“Whether we like it or not, Mississippi now lives in a new economy, and we need to think and act accordingly,” says Pete Walley, director of long-range planning for Mississippi.
The state’s economy is shifting away from manufacturing, and towards the “knowledge economy.”
“Recognizing that the driving forces of the new economy include rapid change, knowledge-based enterprises, and globalization will help us begin to adjust to changing economic conditions,” Walley said. “Mississippi’s workforce is praised for its hard work, loyalty to employers and independence from organized workplaces. Yet, these attributes are not sufficient to compete in the new, global economy. Globalization is not new, but it is much more pervasive and rapid in its effects on our economy.”
Walley calls China the “big gorilla” example of a changed economy. Chinese products can be found in almost any retail store in Mississippi or elsewhere in the country. Another example of a country whose workers are competing in the new knowledge economy is India, where workers are operating software development companies, back-office operations and telecommunication call centers that do work around the globe.
“Mississippi will always have some agriculture production, manufacturing and manual labor jobs,” Walley said. “But future jobs that will allow our citizens to participate in a high and rising standard of living will not be the jobs of our past economy. While it is not clear what the pattern of future businesses and jobs will be, the capability and capacity of our workers will be a significant influence on the kinds of businesses and jobs created.
“The new economy means that businesses will increasingly depend on workers who are creative and innovative thinkers, recognize and develop market niches, build people networks and regional partnerships and make rapid adjustments to global economic forces.
Good and bad news for Mississippi
The new economy is both good news and bad news for Mississippi. Walley said the good news is that the new economy presents opportunities for Mississippians to develop new markets for products and services, find products and services specialty niches and form competitive business clusters and networks of people.
The bad news is that Mississippi has four major problems that greatly affect the workforce and diminish the state’s ability to participate in the new economy. One, an illegitimacy rate of nearly 50%. Two, only about 60% of students who enroll in the first grade graduate from high school. Three, approximately 30% adults 25 years and older are functionally illiterate. Four, a significant majority of the current workforce does not hold any recognizable work-related skill certificates.
More and more of the jobs are going to require higher levels of skills, says Dr. Lyn Stabler, vice president for policy and analysis, Mississippi Technology Alliance.
“There are a lot of different things that need to be done, certainly,” Stabler said. “In order to compete in the knowledge economy, we in Mississippi need to make knowledge important. We have to help the citizenry realize knowledge is important, emphasizing the importance of education from childhood to adulthood. People need to being willing to go back to school to re-train. A lot of people are satisfied with just a high school education, and think they can get by. And a certain percentage can. But it we are going to compete with other states and globally, we have to elevate the skill level of our work force overall.”
Stabler said the state needs a major public relations campaign to advertise the benefits of education. Currently, many state residents just don’t realize that education pays. She envisions a campaign similar to one conducted in Kentucky with billboards that read, “Education pays” and included information showing the link between education and earning levels.
Stabler believes a lot of adult citizens in the state don’t teach their children that they need a good education to have earning power for a comfortable life.
“We have a proportion of our citizenry that is satisfied with things the way they are, and don’t think about or want more education,” she said. “I have a daughter who is 15, and a lot of kids her age are dropping out of high school. It is startling the number of dropouts we have. It is not just low-income students or those whose parents are not educated. These are just kids who haven’t made a connection between their lifestyle and education. It has become kind of cool to drop out of high school. So when we talk about a PR campaign to elevate the importance of education, we don’t just focus on rural areas or low-income groups. It is needed across the board.”
Stabler also believes it is important to focus on early childhood development. The foundation of the ability to learn is laid from birth to the age of five.
“That is something a lot of people don’t know,” she said. “I didn’t know it myself until last year. We overlook the importance of that early childhood care. If children get in high school and have difficulty making it, it may be because of lack of early childhood education.”
When talking about the knowledge economy, it all comes down to the ability of the workforce to fill knowledge jobs.
“The knowledge economy necessitates people with really good education credentials, and good opportunities for training skills,” said Dr. Lionel J. (Bo) Beaulieu, director of the Southern Rural Development Center, Starkville. “On the education front, we still have some real opportunities to improve that area.”
Adequate funding for higher education is absolutely critical in order for Mississippi to become part of the knowledge economy.
“You can’t be part of the knowledge economy without investment in human capital,” Beaulieu said. “That is an area where the state needs to really shore up investments. The kind of jobs we are currently producing in Mississippi are primarily in the service sector, which is not very high paying. So we may talk about the knowledge economy, but we aren’t capturing the knowledge economy in Mississippi, and throughout the South. The question is, how do we begin to create an environment where we actually create knowledge economy jobs, instead of importing them?”
Beaulieu said the state tends to rely primarily on attracting new industries to the state to create news jobs. But that is becoming increasingly difficult. He says that something like the Nissan plant is “a very rare catch” that won’t happen very frequently.
Instead of primarily relying on incentives to attract new industries, Beaulieu advocates Mississippi grow its own jobs by promoting entrepreneurial opportunities, building a system in the state to support entrepreneurship, which, by design, could be very much knowledge-economy oriented.
Critical thinking and ‘real math’
The state must make major investments in education and training to be a full participant in the knowledge economy. And there needs to be more emphasis in K-12 on teaching science and mathematics, says Dr. Charles A. Campbell, professor of economics, Mississippi State University (MSU) College of Business and Industry. He said there also needs to be more emphasis on logic, critical thinking and analysis.
“The biggest problem in the information age is too much information,” Campbell said. “There is a lot of information available, and there is going to be more. You have to figure out the good information from the bad. So far, most people assume if they saw it on the Internet, it must be true. We know that is not the case.”
Students need to be taught how to view information with a critical eye using techniques such as searching for multiple sources for the same facts. Teaching logic is important, Campbell said, because that is a key requirement for information technology (IT) workers. Logic and mathematic are linked inextricably.
“We really don’t put enough effort into teaching real math,” Campbell said. “We spend much more time on rote math than logic math. And it is the logic of math that is important. That’s where it links up with, for example, computer science and, to some extent, critical thinking. If you follow mathematic principles, you don’t have the fuzzy thinking that a lot of people have. We need to teach people how to become IT workers. But we also need to teach people how to use information. Once we have the logic and critical-thinking skills, you have a beginning to teach other aspects related to the information age.”
He also believes more emphasis needs to be placed on ethics. With the information age, it is increasingly common for students to go to the Internet, and paste whole chunks of information into their paper as though it is original. Students need to be taught that information can be copied from the Internet into a paper — but only if it is properly credited as to the original source.
“It doesn’t make a paper bad to give credit to who wrote it,” he said. “It is okay to paraphrase and credit people, and may be better than making up stuff yourself. But a lot of people think if they say they got it from someplace, they won’t get credit.”
While it is difficult getting adequate funding from the Legislature for education, Campbell said that visitors to MSU would likely be impressed. Many classrooms have computers with Internet connections and other technology.
“If you go to the library or any of our computer labs, you will see a lot of our students doing things that are fairly impressive,” Campbell said. “We may not be Berkeley or MIT, but in a way we are. I think we are doing an amazing amount of things considering the funds that are available.”
The knowledge economy is a spinoff of higher education both directly and indirectly. Dr. William F. Shughart II, Barnard Distinguished Professor of Economics at the University of Mississippi, Oxford, said that makes it critical higher education receives the financial support necessary to produce competitive graduates.
“Mississippi needs to make a sustained commitment to higher education, something it has not done in the 16 years I have been at Ole Miss,” Shughart said. “The commitment is very spotty. There are no sustained resources to support higher education. Directly, higher education informs and teaches students, but indirectly academic research is a key input in the growth and development of business firms that operate in the so-called knowledge economy. If you look around the country at where the centers of excellence are in terms of high tech industries, they are located in and around major universities.”
The centers of excellence in the digital economy are Silicon Valley in California, in and around Stanford/Berkeley University, Cambridge, Mass., and Research Triangle Park in North Carolina. High-tech industries locate near centers of learning that are sources of new ideas, techniques and processes that underpin the knowledge economy.
“So you can’t compete on the field unless commitment to higher education is part and parcel of the knowledge economy,” Shughart said.
It is essential that Mississippi create a much more business-friendly economic environment. Shughart said the state has a relatively high tax burden on individuals and companies, lots of regulations and a tort system that is in pretty bad shape — although there have been some success recently in that part of the picture.
He adds that if Mississippi is are going to attract firms and people to the state who are employed in this knowledge economy, they must be provided with lower taxes and better public services.
“And that latter part requires something to be done about the public schools, K-12, as well as the universities,” Shughart said. “No one is going to come here from Cambridge, Mass., and put their kids in our lousy public schools. Improving the public school system is a priority. People in the knowledge economy are highly educated, and want to live in a place where the lifestyle suits their preference. And we don’t have that, and have not had it for some time.”
He also advocates cutting taxes across the board, and not just for favorite firms like Nissan. Regulatory burdens should be reduced, and more needs to be done in the area of tort reform.
It may seem an impossible task for the state to lower taxes while improving education and other services. But Shughart said it can be done. And that making major institutional changes that lead to better public schools isn’t just about giving public schools more money.
“We could probably get by with less money if we spent it better,” he said. “Introduce measures that increase the competiveness of the public school systems, and then force the public schools to do a better job. About 15% of every dollar for K-12 gets spent for administrators, including vice principals and bureaucrats in Jackson who contribute little or nothing to the education of our children. We need to move money out of Jackson and into the public schools, spend less on administration and more on better books and supplies.”
Also, Shughart claims that by taking dramatic steps to reduce the tax burden on business, the state could actually end up with more tax revenue because there would be more business in the state.
“We spend a lot of money bringing in new firms, but we don’t do anything for existing firms,” Shughartd said. “If cutting taxes is good for Nissan, then lets supply that model to every business. If a subsidy is good for Nissan, it is good for everyone. Every new business that wants to locate, cut their taxes. It works every time to encourage economic development. It is not a mystery why some nations are poorer than others, and why some states are poorer than others. That’s because the poor states don’t provide a business-friendly environment.”
Contact MBJ contributing writer Becky Gillette at email@example.com.