Greenspan Highlights Higher Education’s Role In Transforming The Economy

By Vicki Fong
America’s universities and colleges have played a major role in transforming the U.S. economy into the current leader of global technological innovation and the longest U.S. economic expansion, said Alan Greenspan, chairman of the Federal Reserve Board today (July 11).

"If we are to remain preeminent in transforming knowledge into economic value, the U.S. system of higher education must remain the world’s leader in generating scientific and technological breakthroughs and in preparing workers to the meet the evolving demands for skilled labor," Greenspan told nearly 40 of the nation’s governors at the final plenary session of the National Governors’ Association summer meeting held this week at Penn State.

"In a global environment in which prospects for economic growth now depend importantly on a country’s capacity to develop and apply new technologies, our universities are envied around the world," Greenspan said "The payoffs – in terms of the flow of expertise, new products and startup companies, for example – have been impressive. Perhaps the most frequently cited measures of our success have been the emergence of significant centers of commercial innovation and entrepreneurship where creative ideas flow freely between local academic scholars and those in industry.

"We have witnessed in recent years a great multiplicity of these centers of innovation," he added. "State support for both the university system and for small businesses has been important element in the vitality of these centers."

His talk wrapped up the NGA summer meeting, which began Saturday, July 9, at The Penn Stater Conference Center Hotel in Penn State’s Research Park, home to more than 35 businesses and organizations and more than 750 employees. As one of the oldest U.S. land-grant universities, Penn State is the premier integrated knowledge generation and technology transfer system of Pennsylvania. While the largest research university in the Commonwealth, the University also ranks among the top research universities in the U.S., with total research expenditures at $393 million in fiscal 1999. Penn State has consistently been ranked no. 2 among universities in industry-sponsored research.

In addition, Greenspan stressed that the new economy – one driven by innovation and cutting-edge technologies – requires considerable investment in educating and training people.

"Equally critical to our investment in human capital is the quality of education in our elementary and secondary schools," Greenspan told the governors. "I’m encouraged that policymakers, educators and the business community recognize the significant contribution that a stronger elementary and secondary education system will make in boosting the potential productivity of new generations of workers."

"Incorporating new technologies into the educational process is likely to be an important element in improving our schools but it must involve more than simply wiring the classroom. To achieve the most effective outcome from new technologies, we must provide teachers with the necessary training to use them effectively and to provide forums for teachers and education researchers to share ideas and approaches on how best to integrate technology into the curriculum."

A full version of Greenspan’s remarks is available on the Web at http://www.federalreserve.gov/boarddocs/speeches/2000/20000711.htm.