been measured so far.

 

A couple years back, ETSU professor of economics Steb Hipple headed a major study on the economic impact of the university, the Medical Education Assistant Corp. and the physician practice group for the Quillen College of Medicine. The combination of student spending, employment and activities contributed over $683 million to the region's economy. Since then Hipple has retired, and there hasn't been an update to the study. It's safe to say the impact is more significant now. But what would it look like if such a study encompassing the region's higher education community was made? According to the Business Journal's Book of Lists, there are 21 institutions of higher learning in the Northeast Tennessee – Southwest Virginia region.

 

The challenge as the region continues adjusting to and expanding this new economy that thrives in both the physical and digital world is to elevate higher education from a provider of demand for services and goods to a full economic development partner. If localities and the education communities rise to that challenge, they can create a breeding ground for entrepreneurs and innovators to start new enterprises and enhance existing main street business in ways that augment – or maybe surpass – the economic development practice of swinging for the fence to attract new business and industry to relocate here.

 

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