USA Today has a story today on how college towns have done better than many places during the recession. One of the themes of the article is that colleges are playing a greater role in regional economic development.
Over the last couple of years, I've been to college towns like Auburn, Alabama and Lawrence, Kansas, and they are appealing places. But I also grew up around a college town - New Haven, CT - that is hardly a model of economic development, in spite of getting huge sums of research grants through Yale. I also know a lot of people here in the DC area who moved from Syracuse, because it provided so little in the way of jobs in spite of its large university.
I think USA Today would have better off saying smaller towns with land grant universities are doing ok during the recession, because college cities that have lost manufacturing jobs are not.