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Remarks Prepared for Community Foundation of Muskegon County Annual Gathering

Frauenthal Theater, Muskegon, June 27, 2017

John Austin, Director of the Michigan Economic Center

The Education We Must Provide Today for Success in the Economy of Tomorrow

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First it is an honor to join with you here. All of you involved with the Community Foundation
for Muskegon County are engaged in some of the most important and innovative work. To help
this great community which enjoyed such success and prosperity during the timbering and the
great industrial era—to find the path to new economic success and opportunity for your
residents, in a very different era.

You are leading efforts to reconnect to your spectacular waterfront, educate and innovate around
how to take care of your water, and leverage it for community redevelopment. Organizing to
meet the basic health and social support needs of your residents. Building up community
institutions and whole new industries. And today’s topic --how you show the way in making real
the kind of education your citizens need—to ensure they find their way and a secure place in the
economy.

I am going to do my best to talk you through the three the great economic revolutions we have
seen, including one we are in now, and what they mean for the education we have to provide.

We’ve had two great tectonic shifts in our economy and society over the past one hundred and
fifty years, and we are still needing to adapt our education system to the most recent one—the
knowledge and information revolution. Michigan has been a leader in the economic and
education revolutions of the past, and now, once again, we have to step up to lead the changes
we must make today.

So let me take you back and walk you through these big changes, and then talk about what we
must do now to deliver the life-changing education that is a prerequisite for economic success,
family security, and personal satisfaction in the world of today and tomorrow.

First remember that Michigan has always been a place of unrivaled beauty and natural bounty.
There were for millennia Native tribes and people’s here who thrived, and lived in harmony with
the abundant fish and fowls, clean waters, tall trees, and rich soil. Michigan, along with the other
states of what was then called the Northwest Territories, were sparsely settled by outsiders in the
early 1800s -- but were eyed by European settlers for our rich farmland and bountiful raw

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materials. When the Erie Canal opened in 1830 it made East Coast and European markets
accessible by water. Michigan’s population multiplied 7 fold in one decade as settlers flooded in
to farm the rich soil and began to export the grains, timbers and other raw materials.

This was still during an economic era when the vast majority of people worked on the farms, and
in the fields, or as artisans making tools they needed, or shopkeepers nearby who sold them
goods. The Northwest Ordinance that organized Michigan and our region also codified a
political model in the vision of Jefferson. We would be a nation of “yeomen farmers”. We
would have free men and women not slave. We would have local governments close to the
people – Hence we set up those governments as numerous small townships. And the Northwest
Ordinance also said: “Religion, Morality and Knowledge, being necessary to good government
and the happiness of mankind, schools and education shall be forever encouraged.”

And it was-- education was so important, valuable land was set aside in every township for a
school. Local school boards were established in every township to decide what should be taught
in those schools. (Appropriate at a time when most people grew, up, lived work and died in the
same local community).

Many colleges were established, most often by religious denominations, who competed in
college-building in the region. Their leaders believed, like Jefferson, that to provide stable
growth and to civilize the new communities of the frontier, you needed an educated population;
you needed to “train up” men and women of faith. Colleges also brought more learned and
enterprising people to your town, along with culture and civic pride.

This agrarian world began to change pretty fast. As in Muskegon, the great natural resources
began to be processed and converted. Giant paper mills grew, then chemical plants—Henry Ford
invented the assembly line and the auto industry and kicked off the era of mass production and
industrial manufacturing. The factory economy was born and grew to scale in Muskegon and
communities like it all around the Great Lakes. Migrants and immigrants flocked into the
growing cities to take the good jobs.

Over 100 years of great industrialization of Michigan and the Midwest, the vast majority of folks
now came to work in the mills, machine shops and factories in cities big and medium sized, like
Muskegon. They left the farms, and smaller towns.

A new education system was built to service this great new economy. More professionals were
needed - the managers, accountants, lawyers, engineers, and bankers of this new industry.
Teachers, doctors, ministers to tend the needs of the city dwellers. More professionalized and
standardized tradespeople were needed, with technical skills from phone operator to machinist,
carpenter and clerk, to perform particular jobs in the factories and offices. And while so much of
the education system was driven by what was needed for the growing jobs and occupations—
there remained strong belief in education as important to make good citizens, to build strong
moral fiber—and to allow the children of working men and women a path to a better life.

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These goals informed the educational model built to serve the industrial era. And Michigan led
the way.

More people did need a high school education, and a more standardized one too, that could
prepare them for trades or professions. In Kalamazoo the community came together in 1874 to
provide the first free Public High school in the country– Kalamazoo Central. In fact community
residents won a lawsuit versus other residents to tax themselves to provide a free high school
education, when high school education was not the norm.

The great First Public University & Land Grant Universities were started here in Michigan to
provide high quality, low-cost education for all, not just the elites—and in the case of MSU and
the land grant universities, the enabling legislation passed during the Civil war said these
institutions were expressly created to also fuel the growth of agriculture, commerce and industry

The first Community Colleges were created in the Midwest to prepare the new technically
trained workforce needed to serve this industrial economy.

This education revolution did amazing things to make a basic education and even a higher
education and a shot at a better life available for many more. But it also locked in a tiered
educational structure designed for this economy. A certain number of people-- 20% or so --
would be the professionals, the managers, the doctors, and lawyers and teachers that needed a
college education—so we’d put them on a college prep path. We built a big vocational
education system for the 50% of those that would not need college, but a specialized skill for an
occupation they would do the rest of their lives. And finally, for those who could not cut
either—we’d have a general track, a basic education, to civilize, keep them of the streets, and
hopefully graduate high schools and enough discipline to at least perform one of the many low-
or no skill jobs. Sweeping floors, stacking inventory.

And this is largely the education system we still have today.

The problem is no longer do the overwhelming majority of people work as blue collar laborers,
assembly-line factory workers, or factory- like offices with row after row of bookkeepers,
secretaries or phone operators, with the manager in the corner office.

A second great revolution in our economy has occurred. The microchip and the computer. With
global trade and transportation, and modern communications, routinized low-skill work can be
done cheaper in developing countries, or automated and done by robots. More and more of our
work is manipulating ideas, data, information, in fast-changing teams and projects, and done in
front of, or with help of a computer whether in an office, hospital, farm or classroom.

The information age and knowledge revolution has meant the dominant occupation today in
advanced economies (and the only way they can stay advanced and earn high wages) is the

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“knowledge worker”. In today’s economy over 60% of people in advanced societies do
knowledge work. And all the new jobs that pay anything are in knowledge work.

And in an economy that changes faster and faster, whole new occupations are created almost
overnight (think “web designer” “App maker”,) while others disappear at the same speed (think
Travel agent, think personal secretary). There are no stable career ladders or pathways, no
lifetime employment, everyone is a “free agent” in a totally contingent employment labor
marketplace. And the right metaphor for career progression is “rock climber”, not ascending a
predictable career ladder. To succeed as career rock climbers, everyone has to have the skills and
abilities, and networks to stay on the cliff face, spot the next crevice or employment opportunity,
have the skill and ability to learn, or earn the credential or skills needed to grab it—and not fall
off the cliff.

Clearly this economic reality, demands a very different education system.

First, and most fundamentally, today everyone needs an education we used to reserve just for a
few:

“Only those that can offer the world’s highest skill levels and the most creative ideas will be able
to justify the world’s highest wages. Very high wage nations must now abandon the idea that
only a few of their citizens need to have high skills and creative capacities. This is a new idea in
the world, the idea that all must have an education formerly reserved only for elites.”

Mark Tucker, Standing on the Shoulders of Giants: An American Agenda for Education Reform,
May 2011

Second, everyone has to be an entrepreneur on their own behalf, and our education system has to
deliver to every learner the skills of the entrepreneur.

“The old paradigm of a climb up a stable career ladder is dead and gone. No career is a sure
thing anymore. The uncertain, rapidly changing conditions in which entrepreneurs start
companies is what it’s now like for all of us fashioning a career. Approach career strategy the
same way an entrepreneur approaches starting a business. …Ditch the grand life
plan…experiment, adapt…”

Reid Hoffman, LinkedIn founder to Thomas Friedman, The Start-UP of You, NYT 7/17/2011

The business guru and industrial scientist Peter Drucker, who coined the terms “knowledge
work” and worker, also laid out the education and skills the knowledge worker needed…As he
put it: “we are moving from the era of the blue collar industrial worker to one dominated a
growing class of technologists (computer and medical technicians, engineers, educators and
market researchers)”. They need the facility for “flexible specialization”—the ability to learn and
apply highly specialized skills and move rapidly from one job to another—from market research

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to management, from nursing into health administration, from appliance repair to small business
entrepreneur..”

What does this all mean for the education we have to provide now for the economy of today and
tomorrow? Several things:

It means everyone needs a solid foundation in generalizable skills – solid competency in
numeracy, communication skills, use of history to inform insight, the scientific method…all the
stuff we are trying to also make consistent from community to community—township to
township. In a truly integrated economy, where a student from Muskegon may end up, or wants
to end up…but certainly needs to be ready for the University of Michigan, or Muskegon
Community College; and they need to have the skills to compete for work with young people
from Marquette or Monroe, and also from Boston or New York, Bangalore or Shanghai.

But also everyone needs the skills that are what some call soft skills, what some call new basic
skills, what others have more recently labeled the 6 c’s: Critical thinking and problem-solving,
collaboration and teamwork, creativity, confidence and “grit” –The skills you need to keep
learning, and learn how to get to a new spot on the career wall.

And we all have to appreciate the knowledge economy rewards those who put the hard and soft
skills together, those who are the innovators, the ones with the new creative approach to a
product, a problem, an issue. Think of the engineer and liberal arts aesthete Steve Jobs. Think of
the artist that designed the car you buy or the phone in your pocket. Think of the anthropologists
who found how to stop the Ebola epidemic, or those who are exploring how people will want to
communicate in the future, so they can make the new device.

And everyone, everyone needs to learn, and learns best, when the academic and foundational
discipline skills (reading, writing, science), and the soft skills (critical thinking, teamwork) are
taught in an evolving serious of specialized contexts – e.g. learning your stuff in an project
driven class, out in a work-work context; organizing all our learning in a STEM, or arts, or
financial theme. That is how you are needing and going to have to spend your life: learning,
learning anew—finding a new path in a new context, while adding real value if you are going to
be paid.

And everyone needs to learn in open-ended, non-terminal learning programs. Yes you can train
someone to operate a CNC machine or be medical technologist (occupations in high demand
today)—but as the movie “Hidden Figures” shows so vividly, the job of “human computer”
today will give way to “computer, computer” tomorrow, and the education system has to make
sure every individual has the skills to move on and up to the next rung, and become the person,
maintaining, programming the computer or designing and building the next version!

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So everyone needs the basic academic and discipline knowledge. Everyone needs the new soft
and critical thinking, creativity and problem solving skills. Everyone needs to learn in one of
thousands upon thousands of different open-ended series of applied learning contexts.

And everyone has to be able to learn and move in their own way, and at their own pace…

And oh, if that weren’t enough, the economy of today and tomorrow demands everyone have as
a starting point, some form of postsecondary credential, certificate, or degree that allows them to
participate and navigate in the economy of today and tomorrow. There are no good, paying jobs
anymore for people with no or little skill and just a high school degree. And the education system
has no business preparing people for no-skill and dead end jobs!

It’s very clear the higher your postsecondary credential earning level—the more you can achieve
financially, the better able you are to take care of your family, more likely to keep your job in a
recession, and the greater the chance you will be the entrepreneur-- the one who creates jobs for
others. Your postsecondary credentials and the skills they embed are what allow you to keep
moving up the rock-face, spotting what additional skills and credential you need for the next
opportunity, and learning what it takes to get there.

So you all are no doubt thinking... whoa! That is a tall order. How do we do all that?

And yes, it is but we must.

So first we have to blow-up the current education paradigm and get its imprint out of our brains.
We don’t need an education system where some are assumed to be high-flyers, others not. We
don’t need one education path that slots some onto college bound—some into career technical
education—and others into checkbook math for four years. We need one education system that
builds the same robust skills and supports for each learner, and helps them reach the highest
possible destinations in a host of different fields and disciplines!

We have to reorganize the learning system to support this learning model. What happens to
individual students the classroom and outside the classroom, where and what they learn, in which
themes and contexts, with whom, and at what pace…all has to change.

A huge piece of this work is about better supporting and equipping teachers with the skills and
ability to manage a different personalized, contextualized, and connected learning experience.
We need a big investment in teachers--their preparation, their skill-building, their long-term
career satisfaction.

Other essential enablers of this this new model are providing the right resources—yes to train
and support educators—but also to spend money differently—to make sure different resources
are available based on the costs of the learning, and the particularly needs of the learner. Poor
kids and others with greater academic needs, need more support. In-person quality teaching,
career guidance and counseling, early and middle colleges, and applied STEAM academies

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where high schoolers learn on college campuses, with modern labs, studios and facilities, cost
more than elementary schools or virtual learning. We need a differential funding model not one
size fits all.

And we have to make sure we aren’t wasting resources on a school choice model that isn’t
educating kids—we have 200,000 fewer k-12 age students in Michigan over the past decade, yet
over 350 new school districts and cyber schools have opened. We are not controlling this
marketplace to ensure quality- so we are wasting precious taxpayer-funded education resources
we do not have. We need a community driven, quality control “certificate of need” process to
determine what schools are needed in every community and insist every school delivers a quality
education.

We need to pay for postsecondary education for everyone—to make sure a family’s income is
not an obstacle to a higher education—just as Kalamazoo did for high school learning 150 years
ago and did again for higher education recently with the Kalamazoo Promise.

And that is why what you all are about to do here and announce in Muskegon is so important and
powerful.

Societies’ rise when our collective wealth and dollars are put back to work to support access and
opportunity for education and the chance for many more to access the middle class. When one
generation works and sacrifices so the next one has an even better chance. Societies fall when
those doing well keep hoarding more and more until there is rebellion and revolt.

For Years America and Michigan build and grew a broader prosperity and a growing middle
class, and improved the lives of so many by putting great education and higher education
available within reach of everyone.

Education is the only thing we know that can close big gaps in income between haves and have-
nots. It is the most powerful way to help the next generation to be better off than the last.

I’ll exit the stage and just say, as we as a state and society need to step up to do our bit to get
everyone the educational opportunity they deserve- I am thrilled to see you here in Muskegon
come together to do more than your bit at the same!

Thank you!

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