March 21, 2007

Economic Development is a currently used phrase which means different things to different audiences. To some, it means preparing a contemporary workforce by skills training and professional education. To others, it means financial investment by individuals, organizations and government in the established or emerging business community and in entrepreneurial endeavors. And to others, it means providing an upgraded infrastructure of services and incentives to meet the needs of a growing and vibrant region. For all, it means creating and sustaining an environment where businesses thrive, employees are productive and are supported with good working conditions and salaries, citizens have a reason to remain and prosper in the area, and governments have pride and financial security to provide what is expected and needed of them.

Business and government partnerships are essential for economic development.  Each has something unique and necessary to contribute to realizing the hope of a developed economy.  Neither can accomplish alone the goal of a sustainable economy.  But there is another partner in the mix whose role is essential for economic development: education, specifically higher education. As with business and government, education can not achieve the goal of a developed economy on its own. 

My focus today is on what higher education contributes to economic development. I suggest four main areas of contribution: first, the most obvious, education itself. On the pragmatic side, education is for preparing, upgrading, enhancing the workforce at all levels, but education has more than a pragmatic purpose, and must be seen in the larger context.  Second, the business side of education must be factored into discussion of economic development: education as an employer, a consumer of products and customer for services.  Third, education contributes to economic development as a community developer…preparing community leaders, participating in community projects, and providing voluntary service to improving communities.  And fourth, education fosters a developed economy as a provider of a wide-ranging preparation for effective citizenship…teaching the role and responsibilities of good citizens in a democratic society.  Some might say there is a fifth area of contribution: education as a financial supporter of local government.  But I leave that aspect for others to debate in the context of the law and of the role and responsibility of non-profit organizations.

In identifying the role of higher education as a factor contributing to economic development, we need to understand the original purpose of higher education, and how it has emerged in contemporary society.  In the classical sense, higher education was viewed as an end in itself, and not as a means to an end.  Higher education - that education beyond basic skills and workforce preparation - was viewed as essential to fulfilling the highest aspects of our human nature…our essence as thinking. self-determining beings.  

Knowledge was viewed as having intrinsic value, and was pursued in the search for truth and understanding of self and the world. Liberal education (an original term for what was later called higher education) was a liberating education…freeing persons to be all that they could be.  It is interesting to note that the Latin root for liberal is also the root for freedom and for book, since traditional liberal education used the writings of others to form and free the minds of students.  For many, education at this level was predominantly for the leisure class, for the wealthy and the leadership of society.  The working class had access to little in the way of this higher knowledge, but learned the skills of their trade through guilds and apprenticeships.  Today, education in the liberal arts and sciences is but a small part of higher education, which has become more pragmatic with the focus on education’s extrinsic value: preparation for professions, careers, jobs. In identifying a goal of attending college, students today are asked “What do you want to be…or to do with your education?”  Clearly, this statement reflects a view of education as a means to an end. Today, students view higher education as a right rather than a privilege.  In a democratic society, we claim that higher education should be available to all who qualify academically for the intellectual challenges and opportunities it provides, and that higher education is necessary in many cases to finding a good job and preparing for a successful career.  Higher education has become a need, a workforce imperative in democratic societies, and in what we now call a ‘knowledge economy’. We now view higher education as a community (or public) ‘good’, not just as an individual (or private) ‘good’.  And providing this good is one of the major contributions of higher education to economic development.  In addition to a sampling of the liberal arts and sciences, students now learn technology, analysis, communication, business, applied sciences and other skills necessary to fuel the economy and funnel graduates into the world of commerce. In Pittsburgh, we see the effects on our economy of having great higher education institutions preparing the contemporary workforce at the higher levels of employment. One concern we have is that so many of the graduates of our local institutions go elsewhere for employment, and we strive to find ways to keep them here. Several years ago, I was involved in a Pennsylvania initiative called “Stay! Invent the Future!”, which was aimed at attracting our college and university graduates to remain in the Commonwealth for their careers and thus contribute to shaping the future of Pennsylvania’s economy.  This program was mildly successful, but the challenge remains for graduates of our institutions to actually find good paying jobs comparable to what others with their knowledge and skills are receiving in other states.

The second contribution of higher education to economic development is the reality of education as a business itself.  Higher education is a major employer in Pittsburgh.  To some, Pittsburgh is known as an “Ed/Med” town, where educational and medical institutions are major employers.  Higher education not only prepares people for careers in those fields, but also employs thousands of people to work at these institutions. This is just one way higher education drives the economy. We hire people and give them good salaries for spending in the local businesses and for paying taxes to local municipalities.  We purchase goods and services from local businesses for the running of our institutions. We hire auditors, lawyers, advertisers, consultants, caterers, architects, engineers, and other local workers to meet our needs.  We market our institutions in our local media. We participate in regional business organizations. We hold our Endowments and operating funds in local banks and investment companies.  Unlike other major corporations who have moved headquarters from Pittsburgh, we are employers who will not re-locate. We are committed to being an employer, consumer and customer in the greater Pittsburgh area for the long term.

The third contribution of higher education to economic development is as a developer of communities. There is a clear link between economic and community development.  Good communities are essential components of thriving economies, and higher education plays a major role in building communities.  One goal of education is to teach social skills and responsibility. Higher education takes this basic education further by preparing students to become leaders and committed advocates of just causes, both within the institution and within the community.  Faculty and staff of our institutions serve on local and regional boards of community organizations. Faculty, staff and students volunteer countless hours of service to communities, both as individuals and as representatives of their colleges and universities. Service Learning is a key curricular component at many of our institutions, and dedicated days of service are common at our institutions.

The final contribution higher education makes to economic development is that of preparing students for effective citizenship in a democratic society.  Thomas Jefferson claimed that the worst thing that could happen in a democracy was citizen apathy. For democracies to work, informed dissent is as important as informed consent. Persons who are well educated in the broadest sense are best able to create, affirm and challenge democratic systems which, in turn, can foster a strong economy.  Our colleges and universities teach students the origins, values and challenges of democratic societies, and provide them the skills and opportunities to analyze existing policies and practices against models and values.

Many higher education institutions, individually and collectively, have published studies on how they influence the economic development of their city, region and state.  Among these economic impact studies in Pennsylvania are those of the Association of Independent Colleges and Universities of Pennsylvania (AICUP), of large public institutions (such as Pitt, Carnegie Mellon and Penn State), and of the Pittsburgh Council on Higher Education (PCHE) whose study will be published in the next few weeks. The robust higher education community in Pittsburgh sets the city apart from many other American cities.  The ten member institutions of PCHE enroll more than 98,000 students annually, including 5,000 students from all over the world.  The colleges and universities employ 25,000 people, and can measure their collective direct and indirect economic impact in the billions of dollars.  With the presence of world-class colleges and universities comes a culture of progress, creativity, discovery and social conscience. PCHE institutions are building the workforce of the future, and improving the quality of life for Pittsburgh.  These institutions offer more than 100 programs in health-care and related fields, and provide new discoveries in medical technology, engineering, computer science and other fields which bring nearly $1 billion annually in research funding to Pittsburgh.  It is clear that Pittsburgh’s colleges and universities, recently recognized in the US Airways Magazine, significantly contribute to the economic and community development of the region.

Another major initiative which has potential for increased contributions of our higher education institutions to the economic development of Pittsburgh is the Commonwealth’s incentive for businesses to associate with local colleges and universities through Knowledge Innovation Zones, or KIZs.  This is an extension of Pennsylvania’s original Keystone Innovation Zone tax incentives to businesses to locate or re-locate in key areas of the Commonwealth. The first Knowledge Innovation Zone was established locally in Oakland, where both Pitt and Carnegie Mellon Universities serve as the anchor schools.  A more recent award of KIZ designation was made to the Pittsburgh Central Knowledge Innovation Zone, in which the participating higher education institutions are Duquesne, Point Park and Carlow Universities, and the Community College of Allegheny County. Several businesses are also involved in both our regional KIZ initiatives, and all of us pay to play on this field of business-education partnerships. In addition to financial incentives  for businesses to participate in these KIZs, other benefits specifically related to working with the higher education institutions include access to faculty expertise, student interns, research projects which spin off businesses and inventions, special project and facilities support by the institutions, and professional guidance to emerging and entrepreneurial businesses.  Involvement of the colleges and universities in the KIZ demonstrates their commitment to expanding the knowledge economy of the ZONE in which they are located.

This brief outline of higher education’s contributions to economic development, both in general and in Pittsburgh, leaves much to be said on this topic.  It is my hope that the few ideas contained in this summary will stimulate your interest in learning more about the role of higher education in economic and community development.   

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