An old coal town in Central Appalachia shows a way forward for rural economies: higher education

Google Earth shows Pikeville, Ky., in a bend of the Levisa Fork of the Big Sandy River, which was cut off by a federally financed project decades ago, opening and creating land for development. It was also helped by Paul Patton, who was governor in 1995-2003 and then chancellor of the University of Pikeville. (Click on the image for a larger version.)

A year ago today, economist Lyman Stone published what Noah Smith of Bloomberg News calls "one of the most important blog posts in recent history," describing how a small university has rescued the economy of Pikeville, Ky., population 7,000, deep in the Central Appalachian coalfield.

"It is not too much to say that the University of Pikeville is saving the city," which is far from any interstate highway, Stone wrote. The 3,000-student school, formerly 1,000-student Pikeville College, has an osteopathic medical school, an optometry school and graduate programs in business and education. "Those 2,000 new students amount to essentially 100 percent of the growth in greater Pikeville," Stone declared. "This knowledge-and-talent-production facility in turn helps make Pikeville Medical Center a booming and effective employer, with a brand new building completed in 2014. Pikeville Medical Center is the only Mayo Clinic Network partner in Appalachia which, again, helps it operate as not only a hub for medical services but also a key knowledge-generation site." And the school's growth has spawned many new businesses, so the town "is becoming more amenity-dense, which is a necessary precondition for lasting growth."

Stone concluded, "Pikeville is defying the odds and experiencing real urban growth in the midst of Appalachian population collapse. This is a huge success story with lessons for many communities. The success of small cities is based on their ability to draw people in with jobs, amenities, and low costs: universities serve as excellent incubators for at least the first two. Moreover, universities need not be public, nor enormous. UPike is a private school and isn’t huge. But university and government leadership have both invested in their communities, pouring energy and resources into assets: knowledge creation, civic organizations, institutions, reputational capital, etc. Furthermore, Pikeville’s success shows that post-industrial towns deep in the coal belt totally isolated from the large urban centers can nonetheless succeed. Their success will look different. They may never take home the fat paychecks of Silicon Valley. But they can nonetheless have functional, economically viable towns that give their young people a shot at achieving their dreams, often in their very own hometowns."

Smith says Stone's piece, dense with data by leavened by graphics and photos, "shows the way forward for the U.S. economy and American society." But he sees a risk in the tax bill moving through Congress, because it "contains big cuts to higher-education funding. It eliminates tax credits and deductions that students use to help pay for college. And it makes certain kinds of financial aid taxable -- for example, tuition waivers, which help graduate students eke out a meager living while they get their advanced degrees. . . . These cuts -- about $65 billion during the next decade -- would force universities to cut costs and tighten their belts. But they would also crush the nation's Pikevilles. The Ivy League universities and big flagship state schools would survive, but many smaller colleges in more vulnerable regions would be devastated. The same struggling working-class regions that Donald Trump promised to save during his campaign would find one more path to a brighter future cut off."