Higher Education's Role in Tough Times

Richard L. McCormick, President
As published in the Winter 2009 issue of Rutgers Magazine

What is the place of the university in an economic downturn? Conventional wisdom has it that such periods create a surge in college enrollment. But that's only the half of it. Higher education has a critical role to play in lifting the country out of a difficult period through all of its central missions—teaching, research, and service.

For many years, higher education has been one of the single most important ingredients to generating prosperity. It has been estimated that the education received at the nation's colleges and universities, and the innovations these institutions engendered, accounted for two-thirds of the economic growth in the post-World War II years.

University research in our nation has been responsible for a wide range of innovations, including internet search engines, laser eye surgery, overnight delivery, and nasal spray vaccines. In the 1990s, University of Pennsylvania scholar Edwin Mansfield looked at seven major industries and found that, on average, 11 percent of their products could not have been developed without recent university research; in the case of pharmaceuticals, it's as high as 27 percent. Fittingly, Rutgers and its fellow institutions are deeply engaged. New Jersey's public research universities conduct more than $600 million in R&D each year. These projects range across every discipline, many with profound implications for economic development, such as transportation, nanotechnology, regenerative medicine, and nutrition.

Academic institutions are recognizing a growing responsibility for outreach, going beyond the traditional services offered through cooperative extension programs. Rutgers, for example, recently opened a state-of-the-art Food Innovation Center facility in Bridgeton that will enable hundreds of food-industry businesses to develop their products and create new jobs.

Of course, the chief way in which higher education can spark economic growth during a recession is the most fundamental: by preparing students well. By one estimate, increasing the U.S. average level of schooling by a single year could yield economic growth of between six and 15 percent, and up to $1.5 trillion in economic output. In addition to educating our traditional student population, Rutgers must be ready to help people out of work who need retraining either within their field or a new one altogether. Those who have lost their jobs in the financial industry, for example, might seek new opportunities in related fields such as marketing, auditing, accounting, or supply chain management. Or this may be the time they shift to a completely new career in a field of great need, such as nursing. Just as important, we must do all we can to keep college affordable and accessible, especially in a credit crunch.

Rutgers and other universities are economic engines that produce real assets of value: intellectual property, innovative products and processes, technical assistance, and a diverse and highly skilled workforce. Even in times of reduced public funding, they can and should contribute immensely to our economic recovery.