Boston's Learned Market

The stunning announcement by MIT and Harvard of plans for a $300 million biotech institute, an unprecedented collaboration to unlock the human genome’s medical potential, is a potent reminder that research universities are Boston’s premier economic asset.

This joint venture signals a new willingness on the part of Boston’s two leading research universities to cooperate in a critical scientific undertaking. The question now is whether the political, business and civic communities of Boston can cooperate with the universities to deliver the maximum benefit to the region.

The stakes are clear. In the new global economy, the key to commercial success is knowledge. The asset with the greatest leverage in a knowledge economy is the modern research university, an asset Boston possesses in abundance.

Boston’s eight major research universities recently released a joint economic impact study, and the numbers are eye-popping: direct employment of over 50,000 people at an average wage of $51,000; $2.5 billion annually in research funding; average construction activity of $850 million per year; and total direct expenditures of nearly $4 billion annually in the metro area. Boston’s universities actually added jobs in the last two years, a claim no other sector can make.

As these statistics make clear, higher education is a big business unto itself. But it also underlies many of the other sectors of our economy, such as our health care, technology, tourism and arts and culture industries, to name only a few.

Given all this, one might expect that helping these economic engines flourish would be everyone’s number one priority. But this is hardly the reality. Indeed, the best the universities get from the rest of us is classic Boston complacence. And at worse, Boston’s universities suffer from endless squabbles with neighborhood groups over building projects, shakedowns for various forms of tribute by municipal officials and periodic efforts to breach their tax exemption.

The crux of university-community conflict is often over the tax exemption these institutions enjoy. Whether the tax exemption of colleges and universities actually constitutes a fiscal drain is highly debatable. These institutions attract large numbers of taxable uses, and adjacent residential and commercial values are elevated by their presence.

If universities were really a drain, Cambridge would be in dire straits. Yet, the city is among the most fiscally healthy in Massachusetts, with a $7.5 billion tax assessment, a triple-A bond rating and the highest per pupil expenditure on public education in the state.

It is good politics on the Cambridge City Council to pretend that the universities “cost” the city. A better guide might be the rating agencies, which perennially cite the presence of Harvard and MIT as the key to the city’s fiscal good health.

But if we persist in believing that universities are a local burden, we ought to do what Connecticut did 25 years ago: enact a measure that offers reimbursement to cities for the theoretically lost revenue. New Haven alone gets $32 million from the state to alleviate the supposed burden of Yale and its other major non-profits. Connecticut lawmakers wisely did not want their colleges and universities continually distracted by disputes with local officials.

Are the universities to blame for some of their ill treatment? You bet. University leaders, particularly in the past, have exhibited their own brand of indifference to their host communities, failing to develop and nurture key government and community relationships.

In some cases, the problem is long memories. During the urban renewal era of the 50s and 60s, many universities rode roughshod over surrounding neighborhoods, earning the enmity of residents and community groups. But it is fair to ask whether reliving the conflicts of yesteryear is more important than forging a pragmatic future, particularly when so much has changed.

Both nationally and locally, there is a new breed of university leadership that recognizes that its own ability to compete for top students and faculty depends on the health and vitality of its host city. Young presidents like Richard M. Freeland of Northeastern, Lawrence S. Bacow of Tufts and Lawrence H. Summers of Harvard are giving significant attention to local relations, as they should.

While conflicts between universities and their communities will not completely disappear, there is potential for cooperation based on a new alignment of fundamental interests. The question is whether greater Boston will take full advantage of this historic opportunity.

Other cities and states already are. Atlanta, Pittsburgh, Philadelphia and Chicago are well on their way to building cross-sector alliances to boost local higher education. Though less well-endowed than Boston, these cities reveal a more advanced understanding of the pay-off from thriving universities. States like Colorado, Ohio, Michigan and Arizona have created so-called “university-business-state road maps” to maximize the potential of in-state research institutions. Massachusetts has not. Others are coming after our students, our faculty and our research dollars. When will we wake up?

Eli Broad, the California philanthropist who committed the first $100 million to the genome initiative, passed over elite institutions in his home state to make his big bet on Boston. Maybe that kind of recognition, coming from 3,000 miles away, will help all of us see the opportunities right in front of us.

Paul S. Grogan is President and CEO of the Boston Foundation and co-author of Comeback Cities: A Blueprint for Urban Neighborhood Revival. Grogan was the Vice President for government, community and public affairs from 1998-2001.