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NOCHE Talent Dividend Summit

  • Date: 12/04/2013
  • Author: Dr. Luis M. Proenza (President, The University of Akron)
  • Location: Cleveland State University Student Center
  • Thank you, Bob, and my thanks to all of you for joining us this morning.

    I have to tell you that in 2010 I was asked to give the closing talk at the end of our first Talent Dividend Summit, which seemed to be somewhat of an ambiguous honor.

    On one hand, I had the last word at the event.

    On the other, I couldn’t quite be sure if the audience was applauding my talk . . . or the opportunity to leave.

    So thank you, Ann and Bob, for asking me to open today’s Summit with a few remarks.

    In 2010, we completed a Talent Dividend Action Plan, identified many worthy goals, and began to put that plan into effect.  I am pleased to report that four years later, as we review the Talent Dividend’s Dashboard, six of the seven needles are pointing in the right direction.

    The number of degree holders and degrees awarded are up, as are rates for college completion, adult postsecondary participation, regional attainment and on-time high school graduation. The lone exception is the rate of college continuation, which is virtually flat.[i]

    Northeast Ohio’s portion of the state’s higher education industry is getting the job done.

    Perhaps my use of the phrase “higher education industry” caught your attention. Indeed, too often the public discussion of higher education focuses only on state subsidies. Yet when we consider higher education’s contributions to the state’s economy – physical assets, new technologies created, jobs created, revenue generated, multiplier effects upon on vendors, suppliers, stores and others – how can you call this dynamic, churning, productive, growing enterprise anything but an industry! Indeed, one with a very high return on investment.

    Indeed, any governor who attracted a comparable economic engine to his state would be considered a great success and promptly re-elected.

    Conversely, any governor who either neglected or lost such an industry would find their re-election in jeopardy.

    Yet, I find it ironic that most of our chambers of commerce would simply not care if we were to threaten to leave NE Ohio. Why? They have no understanding of our economic worth.  They now understand hospitals, but not colleges and universities.  And that, of course, is just one more reason why I consider chambers of commerce to be obsolete in this current economy.

    Indeed, higher education is rarely referred to in economic terms – perhaps because of our own reluctance to speak of students as customers or clients; Or perhaps because many of us think the term “industry” is inappropriate to our noble charter as educators.

    But is it?!

    Consider that our region alone is home to more than 30 universities and colleges enrolling more than 226,000 students.[ii]

    In Northeast Ohio, more than 33,000 degrees are awarded each year.[iii]  And annual “sales” are in the billion of dollars.

    What is more, we are genuinely a “traded” industry, in that we attract capital that would not otherwise be here in the form of contracts and grants and, of course, international and out-of-state students.

    Moreover, more than 955,000 of our fellow citizens use our product in that they hold degrees from most of our institutions, and our market share in NE Ohio, read attainment rate, has increased to 30 percent from 28 percent in 2009.[iv]

    In fact, just a few weeks ago the Federal Reserve Bank of Cleveland issued a report on education attainment trends from 1980 to 2010 for the top 100 Metropolitan Statistical Areas, or MSAs.[v]

    Of those living in downtown Cleveland, the attainment percent rose from 6.6 percent to 19 percent in 2010.  We did a bit better in Akron, with a recent downtown attainment rate of 27 percent. 

    But let’s not open the champagne bottles yet, because, for one thing, it is too early in the morning for as champagne brunch, but more importantly, it is too early in this process to celebrate these gains. We have much more yet to do.

    Let’s take another look at that regional college-attainment rate of 30 percent.  It is better than it was, but not nearly as high as it should be.

    The national attainment average is almost 39 percent, and in some MSAs like Washington, Boston and San Francisco, degree attainment is well over 50 percent.[vi]  Even our friends in Pittsburgh can boast of a 42-percent attainment rate.[vii]

    Let’s look at it another way: By now, it should be obvious to everyone that college is to the 21st century what high school was to the 20th century. In other words, today’s college is yesterday’s high school!

    Let me provide a few supporting facts for that assertion.

    The Georgetown Center on Education and the Workforce estimates that by 2020, 64% of jobs in Ohio – that’s 64% of all jobs in Ohio – will require a college degree.[viii]

    Many studies have established the fact that a substantial lifetime income gap exists between college graduates and high school graduates, just as a similar gap separates high school graduates from their peers without diplomas.

    In 1998, the median earnings for women ages 25 to 34 with a bachelor degree or better were 60-percent higher than women with a high school diploma.  By 2008, that gap had expanded to 79 percent.[ix]  A similar ratio exists for men, and I have little doubt that this difference will continue to grow.

    College graduates are more likely than non-degreed workers to have health insurance and pension benefits from employers, and to report higher job satisfaction.[x]

    They also have lower unemployment rates, even during economic downturns. They place fewer demands on our health care and welfare systems, evidence fewer criminal activities, and in so many other ways contribute to economic growth, rather than being a burden on the economy.

    And of course, more prosperous citizens make for more prosperous communities and regional economies.

    College-educated people tend to lead healthier lifestyles, are more active citizens, and engage in more educational activities with their children, who are then better prepared for school than other children. [xi]

    College graduates are the reason we all are here today:

    Research by CEOs for Cities indicates that for every one-percentage-point increase in Northeast Ohio’s educational attainment, we will see a $2.8 billion increase in personal regional income.[xii] That is the Talent Dividend!

    Sandy Pianalto, a proud Akron alumna and now president and CEO of the Federal Reserve Bank of Cleveland, stated the situation quite elegantly when she said “Simply put, areas of the country that have more “knowledge capital” perform better than areas with less.”[xiii]

    Ladies and gentlemen, as I said earlier, today’s college is yesterday’s high school, and is essential for someone to be engaged in any sector of our economy.

    We would not tolerate conditions if only 30 percent of our population graduated from high school.  Why then, should we accept a 30-percent college attainment rate?   

    In fact, why should the US tolerate a 75% high school graduation rate,[xiv] when 22 other countries now graduate a higher percentage of their population from secondary education, with some graduating as much as 95 to 99%? [xv]

    Indeed, why should we now tolerate an average 39% college attainment rate in our nation when 7 other nations have now surpassed us?

    We once were the most educated nation on the planet and now, we no longer are. Where is the outrage? When will we act collectively as a nation?

    So, how do we grow the attainment rate, at least in NE Ohio?

    Let me be the first to say that higher education needs to do a better job of adapting to the changing realities of the times.  The price of a college education is far too expensive for students.  But note that I said price and not cost, because the cost of providing an Ohio public higher education is below the national average and has risen well below the rate of inflation – I am sure many of you may not have known that and, of course, our legislators cannot be bothered by such facts.  But the fact is that among Ohio’s public universities, we are now teaching 45% more students for essentially the same expenditure of funds as a decade ago!  Don’t confuse price and cost.

    The problem is that even if we hold our costs steady, years of declining state funding have left us with little choice but to raise our prices, namely, to raise tuition.

    Still, I believe that if higher education becomes more creative and innovative in its approach to teaching, assessing learning and assigning credit, we can significantly reduce costs and lower tuition for students, and have our legislature bring Ohio up from 46th in the country to at least the national average.

    Some of you may be familiar with the now overly hyped term “MOOCs,” which stands for Massive Open Online Courses.  This approach seeks to leverage the power of the Internet to make higher education more affordable and accessible.

    It is still too soon to determine MOOCs’ potential for success, but many of this nation’s elite universities endorse the concept and it certainly is an approach worth pursuing with today’s digital natives.

    An elaboration of this approach, which I introduced last year at a national higher education gathering, is a concept we have termed the Integrator-Assessor Model, or “I AM.”

    This idea seeks to move universities from the role of all-inclusive providers of instructional resources, to that of an integrator and enabler of knowledge acquisition and the assessor of knowledge acquired, regardless of how that knowledge is gained.

    That, of course, would be a substantial leap and is well into the future.

    So, in the interim, there is much we can and must do.  For example, we must work harder to improve student success for all students – not just those who will graduate regardless of where they go to college.

    Just a few weeks ago, our campus held a Summit on Retention – a Summit on Student Success – designed to improve our ability to help students stay in school and advance to completion.

    I am very pleased to say that, over the course of two days, nearly a thousand of our faculty and staff participated in the Summit, and we are working on new strategies based on what we have learned, because we do have to improve educational attainment for all of our students.

    We also must align ourselves more closely to the needs of business and industry, the very people who hire our graduates.

    For example, four years ago The University of Akron developed the nation’s first bachelor degree program for corrosion engineering in partnership with the Department of Defense and companies across the country. That year we admitted our first class of 12 students.

    Today that program has more than 100 students and it continues to grow.

    Our friends in industry certainly like the idea – the first class will not graduate until Spring 2015, but companies already are attempting to contact students with employment opportunities.

    As we in higher education take necessary actions to grow Northeast Ohio’s talent dividend, what can industry and business do to achieve that goal?

    There are a number of strategies that I could recommend, but to do so would be merely preaching to the choir.

    Your very presence here indicates that you get it, you appreciate the need to increase college attainment in our region.

    So I will tell you the same thing I tell alumni who ask how they can assist their alma mater:

    We need advocates.

    We need voices to counter those who claim that higher education is unnecessary or unproductive or that we already have too many degreed people.

    We also need partners from the private sector.

    Allow me just a moment to talk about another dividend that will benefit our region if industry and higher education collaborate more productively.

    Put simply, research begets new companies, which beget new jobs, which beget economic expansions and ultimately the creation of new wealth.  It’s the economic version of “the birds and the bees.” Wealth creation doesn’t happen by accident.

    U.S. colleges and universities perform the bulk of our country’s basic research, annually performing approximately $32.6 billion of Federally supported research.[xvi] You might think that this source of knowledge creation – basic research at our universities – would be closely sought out by industry and linked to new market opportunities.

    You might think that you would find companies standing in line to find ways to leverage their own investments by linking with colleges and universities, which are so active in new knowledge and technology creation. 

    But you would be wrong.

    Industry presently supports less than 6% of university research in the U.S., and that level of interaction has never been higher than 7%.[xvii]  

    This is a major disconnect – and an opportunity waiting to be seized!

    I promise you, nothing will set your foreign competitors’ teeth on edge faster than learning that you have gained new access to an important resource that will help your business.

    Not only are companies passing up opportunities to gain from the talent dividend, they also are missing out on the research dividend, and dividends of collaboration working together to advance our knowledge.

    But those are topics for another time.

    I am sure that like me, you are looking forward to today’s panel discussion.

    As you listen to the panelists and moderator, please keep in mind what I said earlier:

    “In today’s knowledge-based, global economy, college is to the 21st century what high school was to the 20th century.” Today’s college is yesterday’s high school!

    If we are to grow Northeast Ohio’s regional economy, we must grow the talent dividend.

    And if we are to fully optimize our regional innovation ecosystem, I submit that we also must pursue the research and collaboration dividends.

    We are making progress! So let us be cheerful and plunge ahead!

    Thank you.



    [i] NOCHE

    [ii] NOCHE

    [iii] NOCHE

    [iv] NOCHE

    [v] Fee, Kyle. Population Distribution and Educational Attainment within MSAs, 1980-2010, Nov. 19, 2013. Federal Reserve Bank of Cleveland. http://www.clevelandfed.org/research/commentary/2013/2013-18.cfm

    [vii] Fee, Kyle. Ibid

    [viii] NOCHE

    [ix] Baus, Sandy; Ma, Jennifer; Payea, Kathleen. “Education Pays 2010: The Benefits of Higher Education for Individuals and Society,” College Board Advocacy & Policy Center, Executive Summary, p. 4

    [x] Baus, Ma, and Payea, Ibid

    [xi] Baus, Sandy; Ma, Jennifer; Payea, Kathleen. “Education Pays 2010: The Benefits of Higher Education for Individuals and Society,” College Board Advocacy & Policy Center, Executive Summary, p. 5

    [xiii] Pianalto, Sandra. “Reflections on Leadership From a Federal Reserve Policymaker.” Address to students at Farmer School of Business, Miami University, Oxford, Ohio. September 20, 2012

    [xiv] Ed Week, “As Graduation Rates Rise, Focus Shifts to Dropouts.” May 31, 2013. http://www.edweek.org/ew/articles/2013/06/06/34execsum.h32.html?intc=EW-DC13-TOC

    [xv] Education at a Glance 2013, OECD Indicators. p42. http://www.oecd.org/edu/eag2013%20%28eng%29--FINAL%2020%20June%202013.pdf

    [xvi] National Science Board Science and Engineering Indicators 2012, Chapter 5, pg. 4 http://www.nsf.gov/statistics/seind12/?CFID=9855925&CFTOKEN=63489900&jsessionid=f0303b7f58b7f60a713c1050492447723a28

    [xvii] National Science Board, Ibid

  • Topic Category: Northeast Ohio regional talent dividend
  • Tags: NOCHE, Crain's Cleveland Business, talent, regionalism, completion, attainment,
  • Filed in:

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