From time to time at Pittsblog, I have drawn comparisons between Pittsburgh and New Haven, Connecticut and specifically between Pitt's role locally and Yale's role in New Haven. In many ways, Pitt doesn't compare favorably. In the real estate department, its economic development initiatives over the last decade have been confined largely to making the campus more secure and serene for students, more pleasant for shoppers, and more robust for researchers. On all three counts, the university has succeeded brilliantly. But its ambition has been limited. On the whole, and outside of Oakland (and outside of co-developments with the Steelers) Pitt has not used its leverage as a licensor or investor -- which is significant, given Pitt's size -- to make the City of Pittsburgh a more vibrant economic community. Not publicly, anyway. While New Haven, by contrast, still has even farther to go than Pittsburgh, Yale's impact has been direct and tangible impacts on the quality of the city.
But Yale is hardly impervious to criticism. The New Haven Independent reports today that Yale is facing criticism for pursuing the purchase of a soon-to-be-abandoned biotech research facility in -- West Haven, not New Haven. Bruce Alexander, the Yale official who runs Yale's property program, is one of the shrewdest real estate developers in the country -- university or no university. So I'm willing to bet that he knows what he's doing. Still, the report suggests a significant public relations misstep. The economic footprint of a research university is regional, not city-wide. Yale has learned that a better city makes a better university, and it has invested accordingly. But universities need to take account of political boundaries, too.
8 comments:
The whole "community benefit" thing has fascinated me ever since I took a job as a dishwasher at Yale, when I was a junior. I had to join the union (I can't remember if it was local 34 or 35) but I do know that I made about $10 per hour. In 1993. The local guys working with me made $17. When the light bulb went out over my station, I had to work in the dark for a few days, because I was not allowed to change it. That was a job for someone from the other union.
On Superbowl Sunday 1994, I worked alone. All the workers on the schedule told the boss they were getting drunk and watching the game at a party. He threatened to fire them. They dared him. He didn't try.
Then our grad students went on strike.
Not sure what it all means. And not sure what these anecdotes have to do with investment. But it does seem clear that universities, due to their nonprofit status, operate on extremely complex ground. What's right? What's effective?
Sheesh.
This reminds me of something I was thinking of the other day. When I worked in New Haven -- for Local 34 (Sam, you must've been a member of 34 if the electrician was from the other union, which would be 35) -- we took it as an article of faith that Yale workers' jobs couldn't be outsourced. And we counted on University jobs as perpetually available for that reason.
But you know, there's a lot of stuff that Pitt workers do that could be done in Bangalore or Beijing. All that administrative work, for example. A lot of library work is done online, where students don't need physical access to books. Research is not necessarily better when it's local.
My point is, we should probably get ahead of the curve -- like we didn't do in the 1960s, instead believing that steel jobs would always be there and would always be very well-paying -- and treat Pitt like the mobile entity it is.
Does that mean giving more tax breaks? (Good lord, I hope not.) Fewer tax breaks? Insisting on "lease" agreements, sort of like we've done with the sports teams? I don't know, but whatever we do, we should be prepared for the potential of job loss.
I just want to point out that: The University of Pittsburgh is not Yale. Pitt does not have the luxury of not focusing on itself almost exclusively. When Pitt has the rep and stature of Yale, they can then spare some time and money to focus on the rest of the community.
Well, part of Yale's investment in the New Haven community has been altruistic but a lot of it (most of it) has been self-interested: as New Haven goes, so goes Yale--in terms of faculty and staff recruitment (you need a healthy economy of the spouse/partner; you need cultural amenities); campus safety; opportunities for students (internships, cultural amenities), etc. Ditto for Penn in West Philly; Brown in Providence; Cornell in Ithaca; Rochester in Rochester; Hopkins in Baltimore; Lehigh in Bethlehem, etc. etc. even Harvard in Cambridge and now Allston. Some of these schools see this more clearly than others.
Remember also that Yale's endowment dwarfs Pitt's, but Pitt dwarfs Yale in terms of numbers of students, staff, faculty, and thus economic impact. (Although given that Pittsburgh is a much larger metro area than New Haven, this may be a wash proportionally and, in fact, Yale may actually play a bigger role in the New Haven economy than Pitt does in the Pittsburgh economy; not sure about this.)
But the key point is that Yale investing in New Haven is not a luxury item--a way to spend surplus cash--or charity. Likewise, Pitt (and UPMC, CMU, Duquesne) investing in Pittsburgh should be viewed in the same light. One can argue that such investments are necessary for the core functions of the institutions.
Wait, Pitt is still in the city? Wow, from reading the Post-Gazette, I only focused on the Penquins and Casinos. Pgh has universities still? Oh, good reminder. How 'bout 'dat.
To add a recent bullet - a promising bio tech start-up spun out of Pitt and taking its initial funding from a VC firm using state money ups and bails to Boston after securing $30m from VC's up there (Logical Therapeutics).
So is this what we expected - promising technology developed within the state universities, funded by PA taxpayers (at least partially), VC funded initally with PA taxpayer money, bolts to greener pastures when things go jelly side up?
I have a problem with this. It the money is private, companies are free to go where they like. But if the taxpayers are at least partially responsible for birthing these things, the gains should stay here.
Comments?
I have more coming in the blog about this deal and about what PA taxpayers should expect. One thing to note is that PA taxpayer money in LT (or in any private co. with university-developed technology) may be dwarfed by indirect money coming from the federal treasury. Pitt and UPMC take in several hundred million dollars in federal grant money each year, a huge chunk of which goes into biotech/bioscience research. I don't know how much federal money went into the technology that LT is developing, but federal indirect cost reimbursement funds facilities that likely housed much of the early work.
Bayh/Dole gives the researchers the right to patent and license resulting inventions; the researchers split licensing proceeds with their employers -- Pitt and UPMC. State-related investment funds may be playing high stakes poker here, placing bets with their investments and hoping to win a hand or two. But they are playing at a table where they don't have enough cash to compete effectively over the long term. Biotech investing is a long-term game, and every play is risky. (LT is leaving with PA money and has chance to succeed elsewhere; would we be happier if it stayed and likely failed? Personally -- no.) My question, instead, is whether the *federal* taxpayer is getting a fair deal.
Perhaps instead of depending on non profits to develop our economy we should improve our business climate and grow the private sector.
Post a Comment