Economic development is undoubtedly the front burner topic in our state and in Kershaw County. For good reason. Economic development is the key to stable employment and to developing and nurturing a tax base that will support community needs for education, public safety, recreation, roads and infrastructure, and human services.
Economic development has certainly been Gov. Nikki Haley’s top priority, and I was very pleased a little over a year ago when she realized education is directly tied to sustainable economic development. As I understand it, she came to this conclusion during an overseas economic development trip. I wish she had figured this out a little sooner, but better late than never.
That being said, as the General Assembly and our local elected officials grapple with budgets and spending priorities, it’s timely to talk about how education can be a catalyst for the economic development our state and community wants.
There is a growing body of research evidence linking educational quality and economic growth. One study I read about showed that for every year of increase in average educational attainment, economic growth increases by 3.7 percent. Further studies indicate the impact could be even larger in technology-based economies.
These results shouldn’t be that surprising. Technology-based companies like BMW, Michelin and Boeing are all located in the fastest growing and most prosperous areas of our state. Communities which have aspirations for similar economic growth must develop a technology competent workforce, as is being done in Charleston and the Upstate. “Minimally adequate education” (as required by our State Constitution) doesn’t cut it in a 21st century economic environment.
Local economic impact
Beyond productivity, research indicates quality public schools strongly benefit local economies. A study which examined why some cities prospered while others did not found a direct link between a strong local economy and the educational level of the population. Another study indicated, because school districts and school employees are major consumers in a community, they help to attract and sustain a wide variety of businesses. There is also research indicating quality public schools attract a high-skilled workforce which will in turn attract industry and greater investment in the community. Another study I saw showed how quality schools help increase real estate values, which leads to a larger tax base.
I was particularly struck by the importance of public schools to a thriving local economy. Since the downturn, our school district has cut spending by more than $30 million, most of which would have been spent locally. It’s not hard to imagine how this loss of spending capacity hurt our local businesses, especially small family-owned businesses. This isn’t all that different from the current and very valid concern in the Midlands about the economic impact of a possible downsizing at Fort Jackson. While we hear a lot of railing about government spending, this spending is very important to local economies.
Quality of life and business location decisions
A number of studies have shown the quality of life in a community directly impacts decisions about locating a business or industry. Quality of life can include a number of factors, but education is always near the top of the list. Quality of life is particularly important when higher-skilled workers are required. However, even for industries where less-skilled workers are required, research also indicates the quality of education in a community remains an important factor in the decision to locate a business or industry.
The manager of a large local business once told me the factor which brought this large business to Kershaw County versus another Midlands location was the quality of our school district. I know from other districts where I’ve worked the quality of the local public schools was the pivotal factor in some very large business ventures coming to these communities.
Economic impact of school facilities
When facilities are being constructed or renovated, there is an immediate economic impact in terms of jobs created, contractors purchasing supplies and materials from local businesses and construction workers earning and spending money in the community. There is also research showing new or renovated facilities can promote economic revitalization in a community.
I wonder what impact the current condition of our school facilities has on industry considering Kershaw County versus other places. I particularly wonder if the condition of our facilities has ever eliminated us before we even had a chance to compete. The condition of public facilities, especially schools, is a visible indicator of a community’s willingness to invest in itself. Business sees investment as a two-way proposition. It’s not just about tax rates, especially given local tax rates are usually negotiated with large industries through fee in lieu of taxes, or FILOT, agreements.
Education as an investment
If economic development is the front burner issue in our community, I hope we can begin to look at education as a long-term investment in economic development versus simply a drain on resources. There is certainly research to support this notion.