The Good, the Bad and the Ugly at the Leadership Summit

Jon Perr

Last Monday, hundreds of Oregon's business captains, political players and community leaders came together in Portland for the 4th annual Oregon Leadership Summit.  The daylong agenda showed the significant progress the state has made since the Oregon Business Plan was formed during the depths of the recession.  Unfortunately, the event also highlighted the good, the bad and the ugly of Oregon economic development.

Overall, the tone and tenor of the Summit was upbeat, and for good reason.  Pulling out of the recession, Oregon ranked 8th in the nation in job growth from September 2004 to 2005, with only Idaho performing better among northwest states (according to the 2006 Competitive Index produced by the OBP).  Incomes, too, have started to improve for Oregonians, with gross state product estimated to expand by as much as 5% in 2006.

Perhaps more important that the promising news was the Summit's overwhelming consensus regarding the central role of education in driving future economic success - and higher living standards - in Oregon.  Senators Gordon Smith and Ron Wyden echoed the sentiments of new Oregon Business Plan chairman and Pixelworks CEO Allen Alley, who exhorted the audience that "training our children to be prepared for their future responsibilities is not so much a question of civic duty, which it certainly is, but is in fact, a moral obligation."

Governor Kulongoski, too, used the summit stage as a bully pulpit for major education reform.  In a preview of what no doubt will be a major theme in his 2006 reelection bid, the Governor spoke of a new "Education Enterprise" that would provide seamless "K20" education encompassing all levels of schooling from primary and secondary through community colleges, universities and graduate study.  Seeking to break down current budgetary and bureaucratic fiefdoms, Kulongoski put it simply, "The more we put into education the more we will get out of the economy."

The Oregon Business Plan, and the set of initiatives pursued by its business leadership team, also received general praise from speaker Professor Michael Porter, who heads the Institute for Strategy and Competitiveness at Harvard Business School. Porter, a pioneer in the application of industry clusters to economic development, endorsed Oregon's leverage of its natural endowment, resources and sustainability.  He also lauded the state's support of over 40 economic clusters old and new, whether fisheries or timber, biotech or software.  "All clusters are good," Porter noted, adding that there is "no such thing as high-tech clusters or low-tech clusters, only high-tech firms and low-tech firms."

But it was Porter who also provided some of the more sobering assessments of Oregon's economic competitiveness.  Oregon, he noted, trailed the national average for state income per capita, in part due to a much lower work force participation rate (61%) than the country as a whole (66%).  Worse still, while Oregon overall ranks in the top 10 in patents awarded per 1000 residents on the strength of firms such as Intel, HP and Tektronix, its universities lag badly, with OHSU ranked 75th, Oregon State 135th, U of O at 206 and Portland State almost off the charts at 422nd.  "Oregon is lacking a research-based university system," Porter intoned, and has "not yet risen to the level where it is competitive."

Which brings us to the 800 pound elephant in the room.  Despite the overwhelming support of the Summit audience for education reform (as evidenced by a less-than-scientific vote among attendees), no one addressed Oregon's self-imposed budgetary strait-jacket that will make major improvements at all levels of education difficult at best.

Defying credibility after last session's $200 million stalemate House Speaker Karen Minnis said last Monday "I don't know one Democrat or one Republican who wouldn't want to give as much to education, not just dollars but policy."  Ranked 27th in per student K12 spending, 43rd in the ratio of students to online computers, and below average in per capita R&D expenditures at its colleges and universities, Oregon simply will have to provide more resources for future market results to match last Monday's rhetoric.

But on that point, the Oregon Leadership Summit was largely silent.  There were no calls to undo Oregon's income tax "kicker", which enshrines recession in the state's tax and budget policies.  There were no calls for Oregon, with among the highest personal income tax burdens in the country, to seek more from its corporations, which benefit from one of the lowest tax rates in the nation.  Ballot measures previously approved by voters only tighten the handcuffs. Across the state, Oregon's business community has the clout - and the money - to be perhaps the only force capable of driving reform of that magnitude.

Perhaps that will be the agenda for the Leadership Summit in 2007.

  • Gil Johnson (unverified)

    This is a fine, concise and cogent analysis, though I have to point out that elephants commonly weigh more than 800 pounds.

    I don't think the corporate sector is going to voluntarily pony up the bucks to fund education adequately, but they also aren't going to bail on Oregon if the voters make them pay more taxes for education.

    One troubling thing is that there probably is a big difference between what most of us think of as "education" and how the business sector defines it. Corporations want our schools to create ideal employees for them, and that doesn't necessarily include an education in arts or humanities or civics (although if corporations were smarter, it would).

  • Jon (unverified)

    Sadly, my effort to use "800 pound elephant" (rather than the usual "800 pound gorilla") for partisan political symbolism was a feeble one. That would indeed be one amaciated pachyderm.

  • Steve Schopp (unverified)

    Oh yes the Summiteers.

    US Sen. Ron Wyden best represents the summiteers at yesterday's economic summit. (story link below)

    "At the end of the day, we can do everything else right, but if we muff the education piece, we aren't tapping our economic potential," Sen. Ron Wyden said.

    "Everything else right"? Apparently Ron doesn't live in the State and rarely reads about it. But that doesn't explain the collective out of touch condition the summiteers demonstrate.

    In the real world of Oregon it's tough to find an arena where our policy makers are "doing things right". Severe problems exist at nearly every major agency and program.

    Moreover, the fresh call by the summiteers for the State to "Raise academic standards so that students are college-or job-ready when they graduate from high school" is a remarkable verbatim repeat of the rhetoric which spurred 15 years of "muffed" CIM/CAM school reform for the 21st Century.

    Now the same people who perpetrated and perpetuated the 15 year muff are calling for the same thing all over again. With the same people doing the same things only with more money thrown at the same system.

    There is some fresh rhetoric about "seamless transitions" and "transparent budgeting for dollars to follow students" but what the heck does that mean. More busy work for OUT of the classroom bureaucrats? Of course it does.

    This can only be about the pursuit of additional funding without any genuine regard for results or their own track record.

    How many "muffs" without any accountability or consequences will Oregonians stand for.

    Steve Schopp

  • Jeff Bull (unverified)

    That's a fine post, Mr. Perr, better than The Oregonian's write-up on the subject, certainly. And the last commenter gets at how receptive the audience for all that increased spending is likely to be. Think I'll crib this for my site...

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    Steve, perhaps you don't understand Wyden's turn-of-phrase... It means, "If we get education wrong, nothing else matters." It's not a suggestion that we're already doing everything right.

    Oh, the hyperbolic insanity of the right-wing bores me.

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    I attended the City Club's State of the Economy event last Friday and heard much of the good news and the mixed news.

    But one moment left me blank--when Chris Smith asked about how we can explain the population growth in the Central City combined with the loss of jobs in the Central City, state economist Tom Potiowsky essentially pooh poohed any claims that movement of people and jobs to Vancouver means anything. To paraphrase, he thought that relocation to Vancouver has peaked; that people will begin to move back to Portland to be "close to the action", and that the only reason people have been moving to Vancouver is to escape state taxes.

    And this is the economist who has the governor's ear? Mary King of PSU quickly responded that virtually everyone she knows who has moved to Vancouver has done so because of schools and housing prices, which fits precisely with my own experience.

    What left me worried, though, was what felt like a complete disconnect both with Chris's main question and how serious the educational crisis is in the city.

    I will give Potiowsky this, though: he did give a clarion call to end the corporate kicker.

  • Steve Schopp (unverified)

    Kari said; "Steve, perhaps you don't understand Wyden's turn-of-phrase... It means, "If we get education wrong, nothing else matters." It's not a suggestion that we're already doing everything right."

    What a petty thing to choose to comment on.

    I know what Wyden said.

    He implied we are in a circumstance of getting many things right, possibly everything, except education. So we better fix education or it will screw up everything else.

    Your version is as sad as his.

    We are currently "muffing" education and have been for many years, while doing the same with land use, transportation, criminal justice and illegal immigration.

    Of course other things matter even if we "muff" education.

    Wyden's observation lacks any collection of real measurements of where we are on those fronts.

    The Summitt is riddled with generalities, sloganeze and theoretics. None of which describe any remedies for anything at all.

    Did you find or read any?

  • MsBlue (unverified)

    One of the things I noticed about the educational plan that came out of this event was talk of K-20 education.

    Wait, whose goal is K-20 education? I thought we were aiming for Pre-K - 12 or Pre-K - 16----giving more of the underclass opportunity. I'd be proud of a top notch public university in this state. But K-20 sounds seriously like getting the public to more fully participate in the PHD's that a few industries rely on...doing their topgrass workforce training, and by omiting Pre-K, keeping available the folks who will wash their dishes at restaurants, build or clean their oversizied homes and accept an ever decreasing standard of living.

  • Marvinlee (unverified)

    The Oregon Business Plan did put out six excellent education papers. In total, they represent the best thinking that I've observed thus far from the business sector.

    The call for seamless education, whether dubbed PreK-16 or PreK-20, offers an opportunity to consolidate the education systems and perhaps eliminate one or more years of seat time. As boomers retire we may have labor shortages. If so, more efficient education could provide educated workers sooner than now.

    The money discussion misses the point. We are suffering major trade deficits to competitors that also value education yet spend less on it than we do. More education, but at more cost, is no longer a long-term viable response for us, given our growing economic ills. Education already costs the country about $900 billion dollars a year, officially, and about a trillion dollars if better accounting systems were in place.

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