Posts Tagged “economic engine”
In a thoughtful commentary on Philly.com recently, Pennsylvania State Treasurer Joe Torsella, offered an insightful perspective on Pennsylvania’s #1 national ranking for most college debt per student, a dubious distinction. The level has reached $35,000 at graduation, or roughly the price of a fully loaded, full–sized new car. It’s a growing problem but not an insurmountable crisis.
Mr. Torsella argues that “time for a big and bold conversation about what public higher education in Pennsylvania should look like in the 21st century, a conversation that looks at both reform and reinvestment.” He notes a Georgetown University study found that “95 percent of jobs added since 2010 require some form of postsecondary education, whether trade school, community college, or a four-year program.”
Mr. Torsella is correct to argue that Pennsylvania’s state government has failed to adequately fund public higher education, especially in the Great Recession years and thereafter. And he is right to decry the level of indebtedness compared to the average in other states. But on a couple of points, the national numbers confuse a part of the story.
Distinctive characteristics of higher education in Pennsylvania
First, Pennsylvania has 90 private colleges and universities with sticker prices higher than the state-subsidized public tuition numbers.
Second, the Commonwealth also has a unique category of schools – state-related – including the University of Pittsburgh and Temple University where tuition prices have been historically higher than their state-owned counterparts.
And third, Pennsylvania has offset some of its high tuition public and private sticker prices through support for its PHEAA student aid program, among the most generous in the country. Collectively, these conditions affect the level of student debt.
Transition from industrial powerhouse to knowledge-based economy
These differences aside, Mr. Torsella’s points make a great deal of sense. Pennsylvania was an industrial and manufacture powerhouse whose economy has shifted dramatically in the past 70 years. Today’s renaissance in Pittsburgh illustrates this point nicely. But for the rest of America, Pennsylvania embodies a state in the throes of transition, moving to a post-industrial economy that is largely shaped in its biggest cities and their “eds and meds” complexes.
This is the point on which Mr. Torsella’s argument holds together best. Pennsylvania has an enormous higher education community, anchored by some of the most prestigious institutions in the country. The two questions that he raises on reform and reinvestment make sense. Now is the time to have the discussion.
Reform begins with understanding of how state government works
Conversations about public support for education must start with an understanding of the realities of how state government operates. It’s very hard to plan for a future when state funding is dependent on an annual appropriations cycle and competing political interests. Any action must be consensus-driven and benefit, at whatever level possible, from both legislative and executive branches.
Further, any reform must include a willingness on the part of colleges and universities to see themselves in the mix of needed reforms. They must become more efficient and accountable.
Futures of public and private colleges are connected
But what is missing from Mr. Torsella’s analysis is an understanding that Pennsylvania is neither a public nor a private college state. It’s both. The two are not mutually exclusive and their futures are intertwined. Philadelphia is home to Temple and to the University of Pennsylvania and Drexel. Pittsburgh is the home to the University of Pittsburgh and Carnegie Mellon. The conversation must be comprehensive. The agenda must be thoughtful and complete.
Any overarching strategy in Pennsylvania must be linked to broader questions. In Massachusetts, for example, former Governor Deval Patrick made a critical investment in the state’s biotech community. Years later, the results have transformed the regional economy and precipitated a boom in metropolitan Boston that highlighted growing income inequality, rising housing prices, the need for public transportation improvements, and the importance of better basic education outcomes. While these are persistent problems, they are also the next generation of problems that growing post-industrial economies face.
Greater Boston is a robust place because Massachusetts placed a bet on a rapidly expanding industry that pulled higher education squarely into its economic development and workforce preparation mix.
Colleges and universities are economic engines fueling state’s economy
An ambitious strategy to play to the strengths of Pennsylvania by using its extraordinary colleges and universities could increase access and opportunity and link the state’s disparate regions together. Its government leaders must better appreciate that colleges are also economic engines that fuel the state’s economy.
What would rural Pennsylvania look like without its mix of public and private colleges providing jobs that have long since evaporated in once-booming industries in their areas?
Pennsylvania already has a dynamic higher educator incubator in place. The model works in states like North Carolina, Texas, California, Georgia, Massachusetts, and Minnesota. It’s already operating successfully in cities like Pittsburgh. Yet as discretionary spending decreases, Pennsylvania state leaders have important choices to make. One must be to support public higher education better.
The second must be to recognize that Pennsylvanians are in this together. It’s not just a public college problem. But it can become a opportunity to re-imagine how its colleges and universities can redefine Pennsylvania’s presence on the national stage.
The Boston Globe recently reported on the decision by record numbers of international students to choose Canada when pursuing their higher education goals. Reporter Laura Krantz noted:
“Some reasons are longstanding – fear of gun crime in the United States and cheaper tuition up north. But the 2016 election, and with it Trump’s travel ban and what many see as the demonization of foreigners and immigrants and a new wave of racism, have created a post-Trump surge at Canadian colleges.”
At the University of Toronto, the number of foreign students who accepted admissions offers increased by 21 percent. In fairness, Canada has increased its international recruiting goals to spur economic growth. It has 353,000 international students today but plans to increase the number to 450,000 by 2022.
Overall, the number of international students has increased 92 percent in Canada since 2008. Ms. Krantz relates: “By comparison, the United States has about one million foreign students and a population ten times the size of Canada.”
International Student Enrollment Declines at U.S. Colleges, Universities
Elizabeth Redden reported similar findings in Inside Higher Education earlier this month after interviewing about two dozen university officials. She found:
“…no consistent, unifying trends emerge, but some are reporting a slowdown in the flow of students from China and declines in graduate students from India, two countries that together account for nearly half of all international students in the U.S. Universities also continue to feel the effects of the declines in enrollments of Saudi Arabian students that began in 2016, after the Saudi government tightened up some of the terms of its massive scholarship program.”
Is the U.S. Losing Its Competitive Edge with International Students?
This raises the important question about how American colleges and universities present their value proposition to international students. Ms. Redden notes that Dane Rowley, international admissions director at California Lutheran University, suggests:
“In some ways it’s really good; the accessibility of international education is expanding for students, so they don’t have to come to the U.S. as the be-all, end-all of international education. It just happens that it’s coming at a time when the U.S. is almost abdicating its international edge with international students.”
Ms. Redden further reports that Rahul Choudaha, executive vice president for global engagement, research and intelligence for StudyPortals, an online international student marketing and recruitment platform, surmises that large research universities: “… seem to be less hurting than the other categories, because they have a much longer history of enrolling international students, but also they have a better brand than the other institutions that joined the international student wave in the last decade or so.” By contrast, he said,
“Institutions which are not perceived to be high ranked or are not located close to major cities or [that have not] experienced challenges with student experiences or [are] over-reliant on few markets (e.g., Saudi or China or India) will be the first to get hurt. Many institutions that were late entrants in building their capacity for international enrollment will be the first to lose in this wave of declining international enrollment for fall 2017. The multiplier effect of financial implications of lower fall 2017 enrollment over next two to four years [is] significant for institutions already hurting.”
Mr. Choudaha argues: “The years of fairly easy growth may be over — at least for many universities, and at least for now. Universities may have to work harder to keep their international enrollments steady, or at least to prevent precipitous drops.”
Fewer International Students Hits Colleges’ Revenue Stream
These changes have important policy implications for American higher education. At smaller colleges that are less well known, the implications to their financial bottom line can be enormous.
The decline in international students destabilizes the tuition base and may dramatically affect net tuition revenue on which almost all of these institutions depend heavily.
It looks like American colleges and universities will suffer the most in the battle between the economics that helps them be sustainable long term and the politics administered by the US State Department.
US Immigration Policy Hinders International Students’ Ability to Work After Graduation
The problem is complicated because international students face additional concerns over their ability to obtain US work visas after graduation, further depressing the number of international students in American universities. This is not a problem in Canada, for example, especially since the Canadian government had instituted policies making it easier for international students graduating from Canadian universities to obtain work in Canada after graduation.
Perhaps the most troubling aspect is the sense that American higher education is suffering a public relations debacle, whether because of the Trump Administration’s political agenda or a sense by the students that America is no longer a safe or welcoming place for them.
This will have long-term implications for the American workforce, especially since the workforce benefits enormously from the talent available after the graduation of non-US-born graduates.
If the nationalism that polarizes much of America continues, the impact will damage US international standing further and weaken the growth of the American economy.
Has anyone really thought this through carefully?
Multiple media reports appeared last week about the efforts by American cities, backed by their state governments, to lure the merchandizing giant Amazon’s second global headquarters to their regions. The company will entertain proposals until October 19.
Amazon set general parameters and has a history in Seattle that forecasts what mix of opportunities it might seek in this $5 billion expansion that may produce as many as 50,000 new jobs. The stakes are high for the North American cities — including Denver, Minneapolis/St. Paul, Dallas, Toronto, Pittsburgh, Austin, Atlanta, Washington, and Boston — that will likely make serious bids for Amazon.
Boston wins on points for the following reasons:
- Boston recently attracted the global headquarters of General Electric into a strong, entrepreneurial, global-based economy.
- Boston has a well-connected international airport.
- Its winter weather is no worse than what hot and oppressive summers offer in Dallas,
Atlanta, Austin, and Washington.
- The Greater Boston economy is healthy and diversified.
- Boston operates one of the country’s largest public transit systems, now being upgraded after years of neglect.
- It can offer or piece together large tracts of land to create a new Amazon campus near its thriving downtown.
Boston also has a strong sense of self that mirrors the social, psychological, and cultural mix that also makes Seattle so attractive to Amazon. In fact, Boston’s potential is enormous. It ranked third in A. T. Kearney’s Global Cities 2016 Outlook study. This study looked at both a city’s current performance — based on business activity, human capital, information exchange, cultural experience, and political engagement — and its projected success, based on how personal well-being, economics, innovation, and governance have changed over time.
Obviously, the City of Boston and the Commonwealth of Massachusetts have a role to play in the bid for Amazon’s headquarters. It’s complicated politically by the run-up to the 2018 elections and the ability and willingness of some bidders to buy Amazon’s commitment through cash and regulatory and tax incentives.
Massachusetts’ politicians should capitalize on a full range of existing programs and incentives but focus on improvements that would benefit its citizens – especially transit upgrades – to answer local questions about “what’s in it for me” rather than try to outbid others financially.
Amazon’s vision must be tied inexorably to a broader, more encompassing and inclusive vision for New England in the 21st century.
Boston’s Bid for Amazon Must Be Built on its Culture of Innovation
Where Boston truly pulls ahead of potential suitors is on the dynamics of its creative culture. Boston rose into the ranks of global cities because it reinvented itself over the past 40 years, while maintaining a historic commitment to wealth management, defense, insurance, and manufacturing, among other core industries. In the eyes of many, it has become the leading example of an “eds and meds” culture, anchored by global heavyweights like MIT and Harvard.
The foundation upon which Boston’s bid for Amazon must be built is higher education writ large.
New England’s colleges and universities have produced a culture of collaboration, creativity, and innovation that permeates its economy, particularly in biotech and medical research — a culture that matches the creative mix of cities like Austin.
What is different, however, is the depth and diversity of the collaborative culture that took root in New England. There is simply more of the historic ingredients available at a scale, maturity, investment capability, and management expertise than possible among other bidders. Visiting Kendall Square or the Seaport District, you sense it as you feel it.
Higher Ed Leadership Must Step Forward to Make Boston’s Case for Amazon
By challenging local leaders to imagine the possible, my hunch is that Amazon was not looking to extract the most ransom but more likely interested in seeing what creatively might emerge to judge its best fit. And this is where higher education leadership must step forward. Even the strengths associated with MIT and Harvard will not win the bid.
The core argument must be that Boston has produced the best model for nurturing the next creative generation in America. In doing so, Boston must also make the case as the logical choice to set Amazon’s future strategically within a global economy.
It begins with New England’s colleges and universities whose combined size, overall quality, skilled alumni and student bases, regional work ethic, and collaborative integration provide the resources that Amazon needs.
Almost 100 colleges and universities are within a two-hour drive of Boston to nurture this creative energy — a fact unmatched elsewhere in North America.
Beyond a skilled labor force that can be rapidly grown, higher education must offer concrete examples of collaboration that point to innovation and re-imagination. Massachusetts has come a long way from a manufacturing economy once based on shoes, textiles, and machine parts production, banking, insurance, defense, and electronics.
Boston became a biotech powerhouse over the past 20 years, for example, because its leadership – especially in higher education — could imagine the possible.
Higher education is the economic engine that built the booming Boston that we know today. In the end, sometimes money and tax breaks aren’t always enough. In its bid for Amazon, Boston must demonstrate why.
On June 1, President Trump announced that he was taking the United States out of the Paris Climate Accord, making the U.S., Syria, and Nicaragua (which felt the deal was not sufficiently ambitious), the only nations not to support the agreement.
The Paris Agreement sets a series of goals and is voluntary by design. Its value principally is that the agreement got everyone to the table to work on a pressing global issue that crossed national boundaries and directly impacted the quality of life on the planet.
Predictably, there has been a sharp reaction on both sides. Mr. Trump’s critics object to the use of discredited “doomsday” data to justify the American exit. His supporters argue that it was a job-killing “bad deal.” When asked the generic question about whether they were concerned about climate change, over 70 percent of Americans believe that it is a challenge that Americans must face. But differences in opinion emerge as the implications for the American consumer and taxpayer become clearer.
Higher Ed’s First Climate Leadership Conference was 10 Years Ago
The leadership in American higher education has taken a stand on climate commitment for more than ten years. The American College & University Presidents’ Climate Commitment (ACUPCC) emerged when a group of presidents meeting at Arizona State University sent a letter to almost 400 of their colleagues to join them. By June 2007, the ACUPCC, with a signatory group of 284 higher education leaders, went public with the first Climate Leadership Conference. By 2010, there were 697 higher education institutions in all 50 states and the District of Columbia as signatories. Collectively, they represented 5.6 million students.
Higher Education Leaders Encouraged Support of Initiatives to Battle Climate Change
In December 2016, as the transition of national political power began, 235 senior leaders in higher education sent a letter to the new Congressional delegation and incoming presidential transition team. They asked that the Trump Administration continue to support the Paris Agreement, encouraged research based on leading scientific and technical knowledge, and petitioned the Trump Administration to make investments in a low carbon economy.
In letter to Congressional and executive leadership, these college and university leaders noted that they prepare graduates for the American workforce and that their institutions led the country in innovative and ongoing research to address climate challenges, pledging to work with the new administration to meet them.
Decision to Exit Paris Accord is Global Teachable Moment, Beyond Politics
Mr. Trump’s decision to abandon the Paris Agreement moves the discussion to a new stage. The question that higher education leadership must now address is what to do next. It’s an ethics and morals question that will likely also emerge as a global teachable moment for America’s colleges and universities.
Whatever the next step, higher education now has an opportunity to align with an issue of global importance rather than a policy emerging from a political platform promise. In fact, the opportunity is so large and significant that whatever higher education puts forward will move immediately beyond politics.
It is also, therefore, the perfect opportunity for higher education leadership to regain some ground as a leading voice of moral authority as America’s bedrock institutions like higher education continue to come under fire and diminish in reputation.
America’s higher education leaders must have the courage to lead. And they must be strategic in how, when, and where they exercise this leadership. Colleges and universities must not become centers of unfocused, if well meaning, protest. Yet they must vigorously protect the First Amendment rights of their stakeholders, including the right to protest.
That having been said, the optics must show that colleges and universities are the sane and reasonable centers of rational thinking about the impact that climate shifts will have on global society. They must be the “go to” authoritative source that will dampen nationalist efforts to ignore global challenges for political gain.
In American society, colleges and universities are the conduit through which society passes on its history, traditions, challenges, and aspirations. They are where theories are tested and research is undertaken.
The outlandish efforts to deny climate change must be met with ongoing advanced research that supports the efforts by the American educational community to act responsibly and globally. Whatever the action that emerges to Mr. Trump’s decision, it has to be more than a political response. The federal government is now too dysfunctional to operate effectively to address higher education’s concerns on climate.
As Economic Engine, Higher Ed Can Join Cities & States in Battling Climate Change
Higher education needs a game plan on climate change. A good opening step may be to align the higher education message on climate change with local and state authorities. If the states work together to develop a kind of alternative national policy on climate change – even if only temporarily – then colleges and universities might be able to use their moral influence and capacity as economic engines to work with regional economies to offset the worst excesses of the abandonment of the Paris Agreement.
At least it’s a start. At best it may be a pathway to a sane and seasoned approach to addressing a global problem.
In post-industrial America, the roles played by large nonprofits – especially its hospitals and universities – power the economic engines in many regional economies. What would cities like San Francisco, Philadelphia, Pittsburgh, and Boston look like without their large educational and medical research complexes? Would other cities, such as Houston, Chicago, Los Angeles, Austin, and Washington, DC, be as vibrant without the diversification made possible by these important economic drivers?
The facts are clear. America may – or may not – regain some of its manufacturing capacity, although this re-growth is likely to be infused with a level of technology certain to assure that what develops is not likely to be your grandfather’s auto assembly line. America may develop energy policies that re-open coal mines even as newer, alternative sources of power move forward to increasingly dominate the energy landscape.
But the future of the American economy is to prepare and lead a global economy. The alternative is to be lost in a political quagmire that will lessen America’s impact and influence on the rest of the world.
Whether you like NAFTA or the Trans Pacific Partnership really doesn’t matter in the end. What matters is that the boat has long since sailed on whether we live and work in a global economy. The relevant questions are how will we be transformed by it? And, which countries will lead it?
Higher Education and Medical Research Are Economic Engines
The heart of the post-industrial economy arguably is the education and medical research complexes that fuel our regional economies. From these pulsing economic engines emerge spin-offs created by entrepreneurs who transform – and effectively recreate — the American economy. Together with small business, they shape the direction of American society, often from the ground up.
President Eisenhower once warned Americans about the dangers of the military-industrial complex. It was an important admonition that has continued relevance in a transforming America. Rules and protocols – matched by common sense and good will – must continue to shape the political, cultural, and economic relationships between politics and the economy.
Trump Administration Proposals’ Troubling Impact on Higher Ed
That’s why two of the Trump Administrations proposed policies, in particular, are deeply troubling. It doesn’t matter whether these policies are part of a first-year executive policy and budget request that is likely “dead on arrival.” They show a predisposition by the executive branch that speaks more to ideology than cost.
The first is the much discussed travel ban, part of a larger discussion about the role that immigrants have and will play in the history of the United States. The future of the travel ban will likely be settled by the courts, but there are some early trends that bear close scrutiny.
According to Inside Higher Education (IHE), “Four in ten colleges are seeing drops in applications from international students amid pervasive concerns that the political climate might keep them away.” For many years now, US colleges have benefited from steady increases in applications from international students. As students, they often pay full tuition and fees, providing a valuable revenue stream for these institutions.
Travel Ban Already Hurting International Applications
IHE’s Elizabeth Redden writes, “the highest reported declines involved applications from the Middle East. Thirty-nine percent of universities reported declines in undergraduate applications from the Middle East, while 31 percent reported declines in graduate applications. Fall enrollment numbers from the region will likely be hard hit by President Trump’s executive order.” Higher education officials find similar trends in China and India, which account for nearly half of the international students in the United States.
Do we really want international students to go elsewhere? Shouldn’t the next great innovations in America come from a global workforce educated here that stays here because Americans – whether native born or naturalized – create a climate that encourages and supports global innovation developed by the best and brightest from across the globe?
Trump Budget Proposal Will Stifle Innovation & Growth
The second problematic proposal, the Administration’s budget blueprint, compounds the first. In a statement on the proposed budget, Mary Sue Coleman, president of the American Association of Universities, was blunt: “This budget proposal would cripple American innovation and economic growth. The President’s FY18 budget proposes deep cuts to vital scientific research at the National Institutes of Health, Department of Energy, NASA, NOAA, and other critical scientific agencies.”
Coleman argues that the budget proposal “would lead to a U.S. innovation deficit, as it comes at a time when China and other economic competitors continue their investment surge in research and higher education. For decades, federal investments in these areas have paid enormous dividends in medical advancements, new technologies, and enhanced national security, and helped to produce high-wage American jobs and the most talented workforce in the world.”
If we accept the premise that America’s nonprofit education and medical centers power the economic engines that fuel the most promising contributors to American economic growth, does it make any sense to damage these global institutions, perhaps irreparably?
In the end, it’s not a “guns versus no butter” decision to favor military buildups over domestic discretionary spending. It’s about labor, capital, partnerships, and investment. At its most fundamental, “it’s the economy, stupid.” Let’s not muck it up.