(Editor's Note: This is the second of two articles exploring the challenges faced by higher education in coming to grips with the role of four-year colleges and universities in serving the economic development needs of their regions and states.)

The concept of an economic development mission for higher education is as old as the creation of land grant colleges more than 150 years ago. And Elson Floyd understood that from the time he arrived at Washington State University in 2007 as president of this state's first land grant university.

"As a land-grant university, economic development is a core part of our mission," Floyd said, noting that one of his first acts upon arriving in Pullman from Missouri, where he had been president of the University of Missouri, was creating an office of economic development.

Elson Floyd.

When Congress created land-grant universities, their educational mission was is to focus on the teaching of "practical studies like agriculture, science, military science and engineering."

And those constituted the educational focus of what was Washington Agricultural College and School of Science from its founding in 1890 until 1905 when it became Washington State College.

That land grant status is an important historical asterisk as Floyd's four-campus university is among the colleges and universities around the country challenged by the emerging effort to press higher education to play larger roles in the economic development initiatives in their states.

That linkage between higher ed and economic development has been under scrutiny around the country as various states have been exploring what role colleges and universities should play in helping grow the economies of their states.

The issue was brought to the fore in this state in recent weeks with a report to the board of regents of the University of Washington by the Washington Future Committee, headed by former regent William Gates Sr., which suggested UW could do more despite itsobvious and significant economic impact.

The group of business and civic leaders Gates chaired urged UW to increase the number of in-state students, keep tuition affordableand increase the number of STEM degrees and do a better job of telling its story to key stakeholders.

UW President Michael Young and the regents will now have to digest the report and weigh its relevance to how the state's major research university charts its future.

For the state's other major research institution across the state, Floyd says "Our economic development activities are many," pointing to "research and its translation through commercialization," the small-business development centers WSU operates around the state as well as extension activities in every county in the state.

"From the beginning of my tenure here, I knew we could have a tremendous regional economic impact by leveraging our institutional strengths through our array of programs," Floyd said in an exchange of emails for this column. "The power of the research university is tremendous in helping to drive economic impact."

But Floyd noted "WSU cannot be all things to all people. In our ongoing effort to continue to refine our mission and ensure we are aligned with the state's needs, our institution is continually asking our stakeholder how we can better serve them."

"We have listened to our communities and, as a result, have made 

changes to what we do and where we do it," he added, noting the health sciences focus in Spokane, the bio and alternative fuels focus in the Tri-Cities with PNNL and aerospace programs in Everett in cooperation with the local community college

The economic-development look is also under way at the state's regional universities, including Central Washington University in Ellensburg.

James Gaudino

CWU President James Gaudino, who spent 15 years looking at higher education from the outside as executive director of National Communication Association, says "It would be irresponsible for a public institution to ignore the economic-development need" of its state or region.

Gaudino, an Air Force Academy grad who came to Central as president on January 1, 2009, says all of the state's universities, in looking at programs in the wake of increasing budget restrictions, used workforce demand for students in the various programs as a key factor in the belt tightening.

"While we have a growing awareness of how a major fits the industry needs, we retain a strong commitment to liberal arts," said Gaudino, who was the founding dean of the College of Communication and Information at Kent State University before coming to Ellensburg as president of one of the three regional universities.

Gaudino, who drew praise for turning the Kent State program into a center of innovation in the new information age, notes all the universities have advisory groups from industry for each of their schools to "keep an ongoing dialogue about industry needs and how we can best satisfy them."

But, in an observation that would be echoed by presidents of all six universities in the state, Gaudino said: "We don't want to live in a society that doesn't have artists and humanists or where people have no knowledge of or appreciation for history. And no one would want to move their company to such a place."

Gaudino has launched a Center for Innovation and Entrepreneurship and it is the focus on innovation that the University of Washington, in particular, would say is a key contribution it has made to economic development.

Yet ironically, what's called tech transfer is an area where the efforts by the state's universities have drawn criticism for a lack of focus or commitment.

Len Jessup, former dean of the business school at WSU and now dean of the Eller College of Management at University of Arizona in Tucson, concedes that many research universities across the country just haven't been able to deliver on the tech transfer and commercialization front.

"For some it just hasn't been a priority, for others it just wasn't accepted by their campus cultures, and for others 'wanting' to do more of it just wasn't enough to overcome their inexperience in this area," Jessup told me in an email exchange. 

"On the other hand, I would say that nationally the collective of all the research universities has gotten better at this as more and more universities improve on metrics like faculty invention disclosures, patent filings, licensing, start-ups, start-ups that get to revenue, and jobs created as a result," Jessup added. "Things are clearly getting better and they are leading to new jobs."

(Editor's Note: This is the first of two articles exploring the challenges faced by higher education in coming to grips with the role of four-year colleges and universities in serving the economic development needs of their regions and states.)

As institutions of higher education come to terms with the expectation that they should adopt a mission to serve the economic development needs of their regions, some in academia may recall wistfully Thomas Jefferson's view that "education, as a lifelong encounter with the delights of the mind, is an end in itself."

But a growing number of leaders in higher education might view a different Jeffersonian observation as more appropriate today: "Education is a highly legitimate claimant on public treasuries."

The point of the latter quote, in the view of many within the higher ed system and in other segments of society, is that institutions of higher education provide economic value and should receive financial support accordingly.

The issue was brought to the fore in this state in recent days with a report to the board of regents of the University of Washington by the Washington Future Committee, headed by former regent William Gates Sr., which suggested UW could do more despite its obvious and significant economic impact.

The group of business and civic leaders Gates chaired urged UW to increase the number of in-state students, keep tuition affordable and increase the number of STEM degrees and do a better job of telling its story to key stakeholders.

But well before the Gates report, Initiatives have been under way across the country to explore what role colleges and universities should play, and, how, in helping grow the economies of their states.

UW President Michael Young and the regents will now have to digest the report and weigh its relevance to how the state's major research university charts its future.

Nowhere is the process of higher ed's role in economic development being scrutinized more than in North Carolina. There a process is under way that has each of the state's college and universities being asked to define their mission and answer how the mission is serving the needs of the state today.

"It's basically a hard look at what the state needs to meet its education and economic needs," says Sam Smith, the WSU president emeritus, who has been hired as a consultant to help the North Carolina process.

"They got me involved to see how they are using modern technology and online education to meet the needs of the state," explained Smith, who as WSU president from 1985 to 2000, launched WSU's three branch campuses and helped the launch of Western Governors University as an online accredited university. Still a member of WGU board of trustees, Smith guided the launch of WGU-Washington in early 2011.

Smith says he is currently advising colleges in a handful of states as part of his role with a Sacramento-based higher-education consulting organization called Collaborative Brain Trust, one of whose focuses is consulting for colleges and universities in dealing with the challenges of change they face.

"It's as simple as if institutions are doing a better job of meeting the needs of students, they'll get more students and more pay for what they are doing," Smith said.

Smith notes there's a challenge for colleges and universities facing increasing budget pressures and for businesses seeking the educated work force necessary to grow and compete and both challenges need to be addressed by those who would have higher education serve economic development needs of their states.

Those who help chart the changes higher education needs to make have to understand that "there's little incentive, from strictly a business point of view, for universities to increase the number of students and there's no reward for them to increase the percentage of graduates or to decrease the time it takes to get a degree," Smith said. "And there's little incentive for a university to see to attract middle-income students since those are the student least likely to be able to afford college."

And he pointed out that "many businesses don't feel there's a lack of educated people for them to hire because they are hiring students from other states. In essence those businesses think it's easier and less expensive to have a system where they hire those educated elsewhere.

"Higher education institutions who hope to become a more essential part of producing the state workforce of the future need to convince those businesses we're talking about that in-state schools can better tailor their programs to fit the changing and emerging needs of the state's economy," Smith added.

Smith lauded the University of Washington Medical School for the partnering arrangements it has developed.

Smith suggests that the fastest-growing segment of "the new model" for public universities will be what is referred to as the 2-4, meaning four-year institutions partnering with community colleges, which already have built a reputation of working with businesses to determine their workforce needs.

"One of the first things I do when I go into state to examine how things are working is to look at the primary medical school to see if it is a silo or is working with others," he said. "If the medical school is a silo, it tells me that the university isn't involved with others and isn't interested in changing."

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(Next: Elson Floyd, president of Washington State University, brought with him when he arrived here in May of 2007 from Missouri a conviction that economic contribution should be a key measure of how well an institution of higher education is fulfilling its mission.

And James Gaudino, who became Central Washington University president in 2009, spent 15 years looking at higher education from the outside as executive director of National Communication Association. He says "It would be irresponsible for a public institution to ignore the higher-education need" of its state or region. They share their thoughts on the next Flynn's Harp.)

To those who have watched the leading role Washington State University has played in distance education for nearly a quarter century, word that WSU's online MBA programs have been ranked No. 1 in the nation by U.S. News & World Report will seem like appropriate recognition.

But the honor isn't viewed by College of Business Dean Eric Spangenberg, or WSU President Elson Floyd, as the culmination of a chase for rankings. Rather, as Floyd put it, "Our goals are to increase access, improve quality and push the envelope of educational innovation. We have and will continue to experiment with the most promising approaches to digital instruction for connecting students to WSU."

Dean Eric Spangenberg

Indeed the success of Spangenberg and his team in being chosen as at the forefront of online MBA programs nationally is far beyond the early distance learning WSU established when a microwave-tower relay system brought higher ed to new branch campuses in Vancouver and the Tri-Cities.

In the view of Sam Smith, who as WSU president at the time oversaw launch of the branch campuses and was the key college president involved in development in the late '90s of Western Governors University (WGU), the WSU honor is a key indicator of this state's leadership in on-line education.

Smith was instrumental in getting legislative approval two years ago for the launch of WGU-Washington to provide online baccalaureate degrees. And he suggests:"Watch our state's two-year colleges because they are on the forefront of one of the next real stages of this evolution."

"It has long been predicted that America' system of higher education must evolve new and more creative models of institutions to meet the needs of our students and our country," Smith said. "The state of Washington, with WSU's leadership, is doing just that and if you combine it with the online, competency based WGU-Washington, we are truly leading this evolution.".

Janis Machala, long involved in coaching entrepreneurs and now guiding online programs at Bellevue College, picks up on Smith's comments by noting she "fell in love with the role of the community colleges" because of their ability "to be more flexible and entrepreneurial in meeting employer needs and because of the focus on employable job skills versus theoretical education."

While there's more than a little challenge to bringing those getting their degrees and MBAs online into the normal university experience, the social media evolution is enhancing the opportunity to do that, says Cheryl Oliver, director of graduate business programs at WSU.

"I think one of the biggest challenges we have had in entering the online arena is a public misunderstanding," Oliver noted. "People tend to believe that going online means boxing up a brick and mortar program and trying to replicate a traditional classroom online. While we do offer the same core material (course topics, etc...) online education is a class unto itself."

Spangenberg, who praises Floyd for being "instrumental in encouraging us to pursue excellence in this learning space" and for "allowing us to pursue our own destiny" in this online development, views online offerings as a global opportunity.

"Online programs are the most effective and efficient mechanism by which we can positively influence communities around the globe," he says."While the education of many communities is prohibitively expensive on both sides of the equation for face-to-face programs, they are readily and economically reachable through online access."

Smith, the emeritus president of WSU, carries a lifetime conviction about the importance of higher education's broad accessibility.

As a youngster, Smith was a crop picker in the fields of the Salinas Valley until an academic scholarship to University of California-Berkeley proved to be his ticket to higher education, a career in academia and eventually to a college presidency. He maintains a strong belief that "our higher education system must evolve and once again be accessible to the average person," an accessibility he calls "the key to our country's future."