Investing in brainpower as economic development

Educational attainment is the single most important driver of regional economic development. So, it's no surprise that leading communities are starting to explore how to boost educational opportunities, as an economic development strategy.

As this strategy evolves, the separation between economic development and workforce development will dissolve.

Last week, two important events took place. Both involve new types of scholarship programs.

PromiseNet 2008

Since its launch a couple of years ago, the Kalamazoo Promise has focused civic leaders on new approaches to create incentives for education. The initiative provides college scholarships to children in the Kalamazoo City Schools. Watch a video briefing of the Kalamazoo Promise.

Educational incentives -- directed toward people -- have a direct impact on economic outcomes (higher incomes over a lifetime).Economic incentives directed toward companies generally do not work and are largely a waste of money.

PromiseNet 2008 brought together representatives from 75 communities across the country to explore college scholarships for city school children. The event marks the beginning of a national movement toward community scholarships.

Read more: Kalamazoo PromiseNet conference to share programs' expertise.

Early child education scholarships

In another event last week, I attended a conference at the Federal Reserve in Minneapolis for the Big Ten schools and the University of Chicago. We focused on the importance of education (human capital, as the economists would have it) to economic outcomes in the Great Lakes. Our major research universities are exploring new avenues of collaboration.

At lunch yesterday, Art Rolnick, an economist with the FRB in Minneapolis, briefed us on a new scholarship pilot that focuses on early child care. The scholarship program is remarkably simple: it awards parents of young children with a scholarship for early education. This focus on early education as an economic development strategy has a strong foundation of evidence to support it. Read more.

The prestigious Committee for Economic Development in Washington DC strongly supports this strategy. The focus on early childhood development is closely connected to new learning in brain development. Here's an excellent overview by Joan Stiles, a cognitive scientist at UCSD.