Austan Goolsbee, writing yesterday’s Economic Scene column in the NY Times (sub required), hits a grand slam (he started with the baseball analogies).
Goolsbee , a professor of economics at the University of Chicago Graduate School of Business, takes on the question of whether or not state and local spending on university based research and technology can spur regional development — recasting the ‘contemporary age-old question’: how to create another Silicon Valley?
His answer is: not so easy and not so fast. According to Goolsbee,
“with so many trying to spin universities away from their traditional academic focus into engines of economic development, it is worth considering whether investing in local universities can achieve that goal. This strategy is based on the view that research done by professors can form the basis for local start-up companies and that the graduates of the university can supply the entrepreneurs and employees.”
Goolsbee reminds economic development professionals, “advocates should remember an old maxim of economic development: Beware of investing in things that can move. As it turns out, graduates and research ideas both tend to move around a lot. Subsidizing teaching is problematic as a development strategy because graduates frequently move out of state.” AMEN!
Citing work by Lynne Zucker and Michael Darby of UCLA, Goolsbee focuses on scientific talent. He finds that only by having ’superstar scientists’ will university research lead to economic development. The star scientists provide a reputation needed to lure others.
However, according to Zucker and Darby (check out their paper here), there are only about 1,800 ’superstar scientists’ nationwide – about the same number of people who played Major League baseball between 1981 and 1994 (the same period the study covered).
And here is the rub: Lot’s of intelligent baseball owners and general managers have tried to best the NY Yankees — with only limited success. “If dozens of sports mad billionaire team owners can’t do that, how easy would it be for the economic development office” at a local university to match Silicon Valley?… DOUBLE AMEN!
Goolsbee acknowledges that universities are important to local development, but “counting on them to make you the next Silicon Valley is, alas, more like betting on my beloved Cubs to win it all.”
(posted by Richard)
August 18th, 2006 at 1:02 pm
Paul Graham has an interesting article at http://www.paulgraham.com/siliconvalley.html about the matter of reproducing silicon valleys.
I prefer hockey to baseball, and I’ve noticed over the years a decline in the quality of the game played as the league expands the number of teams. It seems as if the pool of great players remains the same while it gets spread over a larger number of teams.
So I wonder if more universities clamouring for a finite number of “stars” spreads these “stars” so thin that it similarly reduces the overall quality of the system? Perhaps density of talent is more important than sheer amount of talent?
August 21st, 2006 at 9:40 pm
The article supports the idea for a city to invest in things that can’t move to another city such as mines, hospitals, and tourist attactions. If the article is correct then 99 percent of cities are loosers in technology and will just loose the talent they generate to the Montreals, and San Franciscos. If there is any investment in education then it probably would be in such things like health care, mining, and tourism management where the graduates will stick around the city after they graduate because there are jobs in that city. Richard Florida’s prescription of the 3 T’s Tolerance, Talent and Technology would not be beneficial or even apply to most cities. Florida’s plan would only be beneficial to a very small number of cities period. Anyone with opposing opinions??
August 21st, 2006 at 10:46 pm
With all due respect to any academic stars out there, Silicon Valley and Mircosoft were built by people who did not have their PhDs. The PhDs were hired help in most cases. Location in a creative center may indeed be attractive to the next great genius, but it is not essential.
Perhaps a different paradigm for attracting and training genius is necessary. One which, in the spirit of the Creative Class, lets genius soar and rewards this soaring fairly, rather than by corporate scale or with higher salaries and the expectation of results. Pay for results after the fact and you will get genius from unexpected places, rather than your 1,800 or so “stars” who may actually retard creativity in many cases by serving a gatekeeper function. Genius sometimes needs a mentor but unexpected genius abhores gatekeeping.