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Local Colleges Mean Thriving Communities

August 19, 2008 By Michael Arnst, Undergraduate Research Fellow

The "graying" of small-town and rural Minnesota is hardly a secret,  but communities have recognized the demographic shift and are now creating innovative partnerships with community and technical colleges to help strengthen local economies,  even in the face of stagnation or decline.

According to a study commissioned by the Minnesota State Colleges and Universities (MnSCU) in 2006, for every dollar of state money provided, $10.87 is returned to the local economy. The most recent University of Minnesota numbers, which uses a different methodology, shows that every state dollar spent induces $1.57 in indirect spending in the local economy. While the MnSCU figure takes into account the increased productivity in the workforce, also called the educational premium, the U of M report states that half of its $12.8 billion educational premium stays within Minnesota.

Simply put, the money taxpayers invest in higher education repays us with great dividends. When broken down, the numbers show what many of us expect: students and faculty buy products and services from local businesses. The largest effect of the schools, however, is the creation of a flexible and dynamic labor force, whose worth can hardly be measured in hard dollars.

Aside from traditional degree programs, MnSCU's main objective is to provide quality training and continuing education opportunities for local businesses and industry. Last year, MnSCU campuses trained more than 151,000 employees for 6,000 employers.

This can range from offering a certificate in wind energy technology which provides the growing wind energy industry in southwestern Minnesota with a trained labor force, to Quickbooks seminars for Main Street storeowners co-sponsored by the Small Business Development Center, a free service of MnSCU.

Hibbing faces a workforce reduction of 50-60% due to mining retirees, while International Falls faces a similar baby-boomer retirement crunch in its paper industry.  Julie Schumacher, customized training coordinator at Rainy River Community College in International Falls says, "We have a stable economy right now, but we see a coming retirement boom. We see this as a window of opportunity and time to pay attention in order to make the right transition into a new economy."

Hibbing is a prime example of how higher education institutions, local government and businesses can collaborate in this economic transition. Duane Northagen, executive director of the Hibbing Economic Development Agency, describes the city's relationship with Hibbing Community College as "reactive" in the sense that "we ask the questions and HCC works with us to come up with solutions, it's really a two-way street."

For instance, DMR Electronics approached HEDA with a desire for extra training and together with HCC, the company received training in safety and customized engineering and design layout.  HEDA has worked with the Northern Higher Education District, an association of community and technical colleges in the Arrowhead region, in adding HCC as its latest member.

Home to Rainy River Community College, International Falls cannot tout the benefits of its educational opportunities loud enough. The Chamber of Commerce, City Hall and Koochiching Economic Development Agency all have RRCC on their front page.

Paul Nenaven, director of KEDA, calls RRCC a "crucial partner in workforce development and training". He is personally involved with RRCC, serving on its advisory board. Such personal connections are essential in institutional partnerships, especially in smaller town and cities. Crookston's newest EDA head, Dan Johanneck, has listed as one of his priorities to formalize the relationship between the University of Minnesota-Crookston campus and the EDA, which currently includes participation in board meetings by both parties.

Economic innovation requires an educated workforce and specialized training. One can see this in southwestern Minnesota, where Xcel Energy and farmer co-ops are planning dozens of new wind energy projects in response to public demand for renewable energy. Minnesota West's multiple certification and degree programs in wind energy have seen increasing enrollment, increasing from 16 to 32 students in just the last year.

In the last legislative session, the House and Senate both passed a bonding bill totaling $925 million, which the Governor promptly slashed more than $200 million out through line-item vetoes. While the final bonding amount is the highest that MnSCU has received, it was well below even the Governor's initial funding proposal.

Some of the nixed projects included classroom renovations and expansions at Central Lakes College and Metropolitan State, and a health center addition at Lake Superior College. Other projects had funding drastically reduced. The following had funds cut by nearly half: a workforce training program in bioscience and healthcare (cut from $1.9 million to $900,000), classroom renovations at South Central College and a library renovation at Moorhead.

Simply giving more money to the colleges won't work either; it must be part of a larger, concerted effort, such as the Northern Higher Education District. As Schumacher said of Greater Minnesota's economic potential, "in the metro area there are a lot of economic growth activists and coalitions, but out here you really need to roll up your sleeves and do some hard work."

If we want economic development created by innovation and an educated workforce, we need to increase the permanent linkages and discussion between municipal government, small businesses and the colleges. Failure to maintain and improve them is not an option if we wish to make Minnesota an economic powerhouse again.
 

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