by Eugenie Birch
Eugenie Birch is co-director of Penn IUR and Lawrence C. Nussdorf Professor of Urban Research in Penn's Department of City & Regional Planning. The following article is adapted from "Anchor Institutions in the Northeast Megaregion: An Important But Not Fully Realized Resource," Birch's chapter in the forthcoming Revitalizing American Cities (Penn Press 2013), edited by Susan Wachter and Kimberly Zeuli. To read more about the book Revitalizing American Cities or to order your copy in advance of publication, visit the Penn Press website.
As former manufacturing cities in the United States seek to reinvent their economies, they have engaged in several types of revitalization strategies to use their key asset, land, to attract investment in new industries. Land is a critical ingredient for revitalization because it supports activities that generate income for both the public and private sectors, which, in turn, generate additional municipal revenues by the entity occupying the land.
To attract income- producing land uses, municipalities employ such economic development incentives as accelerated zoning code approvals and/or amenity or infrastructure improvements, including open space (parks, gardens), transportation (highways, bike lanes, parking), or services (schools, police stations). In recent decades, cities have sought to attract or retain private corporations but have given much less attention to nurturing another type of important land holder: the anchor institution, usually defined as universities, medical centers, performing arts centers, museums, sports facilities, and libraries. Local officials’ failure to appreciate fully the potential role of “eds and meds” in urban revitalization stems from a number of factors. For example, planners oft en fail to conceptualize these entities as “industry clusters,” bud get directors do not appreciate these institutions’ contributions to municipal bud gets since, as nonprofits, the nature of their contributions differs from those of for-profit entities, and many elected officials, oft en tainted by a history of insensitive urban renewal activities, are reluctant to engage with anchors in the face of community opposition to institutional expansion. In addition, anchor institution leaders tend to shy from or resist undertaking the strong civic leadership roles in their communities that their corporate counterparts once provided because they have not traditionally taken on this type of role.
In many cities, especially those in the Northeast Megaregion, anchor institutions are important, relatively stable landowners. They are committed to their city locations because of their real estate holdings, their missions, the attraction of their locations to their audiences, or the presence of other economic activities that support their work and sometimes their location at the center of a network of satellite operations. While the Northeast Megaregion is well endowed with prestigious universities and hospitals, many of which date from America’s colonial era, it also has a great number of less prominent institutions, oft en invented in the late Industrial Era to meet the needs of the nation’s rapidly growing economy and fast- urbanizing places. The anchor presence, especially high- performing universities and medical centers, is important to local economies and to central city resilience.
The Northeast Megaregion extends from southern New England to northern Virginia. It encompasses twelve states and 142 counties and has a large number of anchor institutions. Its major cities and metropolitan areas are Boston, New York, Philadelphia, Baltimore, and Washington D.C.; smaller places include Bethlehem, Providence, Hartford, New Haven, White Plains, Newark, Trenton, and Wilmington. Its population of 52.3 million (projected to increase to 70 million by 2050) supports a $2.92 trillion economy, represents 17 percent of the U.S. population, and generates 20 percent of the nation’s GDP. Relatively dense land use characterizes the region that encompasses 2 percent of the nation’s land area (America 2050 n.d.).
Bolstering the megaregion’s economy are the important sectors of finance, pharmaceuticals, food, technology, communications, education, and health. Anchors are leading employers in the area’s five major metro areas. Within the political boundaries of this area’s cities, the eds and meds lead the mix of dominant nongovernment employers. For example, in Philadelphia and Washington, four of the top employers are eds or meds; in Boston and New York three of five, and in Baltimore one of five. Adding public universities to the list puts ed and meds in the top five in Boston and Baltimore. In Providence, eds and meds occupy four of the top five spots (Business Journals 2012; Crain’s 2012). A look at the actual numbers of employees in the top one or two nongovernmental employers in several of the cities gives a sense of the scale of these labor forces in individual firms or institutions in 2010. In the larger cities where the number of workers among the largest employers ranged from 17,000 to 48,000, eds and meds dominate as the top employers in Baltimore (with Johns Hopkins having 48,000 employees) in Philadelphia (with the University of Pennsylvania having 32,000 employees and Jefferson Medical School, 19,000) and in Boston (with Massachusetts General Hospital having 23,000 employees). In the smaller cities, a similar pattern prevails as exemplified by Providence’s top two employers: Rhode Island Hospital with 6,910 employees and Brown University with 4,800 (Business Journals 2012; Crain’s 2012). In New York, eds and meds fill the third and fourth spots.
In the entire Northeast Megaregion, universities and their associated medical centers generate a substantial number of jobs, have multi- million and in some cases multi- billion- dollar operating and capital bud gets, attract billions of dollars in government- sponsored research, private donations, and federal funds in the form of Medicare payments or student loans, and stimulate local spending through their own purchases and spending by visitors and students. While a precise accounting of these impacts is beyond the scope of this chapter, data from national databases (U.S. Departments of Education and Treasury) yield a rough estimate of these megaregional impacts.
In 2010, major eds and meds anchors collectively employed nearly a million people, had aggregated operating budgets of nearly $100 billion, attracted $28 billion in sponsored programs, gift s, and contracts ($23 billion from government grants and contracts, a minimum of $5 billion in Medicare payments), and brought in upward of one and a half million students (Birch 2012). While these institutions attract highly skilled and highly paid knowledge workers, they also have well- defined job ladders for entry and movement from unskilled to medium-skilled work. Salaries at the top exceed national averages. Although faculty are less than 10 percent of the total workforce in these anchors, their average salary of $85,000 is double the nation’s per capita average income. Finally, these anchors capture a disproportionate share of government research dollars— in 2010 they received some 25– 35 percent of the total (Webber 2012).
Due to historic and economic reasons, an important locus of action among the megaregion’s eds and meds is in its five major cities. Boston, New York, Philadelphia, Baltimore, and Washington were responsible for 59 percent of sponsored programs, gifts, and contracts, 73 percent of aggregated operating bud gets, 65 percent of all employees, and 49 percent of all students. (Remarkably, even in New York City, known for the dominance of the Finance, Insurance, and Real Estate (FIRE) industries, eds and meds are important. For example, the city’s student population in higher education is higher than the entire populations of Boston, Denver, or Seattle.) High shares of aggregated budgets and employees may be attributed to the large staff s of the university/medical centers that tend to be in cities. For example, Johns Hopkins, University of Pennsylvania, Columbia, and NYU have labor forces ranging from 32,000 to 48,000. The relatively low proportion of students may be accounted for by the fact that the flagship, highly populated campuses of state universities with student populations of 20,000– 30,000 tend to locate outside large cities.
This higher ed agglomeration is even more pronounced when traced beyond a city’s boundaries. For example, the eleven- county Greater Philadelphia area has 101 colleges and universities that, in 2010, supported 91,000 jobs, attracted 295,000 full- time- equivalent students, and contributed $15 billion to the regional economy (CEO Council for Growth 2010: 3– 7). Drilling down to eds and meds in small and medium- sized cities in the Northeast Megaregion— as in Providence, Hartford, Middletown, New London, New Haven, Bethlehem, Easton, Allentown, Newark, Wilmington, Towson, and their suburbs— reveals the different types of eds and meds, which, like firms in any industrial cluster, vary in size and resources. While the numbers of students and other resources in small and medium- sized cities are less important to the megaregion than are the larger cities, they are quite significant in the cities in which they are located, where they are important employers and city builders.
Notably, within the megaregion (and beyond), important synergies exist among the institutions’ research and instructional arms, creating an intricate, networked economic ecology. Research teams often work across institutional boundaries, with a grant- recipient university subcontracting parts of a given project to others. Or students may study in a program sponsored by a partner institution. For example, in 2009, Lehigh University made substantial payments to thirty institutions, including Carnegie Mellon, Children’s Hospital of Philadelphia, Cornell, Johns Hopkins, MIT, NYU/Polytechnic, Dartmouth, and Widener College, for research and other services (Lehigh University 2009).
While eds and meds are an important industry cluster in the Northeast Megaregion, their economic functionality is not well understood and, therefore, little scholarly or practice- based thought has gone into maximizing their impacts. Two major themes emerge: first, improving local planning and land use decision making; and second, undertaking regional planning and projects to help resolve problems that cannot be solved locally and improve the efficiency of the institutions in their primary functions of instruction or service provision and research. At the local level, smoothing the environment for institutional growth is of utmost importance. A key measure here is to improve communications among elected officials and city agencies, citizens, and anchor institution leadership to facilitate institutional growth while recognizing the needs and rights of the communities in which they operate— that is, improving the democratic decision- making process. Although there are many ways to achieve this, Boston provides one example with its requirement for Institutional Master Plans as a prerequisite for land use permissions. While time- consuming and expensive in the short run, this device, a city- wide requirement applying to all institutions, allows for transparency and negotiation in a relatively neutral environment. And, in many cases, it provides direction for agency work. For example, for Harvard’s project in Allston, the Boston Redevelopment Authority undertook the broad planning work necessary to contextualize upcoming institutional efforts (BRA 2005).
In considering the many megaregional approaches possible, one stands out: promoting and participating in sustainable development practices along the northeast transportation corridor. Supporting high- speed rail, better local public transit, and transit- oriented land development offers many possibilities for improving the effiiency and functionality of the eds and meds. Improving staff and student/visitor housing and accommodations, facilitating research, and promoting instructional and patient service exchanges—
much is already happening— could be advantageous to all. The most important point of this discussion is the necessity of conceptualizing the eds and meds as critical to the economic base of a megaregion and its component parts and taking appropriate actions to improve their functioning.