Intercom Online......July 17, 2000

Greenspan cites higher education's
role in transforming the economy

Editor's note: Alan Greenspan, chairman of the Federal Reserve Board, was the featured speaker at the closing session of the 92nd annual National Governors' Association meeting, held at The Penn Stater Conference Center Hotel on the University Park campus from July 8-11. Like many of his counterparts who spoke during the four-day meeting, Greenspan discussed ways that states could remain competitive in a new global economy. But the Federal Reserve chief, largely regarded as the architect of the country's current economic expansion, also focused on higher education as a vehicle for states to take advantage of new opportunities.

A brief overview of his talk follows. For a full version of Greenspan's remarks, visit the Web at http://www.federalreserve.gov/boarddocs/ speeches/2000/20000711.htm. For full coverage, including photos and video clips, go to http://www.psu.edu/ur/nga/.

By Vicki Fong
Public Information

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, according to Alan Greenspan, chairman of the Federal Reserve Board, who spoke on campus July 11 during the National Governors' Association meeting.

"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 meet the evolving demands for skilled labor," he said.

Greenspan outlined the economic changes brought on by information technology and said that prospects for economic growth now depend on a country's capacity to develop and apply new technologies -- a job being handled well by U.S. universities.

"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."

Greenspan went on to say that state support for both the university system and for small businesses has been an important element in the vitality of these centers. 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.

"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."

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