Brain Drain Threatens New Jersey’s Economic Development

by Rutgers President Richard L. McCormick
As submitted; an edited version was published in The Star-Ledger on January 27, 2005.

New Jersey’s economy is among the most highly knowledge-dependent in the nation. Its industries grow and flourish when they have direct access to a steady stream of talented and very well-educated workers. In the past, New Jersey was a beacon for scientists, engineers, technicians, and business professionals from throughout the world, an influx that satisfied the needs of our local economy. The result was a population with one of the highest proportions of advanced degree recipients among all the states, and the continued location, relocation, and investment by high-technology companies in the region. In the past several years, however, these trends have reversed. The talent pool elsewhere is now much deeper, with the effect that even historically New Jersey-centered industries are locating their latest and most important new research facilities outside the state. These threats to New Jersey will only grow as companies increasingly emphasize “proximity effects” – the economic value to knowledge-based industry of locating near institutions that develop the intellectual property and train the highly skilled R&D workers they need in order to succeed.

New Jersey is losing its edge in part because fewer talented workers are coming here from abroad. Our importation of overseas talent has diminished as part of a national trend resulting from major changes in immigration laws, globalization, outsourcing, and the increasing attractiveness of business development in countries that used to fuel our nation’s strong need for scientists and engineers, such as China, South Korea, and India. We have seen the number of foreign graduate students enrolling in the U.S. decrease for each of the past three years and, in fact, graduate applications from China dropped by 45% over the past year alone.

But at the same time that New Jersey is importing fewer knowledge workers, we continue to export far too many of New Jersey’s own students to other states for college, never to return and contribute to our economy. This is especially dispiriting because our state invests so much in our young people, spending more per capita for primary and secondary education than any other state. New Jersey students, among the best educated and best prepared in the nation, are also the most likely to leave the state for college. Whereas about one in five high school seniors nationally leave their state to enroll elsewhere, New Jersey suffers more than double that rate.

Most important, the students who leave are among our best. More than 93% of New Jersey students who score above 1300 on the SAT send their scores (and therefore most likely apply) mainly to out-of-state schools. The same situation exists for New Jersey’s undergraduate students, who choose commonly to go elsewhere for graduate or professional training. And it’s not simply a matter of reciprocity with other states: for every seven students New Jersey loses elsewhere, only one student from another state comes to New Jersey to study in our universities. The net result is a significant outflow of the best and brightest from New Jersey to other states, enhancing their attractiveness for knowledge-driven industry and reducing our own.

How can our state stem this brain drain and restore its economic edge? A critical first step is to put forth the investments in higher education that will make our colleges and universities a clear first choice for more of our leading students. We aren’t making these investments now. In fact, New Jersey ranks 39th nationally in state and local funding for higher education on a per capita basis, and 47th in higher education spending per $1,000 of personal income. We cannot continue to lag behind nearly every other state in recognizing this economic imperative.

The best students – from New Jersey and elsewhere – are sophisticated education consumers. They seek out universities with state-of-the-art facilities on attractive campuses. They are drawn to institutions where faculty at the forefront of their fields provide the very best education, with enhancements that include meaningful research opportunities and connections with global business. In states where such investments have been made – California, Michigan, and North Carolina, for example – top students flock to well-known national universities in Berkeley, Ann Arbor, and Chapel Hill. Not surprisingly, these states rank among the very best in retaining their students; in fact, only about 1 in 11 North Carolina students leaves the state for college. In turn, the attractiveness of these universities to the best in-state and out-of-state students helps fulfill their mission as their states’ engines of economic development.

New Jersey has historically not embraced its universities in this way. Stemming the brain drain and recapturing our place as the leader in knowledge-dependent industry requires New Jersey to reconceptualize its relationship with our public research universities. What is needed is a clear commitment to an adequate level of sustained state support of the system. This is particularly critical for developing its teaching and research facilities and for recruiting and retaining world-class faculty in an increasingly competitive environment.

New Jersey’s spending on primary and secondary education shows that we want the best for our children. Let’s make investments in our colleges and universities that demonstrate the same kind of commitment to our young adults and to the knowledge-based economy that is waiting for their talents.