Financially Sustainable University and Building Regional Knowledge Economy Evidence from the U.S.

Abstract

This research measures the empirical perspective that examines the growing prominence of universities in knowledge production and innovation for national and regional socioeconomic impact of university’s ‘third mission’ thereby leading to revenue stream diversification and long-term financial sustainability. US colleges and universities in the last 3 decades have consistently achieved unquestionable scientific and prosperous global leadership unrivaled by any other industry in the United States. This is as a result of embarking on the “Third mission” for universities, and hence, repositioning national and regional economies to become engines for innovation, growth and knowledge production. A recent study by the Brookings institute (2012) showed that most U.S. patents of which have been consistently ranked 1st in the world for past decade, 63 percent — are developed by people living in 20 metropolitan areas, that account for only 34 percent of U.S. population. This reflects the advantages of large metropolitan economies and how it influences knowledge production. (Denneen & Dretler 2013, Roessner, et.al 2012, WIPO 2013, Brookings 2013) This research attempts to measure the role of universities and their ability to create new and build on existing stock of knowledge through independent and collaborative research of which its spillover creates revenue for the university and serves as a nurturing ecosystem for businesses and individuals in that cluster. Hence fostering regional knowledge production and economic growth.