You can’t tell the story of Philadelphia’s modern economy without mentioning its higher education institutions. Just like I can’t explain my own professional trajectory without invoking the role of the University of Pennsylvania in bringing me to town in the first place some 35 years ago and then helping create the conditions where I could thrive as a resident, civic participant, and business leader.
In the 20 years I’ve been at ESI, I’ve had the pleasure of working for a wide range of higher education clients. Big schools, small schools, urban schools, rural schools, East Coast, West Coast, STEM-focused, liberal arts – each client their own unique character, but with some commonalities, which are useful to highlight to better understand what the sector has gone through and is going through. Let me start with a few observations on critical messaging we’ve been able to help our higher ed clients with and then conclude with a few thoughts on where we will be focusing our support in the future.
Lessons Learned
Economic Engines
Most schools are among the largest employers and procurers in their community and contribute to their local economies through capital investments and through the purchasing power of their employees, students, and visitors. People intuitively know this yet have been consistently wowed by the sheer magnitude of this economic footprint when presented with our data on just how much economic activity schools are directly or indirectly responsible for, or how many jobs are supported by them.
Tax Revenue Generator
As nonprofits, educational institutions do not typically pay local or state taxes, which can become a point of contention in communities where they are seen as consuming public services without paying for their fair share, or from state legislators who make large outlays to their publics and then wonder what they’re getting back from those investments. But in fact, universities are often among a community’s largest generators of tax revenues, whether it is supporting an area’s employment base and business activity levels which are taxed, or stabilizing land values which strengthens the property tax base for municipalities and school districts, so it’s useful for schools to be able to point to our estimates of just how much in tax revenues they are generating for their local and state governments.
Local Partner, Regional Catalyst
The predominant metaphor of the set-apart “ivory tower” has given way to a push by schools to engage with the issues facing their local communities and regional economies. Institutional mission is increasingly defined by, and employees and students increasingly demanding, schools figuring out ways their daily operations can connect with and provide benefit to their immediate neighborhoods, and ways their research and scholarship work helps make their region’s business community more robust.
Future Trends
Place Matters
Knowledge activity may be increasingly digital, but it still requires human connection. The magic that happens on campuses – learning, scientific discovery, entrepreneurial innovation – requires thoughtfully designed spaces and real estate acumen, things our firm is looking to provide more support on through our deepening credentials in planning, development, and financial analysis.
Workforce Pipeline
Academic institutions remain a key conduit between students seeking jobs and employers seeking talent. Advances in A.I., the proliferation of non-traditional credentialing platforms, and global economic uncertainties are forcing these institutions to rethink and express anew the value proposition they are offering to students and employers alike. Our clients benefit from the analytics we can marshal to support this value proposition, namely substantiating the connection between their educational offerings, the skills employers seek in new hires, and the job categories that are expected to see future growth.
An Economy Where Everyone Contributes
Technological advancement holds the potential for significant economic growth and growing economic divide. Which is not only bad for a just and stable society but also bad for business, since the things we want in our economy – innovation, creativity, discovery – all require participation from a wide range of academic perspectives and personal walks of life. Universities and colleges can ensure they are contributing to greater flourishing through broader participation – through affordability initiatives and related supports – rather than greater instability through increased stratification.
We’ve been busy in our work within higher education because universities and colleges have been under greater scrutiny from many directions and need help making their case – letting governments know they’re a good investment of public dollars, letting communities know they’re good neighbors, and letting students and families know there remains a high ROI on going to college. Higher education institutions have never been more important to the success of households, communities, and our nation, and we at ESI are eager to continue to play a role in demonstrating their value to the broader community.
Lee Huang, Principal | [email protected]
Lee Huang brings over 20 years of experience in economic development to ESI’s public, private, institutional, and nonprofit clients. While he has led consulting engagements in a wide range of fields, including economic inclusion, historic preservation, real estate, and neighborhood economic development, Lee has played a foundational role in establishing ESI as a leading provider in economic impact studies for universities and colleges across the US. His clients have included Carnegie Mellon University, Emory University, University of Chicago, University of Notre Dame, University of Pennsylvania, and the Council for Christian Colleges & Universities.