State must embrace knowledge economy

By Garrison Walters (Executive Director-SC Commission on Higher Education)

Recent news stories about per capita income show South Carolina at the low end of states -- 47th (and 43rd in rate of growth).

It's no coincidence that we also rank poorly in the percent of the population with higher education degrees. We are 38th in the percent with a bachelor's degree (a number that is likely inflated by the retiree population), 40th with associate degrees, and even lower at the graduate and professional levels.

There's no coincidence because the data show one thing very clearly: The more you learn, the more you earn.

Recent reports, for example, show that a person with a baccalaureate degree earns 62 percent more per year than someone with a high school diploma. The figure is about 29 percent more for an associate degree and becomes more than double for graduate and professional degrees.

The earnings differences are a trend -- the incomes of college-educated people have been pulling away from those with high school diplomas for some time, and the gap has been increasing.

What's changed? Why is education so directly related to income?

The answer is that in recent years our society has undergone a fundamental transformation. From the founding of the nation until the late 1800s, the economy was mostly agricultural. Then, until a new shift started around 1980, it was primarily based on industry. Both these economies were heavily dependent on natural resources, including first land, then coal and iron ore. Abundant labor was required for both. But now we are in a knowledge economy, and in this new structure the population's knowledge and skills matter more than their physical ability or what kind of natural resources they command.

We've known for a while that businesses can go to places like Mexico and China for low-cost labor. But in the "Flat World" they can also buy knowledge-based services, like computer programming from India.

Our choice now is either to compete on advanced knowledge or to compete on labor and see the wages of the least-educated segments of our population fall to Third World levels -- a change that will also lower the incomes of all other Americans. Edison, the Wright brothers and other inventors of the industrial economy typically created knowledge with little help, often in garage-type workshops, and did so with only moderate schooling. But today, when the economy is driven by advances in biology, nanotechnology, computational science and similar areas, the people at the leading edge have advanced degrees and need expensive technicians, facilities and equipment.

A series of breakthroughs in science and technology led to the appearance of computers and telecommunications networks that made possible huge increases in productivity in both goods and services. But actually realizing that potential took the hard work and creativity of vast numbers of managers, technical people and entrepreneurs.

America was far ahead in reaping the benefits of the computer revolution precisely because it had a critical mass of talent -- millions of educated people who are able to understand and implement new ideas.

Unfortunately, because America is fast losing its lead in both education and research capacity, it's questionable that we'll be ahead in the future. And South Carolina, which is far behind the nation as a whole in education levels, has especially challenging problems.

So, what should South Carolina do?

First, we should take pride that we have a strong base to build on. There's real momentum in K-12 and we have a truly excellent set of colleges and universities.

Second, we have to build a statewide understanding of the imperative to sharply increase our education levels. If we don't agree on where we need to go, we have no chance of getting there.

Third, we have to think "out of the box" and lead in key areas such as: strengthening "aspirational access," which means getting people to understand that it is academically and financially feasible for them to succeed in college (changed attitudes will also help high school graduation rates); building a "new front door" to higher education that makes it truly accessible to working adults who lack the time and confidence to start in the traditional way; and continuing to innovate in lowering costs and improving learning.

Finally, we need to focus the entire population on a plan to make change happen. How to get a plan? The Higher Education Study Committee appointed by the governor and General Assembly is developing one that will be rolled out this fall. More on that in a future column.