Ed Morrison · Why universities matter to economic development

November 8th, 2010


Over the past few years, the University Economic Development Association has emerged as an increasingly important gathering of university-based professionals engaged in economic development. (Disclosure: I sit on the board.) University-based strategies are becoming increasingly important for communities and regions.

Wayne Watkins at The University of Akron, a past president of UEDA, has inspired the organization’s transformation.

Across the country, civic leaders are redefining economic development to include higher education as a core partner. It only makes sense. We live in a world of increasingly integrated markets. For the last three decades, this market integration-–or globalization as some would have it–-has dramatically shifted the terms of competition in most markets.

In the early 1980s, I worked as a corporate strategy consultant to large companies such as General Electric, Ford and Volvo. Most of my work involved analyzing new opportunities in global manufacturing that were quickly emerging for these companies.

In the middle of this work, I remember sitting on the dock in Hiroshima, Japan. It was 1984. That was the site of my first “flat Earth” experience.

For three weeks, I had spent time analyzing how Mazda manufactured engines and transmissions. My work was part of a larger project comparing the production economics of a Ford Escort with a Mazda GLC, roughly equivalent cars.

I sat on the dock watching Mazdas being loaded onto huge ocean transports. It suddenly dawned on me: dramatically improved logistics meant that the Hiroshima engine plant could just as easily be located close by Ford’s Dearborn engine plant. While the Japanese had some cost disadvantage in ocean transportation, it was minimal compared to the cost advantages they were generating from their significantly more productive manufacturing operations.

The implications of this insight were profound. Competitive advantage in the global market comes down to this: brainpower and the capacity to convert brain power into wealth through innovation. All other factors production have been basically wiped out.

In a world where thousands of economic development organizations have land developed with infrastructure, advanced logistics moves goods anywhere cheaply, technology moves into new markets in a matter of days and weeks, and capital flies around the globe the click of a mouse, brainpower and innovation become the only competitive advantage.

That was 25 years ago, and we still see today regions that have yet to come to grips with this reality.

The future of any region will now depend on the willingness and ability of regional leaders to design open networks of innovation with colleges and universities embedded in the middle of these networks.

That is why colleges and universities become critically important to our competitive future. And that’s why the University Economic Development Association becomes such an important part of our future. It’s a hub — a place where civic leaders, economic and workforce development professionals and others can find quick, low cost ways to connect to their colleges and universities.

It is also the only place where the full spectrum of higher education — from small community colleges to large research universities — comes together to share new ideas about what works to move our economies ahead.

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