Consumer University: Winner-Take-All Eds & Meds

In Rust Belt cities such as St. Louis, neighborhoods tied to anchor institutions are doing relatively well. Neighborhoods tied to manufacturing experience terminal decline. Optics at the regional scale will depend upon preponderance of neighborhoods associated with the respective economic eras. This apparent divergence is a wedge between low-skill and high-skill jobs that structures much of the political discourse today:

Figure 2 shows that cross-MSAs wage convergence rates between 1940 and 1980 were the same for high-skill and low-skill workers. But, they differ strongly post 1980. Between 1980 and 2010, wage convergence rate occurs only among low-skill workers not for high-skill workers.

The 1980 rupture only concerns high-skill workers with wealth concentrating in select metros. Over time, more and more regions join Club Divergence. How? There is no theory of change offered, only fear about places left behind.

The granularity of geographic scale is not fine enough. Economic restructuring (the process of deleveraging from the high concentration of manufacturing employment) happens neighborhood by neighborhood, not in certain cities. A toehold of globalization on a few blocks next to a research university is lost in the noise of continuing low-skill economic convergence. To the extent local and state leadership cling to yesterday will serve to prolong the pain and perpetuate the Rust Belt stereotype.

But the embrace of a hospital or a university comes with its own peril. Chasing bodies instead of knowledge enters the arena of superstar cities and winner-take-all divergence. Given the diffusing pressures of demographic decline, how can Flyover Country compete with the likes of Oxford for tuition dollars?

Campus building has become an arms race among top business schools around the world as they seek to beat competition from cheaper online executive education courses with the lure of high-end training facilities in world renowned locations.

A few institutions will scale and gobble up all the inexpensive market for MBAs. While a few other institutions will be able to promote themselves as a luxury good (on the meds side, see Cleveland Clinic). This recipe for success is not one that most places can follow. Esports at the University of Akron won't serve as a catalyst for desperately needed urban revitalization and economic convergence will continue to dominate the landscape there.