Business leaders seek better return on investment
W
ASHINGTON — Big business and the Obama administration are teaming up to better target the $3.5 billion corporations invest in the U.S. education system each year, with a focus on fixing lagging skills in science, technology, engineering and math.
The first step: A meeting in Washington last week to announce new financial commitments from Bank of America Corp., Microsoft Corp. and Nike Inc. The next step: Business leaders plan to look to employees and communities for answers.
President Barack Obama and representatives from education advocacy groups met July 18 to discuss ways to make sure corporate investment is money well spent. Right now, businesses are struggling with how to coordinate corporate giving and education in a way that gets more money to programs with effective track records.
“A world-class education is the single most important factor in determining not just whether our kids can compete for the best jobs but whether America can out-compete countries around the world,” Obama said in remarks before the meeting. “America’s business leaders understand that when it comes to education, we need to up our game.”
Education helps drive the economy
Corporate leaders must act decisively to spread awareness to the public that a broken education system has direct economic implications, participants said.
“We know for sure that there is a direct economic impact when kids become engaged and drop out of school,” said a representative from Microsoft, which announced plans to invest $15 million to develop immersive game-based instruction technologies and to train educators through its Partners in Learning network.
Bank of America pledged $50 million to help more Americans finish college, with the first batch of that money — $4.5 million — headed to Boston-area nonprofits.
Nike made a $9 million, five-year commitment in 2007 — that amount was then upped to $10 million. The company already has spent $7 million of that on grants, and announced plans to spend the remaining $3 million to provide funding for a pilot program in Oregon that encourages innovation among high-school students.
Marguerite Kondracke, chief executive of America’s Promise Alliance, which pledged to raise $50 million through its “Grad Nation” campaign to reduce high-school dropout rates, said the public generally isn’t aware that the nation’s economic prosperity is directly linked to a strong education system. America’s Promise Alliance was founded by former Secretary of State Colin Powell and his wife, Alma, who attended the meeting.
“We’ve got to be better at [making] the connection between education, the workforce, and the economy,” Kondracke said. “We are falling further and further behind in global competition.”
Fewer grads, less tax revenue
Kondracke estimated there are 3 million unfilled jobs in the U.S. because employers cannot find qualified employees.
According to an Alliance for Excellent Education report on the economic impact of steep high-school dropout rates, more than 30% of students — and nearly half of students of color — in 2007 failed to graduate after four years of high school. The report estimates that even halving that number would generate an additional $42 trillion in tax revenue over 20 years.
“The best economic stimulus package is a diploma,” said Bob Wise, former governor of West Virginia and president of the Alliance for Excellent Education.
Rather than shying away from investing in education, participants at the meeting said the country’s debt crisis demonstrated the need to do more.
“We need to be much more vocal and much more visible so the states don’t see that, in this time of budget cuts, [education] is something that can be taken off the table,” said Kathy Havens-Payne, the director of education initiatives for State Farm, the insurance company.
“When a governor is willing to stand up and say ‘we’re going to raise our standards,’ we as a business community need to be standing side-by-side with our governor,” she said.
But executives that took part in the conversation expressed some hesitation in spending yet more money on education without ensuring the efficacy of the programs and some return — financial or otherwise — on their investment.
According to the National Center for Education Statistics, public dollars spent per student more than doubled since 1971, from $4,500 to $10,500, while assessment scores have not appreciably risen over the same span.
“We’re still a nation that’s focused on putting money on a problem before really understanding it,” said Richard Stephens, a founding member of the Business Industry STEM Education Coalition and a senior vice president at Boeing Co.
“Community leaders need to come together to understand that sometimes it does take money, but more often than not, money is not the issue,” he said.
State Farm’s Havens-Payne sees a need for business investment in education to pay off for the companies, something that does not always happen now.
“We’re investing a lot in education but we’re not really seeing any improvement,” she said. “We need to bring the [programs] that work to scale, rather than just creating another new program.”