Is Economic Development the Job of a University?

The other night on CBS Evening News, we learned about how our state government is – to quote the report – “investing in public universities to turn South Carolina into a center for high tech.” (You can watch the segment here.) The report focused on a company called Proterra, a manufacturer of electric-powered buses located in South Carolina’s Upstate. Proterra, we learn, has teamed up with Clemson University’s International Center for Automotive Research (or CU-ICAR) and a lottery-funded program called SmartState, to bring high tech jobs to Spartanburg.

“Since 2003,” the report says, “the state has spent $200 million in lottery funds to bankroll research centers at public universities like Clemson, creating technology hubs that they hope will attract new industries and create jobs.”

The report takes a more positive tone than some critics of state-driven economic development might prefer, but the above sentence is a sufficiently accurate statement of what SmartState is intended to do: “bankroll” public universities with yet more public money and “hope” to attract jobs.

The report neglected to mention that South Carolina lawmakers put taxpayers on the hook for as much as $40 million just to bring the Colorado-based company to the state. Nor did the report mention that the heavily grant-dependent company almost went under after a major investor was convicted on fraud charges.

Aside from all that, though, the whole subject raises an important question: Does this have anything to do with the purpose of a public university? Is this why South Carolina’s taxpayers are sending millions of dollars to public universities and paying ever higher tuition costs – so that those universities can create “research centers” that will in turn create “technology hubs” that will then – they hope – create jobs?

If that sounds pretty far afield from what you thought taxpayer-supported universities were supposed to be doing, keep reading. It’s worse than you think.

Indeed, South Carolina’s state institutions of higher learning have sometimes veered so far from their core mission of educating young people that one sometimes wonders if they should be called “colleges” and  “universities” at all.

•     The University of South Carolina in Columbia, for instance, has pumped more than $100 million into a public-private economic development scheme called “Innovista.” The problem is that the “private” side of the equation hasn’t materialized, and after more than five years the scheme has attracted virtually no interest from the private sector.

•     Coastal Carolina University has been trying for years to buy an overpriced golf course. What this has to do with higher education has never been made clear.

•     The South Carolina Technical College System has recently begun to pour public money into financially questionable “green” job-creation programs – essentially using tax dollars to give some businesses a competitive advantage over others.

•     Clemson University operates a $98 million wind turbine center in Charleston. About ninety percent of its funding comes from taxpayer-funded sources. This, by the way, differs from the Clemson University Center for Economic Development, established in 2006 to “foster economic development in South Carolina by providing research and technical assistance to organizations and areas concerned with job and income creation.”

Of course, if our public colleges and universities were providing quality higher education to our young people at an affordable cost, all this high-dollar mission creep might not be so offensive. Yet, as we revealed last week in a report published jointly with the American Council of Trustees and Alumni, our public colleges and universities have been raising tuition at much faster rates than South Carolinians can afford – even as the quality of higher education in South Carolina has suffered. These schools, as our report shows in detail, are constructing expensive new buildings even though existing ones are underused; and instead of competing against each other for academic excellence, they’re vying for taxpayer dollars with no regard to the interests of taxpayers or the state as a whole.

A modest proposal: Our taxpayer-supported colleges and universities should get back to their mission of educating young people – and leave economic development to the market.