Study links higher ed reforms to revitalized regional economy

Stateline Midwest Vol. 20, No.5: May 2011

The Midwest, once the national leader of the industrial economy, is now floundering in the knowledge- and innovation-driven global economy.

The way back to economic vitality and growth, says James Duderstadt in a report for The Chicago Council on Global Affairs, will require changes in another traditional strength of the region: “our extraordinary array of colleges and universities.”

“The Midwest region must make the commitment and the investments necessary to become the brains of the 21st-century knowledge economy,” says Duderstadt, president emeritus and professor at the University of Michigan. To do so, he adds, “We must rethink [higher education] and better leverage it.”

Along with his proposed reforms at the K-12 education level — setting high standards for student and teacher performance, extending the school year and implementing rigorous assessments for student learning — Duderstadt argues for far-reaching reforms and recommendations to transform post-secondary education in the Midwest.

  • Increase engagement between higher education and K-12 education to improve the quality of primary and secondary schools, including a greater commitment of post-secondary staff and resources.
  • Build public awareness about the value of higher education.
  • Establish performance goals in which all students enrolled in Midwestern colleges and universities are expected to graduate in a prescribed period (one possible standard is six years). These goals would have to be accompanied by adequate financial, instructional and counseling support for students. In addition, policymakers could consider implementing new incentives: for example, basing public support on graduation rates rather than enrollments; making adequate staffing of required curricula a priority; and setting tuition levels to encourage early graduation.
  • Explore alternative funding mechanisms for higher education, such as a “degree tax” in which students pay for their education through differential taxing of future earnings (income-contingent loan repayment) and “learn grants” that encourage early learning by providing all students entering K-12 systems with college investment accounts.
  • Encourage “mission differentiation,” in which institutions within the system have different missions, core competencies and course offerings.
  • Supplement traditional schools with new institutions that meet emerging needs: for example, providing multiple paths to student access (distance learning, lifelong learning, and open-learning networks) and adapting to diverse student learning styles and intellectual maturity.

According to Duderstadt, given the importance of new innovation and knowledge to the region’s global competitiveness, priority should be given to the mission of research and graduate institutions. He also argues that universities should become more strategically engaged in regional and state economic development activities. That includes faculty and staff involvement in startup and spinoff high-tech businesses, as well as the investment of university assets in venture capital activities.

Duderstadt’s report was presented during a webinar hosted by the MLC Economic Development Committee in April. The webinar was part of a series on “Building a Competitive Midwest through Regional Collaboration.”