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VT Business Roundtable 1/5/04 BECOMING “The Knowledge State” The Vital Importance of Higher Education in Vermont’s 21st Century Economy January 2004 A Report from the Vermont Business Roundtable Vermont Business Roundtable Lisa M. Ventriss, President Higher Education Task Force Chair: Robert G. Clarke, Chancellor Vermont State Colleges Members: Scott F. Boardman, President Tim Mueller, President Hickok & Boardman, Inc. Okemo Mountain Resort Frances E. Carr, Vice President for Research and Dean of the Graduate College John W. O'Kane, Manager of Community Relations and Government Affairs The University of Vermont IBM Microelectronics Vermont Laura P. Dagan, Chief Operating Officer Roger Perry, President Dwight Asset Management Company, Inc. Champlain College Staige Davis, President Chris Robbins, President Lang Associates E.H.V. Weidmann Industries, Inc. Christopher L. Dutton, President and Chief Executive Officer Richard Schneider, President Green Mountain Power Corporation Norwich University Otto A. Engelberth, Chief Executive Officer Marc vanderHeyden, President Engelberth Construction, Inc. St. Michael’s College Ellen Mercer Fallon, Partner Don Vickers, President and CEO Langrock Sperry & Wool, LLP Vermont Student Assistance Corporation Daniel M. Fogel, President Fran Voigt, President and CEO The University of Vermont New England Culinary Institute Luther F. Hackett, President Tim Volk, President Hackett Valine & MacDonald, Inc. Kelliher Samets Volk James A. Hester, Vice President, Vermont David Wolk, President MVP Health Care, Vermont Region Castleton State College Lisa Q. Lorimer, President and Chief Executive Officer Kinvin Wroth, President and Dean Vermont Bread Company Vermont Law School John M. McCardell, Jr., President Middlebury College 1 BECOMING “The Knowledge State” . BECOMING “The Knowledge State” AN EXECUTIVE SUMMARY I. Higher Education in the state’s 50 fastest-growing occupations, 44 require University of Vermont, the Vermont State Changing Vermont Economy significant postsecondary education or training. For Colleges, and the Vermont Student Assistance the state as a whole, higher education is the vital Corporation (VSAC), Vermont still ranks 49th in igher education is an enormous provider of generally well-educated adults and of state appropriations for public higher education, contributor to Vermont’s quality of life specific, career-related knowledge and learning measured per capita. and cultural vitality — but less well- opportunities. Higher education is also a magnet for attracting and keeping well-educated, talented, • Vermont students are facing intimidatingly high recognized is how much higher education debt to pay for college. The average loan debt Hbrings to the Vermont economy. With more than productive people who make their careers in Vermont. In a knowledge-based economy, the potential for accumulated by senior year, among recipients of 10,000 employees and over $856 million per year in financial aid from VSAC, grew by 91 percent direct spending, the state’s flagship university, its five growth relies largely on innovation and ideas. In response, higher education in Vermont has been between 1994 and 2003 — from $14,242 to state colleges, and its 18 independent colleges are a $27,188. mainstay of our state’s marketplace. learning to work together with business, in a fast- But that’s only the first part of the picture. expanding array of ways, to nurture innovation, • Too many high school graduates are choosing Through the wide variety of additional spending support new enterprise, and bring together ideas, not to attend college — and financial barriers and business it generates, and through its own knowledge, facilities, and expertise so that businesses are the main problem they cite. Thirty-six construction projects, higher education’s overall fiscal and jobs can grow. percent of 2000’s high school graduates chose not impact on Vermont can be estimated at more than “Vermont is the maple syrup state, and the dairy to start college that year, VSAC found. Among $1.71 billion every year. People with bachelor’s state — but I would argue that it’s also the knowledge those who did not continue their education, 15 degrees earn 80 percent more, over their lifetimes on state,” observes Fred Hackett, a business leader and percent said they could not afford to go to college. average, than those with only a high school education; member of the Governor’s Council of Economic That number was 63 percent higher than in 1994. college graduates are also far more likely to be Advisors. employed and to contribute to their communities, and At the same time, in a world of intense competition to the civic life of Vermont. for business growth and well-educated people, “Our model used to be high-tuition, high-aid,” says There’s still more. In tandem with the world’s Vermont faces some significant challenges that center business leader Chris Robbins of St. Johnsbury, chair economy, Vermont’s economy is changing fast — it’s on higher education: of the VSAC board. “Now we have high tuition and becoming more based in the knowledge and skills of not high-enough aid, though in recent years that has people. Even our most traditional businesses depend • State support for higher education and student picked up. We’re going to have to find ways to gain more and more on sophisticated skills. Among the financial aid remains among the nation’s lowest. ground.” Despite recent increases in state support for the . 2 BECOMING “The Knowledge State” . II. The Multiplying Links creating technology and inventions that lead to new At the same time, higher education in Vermont Between Higher Education and business, Vermont higher education interacts with the faces a twin challenge: to invest in meeting the business world in hundreds of often-new ways. demands and opportunities of a fast-changing, Vermont Business “In spite of the progress we’ve made, we need to knowledge-based economy, and to find ways of continue to emphasize the connections,” says Fred controlling costs and restraining tuition increases. For businesses across Vermont, it’s a new world — Hackett. “There’s a lot of room to grow, and it helps “We’re all trying to keep costs down,” says Kinvin one in which active links to higher education are often both ways. It’s good for the institutions, and it’s good Wroth, president of Vermont Law School. “But some vital to success. for the business community.” costs are increasing uncontrollably ... while others Vermont Bread Company in Brattleboro and have to do with maintaining quality, with smaller E.H.V. Weidmann Industries, a manufacturing firm in III. Recommendations for classes, new technology, student support, and St. Johnsbury, are just two examples. These days, the improved faculty salaries.” bread company’s employees have to understand Significant, Long-Term If higher education is to fulfill its tremendous computers, computer controls, and systems theory. Positive Impact potential for contributing to Vermont’s long-term “We certainly access higher education more than economic future, it needs higher levels of state we did 20 years ago,” says Vermont Bread CEO Lisa All of Vermont has a very large stake in working to: appropriations. It also needs to develop more revenue Lorimer. from business and others in the private sector — not With its employees needing to be part of a • make and keep higher education more affordable; just contributions from alumni. complex, teamwork approach to cutting costs, E.H.V. Through its Higher Education Task Force, made Weidmann has worked with Lyndon State College and • increase the state’s support for public higher up of business leaders and college executives, the Vermont Technical College to offer its employees a education, and for student financial aid; and Vermont Business Roundtable calls for Vermont’s state new associate’s degree program in manufacturing. • support and nurture the connections between appropriations to higher education to rise to 40th in This helps the employees to “be part of the solution,” higher education and the business community. the nation, measured per capita; for the tax exempt says company President Chris Robbins. status of public and private postsecondary institutions Across the business sector today, higher education There is a great deal of collaborative work to remain; for the state to consider conducting a is an essential provider of sophisticated skills and underway to meet Vermont’s needs in workforce comprehensive study on higher education’s economic knowledge, through both its graduates and its education and training. Vermont’s colleges and univer- impact; and for support for the development of college programs for workforce education and training. sities, public and private, have joined in these efforts. and university business incubators. For the complete More broadly, from the fast-growing number of They are also working together, more than ever VBR resolution, please see page 23. campus-based business development centers to the before, to make higher education more accessible to importance of university research and development in students of varying ages and financial resources. 3 BECOMING “The Knowledge State” . I. “We Don’t Know What We’ve Got” Higher Education in the Changing Vermont Economy n strictly practical, economic terms, how increasingly vital. It is the primary supplier of well- important is higher education to Vermont? educated, well-rounded young graduates, who are far This sector’s fiscal impact on There are not one but, in today’s economy, three more likely
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