Economic development used to be a fairly simple affair. States and cities would tout their plans for economic development by rolling out tax incentives, land swaps, trade missions (yes, some cities had trade missions), and efforts to improve the local quality of life (parks, neighborhood security).
These people- and capital-attraction policies can be useful tools for economic development. Increasingly, though, experienced practitioners will tell you that developing local economies is becoming a very complicated business. While attraction policies still have influence, the real base of economic development is inviting and nurturing talented residents who can drive the not-so-new information economy.
In many quarters, some of the workers in the knowledge economy are called the “creative class” -- a term coined by urban planner Richard Florida. These are individuals who can spur innovation in a world where the product or idea lifecycle is much shorter than in the past.
Unfortunately, interpretation of the creative class can go seriously off course.
It is very unhelpful when interpreters of the phrase point to revitalized urban neighborhoods that have attracted college-educated “hipsters” who want to be in proximity for social and economic reasons. Not all people can or should want to be hipsters living in Williamsburg, Brooklyn.
At its most limiting, the longing for a creative class supports the increasing reality that America is becoming unequal in terms of income and access to opportunity.
That is fine for those who believe that by dint of education and professional achievement some special class, whatever it is called, should be the focus of attention and enticement policies. But it is in fact dangerous to American democracy. The imperative as a nation has been to sustain an economy that works for the majority.
The reality is that economic development is increasingly a function of effective primary and secondary schools that feed into effective post-secondary institutions. City and state leaders are recognizing that while importing talent is healthy and necessary, a pipeline of educated residents is central to attracting capital investment and creating jobs.
New Jersey has some work to do in overall preparation and advancement of our young people to higher education. As the Western Interstate Commission on Higher Education (WICHE):
“Workforce projections suggest a growing demand for well-educated labor, so that younger adults need to be as well as or more educated than older adults given how much longer they will need to be employed. In New Jersey between 2008 and 2010, 47.2 percent of younger working-age adults (aged 25-34) had earned postsecondary degrees, slightly more than the 43.7 percent of older adults (aged 45-54). Additionally, large gaps in educational attainment exist among racial/ethnic groups, especially for younger adults.”
On this latter point, WICHE found that from 2008 to 2010, “About 29 percent of younger Black non-Hispanics had earned a postsecondary degree compared to only 21.1 percent of younger Hispanics.”
This relatively low level of postsecondary achievement in our state’s minority communities is made that more problematic if matched to the Bureau of Labor Statistics' projection that, nationally, “Total employment is expected to increase by 20.5 million jobs from 2010 to 2020 . . . Industries and occupations related to healthcare, personal care and social assistance, and construction are projected to have the fastest job growth between 2010 and 2020. Jobs requiring a master’s degree are expected to grow the fastest, while those requiring a high school diploma will experience the slowest growth . . .”
Translation: Tomorrow's workforce will require more education than today's. Currently, educational attainment has stagnated such that our kids are only slightly more educated than their parents. Additionally, educational attainment for workers of color is particularly troubling. With America’s minority population growing quickly, the question must be asked: How will we meet the educational needs of this future workforce?
While the fact that minority communities are vulnerable in many areas of American life is not news, national efforts to promote postsecondary attainment (two-year, four-year and industry-related certificates) are worth watching.
Obviously ground zero for promoting post-secondary achievement is the improvement of educational outcomes in urban districts. Still, the best efforts to increase early education, boost graduation rates, and elevate student’s cognitive ability must be aligned with the need to push young people on to higher education.
What we are learning is that building “pathways to success,” “cradle-to-career” pipelines, and other types of connected systems, reform must first and foremost reduce complexity. There has to be a clear, defined goal and clear address of the problem.
Universal scholarship programs, such as the one pioneered in Kalamazoo, MI, illustrate this point. In 2005, donors in Kalamazoo supported a community and economic development revitalization effort that promised children attending public schools in town that they would get a free college education if they graduated high school.
The Upjohn Institute, a workforce-focused research organization, has followed this experiment, which has led to others across the country, and notes:
“The chief lesson of theis that the program holds the potential to transform the community in fundamental ways, but that such a transformation requires a high level of community engagement and alignment. It has taken several years for leaders and residents to recognize this reality and organize their efforts, and Kalamazoo is now embarking on what is likely to prove a remarkable period of innovation in community collaboration.”
Translation: they made mistakes and are correcting them -- principally by providing customized support services for students.
The Kalamazoo Promise is what is known as a “first-dollar-in” universal scholarship program. But not all communities have a robust donor base. In many cases, such initiatives rest on the combination and coordination of existing public sector resources.
with sites in many cities is one example. This initiative works to change the expectations, culture, and management of the entire system and beyond, focusing on everything from financial management and data-driven decision-making to providing needed student supports and changing how time is used inside and outside of school.
Other successful college-access programs are connected to many two-year and four-year higher educational institutions. My own institution has the Rutgers Future Scholars program for first-generation, low-income and academically promising students who attend schools in communities in which the university has a presence. This now five-year old program has produced very positive outcomes, including a more than 95 percent graduation rate for participants, and recently produced its first crop of college freshman.
These programs are demonstrating measurable promise. What if we recognized their worth through local philanthropy increasing their coordinated support of the many services needed by student participants to succeed? What if we found effective ways to network these programs so that they can better target and support students who qualify? What if we were able to connect the public workforce-development system to the college-access system in ways that build on important connections that already exist.
We have to go beyond "what if" and stop the happy talk about economic development in our state and cities simply attracting capital and smart people. I give credit to successful business leaders in our current economy. They know that it is going to take more than cleverly designed tax incentives to grow their enterprise. All of us, including New Jersey's government and business leaders must support and act on the connection between home-grown educational attainment and a robust economy.