There can be no doubt that investment in education ensures a robust economy.  International evidence demonstrates that nations investing in education in the 60s enjoyed higher economic growth than others in the following decades.  Such investment is critical as Alberta strives to compete in an ever-changing, highly competitive work environment.

On an individual level, over the past 15 years, citizens with advanced education have enjoyed higher economic prosperity than their less educated colleagues.  Society has also enjoyed enormous benefits.

Economists have variously valued the rate of return of post-secondary education to the individual at between 7% and 15%; while the quantifiable societal benefits of education have been calculated at between 5% and 13% per year.  These benefits are clearly in line with the average rate of return for comparable investments.

Yet, neither of these figures takes into account the unquantifiable benefits of lower crime rates, lower unemployment and welfare rates, higher volunteerism rates, better health, or the higher taxation income society yields from post-secondary graduates. Society also enjoys immediate economic spin-offs from its investment in
education.

Calgary and Alberta businesses rely on post-secondary institutions to create a highly-educated and nimble work force.  Post-secondary graduates have a clear set of transferable skills equipping them with the ability to think on their feet and the ability to learn new skills quickly without additional formal training.

The annual direct, local economic impact resulting from expenditures of the four Calgary post-secondary institutions, their faculty, staff and students is estimated to be $750 million.  This impact is approximately twice the amount of the Alberta government's support to the city's
public post-secondary education institutions.

Yet today's students pay approximately 50% of the cost of education. Although current government policy limits tuition fees to 30% of institutional costs, this amount does not include some of the 'hidden' costs of education - such as ancillary fees, mandatory recreational fees, locker rentals, etc.

Today less than one quarter of Canada's stock of jobs require more than 16 years of education and training.  But as the Canadian economy strives to compete globally by moving to knowledge-based industries, forecasts indicate that 40-45 per cent of all newly created jobs by the year 2000 will need at least 16 years of education.

In the current economic boom in Calgary, businesses are experiencing a serious shortage of qualified workers.  Post-secondary schools cannot keep pace with the current demand due to serious financial issues.

Investment in education is a healthy proactive insurance policy for future economic prosperity.

Post-secondary institutions are often described as inefficient.  Yet, it is interesting that at least one well-regarded management guru ? Peter Drucker ? regards them as models for the future.  Drucker argues that these institutions have been effectively handling a fundamental management problem that is plaguing other organizations around the globe ? this problem of the 'information-based organization'.

Drucker maintains that an 'information-based organization' must coordinate 'the efforts of specialized knowledge workers whose knowledge of particular areas is far superior to that of senior management.'

The current social and economic environment has required a fundamental shift in management philosophy.  Fifty years ago, managers could expect to have their staff follow their instructions and directions with few questions.  But the role of the traditional boss has disappeared. Workers increasingly expect to be recognized for their expertise and knowledge and accorded a high level of independence and accountability.

In order to succeed, businesses have been required to adopt 'leadership' rather than 'command' models and a broad sense of 'ownership' across the organization.  This new management philosophy has been followed in institutions of higher learning for centuries; it is one which enables these institutions to better prepare future generations of knowledge workers for their roles in the work force.

SEE GRAPHS

Alberta's post-secondary institutions are attempting to plan for the next major influx of students.  The demographic group referred to as the Echo Boomers are just beginning to reach the age for further studies. The Echo Boomers, who were born between 1977 and 1994, make up 26% of our population?just 3% less than the size of their parents' generation and over 10% larger than the current generation of students. The enrollment of Echo Boomers in Alberta's post-secondary institutions will exacerbate an existing enrollment crisis.  For the last two decades, post-secondary institutions have seen a greater than 50% increase in enrollments due to the increasing participation rate in advanced education.  Some of these enrollment increases can be attributed to the growing participation of women in advanced education. Other increases can be attributed to the need of all citizens to pursue life-long learning to maintain their marketability in a sea of constant change.

This challenge is more acute in Calgary than in many other major Canadian cities.  Calgary has been enjoying a 3% annual population growth rate which has been felt in many other aspects of the city's services as well.  In addition, the nature of employment in Calgary requires higher than average skills.  As Calgary's population increases, the space crisis for our post-secondary institutions is reaching critical levels.

For example, Mount Royal College's enrollment for Fall 1997 was 25% higher than it had been 4 years earlier?an early warning sign of the next demographic wave.

With such a large influx of students, Calgary's institutions must plan ahead.  The last time institutions saw such large enrollments was in the '60s - a time when government funding attempted to keep pace with growing need.  Without adequate funding to support this increased enrollment, new students will    encounter:

 · limited access to post-secondary
  programs,
 · much larger class sizes,
 · less contact with faculty,
 · less individualized support,
  especially for 'higher' risk
  students,
 · fewer written assignments, and
 · longer completion time for their
  programs.

Over the past four years the operating grant to the U of C was reduced to 1989 levels (per capita).  Mount Royal College has also experienced a 26% drop in per student funding (from $6,259 to $4,629 per student) over the last 6 years.
The pressures of increased enrollments are already being felt throughout the post-secondary system.  MRC was forced to deny access to over 1,300 qualified applicants this year due to space constraints.  An estimated 16,000 qualified student applications are rejected each year at Alberta's post-secondary institutions for the same reason.

Meanwhile class sizes have been increasing steadily.  Since 1988, the average class size at the U of C has increased by 47% for junior classes and by 9% for senior classes.  At U of C's Faculty of Social Sciences, the average class size has increased by 71% over the last 10 years.

SEE GRAPHS

As the business world is well aware, the effective use of technology requires a huge investment in human capital that can far exceed the direct cost of the technology itself.  This simple truism has become more manifest over the past three decades, during which time the world has experienced unprecedented technological growth and change.

The individual units of this human capital have become known as 'Knowledge Workers'.  Renowned economists have noted that remarkable technological growth has created an unprecedented demand for highly educated workers, not only to advance and manage the technologies themselves, but also to serve as experts in the financing, production and marketing of the resulting new products and services.

The sustenance and growth of a knowledge-based economy requires:

 · strong research and development,
   and
 · corresponding investments in education and training.

Without these two critical ingredients, today's knowledge-based economy will quickly stagnate and flounder.

Workers who are unable to adapt to advances, or who lack expertise with the new technologies, slow down the benefits of innovations for everyone.  Post-secondary institutions provide the resources and training opportunities for workers to acquire these skills.

Without sufficient investment in core education and training, the full benefit of technological advances cannot be achieved.  The ability of businesses to realize full productivity is directly proportional to society's investment in its workers.

SEE GRAPH

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