
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: THURSDAY, November 3, 1994                   TAG: 9411030047
SECTION: EDITORIAL                    PAGE: A-12   EDITION: METRO 
SOURCE: JAMES V. KOCH
DATELINE:                                 LENGTH: Medium

FEED THE 'GAZELLES'

IN RECENT weeks, the attention of the commonwealth has been riveted on the hotly contested race for the U.S. Senate and the prison/parole issue. Albeit unintentionally, this has pushed aside a discussion that also is absolutely essential to Virginia's future - economic development and job creation.

The foremost national expert concerning job creation today is David Birch, who has written books such as ``Job Creation in America'' and ``Entrepreneurial Hot Spots.'' Birch's work, which has been featured in Fortune magazine on several occasions, uses Dun and Bradstreet data on individual firms to identify employment trends long before they become evident in macroeconomic data. He finds three things:

By far the most jobs being created today are generated by companies that he labels ``gazelles'' - small, rapidly growing organizations that more often than not have a technological, information, medical or service base.

The communities and areas that produce the most gazelles (``the entrepreneurial hot spots'') almost invariably are university communities.

Higher education is the single most important ingredient in producing gazelles. Other important factors include climate, airport transportation, attitudes toward entrepreneurial activity, etc.

The implications of Birch's work have never been seriously disputed. He argues that Virginia should be spending more, not less, on its system of public higher education, and that Virginia should reward those institutions that do the most to produce gazelles.

Public colleges and universities in Virginia have been actively engaged in ``restructuring'' themselves via initiatives ranging from Old Dominion's TELETECHNET distance learning system to Radford's College of Global Studies. To become more efficient, individual campuses have pared back on administrators, are making it possible for students to graduate in three years, and are ``privatizing'' a host of services.

But while restructuring higher education and becoming more efficient are both valuable and necessary, it should not distract us from the fact that Virginia now ranks among the bottom 10 states in terms of the tax support it provides per public university student, and in the top 10 in terms of tuition levels.

By contrast, in North Carolina the situation is almost the reverse - North Carolina supports its universities well, and its institutions charge only moderate tuition. This is one of the reasons (along with closely related developments such as the Research Triangle) that North Carolina has forged ahead of most other states in economic growth. North Carolina has capitalized on the fact that each $1 million of newly funded university research activity typically translates to 38 new jobs.

It comes down to this - the evidence strongly indicates that higher education is the major engine of economic growth in the United States. If we choose to ignore this fact, we will pay the consequences for years to come in the form of higher unemployment, lower incomes and deteriorating public services due to diminished tax collections. It's our choice to make.

James V. Koch is president of Old Dominion University in Norfolk.

by CNB