Economic Development, Education, and Government

BLM report emphasizes higher ed as economic driver

February 13, 2015
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The state’s business organization committed to making Michigan a Top 10 state has released a new report highlighting a critical role higher education can play in long-term statewide economic growth.

Business Leaders for Michigan released the “Business Leader’s Insights: How Higher Education Can Help Michigan Become a Top Ten State” report Feb. 12, which outlines the critical role higher education can play in facilitating the state’s ranking in terms of employment, personal income level and sustained economic development.

As Michigan’s workforce diversifies into a knowledge-based economy, following national trends, there is a need for a more educated workforce with tailored skill sets to create higher salaried positions and stimulate economic growth for the state, according to the report.

The fastest-growing occupational groups in West Michigan include: health care support, with 432 annual openings; computer and mathematical, with 216 annual openings; and health care practitioners and technical, with 556 projected annual openings, according to West Michigan Talent Assessment and Outlook conducted by TALENT 2025.

Although manufacturing continues to be a foundation of the state’s economy with a 19 percent market share of Michigan’s GDP and comprising 21.6 percent of West Michigan’s payroll jobs in 2013, the report indicated 70 percent of jobs in Michigan will require education beyond high school by 2020.

Doug Rothwell, president and CEO at BLM, said the report compiles a lot of work the organization has been doing the last few years regarding the role of higher education.

“The only way we are going to have Michigan as a top 10 state is to have higher education at the core,” said Rothwell. “It is a mindset that comes through when you read the report that we need to look at higher education as central for a strategy of growing the economy.”

Not only does the report include multiple findings — such as the correlation between education attainment and per capita income, difficulties in addressing the challenge, and the state’s current ranking — but also it offers a number of key recommendations to strengthen and leverage Michigan’s existing educational system.

“We need more educated and skilled workers; it is not an either-or proposition,” said Rothwell.

Kelly Chesney, BLM vice president of marketing and communications, said the feedback the organization is receiving from its members is the struggle to find educated workers.

“When you look at our education attainment level, it is an eye-opener,” said Chesney. “It is really quite compelling. It shows the need for focus on higher education and it shows that we need to recognize that higher education is central to growth in our state.”

The report indicated only 37 percent of Michigan workers have an education beyond high school, and the state ranks 31st in education attainment in terms of the percentage of working-age population with an associate’s degree. The state is 26th for technical skills in terms of production of degrees and certificates, and 36th in per capita personal income. BLM’s report also indicated personal salaries of those with a bachelor’s degree or greater in Michigan is on average more than 100 percent higher than those with a high school education.

“There is a lot of talk right now in the nation about stagnant wages,” said Rothwell. “When we look at the data, the United States as the leader in education attainment has dropped in the last decade or so behind many other foreign countries.”

With 116 institutions in the state enrolling roughly 660,000 students a year, Michigan has the potential to leverage its higher educational system to create up to $200 million in GDP and add 40,000 new jobs by 2022, according to BLM’s Growing a New Michigan report. Challenges facing higher education include: the 116 institutions share an annual budget of $15.3 billion; Michigan’s K-12 student enrollment has dropped 11 percent in the last decade; and 57 percent of Americans are questioning the value of a college education, based on a Pew Research survey.

To strengthen the state’s existing educational network, BLM recommends several strategies that incorporate statewide collaboration and action by colleges and universities. The four targeted efforts focus on access and affordability, higher education performance-based outcomes, strengthening transition from education to employment, and increasing the role of education in economic development.

Strategic actions include allocating new annual funding from the state based on reaching performance levels, exploring new instructional and administrative efficiencies to hold down tuition rates, forming new public-private partnerships to accelerate collaboration across institutions, developing regional workforce plans matching talent demand and supply, and expanding support for internships and career counseling.

“To make these recommendations a reality, the state should form a new public-private partnership focused on increased collaboration,” said Rothwell in a press release. “A voluntary council comprised of business, higher education and state leaders can build on the advantages of Michigan’s higher education systems and help move the state forward.”

The suggested voluntary council would oversee benchmarking the competitiveness of Michigan’s higher education system, identify strategies to address state talent needs, maintain databases of institutional performance and student outcomes, and increase cross-institutional collaboration such as consolidating back-office operations.

“I think as we point out in the report, higher education needs to play a more central role in economic development, most important of which is recognizing economic development should be a core mission in the colleges and universities and not viewed as an adjunct,” said Rothwell.

“It is hopefully a call to action to say that we can’t get those better jobs, those better wages that we all keep talking about, unless we embrace an approach like we have outlined in this report.”

The BLM higher education report was developed in collaboration with McKinsey & Co. and includes insight from leaders of Michigan higher education associations, state and national experts in the educational, economic and public policy fields, and analysis of national data and case studies.

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