What If We Rethought Where America Puts Its Universities?

Just to say up front: these are my personal views, not my employer’s. And this isn’t a fully fleshed-out proposal—just an idea I’ve been thinking about and wanted to share.

Walk down Kirkwood Avenue in Bloomington, Indiana, on commencement weekend and you’ll see thousands of Indiana University graduates piling into cars headed elsewhere. It’s a heartwarming scene for families—but a sobering one for regional-development economists. The state has just made a major investment in talent that will likely decamp to Chicago, Seattle, or New York the moment the caps hit the air.

Many of the United States’ most prestigious universities sit in similarly small towns—Cornell in Ithaca, Michigan in Ann Arbor, Wisconsin in Madison. That geography is no accident. The Morrill Act of 1862 and subsequent land-grant legislation deliberately placed campuses across the rural frontier to diffuse agricultural and mechanical know-how. Cheap land, rail access, and the desire to stabilize sparsely populated counties sealed the model.

Fast-forward to 2025, and that model is colliding with a knowledge economy that rewards density. Firms seeking to commercialize research tend to cluster near venture capital, suppliers, and—crucially—large pools of graduates who can accept a job without relocating. Evidence suggests that universities embedded in big metros generate more patents, spawn more start-ups, and retain more alumni than equally capable institutions in tiny towns. For example, a Brookings Institution study (“Hidden in Plain Sight: The Oversized Impact of Downtown Universities,” 2017) found that research universities located in the downtowns or midtowns of large cities produce roughly twice as many patents and over 70% more start-ups per student than comparable schools in smaller towns.

A Thought Experiment: Redrawing the Map

If we could reboot U.S. higher education today, would Cornell still be in Ithaca or Purdue in West Lafayette? Probably not. From the standpoint of inclusive growth, elite research campuses belong inside—or at least on the edge of—major metros where both discoveries and graduates can be rapidly absorbed by industry.

Take Indiana. IU’s flagship sits amid forested hills and 80,000 residents. Just an hour away, Indianapolis anchors a metro of over 2 million with a growing tech and life-sciences base. Imagine if the flagship campus were located downtown: research centers could plug directly into corporate R&D labs, founders could pitch VC funds without a road trip, and more graduates would launch their careers in-state thanks to diverse job options for spouses and partners.

The Missing Anchors in Left-Behind Metros

Indiana is far from unique. A quick scan reveals a dozen metro areas with over a million residents but no top-tier research university: Detroit, Kansas City, Indianapolis, Milwaukee, Louisville, Oklahoma City, Memphis, Birmingham, and Albany, among others. These cities make up much of the industrial backbone of Middle America, yet they lack the research engines that power innovation economies in places like Boston, Austin, or Raleigh-Durham.

The result is a damaging loop: limited research capacity constrains knowledge-intensive firms; talented teenagers leave for college elsewhere; and local employers struggle to recruit the specialists they need. Brain drain becomes both a cause and a consequence of economic stagnation.

Why Urban Spillovers Matter

Skeptics may argue that college-town universities still deliver national impact. A biotech breakthrough in Madison, after all, can be licensed to a Boston start-up. True—but the regional multiplier suffers. Face-to-face interaction remains vital in translating research into commerce, especially in early-stage ventures where serendipitous meetings often matter more than formal IP transfers.

Cities compress those interactions: graduate students bump into investors at coffee shops; corporate R&D managers teach evening courses; alumni stick around because they can change jobs without changing zip codes. Small towns can mimic pieces of this ecosystem, but scale is destiny. A place of 80,000 rarely offers the dense supplier, capital, and labor markets that turn ideas into industries.

A Smarter Policy Play: Boost Urban Publics

Relocating 150-year-old campuses is neither feasible nor desirable. But policymakers can reverse decades of underinvestment in the urban publics already on the map. Redirecting even a small share of federal and state research funds toward these metro campuses would yield significant returns.

Such moves would add new engines of growth where they’re most needed—inside left-behind metros that already have infrastructure and, most importantly, scale.

The Stakes

Regional inequality is rising—and AI may make it worse. Talent and capital are concentrating in a handful of “superstar” metros, while much of the industrial heartland struggles to reinvent itself. Universities remain one of the few economic levers still under state control. Deploying that lever more strategically—by empowering urban campuses—could slow brain drain and spark new clusters of innovation in places that have gone too long without them.

The land-grant vision of 1862 aimed to spread prosperity across the frontier. Today, the frontier is not geographic but economic: the widening gap between cities that attract opportunity and those that repel it. Planting world-class research universities inside the latter could be the twenty-first-century equivalent of the Morrill Act—a bold, place-based investment in America’s next wave of growth.