A growing list of cities are banking their economic development on the medical and educational sectors, which have consistently grown over the past few decades. Aaron Renn examines why overreliance on eds and meds is problematic.
From cities like Piitsburgh and Cleveland, that stabilized declines in manufacturing with so-called "eds and meds," to Chicago, where "education growth has been a bulwark of the Loop economy," it's hard to find an American city that isn't turning to these sectors as an economic development strategy.
Renn, however, warns about the potential problems for cities that rely too much on eds and meds as the road to their economic futures. For one, "these tend to be non-profit, and thus reduce the tax base in cities that are dependent on them." Second, he argues, these sectors "are seldom a source to dynamism in communities in and of themselves." While these points, particularly the last one, may be arguable, he sees an even bigger problem in the fact that, "these industries are at the end of their growth cycle."
"As the US starts to groan under the weight of spending on health care
and higher education," warns Renn, "it's clear that, as a society, we need to be
spend less, not more on these items as a share of national output.
Some cities with unique strengths, like Boston, with its many
specialized biotech firms, or Houston, with the world's largest medical
center, may thrive in this environment, but the vast majority of cities
are likely to be very disappointed in where eds and meds growth will
take them."
FULL STORY: The End of the Road for Eds and Meds

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