A Framework For How Higher Education Influences Economic Growth

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A Framework For How Higher Education Influences
Economic Growth

• Rick Mattoon
• Senior Economist and Economic Advisor
• Federal Reserve Bank of Chicago
• SHEEO Professional Development Conference
• August 15, 2007
• Boston, MA

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Project structure

• 2 year project examining the role of higher
  education in the economy. Special emphasis on
  Midwest
• 2 conferences (both cosponsored by MHEC). First,
  (November 2, 2005) focused on evolving role of
  higher education, public funding issues, access.
  Second conference (Oct 30, 2006) focused on
  higher education and its role in economic
  development
• Major issue at first conferencethe changing
  social compact for funding higher education. The
  private vs. public good debate
• http//www.chicagofed.org/news_and_conferences/co
  nferences_and_events/2006_higher_education_agenda.
  cfm
• http//www.chicagofed.org/news_and_conferences/con
  ferences_and_events/2005_future_of_higher_educatio
  n_agenda.cfm

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Motivation for project

• Shift to a knowledge economy
• What institutions produce knowledge and human
  capital?
• What condition are they in?
• What are the transmission mechanisms for sharing
  knowledge?
• The third stream. A return to the land grant
  mission?

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What did we find

• For Higher Education to influence regional and
  local economic growth it must be strategic and
  attune to the local economy
• Big Bang technology transfer might be
  overstated
• Need to answer two questions
• What type of economic transformation is the
  region trying to promote?
• What is the role of higher education in
  facilitating this change?

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Richard Lesters typology for university led
economic growth
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Why universities?

• Immobile assets in a world of increasingly mobile
  assets (problemif the most important product of
  the university is graduates, mobility undermines
  this contribution)
• Emphasis on innovation defined as the
  capabilities of local firms to take up new
  technological and market knowledge and to apply
  it effectively
• Its not just creating knowledge, the take-up rate
  matters

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Lessons from case studies

• North Carolina
• Akron and Rochester
• Entrepreneurship
• Community Colleges
• North Dakota

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Bottom line

• To quote a great scholar (Larry Isaak), it takes
  leadership