Universities reimagined as local incubators: 3 trends for higher education P3s
From tech-forward research labs to amenity-rich student housing, U.S. colleges and universities are striving to create unique live-work-learn-play spaces to attract talent and tuition dollars.
But as competition heightens, budgets are shrinking at institutions that rely on state funding.
Federal contributions have not yet rebounded to levels seen before the Great Recession a decade ago: Of 49 states analyzed by the Center on Budget and Policy Priorities, 45 spent less per student in the 2018 school year than in 2008.
This puts publicly-funded universities in a difficult position: Schools recognize a need to increase enrollment, but don’t have sufficient levels of state or federal funds to support exciting new campus projects.
To compensate, many schools have shifted their focus to partnerships with the private sector and startups.
These public private partnerships (P3s) vary, but they often center on taking what’s traditionally a major cost center—campus real estate—and reinventing it as a strategic asset to the broader geographic region.
By reimagining their investments as projects that improve economic development and career-readiness, universities are finding eager partners within their communities.
Here are 3 emerging models of the higher education P3s:
1. Real estate expansion drives local economic growth
With competition for new students rising, universities look to support higher enrollment numbers and a rich student life experience—and are finding creative ways to fund them.
One approach is to tackle projects that offer clear community development opportunities.
The University of California has embarked on a partnership to build more than 10,000 affordable housing units for students at UC Merced, the university’s youngest satellite campus.
The $1.3 billion project to expand the campus will accommodate thousands of additional students, support new jobs and stimulate an estimated $1.9 billion in local economic growth.
By leveraging campus expansion to drive both economic development and local employment, schools can attract willing private sector partners and revitalize their surrounding communities.
2. New mixed-use campus spaces foster community and innovation
With state funding down and education costs on the rise, universities are trying to avoid hiking their tuitions in response. The timing is perfect for institutes of higher education to re-define the recruiting role of their real estate.
By bringing together research centers, restaurants, retailers, hotels and apartments into new on- or near-campus spaces, schools can create self-contained neighborhoods that offer value to students and non-students alike.
Harvard University is making use of a once-vacant university-owned parcel of land adjacent to its campus. It is partnering with private entities to construct combination office and laboratory buildings, a hotel and conference center, and an apartment building.
The 900,000-square-foot, mixed-use development will support applied research and collaborative spaces for businesses, nonprofits, incubators and startups in the area.
3. Applied learning opportunities create a local talent pipeline
From on-campus business incubators to corporate-supported programs dedicated to career training, universities are also tapping into the startup economy.
In Kansas, Wichita State University launched its Innovation Campus concept. In addition to a 120-acre “community makerspace” and mixed-use areas, the project initiated a series of public/private partnerships with area corporations like Airbus and NetApp.
Together, they’ve developed tech-rich courses designed to the train potential employees while they’re still in school, and in turn create a ready-made workforce.
While the previous ramp-up for a new hire was 18 to 30 months, Innovation Campus partners engage WSU students in applied learning activities, and can now cutting the post-graduation on-boarding time to as little as six months.
Bringing together the academic faculty and students, local businesses and the social environment is a cross-functional idea. It creates a hyper-local ecosystem to bring both academic and business ideas to market. And it’s going to be a differentiating factor for forward-looking organizations.
Unlike the stoic hallways and quiet self-study of institutions past, the universities of the next decade will look more like these examples—more dynamic, more collaborative and more deeply integrated with their surrounding community.