Universities as anchor institutions in cities

Universities can play a significant role in the long-term success of their cities.  While universities may have once been called unengaged ivory towers, today, universities participate as active stakeholders in their communities.  Given the knowledge economy, universities can serve a vital role in improving the economic and social status of cities.  In today’s post, I want to describe the role of universities as anchor institutions and how they can benefit urban regions.

Photo credit: SMU

The scholarly literature describes universities (and hospitals) as anchor institutions, meaning stable organizations upon which to base development efforts.

Anchor institutions are like large department stores in a mall.  The serve as a key driver of people and activity.

Universities possess all the characteristics of anchor institutions.

Specifically, Taylor and Luter (2013) identify four major aspects of anchor institutions:  spatial immobility, corporate status, size, and mission.  I will briefly describe each of these.

1.  Spatial immobility.  Universities are tied to their specific location.  Unlike firms that may move to find more favorable economic conditions, universities largely stay where they are founded.  As a result, universities as anchor institutions have a self-interest in helping their communities.  Historical and local advantages build up over time.  Local pride, identity and local support keep universities in place.  Simply put, universities are place-bound organizations.

2.  Corporate status.  Anchor institutions are most frequently non-profit institutions.  For-profit businesses are by nature less committed to place even though there are plenty of businesses with close ties to their communities.  Yet, the importance of financial gain impacts decisions to move locations and makes non-profit institutions better suited to play the role of an anchor institution.

3.  Size.  Small institutions such as libraries or museums have many features for a city to build around, but lack sufficient size to significantly impact economic activity.  Anchor institutions are often the largest employers in their communities.  In addition, they hold tremendous purchasing power.  Universities, even of modest size, have sufficient employees, students, and purchasing power to influence economic activity in surrounding areas.

4.  Mission.  The Anchor Institution Task Force (2009) suggests that anchor institutions must hold a social-purpose mission.  Anchor institutions must do more than simply drive economics, but also social improvement.  The mission of most universities includes service or public purposes that prepares institutions to fill this role for their cities.


I believe universities hold tremendous influence and the ability to transform their communities.  I also believe cities are going to be the dominant social organization of this century.

To that end, I encourage higher education leaders and researchers to more actively consider the role of higher education in fostering the economic and social development of cities.  What the land grant mission was to the 19th century and what the federal grants mission was to the 20th, I believe city development could be for this century.

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