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Done Right, New Applied Science Center for New York Makes Sense

Originally published in The New York Times

March 22, 2011
Edward Glaeser (Glimp Professor of Economics, Harvard University)

On St. Patrick’s Day, the Bloomberg administration announced that New York City had "received 18 responses from academic institutions seeking to develop and operate a new applied science and engineering research campus in New York City."

These expressions of interest, from institutions as far-flung as Stanford and the Indian Institute of Technology in Mumbai, are far from final plans, but they represent the next step in an ambitious concept of expanding the academic footprint in New York City.

Is this a smart economic development plan?

The original request for expressions of intent was made in December, when the city expressed its willingness to "make a capital contribution" and, even more tantalizingly, suggested four possible development sites: the Navy Hospital Campus at the Brooklyn Navy Yard; the Goldwater Hospital Campus on Roosevelt Island in Manhattan; Governors Island; and the Farm Colony on Staten Island.

A new campus for Stanford is surely not the only possible use for the city’s extremely valuable real estate holdings.

London’s financial sector was given a shot in the arm when that city’s underused docklands — the Canary Wharf area — were turned into an enormous modern office complex, where today more than 90,000 people work in more than 14 million square feet of space. Given the difficulties in rebuilding ancient cities, that extra space helped keep London competitive in global finance.

But New York City already has two financial centers — the Wall Street area and Midtown Manhattan — and for all the problems that prevent building in Manhattan, it’s still a lot easier than in London or in Paris.

Moreover, the sites in question don’t seem like natural spots for high-finance spillovers. Governors Island (in New York Harbor just off the southern tip of Manhattan, with historical buildings on its 172 acres), may be physically closest to Wall Street, but it is still probably too far, even if rail links were added to ferry service, to attract many core financial companies.

The Navy Yard hospital site might be attractive for finance, but it is hard in good conscience to suggest that New York should become even more overdependent on finance.

The Bloomberg administration’s aim of attracting an applied science campus was explicitly motivated by a sensible desire to maintain a diverse economy. Because Mr. Bloomberg himself was a technology entrepreneur, it’s not surprising that he sees the value in engineering campuses, and some of the sites, like Governors Island, already look a bit campuslike.

The Roosevelt Island site is almost in the shadow of the medical and scientific centers (Memorial Sloan-Kettering, Rockefeller University, New York-Presbyterian Hospital/Weill Cornell Medical Center) on the Manhattan side of the East River.

The late Senator Daniel Patrick Moynihan of New York is often credited with saying that the way to create a great city is to "create a great university and wait 200 years," and the body of evidence on the role that universities play in generating urban growth continues to grow. (Disclosure: I work for a university.)

More than 20 years ago, Adam Jaffe published an article that used patent data to show the links between universities and nearby companies. He found that corporations patented more in areas where nearby universities did more academic research.

In 2004, Enrico Moretti investigated the remarkable tendency of individual wages to be higher among people with more skilled neighbors and found that earnings were a lot higher in areas that had land-grant colleges, including the Massachusetts Institute of Technology before 1940. Albert Saiz and I later found that these old land-grant colleges were associated with population and income growth.

A Harvard graduate student whom I advise, Naomi Hausman, recently circulated a working paper showing the power of universities to support their local economies. The Bayh-Dole Act in 1980 enabled universities to patent innovations produced with federal funds, and this led to a surge of commercially relevant university patenting activity and, Ms. Hausman found, an explosion of related economic activity in nearby areas.

The stories of Silicon Valley and Bangalore are closely connected to their strength in engineering. In my book "Triumph of the City," I tell the story of the Federal Telegraph Corporation — the ur-tech company of Silicon Valley. The boy genius who first started the company died in a freak collision with a telephone pole (my editor wisely told me to remove the line "telephone killed the radio star" from the book), and his financial supporters asked a Stanford professor to recommend a replacement.

That replacement, Cyril Elwell, ended up creating a company with deep ties to the university, plenty of spinoffs and even a summer job for the young Fred Terman, who would later lead Stanford’s engineering program and the formation of the Stanford Industrial Park.

New York City is a bit unusual among America’s more successful older, colder cities in that only one-third of the city’s adult population has a college degree, which is above the national average but below the figures for Boston and Minneapolis (each 43 percent) and Seattle (54 percent).

Typically, urban reinvention has been quite closely associated with education, but New York City’s numbers are somewhat misleading both because commuters often bring huge amounts of learning with them and because the city is so rich in the nonformal human capital of street smarts and on-the-job training.

Yet despite the enormous strengths of New York, it’s hard not to like importing a little more applied science, especially when we’re talking about idiosyncratic properties like Governors Island.

At this point, I can only agree with broad idea and await the details of the proposals. A new engineering campus for New York sounds great, though not at any price. Cost-benefit analysis is as important for subsidizing a new campus as it is for evaluating a high-speed rail line.

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