Statement by Alan Greenspan
Summit on the 21st Century Workforce,
June 20,2001
MCI Center, Washington DC

Early in the twentieth century, advances in technology began to require workers with a higher level of cognitive skills, for instance the ability to read manuals, to interpret blueprints, or to understand formulas. Our market-driven educational system responded: In the 1920s and 1930s, high school enrollment in this country expanded rapidly, pulling youth from rural areas, where opportunities were limited, into more productive occupations in business and broadening the skills of students to meet the needs of an advancing manufacturing sector.

At the same time, our system of higher education was also responding to the advances in economic processes. Although many states had established land grant schools earlier, support for these schools accelerated in the late nineteenth century as institutions located in states that specialized in agriculture and mining sought to take advantage of new scientific methods of production. A century ago, the content of education at an American college had evolved from a classically based curriculum to one combining the sciences, empirical studies, and modern liberal arts.

Universities responded to the need for the application of science--particularly chemistry and physics--to the manufacture of steel, rubber, chemicals, drugs, petroleum, and other goods requiring the newer production technologies. Communities looked to their institutions of higher learning for leadership in scientific knowledge and for training of professionals such as teachers and engineers. During this time, the scale and scope of higher education in America was shaped by the recognition that research--the creation of knowledge--complemented teaching and training--the diffusion of knowledge. In broad terms, the basic structure of higher education remains much the same today, and it has been one that has proven sufficiently flexible to respond to the needs of a changing economy.

Certainly, if we are to remain preeminent in transforming knowledge into economic value, the U.S. system of higher education must remain the world leader in generating scientific and technological breakthroughs and in preparing workers to meet the evolving demands for skilled labor. However, the pressure to enable all workers to benefit from the new technologies also requires that we strengthen the significant contributions of other types of training and educational programs, especially for those with lesser skills.

The notion that formal degree programs at any scholastic level or that any other training program established today can be crafted to fully support the requirements of one's full working life has become subject to increasing doubt. It is evident that we need to foster a flexible education system--one that integrates work and training and that serves the needs both of experienced workers at different stages in their careers and of students embarking on their initial course of study.

Community colleges, for example, have become important providers of job skills training not just for students who may eventually move on to a four-year college or university but for individuals with jobs--particularly workers seeking to retool, retrain, or simply to broaden their skills. The increasing availability of courses that can be taken "at a distance" over the Internet means that learning can more easily occur outside the workplace or the classroom.

Economists have long argued that a significant proportion of the work knowledge that one acquires in a lifetime is produced on the job. Several decades ago much of that on-the-job training was acquired through work experience. Today, businesses and labor unions are placing greater emphasis on the value of formal education and training programs--ranging from corporate universities to partnerships with community colleges and other providers--as well as relationships with public agencies, including welfare-to-work and school-to-work programs. These efforts recognize that technologically advanced learning must be grounded in real-world curriculums that are relevant to changing business needs and that it be provided in flexible venues that open access to development of skills to as many workers as possible.

Meeting the complex range of skills likely to be required of our workforce in the future presents a significant challenge to our educational system. But it is a challenge we cannot afford to ignore. We must provide young people with the opportunities and incentives to learn. We must ensure that our population at all ages and all competencies receives an education that will allow full and continuing participation in this dynamic period."