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October 30, 2007

Richard Florida

Education 'Fix'

« Class Politics | Main | Gay Shift? »

Stanford's Jeff Pfeffer is the world's preeminent expert on talent.  He has some important things to say about education as a magic bullet for economic woes.

The argument that "more education" (where more sometimes also means "better") will fix problems of competitiveness, income inequality, un- or underemployment, etc., essentially proceeds from a completely free- or competitive-market premise ...  Just upgrade skills and provide more/better education and everything (well, almost everything) will be fine.  But in domains other than science and engineering (as well as in science and engineering, as the current discussion and data suggest) this argument fails and has failed for a long, long time.  Almost 30 years ago (1979 to be exact), Randall Collins wrote a book entitled The Credential Society (Academic Press).  His argument ... was that a) there was little evidence that, on the educational requirements (as assessed by skill levels as derived from detailed studies of jobs and occupations) were increasing overall;  and b) what education and the credentials thereby attained did was move people relative to one another on the hiring list.

Interesting stuff.  Our research at the Martin Prosperity Institute points to a growing disconnect between education or "human capital" levels and regional outcomes.  Educated people frequently leave the places they were educated. That was India or Ireland for a while. When I lived in Pittsburgh I used to say, "our greatest export isn't steel, but our highly educated people." For a time, and maybe still today, lots of them ended up in California and especially Northern California, even though the state had slashed taxes and was not investing a huge amount in primary and secondary education.  And we're also finding that while education levels match somewhat to regional income, they have only limited effect on regional productivity.  Silicon Valley is different that Naples Florida, the former generates wealth and productivity, the latter lives off what was generated elsewhere.

The connection between local education and local development is broken. Something else is going on. It's important to focus the conversation on what exactly that might be.  Your thoughts?

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Comments

Jim Russell

Every region exports its homegrown talent. To the extent that local education can attract talent is the new metric of the connection between investment in education and the return in terms of local economic development.

Talent retention strategies ignore today's geographic mobility of human capital. Instead of leveraging this migration pattern, struggling regions try to stop it. That's poor policy and tantamount to a boondoggle.

Local investment in education may do a good job (preparing students for labor demand) of serving individuals, but this investment does a poor job of boosting local economic development. Even when local investment in education does benefit a region, I suspect that the effect is indirect.

Places that do a good job of attracting students from outside the region (e.g. Pittsburgh), need to figure out how to generate a local benefit from the export of talent. And I don't mean employing a strategy to keep graduates from leaving.

David Wakelyn

There's no doubt that education is an easier political sell, than say, taxes to redistribute income. So education becomes the solution to all sorts of problems, even if it doesn't get the job done.

Some data here would help the debate, especially with the claim that educational levels have only a limited effect on regional income. Look at the states with low per-capita incomes: WVA, MS, ARK, LA, these are all states with the lowest rates of bachelor degree completion. The highest incomes-- CT, MA, MD, and CO-- all have the highest degree attainments. The correlation looks pretty strong to me. If anyone can offer up other data, I'm happy to listen.

Also, what's the original source for the Pfeffer quote???

Bert Sperling

I believe David is on the right track. There is a high correlation between good schools and a "successful" populace, as defined by income and educational attainment. In fact, there is a much higher correlation between these factors than those measurements commonly used to identify a "good" school such as private vs. public, class size, racial and ethnic composition, pupil/teacher ratio, facilities, AP class, expenditures, and graduation rates (completely misleading).
In fact, just show me one metric - the percent of a school's students eligible for free lunch - and I can predict with great accuracy the success of the school's students. Now, the reason for this is up to debate, whether these students are the beneficiaries of their parents' values or teachings, or the informed parents insist on higher educational standards. But the fact remains that for a student to have fulfilling educational experience, he or she would do well to choose their parents wisely.

Jim Russell

Take the states with highest incomes: CT, MA, MD, and CO

Where were the high income residents educated? Are they homegrown talent?

If a state or region has a relatively high educational attainment profile, then we don't necessarily laud local education. For example, in Colorado you often see bumper stickers lamenting the lack of investment in education. How many of Colorado's well educated/high income residents are a product of local schools? If Colorado teaches policymakers anything it is that a state should skimp on education.

John Warner

Richard

When you were in South Carolina recently, you commented about the talent in Pittsburgh leaving to be successful somewhere else. I expressed my concern that the industrial and academic research in Greenville SC looks more like Pittsburgh than Boston or Silicon Valley.

You said what separated these areas was "absorptive capacity" and then we got into a discussion of culture. I am convinced that it is all about culture, but I am not sure we really have much idea what to do about changing a culture.

Clayton Christenson talks about the Innovator's Dilemma. His solution is to take advantage of a discontinuous opportunity by forming a new entity to create an new value proposition. To a large extent that is because you need to create a new culture based around what an emerging market of customers value.

While an organization can form a wholly owned subsidiary to do the new thing, can a community do to that? Can a community focus on a new, emerging culture that ultimately will supersede the existing culture? I think we are doing that in Greenville. For several years I have consciously understood that I needed to put together a new constituency of people in whose interest it was to do the new thing. Here's what my shot at that looks like. http://swampfox.ws

The other thing you said in South Carolina that is very exciting is that the real latent opportunity is tapping into the creative potential of the other 70%. That is as true for organizations as it is for communities. We don't really have much idea about how to do that either though.

I shared several of your observations with others across the southeast. "Inspiration From the Center of the Eighth Largest Economy in the World": http://swampfox.ws/2007/10/26/rise-mega-region

Thanks for inspiring us. You've got us thinking.

John Warner

David Wakelyn

Jim: Three out of the four states-- MD, MA and CT-- all have homegrown talent, which attracts even more talent. Colorado, not so much, though we ought to look at the Census data for an answer there, instead of relying on close reading of bumper stickers and our intuition.

I'm not sure what Colorado really teaches most states. Colorado doesn't offer much consolation to the Kentucky and West Virginia and Arkansas, who are all furiously trying to raise college completion levels.

But you raise an interesting dilemma they're probably papering over in their states: what do you do if you make those investments and the kids still go to where they can ride bikes along the river and snowboard?

Jim Russell

I agree that a closer look at the Census data is a good idea. CT has made a big deal about brain drain, going so far as to invest heavily in UConn in order to attract higher quality students. I'm not sure how the investment actually stems brain drain, but I'm interested to find out. The New England Association of Schools and Colleges Inc. is the one that recently issued the report making that claim.

Take a look at domestic outmigration rates and overall domestic population churn. As Richard suggests, there is definitely a disconnect between local education and local development. The best educated are the most geographically mobile, which is why CT is fretting about brain drain.

Michael R. Bernstein

Hmm. Can good primary education be considered an amenity for attracting young couples?

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