Creating Pennsylvania’s Future

Higher Education & Economic Development:

The Disconnect in Pennsylvania

Ken Gray, Professor Workforce Education and

DevelopmentPenn State. gty@psu.edu

Higher Education and Economic Development

• Higher education as a (subsidized) economic cluster similar to tourism.

• Higher education as a (subsidized) source of technology transfer.

• Higher education as a workforce development provider.

Pennsylvania State Higher Education

Investment2004-05• Operating Expenses 2,012,046,000

• Student Aid 402,147,000

• Institutional Assistance Grants (05-06)

40,186,000

$2.45 Billion

Source: Chronicle of Higher Ed. 8/25/05, LII:105-06 State Budget www.budget.state.pa

State Demographics

• Ten year change in high school graduates

• Montana -17%• Maine -16%• Wyoming -15%• PA -11%

• Ohio -4%• Nevada +57%• CO +27%

Source: Chronicle of Higher Ed. 8/25/05, LII:1

State Demographics

Aging Population:

PA OH NY NC 65 + 15.3% 13.3% 13%12.1

45-64 41% 38.4% 37.5% 35.9%

Source: Chronicle of Higher Ed. 8/25/05, LII:1

Percent Change in Real GSP (Gross State Product), 2003-2004

Source: U.S. Bureau of Economic Analysis

The High Skill/High Wage Workforce

Percent of Occupations Requiring Different Levels of Education

Graduate Ed.8%

Baccalaureate12%

Technical10%

OJT27%

No training43%

Graduate Ed.

Baccalaureate

Technical

OJT

No training

Employment of University Graduates

2000-2012 Supply

Demand Employed

University Grads 1,244,000 730,400 58%

Only 12% of all work requires just a four-year college degree.

The High Skills/High Wage Workplace

EngineersTechnicians Operators

Semi-conductor Manufacturing

Ratio: 1 to 2 to 7

A region that does not have a growing percentage of its non-professional workforcetrained beyond high school level will have increasing difficulty in supporting the competitiveness of high-value business.Building a World-Class Technical Workforce, 1996

Among high-tech industries - those

with a high proportion of scientist,

engineers, and Technicians,

are projected to grow rapidly:

Source: Hecker, Monthly Labor Review (July 2005), p. 57.

National TechniciansJob Growth and Replacements

2000-2010• Computer Support Technicians.

– 97% growth rate. 512,000 job openings. – 230,000 more new jobs for computer technicians than

computer engineers.

• Healthcare Support Technicians. – 32% growth rate. – 121,000 job openings.

• Construction Trades– Job growth 13% = 862,000– Total replacements = 2, 086,000

Monthly Labor Review. Nov 2001.

The Disconnect in PA

Number of Higher Education Institution in Pennsylvania: National Ranking

2yr public# 18 (21)

4yr public# 2 (44) 4yr private

# 3 (98)

2yr private# 1 (74)

0

2

4

6

8

10

12

14

16

18

20

Source: Chronicle of Higher Ed. 8/25/05, LII:1

Ratio of BA to AS Degreesby State by Level of Economic Growth

Economic

Growtha BA : Asso.bEconomic

GrowthBA : Asso.

CA 5.6 1.5 ND 2.1 2.5NV 9.3 2.0 NE 1.5 2.5AZ 7.1 1.9 MO 2.4 2.8IA 5.5 1.9 IL 1.9 2.1AR 5.3 2.2 MS 3.3 1.6FL 5.9 1.1 LA 2.2 3.8VA 6.3 2.6 MI 1.2 2.4NH 5.4 2.4 OH 2.6 2.6ID 5.8 1.6 PA 3.0 3.0

Mean 1.9 Mean 2.6

Highest Growth States Lowest Growth States

Source: The Chronicle of Higher Education, U.S. Bureau of Economic Analysisa Percent change in real GSP (2003-2004), b Bachelor’s : Associate

to 1

to 1

to 1

to 1

Fall Undergraduate Enrollments in Occupational Specific Associate Degree Programs by Institutional Category (1987, 1995, 2004)

Total Total Total

State univ. 79,988 585 (0.07) 83,210 1,143 (1.4) 91,300 1,127 (1.2)

State-related Commonwealth univ.

105,395 3,469 (3.3) 108,142 7,414 (6.9) 119,292 7,161 (6.0)

Community colleges 87,937 44,444 (50.5) 111,353 44,885 (40.3) 124,608 57,377 (46.1)

Private-related aidedinstitutions

28,841 438 (1.5) 21,313 438 (2.1) 26,768 350 (1.3)

Private 2 year colleges

6,166 3,268 (53.0) 5,092 3,133 (61.5) 5,199 1,855 (35.7)

Occupationally specific

Occupationally specific

Occupationally specific

1987 1995 2004

Source: College and Universities: Fall Enrollment 2004, PDE.

Associate Degree Awarded in Pennsylvania

Field 1994-1995 2003-2004

Liberal arts 2,000 2,350

Business 3,200 3,147

Visual/Performing arts 251 983

Engineering related technologies 1,200 1,496

Agricultural. Business 60 66

Construction trades 36 92

Precision production 251 107

Source: College and Universities: Fall Enrollment 2004

• Nationally, only 18% of those who enroll community college transfer program graduate with a four year degree.

Source

Adelman, C. (June, 1999) "Answers in the Tool Box: Academic Intensity, Attendance Patterns, and Bachelor's

Degree Attainment. http://www.ed.gov/pubs/Toolbox/Title.html, [pp. 53-54]

Consequences• PA lacks a developed & coordinated system for the preparation of technician level workers.

• PA has a good record of start-ups & a poor record of growing business thereafter.

• PA is at a strategic disadvantage in attracting industries that need technician level workers.

• PA is a net exporter of four-year college graduates.

• PA lags other states in economic growth.

Supply-side Recommendations

• Analyze Return on State Investment comparing present policy with redirecting dollars to create technical education system.

• Redirect Institutional Aide Grants (40 Million).

• Fund academic programs not institutions.

• Promote technical institutes cooperatively with community colleges and other providers.

Demand-side Recommendations

• Encourage employers to be specific regarding workforce needs.

• Provide students aide forgiveness incentives for those enrolling in pre-baccalaureate technical education.

• Mandate articulation of community college credits with four year degree granting state and state related institutions.