Venture capital (VC) is often hailed as key to innovation. It has, after all, helped fund the world’s most influential and high-growth tech companies, including Alphabet and Tencent. But could the VC model, when applied to place-based regeneration, bring the same level of returns to society?

In Knowledge Towns, Ohio State University associate professor David Staley and venture capitalist Dominic Endicott make a compelling argument for the use of a more iterative approach, which is typical of VC, in post-pandemic local development. Their main pitch is that as Covid-19 has accelerated the flexibility and remote nature of knowledge work and led millions of people to move to more affordable locations, placemaking should be based on attracting highly paid remote knowledge workers rather than companies.

They advocate for smaller colleges and universities to be used in rural areas or secondary cities as ‘talent magnets’. As the knowledge economy, powered by cloud computing, has become the “dominant economic and social model” of the 21st century, the authors are calling for locations to “pursue policies that optimise their ability to attract, retain and grow talent”.

In turn, an influx of highly paid knowledge workers to a community brings a host of benefits, including a boost to innovation and the local services sector, helping to foster sustainable economic, social and environmental growth, according to Mr Staley and Mr Endicott.

The change wrought by the pandemic “creates a once-in-a-century reshuffle in the role of place, reducing the importance of the megacity and revitalising the opportunity for every other place”, they write. An estimated 36,000 potential locations in the US could be talent magnets, according to the authors, meaning they could accommodate high-income, remote work. They also underline the importance of using the beautiful natural settings often found in rural areas as a draw to talent.

Through their “12 new rules of place-based success”, the authors provide a useful framework for how communities can achieve success in this new paradigm. They believe that ‘knowledge enterprises’, an academic institution directly aligned with a region’s talent magnet strategy, hold the key to creating new successful locations.

Unlike typical urban universities, the authors conceive of ‘knowledge enterprises’ as institutions that act as a “public utility” for communities, acting as both “an incubator of civic engagement and an economic driver”. Through this approach they see them as “anchor institutions” within communities that directly help to attract and retain local talent.

Much of the book is dedicated to an instructive, but hypothetical, set of scenarios about the archetypes of talent magnet strategies and knowledge enterprises and how they would work in practice. However, the use of tangible examples makes Knowledge Towns far more persuasive. Notably, the authors hail the 2019 talent attraction programme in Tulsa, Oklahoma, as a success. 

The programme offered $10,000 to 100 successful “high potential” applicants to spend over a year in Tulsa, with 70 of them deciding to stay in the city. The programme was extended to 250 people the following year and “helped to put Tulsa in contention as a finalist for a Tesla factory”, argue the authors. The programme has subsequently been replicated in Alabama, Georgia, West Virginia and Vermont. 

For US economic developers working in smaller towns and rural settings, Knowledge Towns provides an essential roadmap for how universities can be used to boost their communities. Their counterparts in the megacities would be equally wise to heed these arguments. The post-pandemic movement of talent will define the future of economic development in the US and beyond.

The book Knowledge Towns: Colleges and Universities as Talent Magnets by David J Staley and Dominic DJ Endicott was first published by John Hopkins University Press in March 2023.

This article first appeared in the June/July 2023 print edition of fDi Intelligence