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The link between education and economic development

There is a strong link connecting education and economic development in a community.  

Recently retired state economist Dr. Phil Pepper knew it and preached it.  He told just about every group he spoke to that education is the key.  Counties with population growth have good schools, he would remind them.  He often said, “The primary economic development tool for any county is the education level.”

He is not the only one. Gray Swoope, executive director of the Mississippi Development Authority, often recants how, when he was with the Area Development Partnership in Hattiesburg, his economic development team made a presentation to a major prospect in a local school facility instead of the local economic development office to emphasize that the community understood the importance of educated workers to the company.

Dr. Hank Bounds, Mississippi’s commissioner of higher education, often says that “my long-standing belief is that no matter what the question is, education is the answer.”

Mississippi’s leaders in economic development and education “get it.”  The question now becomes how to transfer their enthusiasm and recognition of the connection between education and economic development to the local school and its surrounding community. That is easier said than done when one considers the daily challenges of principals and teachers of students who are coming to school less prepared and less motivated. When a teacher is worried about where school supplies and books are coming from, it is hard to remember that there is a local employer out there who is waiting on trainable workers. And when a student is struggling with homework, involved in friend relationships and trying to fit in with the crowd it is difficult to make the connection between learning and a job that is to come.

The importance of an educated workforce to an economic recovery is getting more attention in the national press. A July 1, 2010, New York Times article headlined “Factory Jobs Return, but Employers Find Skills Shortage” reported that even with a large pool of laborers to choose from as a result of recent layoffs there was still trouble finding qualified workers because of the mismatch between the skills of the unemployed and the kind of skills now needed. One company mentioned in the article reviewed 3,600 job applications and found only 47 people to hire at $13 to $15 an hour, or about $31,000 a year. Applicants must pass a basic skills test showing they can read and understand math at a ninth-grade level. “A significant portion of recent applicants failed, and the company has been disappointed by the quality of graduates from local training programs. It is now struggling to fill 100 positions,” according to the article.

Communities that want to land a new economic development project should know that corporate decision makers look hard at the local workforce. The Area Development 2009 Corporate Survey revealed that “Labor Trumps Other Factors in the Location Decision.”  Labor cost was ranked number one, and skilled labor was ranked number six in the survey about location decisions.

 Rural counties have an especially rough road ahead. Again, from Dr. Phil Pepper who said in a Sept. 9, 2009, Northeast Mississippi Daily Journal article, “Educational opportunities and infrastructure are two of the most important assets an area that is trying to attract business can possess. In rural counties that have no established quality workforce and no infrastructure to help industries be successful, it is more difficult to build an economic base. Rural counties need to concentrate efforts in these areas to increase their prospects at economic success.”

Knowing what must be done and doing it is almost always challenging. There are many local initiatives in Mississippi and other states that are bearing fruit. Some of them are centered on involving the community in the schools. And they go beyond Junior Achievement and Career Day programs, both of which are excellent by the way. Some places are even going so far as to start formal Community and School as an Economic Development Team programs, which include school-business partnerships, school-based businesses, school-incubated businesses and entrepreneurial curricula.  The University of Minnesota Extension web page www.extension.umn.edu/distribution/resourcesandtourism/components/DB6178-2.html is a good resource for communities desiring to implement such a program. 

This writer has been following the Kalamazoo Promise since its inception in 2005 when a group of anonymous donors agreed to pay 100 percent of the tuition at a Michigan college or university for graduates of Kalamazoo’s public high schools.  Students must reside in the district, which is a way of attracting families with school-age children to the city.  So what are the results thus far?  Since the Kalamazoo Promise was announced, enrollment in the school district has grown by 16 percent, test scores have improved, and a greater proportion of high-school graduates are attending college.  According to the Kalamazoo Promise website —  www.kalamazoopromise.com — the program was begun because:

1. Education is an important key to financial well-being. 

2. It allows KPS to differentiate itself from other public and private school systems. 

3. It provides a real meaningful and tangible opportunity for all students. 

4. The Kalamazoo Promise will create opportunities for individuals who attend Kalamazoo Public Schools and their current and future families. It follows — and studies have shown — that there is a strong correlation between overall academic achievement and a community’s economic vitality and quality of life.

State leaders, economic developers, educators and employers are aware of the connection between public schools and economic development. Will your community join the ranks of those that are connected?


Phil Hardwick is coordinator of capacity development at the John C. Stennis Institute of Government. Contact him at phil@philhardwick.com.


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  1. The comments in this extract are so true in Africa than elsewhere in the world and if societies are to transform themselves into sustainable economic entities, they can take their advises from such like documents. The more economically independent societies can become, the more the burden will be removed from the state to provide for their daily needs.

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