Universities, especially the land grant universities, have long taken a leading role in developing local economies. This is increasingly important today, as regions compete to attract companies and professionals who work in the knowledge sector (think of the current Amazon competition, for example). Universities often function as a hub, nurturing and advising high tech startups and small companies that move research into production. Think of the roles played by Stanford and Berkeley in creating Silicon Valley, or Duke and UNC in creating the Research Triangle tech hub. Universities not only provide ideas and research for companies, but also in many cases sponsor major hospitals with state of the art facilities, healthcare outreach to the community, and provide sports and cultural events, all things that make a region more attractive to companies and educated workers.
Sadly, declines in funding for public universities, which are particularly important in the Midwest where there is less tradition of well endowed private universities, threaten all of this. This is something that has the potential to exacerbate geographic inequalities, since underfunded Midwestern public universities will end up having less and less ability to fill their roles as economic drivers. Is this another sign of the death spiral in the Midwest? Is there a solution?