How to add $1.6 billion to the region’s economy

“There’s only one number I need to predict the success of any city,” says the firebrand that is CEOs For Cities President, Carol Coletta.

“Talent explains 58% of the success of any city based on per capita income. So if we start with talent, what are the minimum gains we can make for a huge impact? It’s all in educational attainment.

Coletta’s message is receiving a great deal of attention from other cities around the country thanks to CEOs for Cities Talent Dividend tour which passed through Cincinnati this week. Based on the idea that the more educated a city’s population, the more robust its economy will be, the purpose of the tour is to provide the tools needed to increase the political and civic will to produce more college graduates which translates into demonstrative economic gains – or a city’s Talent Dividend. On a national level, an increase in educational attainment, measured by raising the four-year college attainment rate by one percentage point in each of the 51 largest metropolitan areas, would see an increase in per capita income of $124 billion per year for the country.

“The only way to make a difference in America is if you make a difference in American cities,” says Coletta. “Honestly it’s the Cincinnati’s that are going to change this country. The sooner Cincinnati can realize its destiny in doing that, the stronger America is and the more globally competitive we are.”

What makes the city dividend work exciting is that it demonstrates in seemingly overly-clear terms how a city such as Cincinnati can begin to make modest improvements in performance over where we are today that will pay off in very big ways.

The idea for City Dividends answers the question “what are modest improvements that can produce the largest gains for cities in three key areas:

• The Talent Dividend – increasing college attainment by one percentage point
• The Green Dividend – reducing vehicle miles traveled by one mile per person per day
• The Opportunity Dividend – reducing poverty by one percentage point

By achieving these goals within the top 51 metro areas (1million and above) the nation would see a $166 billion annual dividend for the nation with 124 billion coming from talent alone.

So what does that mean for Cincinnati?

“If you don’t have talent at the top of your economic development agenda, then you don’t have an economic development agenda,” Coletta says in a way that makes you believe she just revealed the secret to alchemy.

Attraction of new talent has long been a much talked about goal for Cincinnati and according to recent figures it is paying off. Out of the top 51 metro areas in the country, only 16 increased its population of 25-34 year-olds. Cincinnati was one of those 16 showing a positive influx. But for America’s competitiveness, we cannot simply re-shuffle talent out of Columbus and drop it into Cincinnati. We as a country receive no net gain. To compete globally, we need create and develop new talent from within our own ranks. By investing in our own talent base we create an educated population that produces more income with more skills that leads to more innovation and more productivity.

The study suggests that if we can move Cincinnati metro region’s current college attainment rate of 27 percent up one percentage point to 28 percent, then that could mean a talent dividend of $1.6 billion annually in personal income. “To get your one percentage point increase you need 14,500 students moving through a four-year college to get the $1.6 billion payoff,” says Coletta. “Even though we are measuring at a four-year college attainment, the benefit is moving the entire distribution curve forward.”

That means bringing everyone on the education spectrum up including elementary preparation, high school graduation rates, as well as two year college degrees and secondary education drop outs.

“You don’t get more people graduating from college unless you get more people graduating high school and that’s the key – you need to move the entire spectrum up 1 percentage point,” says Coletta.

Think about that. 14,500 more students graduating and staying in the region would bring an additional 1.6 billion dollars into the area.

“Once you get that number and realize we’re only talking about 14,500 people, that suddenly seems doable.”

It seems even more doable when you take into consideration that the region boasts sixteen separate colleges and universities. Were a concerted effort to take place in which each of these schools could come together and determine what it would take to increase enrollment across the board to reach the magic number, how soon would it take before we could consider doing even more?

Other cities are asking what they can do to begin this process but thanks to the efforts of Strive, Cincinnati is in the unique position to instead ask the question, “How can we build on what we are already doing?”

“Cincinnati is doing the best work in the country in thinking about the education continuum,” says Coletta.

The question for Strive leadership is what is the priority? Currently, the organization has identified a number of key strategic steps to achieve educational improvement ranging from pre-elementary prep to improving quality of schools and teaching and creating career pathways for graduates.

One possible initiative Strive is considering that could provide significant long term gains is through the idea of dedicated scholarships. A philanthropist in Kalamazoo, Michigan established a fund called the Promise which guaranteed every child in the city could receive free college tuition to a public institution. Strive leadership has determined if Cincinnati offered this promise to only the urban core of our region including Cincinnati Public Schools, Newport and Covington, the number of young adults with two or four-year degrees would double over the course of the next thirteen years.

“And this is just in the urban core,” says Jeff Edmondson, Executive Director for Strive. “It would take a significant investment, but it’s a single strategy that could boost the talent dividend that gets us closer to where we need to be.”
 
Whether it is the promise of a Cincinnati Promise or a combination of strategies, the fact remains that a unified approach to funding is needed to bring about the kind of change possible. “We need to think regionally – it’s not just a city thing or a county thing,” says Coletta. “The Dividend project puts real numbers behind the effort. It helps us all understand what we can invest and what we can get back on an annual basis.”

Conversations around education always seem to break down to a constant appeal for “more money.” But how much money is enough?

“If what we’re about is per capita income,” says Coletta, “then all we need to know is the education attainment rate.”

This is why the talent discussion is so important. It provides a no-nonsense formula. If you can achieve X, the result will be Y. The private, public and government sectors can all understand that this kind of investment, in the long term, is directly related to the survivability of the city which we all call home.

A statistic released by Newsweek last week states that the national unemployment rate is somewhere around 8.5 percent. Unemployment for those without a high school diploma is 13.5 percent. Unemployment among those with a four year degree is only 4.5 percent. The more educated talent a city has the quicker it is going to bounce back when times get tough.

“We are at a particular moment in time where we can go down one of two paths,” says Coletta. “One path is tremendously exciting and one is scary as hell. We’re not going to go down the exciting path unless our cities are leading the way. So we need to get smart real fast about what’s going to matter to city’s success.”

Photography by Scott Beseler