Presidents of Reed

Colin S. Diver’s speeches, letters, and articles

Speech to Portland Rotary Club, August 12, 2003

Baseball, casinos, and colleges: Why is education good for the economy?

Remarks of Reed College President Colin Diver

Since arriving here a year ago, I have heard a great deal of talk about economic development strategies for Portland. Most of these have involved attracting high-profile industries such as major league baseball, biotech, or gambling to the city. As a lifelong Boston Red Sox fan, I have nothing against baseball - other than the fact that it breaks my heart every year. Nor do I have anything against biotech - other than the fact that many of us lost our shirts when the 1990s biotech bubble burst. I do have a great deal against gambling, so was very pleased when Governor Kulongoski expressed his firm opposition to building a casino in Portland.

My point is that Portland, like cities all over the country, seems to be in the thrall of trying to attract sexy new industries to town, while often ignoring or taking for granted the ones they already have. One of them is higher education. Today I want to talk about why higher education is an economic and civic asset to any city, especially Portland. In particular, I want to talk about why liberal arts colleges like Reed College are assets to a city like Portland. In the process, I will say some things that are well known and perhaps obvious to you, but some other things that I suspect may come as a surprise. Reed College, for example, pumps some $50 million annually into the local economy, but it turns out that is just the beginning of the story.

There are five qualities of higher education that I want to discuss: knowledge, leverage, service, sustainability, and community.

First, knowledge. We all know that America has been shifting to a knowledge-based economy, a fact that is especially and increasingly true of the Portland region. This is evident in the list of the top 50 public companies in the Portland region published by the Oregonian a week ago. The vast majority of them are service companies, and even those in the manufacturing business do most of their actual manufacturing overseas, with the local operations focused on design, marketing, finance, and management.

Higher education is, of course, the paradigm example of a knowledge-based business. Our business is to transmit and generate knowledge, and to develop the capacity of young people to generate new knowledge. Most of the talk in Portland of late has focused on the need to develop stronger engineering and medical education to support expansion of the information technology and biotechnology industries. But it is liberal arts programs that provide the necessary base for these and other vocationally relevant programs. And in a rapidly changing economy, today's winning bets are tomorrow's losing bets. People - and communities - need the flexibility and adaptability afforded by a truly liberal education - that is, one that exposes them to all of the primary disciplines of human knowledge.

Reed, for example, has very strong programs in the sciences. It is perennially one of the top three or four undergraduate institutions in the country in the percentage of its graduates who go on to get advanced degrees in the life sciences, physics, and engineering. But the essence of Reed is that all of its students are required to study broadly, so that we produce scientifically literate artists and writers, and humanistically literate scientists.

Great institutions of liberal education also support the development of a knowledge-based economy by providing a magnet for creative, entrepreneurial people. Creative people want to be surrounded by other creative people. Not surprisingly, many of the most creative places in America - such as Boston, Northern New Jersey, Austin, Minneapolis, Silicon Valley -- cluster around great educational institutions. Such institutions are importers of creative talent into a region. Reed, for example, draws 95 percent of its students and almost all of its faculty and senior administrative staff from outside Portland. Beyond that, think of all the distinguished academics, public figures, artists, and musicians drawn to Portland each year to give lectures or performances at its colleges and universities.

Likewise, creative people want access to a rich intellectual and cultural scene. Colleges and universities are often important ingredients in providing such opportunities. Every year Reed provides and offers to the Portland community dozens of lectures, seminars, chamber music performances, theatrical productions, and art exhibitions. Its faculty, staff, students, and alumni provide indispensable support for the arts and culture throughout the region.

The second feature of higher education is leverage. Colleges and universities contribute to the local economy through payroll, taxes, purchases of goods and services, construction contracts, and the like. By these direct measures, Reed College contributes some $50 million a year to the Portland economy. Using the standard multiplier, that translates into roughly $125 million of economic activity. Collectively, higher education contributes some $5 billion to the Oregon economy each year, of which about a third comes from the private sector.

But the true economic and civic effect of higher education is far greater, for several reasons. Institutions of higher education command substantial assets of endowment, real estate, plant and equipment, and, most important, human capital, that are not fully reflected in traditional measures of economic impact. For example, if you estimated Reed College's "market cap" by adding the value of its endowment, plant, and equipment, we are a $400 million corporation, and would rank in the top 20 of the Oregonian's top 50 companies. Our library holds a collection of 500,000 volumes, which are available through interlibrary loans to college and graduate students throughout the Northwest. Every year we bring to the city roughly 1,250 students, 95 percent of whom come from outside Portland, who contribute to the economy and the community in numerous ways. Like most other educational institutions, Reed is a net importer of talent into the economy because roughly twice as many of our graduates remain in Portland as the number of students who come from Portland.

The third factor I want to mention is service. I know that schools like Reed are often viewed as isolated and self-satisfied. But the fact is that the students and faculty of such schools provide a tremendous range of service to the community. Reed College offers a wide array of programs aimed at helping the school-aged children of Portland, including the Young Scholars program, the Latin Symposium, the Math-fest, middle school outreach, the faculty speakers bureau, the theater tickets program, Women in Science program, the Harriet Tubman School partnership, the Youth Outreach program, tours of the college's nuclear research reactor and its art gallery, the biology outreach program, the Physics-Public School Science Collaboration, China Day, and Humanities Teacher Institutes. The college spends out-of-pocket some $400,000 a year on these programs, which does not include over 130 hours of volunteered faculty time and thousands of hours of volunteered student time in many organizations such as Portland Impact and the Childs Work Learning Center. Altogether these programs serve some 2,500 elementary and secondary students from the Portland metro area, most of them in the city itself, in programs ranging from one-time lectures and demonstrations, to semester-long instruction, tutorials, and mentoring. Beyond programs for K-12 education, our students and faculty support the community in countless other ways, from direct volunteer work coordinated by staff at the college to research on matters of concern or interest to the region (such as the environment, history, and public policy).

Colleges and universities typically provide vastly more direct service to the community than do businesses of comparable size, for at least three reasons. First, our central business is education; we recognize that service can be a valuable form of education, even at a highly intellectual school like Reed. Second, we attract to the city a cadre of bright, enthusiastic, and energetic students, many of whom have a strong desire to reach out into their communities and provide service to them. Third, educational institutions are deeply embedded in their communities. We are, after all, local businesses who are tied to the communities in which we are located. Unlike most businesses, there is almost no danger that we will be taken over by some conglomerate headquartered in Atlanta or Zurich. Nor is there any realistic likelihood that we will move our manufacturing operations or our headquarters to another region if we get a better offer. Reed College is married to Portland, for better or worse, and that fact gives us a powerful incentive to support our community.

Fourth, higher education is a sustainable industry, in two senses of the word: environmentally and institutionally. Like other service industries, education is the model of an environmentally friendly industry. Reed College does, to be sure, have a research reactor, and our chemistry and biology departments do handle some toxic substances. But, by and large, we are a remarkably pollution-free and environmentally risk-free enterprise. More than that, those who populate institutions of higher education typically have belief systems that place high value on environmental protection and enhancement. Reed College, for example, has received local and national recognition for its energy efficiency, its conservation of water resources, and particularly for the restoration of the watershed that runs through the heart of its campus. In addition, as you know if you have visited the campus lately, the Reed campus is like a private park or arboretum that not only provides an important greenspace in the crowded city, but is used extensively by neighbors and visitors for walking, jogging, and even gardening.

Higher education is sustainable in a second sense, as well - its institutions are characterized by great longevity. Of the private entities that have been in existence in Western civilization for at least a thousand years, one is the Roman Catholic Church, and all the rest are universities. At age 92, Reed is a comparative adolescent compared to, say, Harvard or even Willamette University. But how many of the Oregonian's top 50 companies were in existence in 1911? How many will be in existence in 2111? Perhaps none. But Reed College will be (God willing), and so will Lewis & Clark College, and Willamette University, and most of the other institutions of higher education here today. The reason is that these institutions have a huge investment in their brand name, and a fiduciary obligation to those whose investments helped to build that brand name. Furthermore, as I stated earlier, these institutions will almost surely remain where they are. An essential part of our identity is our location, our campus. The Nikes and Intels will come and go. Reed College is here to stay.

Why is that important? Because communities need institutional continuity in order to help give them external identity and internal cohesion. The longevity of colleges and universities helps cement images of a city. To people around the country, Boston means (among other things) Harvard and MIT, New Haven means Yale. Princeton means . . . well, Princeton. The newer cities of the West need institutions with long histories and national profiles that can help anchor and amplify popular impressions of them. That is one reason why major league baseball franchises are so popular. But even baseball is not forever. Who - besides me - remembers the Boston Braves?

Internally, institutions of higher education provide a link with the past and a reassurance of the future. They serve to anchor the identity of neighborhoods. The neighborhood north of Reed College is called "Reed." Real estate ads for housing in Eastmoreland and Woodstock boast about proximity to Reed College. Perhaps most important, institutions of higher education serve to carry the memories of a community, which brings me to my fifth point: community. We all know that colleges carry the memories of those who attended them as students, who spent some of their most important and formative years in attendance at those institutions. But colleges and universities also carry the memories of the parents who sent their children to those schools, to people who served on their faculties, staffs, or boards of trustees, to neighbors who played on their grounds or attended lectures or concerts in their facilities.

This characteristic of colleges was brought home to me this spring when I attended three memorial services on the Reed College campus. One was for Betty Gray, one for Emilie Frisbee, and one for George Joseph. Their families chose the Reed College chapel for their memorial services because of the resonance of the college in their lives, and in the lives of their families and friends. In the case of George Joseph, the connection was obvious. He was a student at Reed. He was a loyal alumnus who had served the college in many capacities. He was a neighbor. Betty Gray and Emilie Frisbee, by contrast, did not attend Reed, but they fell in love with it. Their husbands, John Gray and Don Frisbee, have served for a very long time on its board of trustees, and Betty and Emilie adopted the college as if it were a part of their own families. Colleges, almost uniquely, have this effect on people. How many people choose to have a memorial service in the lobby of the bank where they used to work, or in the dining room of their golf club?

Having said all this, you may expect me to conclude by calling upon the state or the city to invest as much in its colleges and universities as in a major league baseball stadium or a downtown high-rise development. Well, I do think that the state and the city need to invest more in higher education, but that is not primarily my point. My point is simply to remind the owners and managers of businesses in this city that we, like you, do care about the environment for our "business." And we, like you, need support, not primarily subsidies, but understanding and appreciation of the contributions we make to the community. I know that we in higher education, and especially at places like Reed, have been viewed suspiciously - as remote, isolated, elitist. To the extent that those adjectives are still justified, I intend to do whatever I can to change that reality. And to the extent that those adjectives are unjustified - as I believe they are - I intend to do everything I can to change that image. There are many conceivable futures for Portland - some of them may include baseball or even gambling, some do not. But I would maintain, and I hope I have convinced you, that we in higher education are a central part of every conceivable - or at least every desirable - future for Portland. Thank you.

Colin S. Diver

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