If asked to identify one statistic that predicts future economic success, it’s hard to ignore the percentage of young people with college degrees. Education drives innovation, productivity and higher wages.
That’s why it’s such a concern that the United States has slipped to 12th among developed countries in our percentage of 25 to 34-year-olds with an associate degree or higher. A few weeks ago, President Obama called for the United States to return to the top of the rankings by 2020 – a daunting goal that will require a 20% increase in college graduates over the next decade.
In Indiana, the climb is even steeper – we’re well below the national average in the educational attainment of young adults; just one of three young Hoosiers goes on to complete a college degree. We’ll need to almost double that to be competitive with countries like Korea, Canada and Japan.
This educational deficit puts our future at risk. Our capacity for technological and scientific innovation is the biggest competitive advantage that the United States has left in the global economy. As more highly-educated workers (the Baby Boomers) begin retiring, we confront a younger workforce ill-equipped to innovate. To be blunt, you can’t sustain a knowledge-based economy without knowledgeable workers.
In Indiana, the impact of a less-educated workforce will threaten the very foundation of our economy, manufacturing and logistics.
In June, Deloitte Consulting and the U.S. Council on Competitiveness released the annual Global Manufacturing Competitiveness Index for 2010. The study (based on a survey of 400+ manufacturing CEOs worldwide) ranked access to educated workers capable of supporting innovation as by far the biggest determinant of success, ahead of factors like the cost of labor and materials, energy costs, and tax/regulatory climates.
Not surprisingly, the same study shows the United States slipping to fourth place in its manufacturing index rankings. The third place country, Korea, finished far ahead of the U.S. in its percentage of younger workers with college credentials. The top two finishers, China and India, have vastly expanded their pool of educated workers in recent years (the number of Chinese college graduates entering the job market each year has grown more than 600% from 1999 to 2009).
It’s clear that improving college completion rates is essential to maintaining our domestic manufacturing base. In Indiana, the erosion of this base would also jeopardize the logistics industry that gets manufactured goods into the hands of customers across the country and around the world. And as global supply chains become more complex and ‘just in time’ inventories the norm, the logistics sector faces its own skilled worker shortages.
Many of President Obama’s proposals to boost higher education focuses on affordability, aiming to increase Pell Grants and expand tuition tax credits. But while the cost of college is a key issue, we face other hurdles in Indiana specific to manufacturing and logistics: Too many young Hoosiers aren’t aware of the high-tech jobs available, and there’s a lack of educational programs that deliver the specific skills that employers are looking for.
These challenges make up a large part of Conexus Indiana’s mission: We’re working to promote manufacturing and logistics careers through our ‘Dream It. Do It.’ campaign. At the same time, we’ve used industry input to create a very specific, multi-layered skills template that details what manufacturers and logistics companies are looking for in new employees. The Indiana Department of Education and Commission for Higher Education have both embraced this template, and we’re working with our educational partners to create ‘industry-approved’ programs that can steer students into the most in-demand job openings.
But clearly this issue is bigger than any one organization, school or government agency. We need focus and coordinated action among policymakers, employers, educators and opinion leaders to push Indiana up the rankings in college completion rates and preserve our manufacturing and logistics edge. The same kind of attention is needed at the federal level to build a world-class workforce.
The only certainty is that a lack of action will cause us to fall even further behind in educational attainment and economic competitiveness. We must act now, before today’s challenge turns into tomorrow’s crisis.
Andre B. Lacy is Chairman of LDI Ltd., a holding company that focuses on value-added distribution businesses. He is an emeritus member of the Central Indiana Corporate Partnership, and chairs the Workforce Development Task Force for Conexus Indiana’s Logistics Council.
