The Risky Bet On Higher Education As An Economic Development Powerhouse

States have relied more and more on higher education to fuel economic development.  Recent trends, however, should force policymakers to rethink.

Ted Boettner, the executive director of the West Virginia Center for Budget and Policy told West Virginia Metro News that the state economy in 30 years needed to diversify.  He included higher education as an important part of moving toward a knowledge and technology based workforce.

Others note that colleges and universities have done a poor job remaining relevant to an ever changing and more competitive workforce.

For example, Poynter.org's study on the State of Journalism Education found that only 28 percent of journalism professionals found a college degree in their field to be very important.  Over 3/4 of journalism professors thought it was "very important."  Increasingly the media field regards experience based internships as more important than traditional journalism school.

And journalism is not the only field undergoing this shift.

Former Secretary of Education William Bennett questioned whether the modern college offered much at all to many young people looking to acquire work skills.

Enrollment numbers show that young people are examining the costs and benefits of college much more closely.  A half a million fewer individuals enrolled in college last year than the year before.  Tuition hikes, student loan debt, and missing out on paid skills development during those years have changed minds.  Young people no longer see college as an automatic necessity for success.

Employers have slowly moved toward assessing potential hires based upon knowledge rather than earned degrees.  People can obtain knowledge through webinars, massive open online courses (MOOCs), internships, or other ways.

Conversely, colleges and universities have not been able to provide educations that prepare students for real world employment.  Liberal arts schools, in all fairness, are not meant for that purpose.  Land grant universities, however, have moved away from their original purpose.  They were originally supposed to prepare students for work in agriculture, mining, or industrial work.  Many have moved far afield from the original purpose of preparing students to work and lead in a technologically advancing world.

Colleges and universities have been seen in the past 20 years as economic engines.  Federal and private sector money concentrates into cities like Morgantown and Huntington.  Ever increasing student populations help to spur the local service industry.

In the meantime, corporations have scaled back management and employee training programs that tailored employees for the particular needs of the company.  Private sector research has declined in terms of money spent compared to higher education.  But is higher education research more economically productive than that done by companies?

For the foreseeable future, debt ridden federal government will have less to spend on research grants.  Students are finding alternatives to college educations.  With such trends developing, relying on higher education to spur the local or state economy is a risky proposition.