The Meds and Eds in Urban Economic Development

ABSTRACT:

Medical and higher education institutions have become centerpieces of urban economies, employing large numbers, purchasing goods and services, and anchoring neighborhoods by their land investments. Perhaps even more important in the knowledge economy of the twenty-first century, these knowledge-generating institutions help cities compete for growth. Yet the literature on urban economic development neglects them. Using Philadelphia as a case study, this article asks whether local and state policymakers have enacted policies to promote the meds and eds. It finds that, far from supporting these institutions, public officials have withdrawn support from them during the 1990s. State government has been shifting subsidies away from the institutions in favor of subsidizing their customers (i.e., patients, students). And municipal officials have challenged the tax-exempt status of major nonprofit institutions. The article concludes that if policy makers recognized these as leading export sectors of the urban economy, they would be more supportive.