The University of Rochester's Duncan Moore writes about "No Rust in Rochester ... Eastman Kodak is bankrupt. So why is Snapshot City thriving?" in today's NY Times.
He cites a variety of effects, including the benefits of being a college town (University of Rochester). Colleges are a town's local export industry that is less sensitive to business cycles. Students bring in cash as do the recipients of various grants from public and private sources that the people at many colleges and universities compete for. Even better, some schools have specialized human capital that attracts entrepreneurs and start-ups. The story of Stanford and Silicon Valley has now been told a thousand times.
The University of Massachusetts' (Amherst) Blake Gumprecht has prepared this list of the nation's 305 "college towns". He used a screen of 20 percent Enrollment-to-Threshold (in 2000) ratio. The biggest 17 of these towns (Madison, Tallahassee, Ann Arbor, Fort Collins, Provo, Champaign-Urbana, Norman, Athens, Gainesville, Boulder, Santa Barbara, Columbia, Denton, Lawrence, Tuscaloosa, Kalamazoo, Las Cruces) are cities with population of 70,000 or more.
New Geography has this ranking of the best job-growth small cities for 2010-2011. 243 places are ranked. Seven of the 17 biggest college towns made this cut (Columbia, MO, was #20; Gainseville, FL, #52; Athens, GA, #89; Lawrence, KA,#165; Tuscaloosa, AL, #91; Kalamazoo, MI, #187; Las Cruces, NM, #43); only one was in the top 20.
This result is for one year only and everyone knows growth is a complex story. Moreover Gumprecht's screen leaves out places like Stanford. Propulsive effects can and do spill over city boundaries, especially if there is a congenial surrounding metropolitan area. But it can also be true that the small places (the 288 college towns below 70,000 population) are that small because they never experienced much growth. Moore is right to list the complementary efforts and political favors ("The state and federal governments have been a big help too") that Rochester received which seemingly boosted the "college town" effect.
Here are several links to the bigger discussion.