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Education & Talent

High Quality Pre-K: A Wise Investment

Contributing writer John Miller explores why both local and national business leaders support investing in high-quality early learning. This is the final installment in a two-part series focused on early childhood education (for part one, click here).


As the Roaring Twenties careened to a close, a small group of Philadelphia businessmen launched the Industrial and Power Securities Company, a mutual fund with a conservative investment philosophy. It may have been the worst possible moment in history to launch an investment vehicle; just a few months later, the stock market would crash, plunging America into the Great Depression.


But, sometimes being bold is what’s needed to survive impending ruin. The concept behind the new fund turned out to be a smart philosophy at a trying time.


That small fund grew and grew, eventually becoming the international investment giant Vanguard. Today, Vanguard is a vital driver of the regional economy – a global company headquartered in Valley Forge, with more than 14,000 employees around the world, 10,000 of them in Greater Philadelphia.


And – let’s be honest – in a region with just a handful of Fortune 500 headquarters, Vanguard is a vitally important economic driver.


While Vanguard was launched in Greater Philadelphia, Chairman Emeritus Jack Brennan says there’s only one reason that Vanguard is still here:




“I can assure you that if the human capital were not here [in the region], Vanguard would not be a Pennsylvania company.”


Brennan, speaking recently at the World Class Council Forum: How the Business Community Can Lead on Early Education, went on to say that Vanguard is a talent-based company that relies on great people to stay at the top of the mutual funds business. And, like so many other companies, they need a talent pipeline to continue to be well stocked.


In business, the best talent wins.


This is a two-pronged equation. Businesses need well-trained, well-educated workers. Those workers, in turn, want their children to have access to great educational opportunities. This reality means that talent development – i.e., education – should be a critical concern for all businesses. While most recruiters look to colleges for up-and-coming talent, developing these future employees begins much, much earlier – with programs for three and four-year-olds whose brains are just developing, kids who are learning how to learn.

There’s plenty of evidence to suggest programs are a prudent investment.


The Case for High-Quality Pre-K


The pre-k years are times of exponential cognitive, emotional, and social growth. Think about how much a child learns before the age of five. Ponder how we do it. It is a period of miraculous change for just about every human being, and this truth makes it a period of extraordinary opportunity for every child.


Children are born with all of the brain cells they’re ever going to have, but they are not connected. As a child has experiences and his brain cells are used, connections – synapses – are created. These connections are made at a dizzying pace – 700 neural connections every second. The synapses get stronger the more the child uses them; this is the basis for how we all think.


“Eighty percent of brain development is completed by the age of five,” says Sara Watson, National Director for ReadyNation/America's Edge, the leading national organization devoted to engaging business leaders in early childhood education.


Dr. Jack Shonkoff of Harvard University’s Center on the Developing Child reports that disparities in children’s vocabularies show up as early as 18 months. And Watson quotes a study that shows that children from high-income families – i.e., those with more educational resources at their disposal – have an advantage in brain processing speed as early as nine months.


An educational turbo boost in a child’s preschool years can set her on a different trajectory for the rest of her life. And, while it certainly isn’t a guarantee of a great future, it is a significant advantage. In his best-selling book Outliers, Malcolm Gladwell details the significant advantage that Canadian hockey players who are born in the first few months of the year have over their childhood counterparts born later in the year: Because they’re a few months older, they are a touch stronger, a touch more developed, and therefore better. Being better at a young age leads to more opportunity, which in turn leads to improved performance.


In the same way, high-quality early childhood education can make a difference – studies have shown that children who don’t have the benefit of quality preschool can arrive in kindergarten already 18 months behind. The Society for Research in Child Development(SRCD) reports that children in preschool programs gain about a third of a year of additional learning across language, reading, and math skills. That might be at the low end – the SRCD also reports that programs in Boston and Tulsa have produced larger gains of between a half and a full year of additional learning. And the downside is real, too – ReadyNation/America’s Edge reports children who aren’t ready for kindergarten are half as likely to read proficiently by the third grade, and children who are not reading proficiently by the third grade are four times more likely to drop out of high school. The dominoes start to fall quickly.


There is strong evidence that quality pre-k education makes a significant difference for students. Children who’ve had a quality pre-k start to their academic careers test better and do better in school. They’re more likely to graduate college. They’re less likely to need special education, and they’re less likely to commit a crime; in fact, the SRCD reports that students who attended one preschool program committed one-third fewer felony crimes by the age of 21 than their peers who did not attend preschool.


What’s in it for Business?


At first blush, it would appear that businesses investing in high-quality pre-k is a nice thing to do, but not necessarily something that is going to have an impact on the talent available to them.

At least not anytime soon.


“What’s in it for you?” asks Jack Brennan. “The answer is ‘nothing today.’ What we’re talking about is a long-term strategy set of investments. That’s what great businesses do.”


The education system is a pipeline. As the largest consumer of the product that comes out the end of that process, the business community should care deeply about what goes into the front end of the pipeline. Smart businesspeople understand that you must put quality in the front end of the pipeline to get quality out.

Businesspeople also understand that course corrections are easier the earlier they are made. “This topic is so up the alley of businesspeople,” says Brennan. “This is a very comfortable place.”


Brennan points to hard data that supports the ROI of high-quality early childhood education. Consider the famous Perry Preschool Project, which in the mid-1960s provided high-quality preschool to three- and four-year-old African-American kids living on the edge of society. They were poor and their future was anything but bright. The students were reassessed in 2005 at the age of 40, and the results were remarkable: On average, students who completed the program were more likely to have higher incomes and avoid incarceration than similar peers who did not have access to the program.


“Early childhood education has a 40-year ROI,” says Watson of Ready Nation/America’s Edge. “You can have a long-term impact… and a short-term impact too.”


The recent study conducted by Ready Nation/America’s Edge points to that possible short-term impact – of the anticipated 28,000 new jobs that would be created by increased public investment in pre-k in Pennsylvania, more than 5,500 jobs would be outside the early learning sector.


If this was a startup’s business plan that landed on your desk, you’d invest.


How Business Makes a Difference


Across America, business has gotten behind the push for high-quality early childhood education. Ready Nation/America’s Edge reports that every state has at least one major business group pushing for universal access to quality pre-k. In Pennsylvania, that group is the Early Learning Investment Commission (ELIC), which has members from businesses all across the Commonwealth. ELIC’s mission is to make the success of every child one of Pennsylvania’s top economic priorities.


In both Alabama and Colorado, business has been at the forefront of the push for quality pre-k. “Think of all the things we fight for that aren’t worth fighting for,” says Alabama’s Billy Canary. “The challenge is to keep the passion up. You have to keep the issue a top priority.”


At Executives Partnering to Invest in Children (EPIC) in Colorado, Gloria Higgins’ approach is to break down barriers that exist between the world of education and the world of business. “We’re seeking a common language between education and business.”


One tactic that has gotten traction is EPIC’s Brown Bag lunch series, a series of workshops in a box that can be delivered in communities and businesses. The workshops focus on topics such as The Early Childhood Development Toolkit for Employers, Is My Child Ready for Kindergarten and Colorado Reads: The Importance of Early Literacy. The series of events is helping to change the mindset of the broader community and creating, well, literacy about the importance of early childhood education.


In Pennsylvania, a group of 10 organizations from across the Commonwealth (including the Economy League) have banded together to create and support Pre-K for PA. This issue campaign is designed to make high-quality early childhood education a key issue in the upcoming Pennsylvania gubernatorial and state legislative elections. Post-election, the campaign will make sure pre-k remains a key issue for elected officials. (Visit the campaign’s website to learn how you can get involved and support these efforts.)


On the national stage, Ready Nation/America’s Edge provides a variety of services and guidance on how to get involved. Their Advocacy Toolkit includes materials and how-to guides for businesses.


Looking Ahead


While we’re not faced with the Great Depression as then-fledgling Vanguard was in the 1920s, we do find ourselves in tough financial times.  Pennsylvania is dealing with a budget deficit and many competing demands for scarce resources. Business leaders need to apply the same kind of tenacity and foresight as those early Vanguard executives – by staying focused on the long–term and working for better access to the kinds of programs that build the foundation for the talent they’ll need in the future.