The role of higher education in economic development

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The Role of Higher Education in Economic Development

The Role of Higher Education in Economic Development
Higher Education Alliance for the Rock River Region
Contributors
Northern Illinois University
Rockford College
Rock Valley College
University of Illinois College of Medicine at Rockford
Prepared by NIU Outreach
May, 2005
The Role of Higher Education in Economic Development
Executive Summary
The HEARRR members - Northern Illinois University, Rockford College, Rock Valley College,
and the University of Illinois College of Medicine - have allocated fiscal, physical, and human
resources, and created entrepreneurship systems to advance economic development.
Major Trends in the Rock River Region
This area is undergoing demographic and industry changes that impact its economic development
and that relate directly to education.
? Population is projected to increase 9 percent from 2000 to 2010, with increasing
populations for those of Hispanic heritage and for those aged 55 to 64.
? Severe downsizing in the manufacturing sector meant the loss of 10,000 jobs.
? Jobs in manufacturing and other areas now typically require post-secondary education.
? Health services, construction, and logistics have strong growth projections and offer high
compensation per employee.
Ten Ways HEARRR Strengthens the Regional Economy
1. Raising educational levels to create a quality workforce by enrolling 18,000 students
annually in 64 certificate programs, 5 apprenticeship programs, 25 associate degree
programs, 80 bachelor's degree programs, 11 master's degree programs, 4 advanced nursing
degrees, a doctor of medicine degree, and a post-doctoral certificate in medicine
2. Improving learning and teaching from pre-school through graduate school through
working with the public schools and by securing over $10 million in competitive grants.
3. Training and supporting - where you need it, when you need it - over 1,000 businesses
and 4,000 employees each year, and through programs such as the Rock River
Entrepreneurship Center Network, Small Business Development Centers, and the
Procurement Technical Assistance program.
4. Providing lifelong learning opportunities to over 15,000 students a year through continuing
education, GED, adult basic education, and English as Second Language programs, as well as
the Jane Addams Center for Civic Public Engagement
5. Identifying the needs of business and industry by including them on nearly 80 advisory
committees for academic and professional programs.
6. Taking strong and visible roles in regional initiatives through partnerships that involve
hundreds of local public and private agencies.
7. Disseminating research and promoting technology transfer through over 25 specialized
research studies and by working with legislators to procure $6 million for the AgTech and
EIGERlab initiatives
8. Enhancing the technology infrastructure through NIUNet, a fiber optic network to give the
Rock River Region broadband access to the world, and by offering programs in information
technology, biotechnology, engineering, and applied technologies.
9. Promoting livable communities through extensive regional arts programming and NCAA
athletics.
10. Employing a diverse workforce with an annual payroll in excess of $66 million, which
generates an additional $24.8 million in income for Winnebago County alone.
Executive Summary: The Role of Higher Education in Economic Development
Introduction
The role of higher education as a major driver of economic development is well
established, and this role will increase as further changes in technology, globalization,
and demographics impact the United States. To remain competitive in light of these
changes, regions will need to improve productivity and adopt an innovative spirit.
Higher education has the capacity, knowledge, and research necessary to help achieve
these goals (Sampson, 2003; 2004).
The focus of this report is the role of higher education in the economic development of Illinois'
Rock River Region. A brief summary of economic development issues in this region is given,
followed by a general discussion of the role of higher education in economic development and
specific actions taken by the institutions of the Higher Education Alliance for the Rock River
Region (HEARRR): Northern Illinois University, Rockford College, Rock Valley College, and
University of Illinois College of Medicine.
The Rock River Region
Rockford is the largest metropolitan area in the Northern Stateline Economic Development
Region and within Winnebago County, which accounts for three-fourths of the employment
within the region (NIU, May 2004). The area is undergoing demographic and industry changes
which impact its economic development and which relate directly to education.
Demographic Changes
From 2000 to 2010, the population of the region is projected to increase 9 percent. During this
same period, the population of those with a Hispanic origin is projected to increase 47 percent,
increasing the relative proportion of Hispanics in the total population from 7.4 percent to 10.1
percent (Woods & Poole, 2003). In 2000, 7.1 percent of the families in Winnebago County and
12.3 percent of the families in Boone County spoke Spanish in the home (NIU, 2004). Ways to
use this increasing diversity to enhance the economic development of the region need to be
explored.
From 2000 to 2010, the percent of the population age 55 to 64 is projected to increase 45.7
percent. The region needs to assess how, and whether, to replace these nearly 15,000 retirement-
age workers in the workforce (Woods & Poole, 2003).
Industry Changes
The Rock River Region is recognized as a leading national manufacturing center; however, from
1999 through 2003, the region lost 10,000 manufacturing jobs. Even though there is a 2.6 percent
projected decrease in manufacturing from 2000 to 2010, there are sub-sectors within
manufacturing with projected increases. These sub-sectors require advanced technical skills, and
dislocated workers need additional training to re-tool for these growth positions. For the
manufacturing sector, critical shortage occupations identified include CNC programmers, CNC
operators, machinists, and welders, all of which require postsecondary education and training
(NIU, May 2004).
The Role of Higher Education in Economic Development Page 3 of 12
Chart 1 reflects the relative strength of industry in terms of the projected growth from
2000 to 2010 and compensation per employee. The size of the circle depicts total
regional employment in that industry. As depicted in Chart 1, health services,
construction, and logistics not only have strong growth projections but also offer high
compensation per employee. The greatest need is for registered nurses; training for an entry-level
registered nurse position requires postsecondary education. Other examples of career growth
areas include speech pathology, occupational therapy, and physical therapy (NIU, May 2004).
Chart 1. Compensation per Employee by Industry
40.00%
High Growth High Growth
Low Com pens ation High Com pensation
Business Services
30.00%
Social Services
20.00%
Automobile Health Services
Recreation R i
Personal Educational Construction
10.00% Services Services
Hotels and Logistics
Lodging
Retail Trade Wholesale
Trade
0.00%
Manuf ac tur ing
Low Growth Low Growth
Low Com pens ation High Com pensation
-10.00%
$- $5,000.00 $10,000.00 $15,000.00 $20,000.00 $25,000.00 $30,000.00 $35,000.00 $40,000.00 $45,000.00 $50,000.00
Compensation per Employee
The critical challenge for the region is how best to provide strategically the workforce needed to
strengthen economic development. Historically, employees could earn sufficient wages with a
high school diploma or a two-year college degree, which is one reason why the region has a
baccalaureate completion rate lower than that of the state. With recent and anticipated
technological and industry changes, more positions will require some college education, and there
will be an ongoing need for continuing education. Raising the educational and skill levels of the
region is vital; however, this will not result in economic growth unless training is strategically
coordinated to meet current and potential industry needs and is accessible to all potential workers.
The Role of Higher Education in Economic Development Page 4 of 12
Growth rate 2000-2010
Higher Education's Role
Higher education has historically included economic development as part of its core
mission. The colleges and universities serving the region have allocated fiscal, physical,
and human resources and created entrepreneurship systems within the institutions to advance
economic development. Senior administrators provide strong, visible leadership designed to
? create a quality workforce by growing, training, and attracting the finest talent
? support current business and industry
? improve learning and teaching from pre-school through graduate school
? take strong and visible roles in regional initiatives
? disseminate research and promote technology transfer
? enhance the technology infrastructure
? promote livable communities
? employ a diverse workforce
A Quality Workforce: Growing, Training, and Attracting the Finest
Higher education will be a dominant, if not decisive, factor in preparing workers with the robust
skills needed to adapt to changing job requirements. The transition from manufacturing to the
technology-based new economy dramatically raised the skill level needed to get a job. By 2005,
85 percent of all new jobs in America will require some level of higher education. The
requirements for current jobs are changing as well; from 1973 to 2003, the percent of workers age
30 to 59 with some postsecondary education increased from 28 to 60 percent, and nearly three-
fourths of the increase in the need for postsecondary education was due to "upskilling" -
employer demands for higher skills (Sampson, 2003; Sampson, 2004; Carnevale & Desrochers,
2003). In addition, higher education will be called upon to address the impending shortage of
college-trained workers needed to replace the baby boomers; by 2030, nearly 30 percent of the
workforce will be at or over the retirement age (Sampson, 2003).
Higher education prepares a quality workforce by offering instructional programs, matching
instruction to the needs of business and industry, and helping individuals learn throughout their
lives.
Instructional Programs
Teaching excellence is the key to a strong and growing regional economy (Sampson, 2004).
Higher education offers quality programs and services and continually improves these programs
to ensure teaching and learning excellence. Instructional programs can be traditional credit
programs or non-credit programs.
? The Alliance institutions offer a wide variety of credit instructional programming in the
Rockford area, including approximately 64 certificate programs, 5 apprenticeship
programs, 25 associate degree programs, 80 bachelor degree majors, 11 master degree
programs, 4 advanced nursing degrees, a professional program leading to a medical
degree, and a post-doctorate certificate in medicine.
? Over 18,000 students enroll annually in credit programs offered in Rockford by the
Alliance institutions. In the past two years, the annual enrollment in Rockford courses
increased 11 percent.
The Role of Higher Education in Economic Development Page 5 of 12
Identifying Needs of Business and Industry
Higher education connects workforce development to the economic development of the
region by matching instructional programs to the needs of business. Efforts include
working with business to identify specific needs, providing work-based learning oppor-
tunities for students, offering and supporting apprenticeship programs, and convening and being
responsive to advisory committees with representatives from business and industry. Once needs
are identified, higher education and industry work together to attract students into critical
programs.
? The members of the Alliance match instructional programs to the economic growth needs
of the region. In the past three years, they have completed over 35 assessments in various
labor market sectors to explore the need and feasibility of instructional programs.
? Numerous students complete internships, practicums, and student teaching in the Rock
River Region. The University of Illinois College of Medicine has a Family Practice
Residency Program and a College of Pharmacy Clerkship program.
? Over 80 advisory committees with representatives from business and industry provide
input into the programs offered by members of the Alliance.
Lifelong Learning of Individuals
Higher education helps individuals achieve their potential. "Just as `no child should be left
behind' in getting a good education, ... no worker should be left behind in having the skills
necessary to find a good job in the 21st century workplace" (Sampson, 2002, p. 3). Higher
education offers lifelong learning opportunities to individuals in these ways:
? Over 15,000 students take non-credit courses for personal development each year.
Courses are available to upgrade work skills, meet professional licensing requirements,
change jobs and careers, as well as programs for learning in retirement and for children.
? An average of over 700 dislocated workers utilized training and/or employment services
at Alliance institutions over the past three years.
? Members of the alliance coordinate and network with social agencies to help the low-
income and low-skilled workers through programs such as NIU's $320,000 grant for
Rockford Concord Commons and Rockford College's Jane Addams Center for Civic
Public Engagement.
? Alliance institutions provide support programs for special and minority populations, such
as disability services and programs for at-risk youth.
? Over 500 students enroll in GED and adult basic education courses offered by members
of the Alliance to improve their basic skills. Rock Valley College and Rockford College
have programs dedicated to English as a Second Language instruction.
? The Alliance institutions provide career services to help workers navigate an uncertain
career path, such as the career and college fairs, financial aid outreach programs, and
student ambassador program of Rock Valley College.
? Students from the alliance institutions serve as student teachers, interns, and consultants
for institutions in the region.
The Role of Higher Education in Economic Development Page 6 of 12

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