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Fed Chairman Goes Back to School

December 4, 1997

SYRACUSE, N.Y. (AP) _ Investment is the key to future economic growth, Alan Greenspan told students at Syracuse University Wednesday _ but the Federal Reserve chairman wasn’t talking about money.

It was investment in ``people, ideas and processes″ that Greenspan stressed as he urged students to make education a lifelong activity so they can transform themselves into ``human capital.″

``Developing human capital is perceived by many corporations as adding to shareholder value,″ Greenspan said. ``Training and education are crucial to the growth of company value-added and profitability.″

Greenspan, in the midst of his third four-year term as the Fed’s chairman, spoke to 120 students from Syracuse’s Maxwell School of Citizenship and Public Affairs and its School of Management. Hundreds of other students watched the 30-minute lecture on closed-circuit television.

Over the past century, the economy has shifted from one grounded on physical products to one based on the exploitation of ideas and concepts, Greenspan said.

While the common perception is that human skills are becoming obsolete, in the modern economy, the value of information creation and transfer has become a paramount factor, he added.

In the future, the demand will be for ``workers who are equipped not simply with technical know-how, but with the ability to create, analyze and transform information and to interact effectively with others.″

Corporations and their employees are already catching on to that notion, Greenspan said.

Responding to the accelerated demand for more skilled workers, many corporations have started their own in-house training centers or now require employees to undergo additional professional training.

College enrollment rates have also picked up noticeably among individuals aged 25 and over who understand the need to ``retool″ during their careers, he said.

``The recognition that more productive workers and learning go hand-in-hand is becoming ever more visible in both schools and in the workplace,″ he said.

For the most part, students were disappointed that Greenspan chose to talk about education rather than provide insights from his years as America’s chief banker.

``I wanted the speech to have a little more substance,″ said James Laich, a 32-year-old management graduate student. ``It’s sad. He’s a man of tremendous insight ... but he can’t talk about the things that would be of interest to us because everyone hinges on his every word, every syllable.″

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