A new report by Scott Andes, a fellow at the Brookings Institution’s Bass Initiative on Innovation and Placemaking, explores the economic impact of downtown research universities and ranks the top such institutions in the United States across five metrics, with New York and Pennsylvania home to four schools each out of the top 25. With the author’s permission, below is a summary of the report’s findings. For the full rankings and recommendations, visit www.brookings.edu.

While research universities are of economic importance anywhere, they are particularly relevant to the economic vitality of cities because their geographic proximity to firms increases the interplay between companies and schools. Economists refer to this feature as “agglomeration” — the process by which firms located near one another and other relevant institutions (like universities) gain additional benefits from their proximity. Hundreds of studies have proved the benefits of density and proximity for innovation. However, relatively new geocoding techniques have allowed researchers to better understand the role of distance and density for firms. Findings suggest that knowledge sharing among universities, research labs and firms exists at the neighborhood level.

Our research compares the commercial outcomes of research universities located within employment-dense neighborhoods (e.g., midtowns and downtowns) in the 100 largest US cities to the average research university. Compared to their peers located in smaller towns or in suburbs or rural areas on a per-student basis, downtown universities:

• Produce 80 percent more licensing deals.
• Disclose 123 percent more inventions.
• Receive 222 percent more income from licensing agreements.
• Create 71 percent more startups (Between 2013 and 2015, urban schools established 220 new companies.)

Examples abound in affiliation with some of the schools ranked highest: The Pennovation District and other physical and programmatic collaborations involving the University of Pennsylvania and other Philadelphia institutions; the powerful corporate and institutional backing of the Indiana Biosciences Research Institute in Indianapolis; the bevy of corporate research centers (12 in the past several years) that have congregated in Midtown Atlanta to be close to Georgia Tech and its Tech Square innovation district; Harvard University’s build-out of the Allston neighborhood portion of its campus into an enterprise research zone that will also give firms proximity to MIT, Boston University and other area institutions; Houston’s Pumps & Pipes program that since 2007 has linked the city’s research institutions and firms such as ExxonMobil around three economic clusters — health care, oil and gas, and aerospace.

Given the positive economic benefits of co-location, “urbanizing” the country’s research base should be a priority of public policy. To this end, downtown universities should accelerate commercialization through industry-aligned, pre-competitive collaboration; connect university research with corporate research centers; and develop programming and incentives for entrepreneurship. 

New development projects that connect traditional academic research with firms, coupled with novel programming, are underway at downtown universities in Pittsburgh; Chicago; Indianapolis; Atlanta; Austin, Texas; New York; Houston; Los Angeles; Providence, Rhode Island.; and Oklahoma City. In each city, these institutions are using the built environment to maximize the impact of research.

Going forward, universities located in cities should follow what leading research institutions around the country are already doing and position themselves as central nodes of innovation and stewards of their urban economies.