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An Investment in ECD: The Economic Argument
"A better start is likely to lead to a better finish."

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Charlie Coffey, O.C.
Executive Vice President
Government Affairs & Business Development
RBC Financial Group
Symposium on Early Child Development (ECD):
A Priority for Sustained Economic Growth and Equity

World Bank
Preston Auditorium
Washington, DC

Wednesday, September 28, 2005

Minister Davies, thanks very much for the kind introduction…I want you and our global audience to know that your government's work with the Adult Continuing Education (ACE) program in Jamaica (particularly in South St. Andrew) that helps school dropouts get another chance at an education and skills training, has not gone unnoticed. I understand the program is "making a difference in the lives of residents" and that "some of (your) protégés have gone on to achieve university degrees." And on September 4th, I was nodding in agreement while reading your eloquent words in a Jamaica Observer article: "The most critical element in handling the challenges of globalization is more education to produce a work force that is world class…one must cut across barriers to promote overall national development."

By the way Minister Davies, it appears your brand of leadership runs in the family…not only are you an avid supporter of early child development, so is Dr. Rose Davies. When your wife delivered an impassioned speech on the subject at the Kiwanis Club of Kingston earlier this year, her message captured immediate attention. The Jamaica Observer picked up on the story in its February 18th editorial, An assignment for Dr. Davies. The piece summed up the urgency to act upon Dr. Davies' ideas about early education, training childhood teachers and improving the learning environment for children with the phrase, "A better start is likely to lead to a better finish." And not so coincidentally, there lies the theme of my remarks, with a focus on the business imperative.

As everyone in this room (and on video conference) is aware, the future economic well-being and growth of countries around the globe rests in very small hands - in children's hands. Children will be the keepers of the key for Canada in 2020, for Peru in 2020, for France in 2020 - for every country on the planet. This is why they deserve the very best start in life. An investment in children strengthens the very fabric of our workplaces, our societies and our economies. We must make smart investments in children - in early child development and care - to ensure a competitive workforce and economy. Advocating sound policy and establishing innovative strategies for children will contribute to Canada's path to prosperity - to South Africa's path to prosperity, to Chile's path to prosperity and the list goes on.

Art Rolnick's remarks reminded me of a story I read in the Hartford Courant (a newspaper in Connecticut) last year entitled "Spending on Kids: A Business Argument". It was an article about an early child development forum organized by a couple of organizations in the state. The piece, in part, read: "A funny thing happened. The business crowd showed up to hear eminent researchers from the Federal Reserve Bank of Minneapolis. Here was Arthur Rolnick, extolling the virtues of early childhood investment. Rather than saying, 'Let's do this because it's our moral responsibility,' the new argument employs rigorous cost-benefit analysis. And it concludes, convincingly, that we're spending too much money on prisons, welfare, remedial education and crisis intervention because we don't spend enough on children before they head off to school." As you heard this morning, the focus should be on human development…"the idea is to merge business and social ways of thinking." This is a business imperative.

Strong, diverse public sector, community and business leadership needs to be at the same table when it comes to policy direction and issues about early child development. History has proven time and time again that shifts or changes in public policy don't usually take off until the business community rallies behind them.

Some of you may remember what economist John Kenneth Galbraith said nearly 25 years ago: "The views of one articulate and affluent banker, businessman, lawyer, or acolyte economist are the equal of several thousand welfare mothers in the corridors of political power."

It's clear that business has a vested interest in supporting and influencing the development of sound public policy, as business has a stake in early child development outcomes, i.e., education, employment, health, safety, increased productivity and community engagement to name a few. The link between economic development and reaching out to children may be an uncommon link; however, it's time for business to make the link - to "get comfortable with the uncomfortable"! The time is now for business to take a more active interest and leadership role in supporting early child development and care.

And this is why I'm involved. In Canada, supporting early child development is an economic issue that requires more federal, provincial and municipal government action; since a good part of my job is "lobbying" elected officials on key issues, there's a natural fit here. In Canada, supporting early child development is an economic issue that needs corporate/business action. And in Canada, supporting early child development is an economic issue that requires more community action - kids are everybody's business. As a business leader, children's advocate and parent, the only way to make a difference is to get involved and get others involved. It's all about leadership in action…

And there's more to my involvement…important work revolving around early child development and care is being done in Canada and I consider myself fortunate to know and work with some great minds in the field. Among his many achievements, Dr. Fraser Mustard founded the Council for Early Child Development in Ontario last year and based it around the recommendations of the Early Years Study in 1999 (a study co-chaired by Fraser and The Honourable Margaret McCain, a former Lieutenant-Governor of New Brunswick). The Council is a not-for-profit, non-governmental, association of community and networks with a focus on early child development science and community action.

It's a special pleasure to be on the Canadian presentation team for this Symposium with Fraser and Council colleagues Kathleen Guy and Jane Bertrand, not to mention associates Magdalena Janus of McMaster University in Hamilton, Ontario and Dr. Alan Pence from Victoria, British Columbia. "From early child development to human development: The quality and capacity of our future population depends on what we do now to support early child development." Those are Fraser's words…and with a passionate visionary like him in our country, how can one not get involved? Every country needs a Fraser Mustard!

As mentioned previously, governments play a critical role in supporting and advancing the early child development and care agenda too. On September 20th, Prime Minister Paul Martin delivered a speech to senior members of the public service emphasizing that, "Canada's competitive edge in the looming economic showdown with China and India must be honed soon after its toddlers leave the crib. It's about development and learning during the crucial time in life when potential is most readily nurtured and developed…Canadians must understand that the intellectual bar is being raised globally and only the best-educated countries will successfully compete."

Our Prime Minister went on to say: "A successful head start is important for all Canadians, and it is crucial for many children of Aboriginal and new Canadians, who face particular challenges of adjustment and transition. What it comes down to is this: Canada will succeed only if Canadians succeed (if our 'human capital' succeeds). Canada's greatest resource isn't found deep within the earth. It's found in the minds of those who walk upon it."

The Organization for Economic Cooperation and Development (OECD) examined Canadian expertise in early child development and care, in terms of research, data collection and information. Last year, it released its international Report on Early Childhood Education and Care in Canada. "The Report singled out data provided by Canadian researchers as high quality, relevant to Canada and increasingly cited at the international level." It referenced the McCain/Mustard Study and the economics research of Gordon Cleveland and Michael Krashinsky. The report also heralded various analyses and data provided by the Child Care Resource and Research Unit of the University of Toronto. The bottom-line is that investments in early child development will make a competitive difference to Canada and to your countries. It's an investment in knowledge and innovation - an investment in the future.

More business leaders must step up to the plate when it comes to investing in children and early child development. They need to hear and discuss research findings - the economic case. They need to hear that high-quality early childhood education produces "long-term positive outcomes and cost-savings that include improved school performance, reduced special education placement, lower school dropout rates, and increased lifelong earning potential - that employers increasingly find that the availability of good early childhood programs is critical to the recruitment and retention of parent employees." 1

Here's more food for thought. Some of you may be familiar with the "trillium flower with three petals, that's used by Cornell University's Linking Economic Development and Child Care Project to reflect the three ways the research community has demonstrated the economic importance of early care and education. Together the three petals capture the short and long-term economic contributions made by early childhood services. One petal represents Children and the investments in human development and education. Another represents the Regional Economy, investments in child care as an industry that produces jobs and stimulates the economy. The third petal represents Parents and the economic contributions they make to the economy, as employees and consumers. The economic contributions of children are considered long-term, because the pay-off largely occurs after the child matures." 2

And others may know of James Heckman, a Nobel Laureate in Economic Sciences from the University of Chicago, who "makes a strong case for a higher return on human capital when dollars are spent on the young rather than the old." He says that "the returns to human capital investments are greatest for the young for two reasons: (a) skill begets skills, and b) younger persons have a longer horizon over which to recoup the fruits of their investments." 3

In essence, early child development is gradually becoming an industry worthy of investment and important to economic growth. "It has fostered new relationships with business, government and economic development experts. It has the potential to spawn new approaches to data collection, planning, professional development, management, finance, government policy, and advocacy." 4

"Promoting the healthy development of children is both an ethical imperative and a critical economic and social investment. A decent and wise society protects and nurtures all its children, so that they grow up to be productive adults, and because it's the right thing to do." 5

"The new convergence of research in neuroscience, human behavior, and economics provides three clear, irrefutable ?ndings. First, young children develop in an environment of relationships. Second, early experiences sculpt the evolving architecture of the brain. Third, wise investments in young children are among the most cost-effective outlays a society can provide." 6

The responsibility for raising children rests mainly with parents and families, but it also requires community and government support. We live in a world where many parents work, we live in a world where "school readiness is more than what children know" 7 and we live is a world where "school unreadiness is expensive." 8 As a result, there's also a business imperative at play here.

As Jack Shonkoff, dean of Brandeis University's Heller School for Social Policy and Management and chairman of the National Scienti?c Council on the Developing Child says: "This is not about government raising children. This is about government strengthening the capacity of families and communities to do the job well. This is not about seeking equality in outcomes. This is about striving for equality of opportunity. This is not about liberals versus conservatives. This is about wise investors who defy ideological labels." Again, there's also a business imperative at play here.

In summary, there is a relationship between investing in children and the development of human capital. Increasing scientific evidence demonstrating the impact of early experiences on the development of the brain and compelling economic data on the return on investment in children has been talked about today and will be an ongoing topic throughout this Symposium…and even after we all head home. People like Jacques Van der Gaag from The Netherlands will also push the envelope on the dialogue.

Needless to say, there are many challenges and opportunities at our doorsteps. No country can afford to minimize the economic and social priorities at stake or risk losing "the behaviour and educational battles in the early years." Government has a responsibility to continue investing in children and young people - so do educators and parents, as well as community and business leaders. RBC Financial Group continues to invest in, as well as support, education and children. Although there's much work being done across the country, we know there's much more for corporate Canada to do - it is a business imperative.

I close in part, with another quote from our Prime Minister: "Today, we don't just want our children to succeed in school. We need them to. We don't just want them to get the right training and develop the right skills to land a good job. We need them to. We're investing in lifelong (quality) learning, so that Canadians can keep up, keep ahead of the curve, as technology progresses and as the demand for specialized skills evolves. We're working to ensure that a university education is accessible to all, and that income does not stand as a barrier. And we're working to ensure sure that Canadians start learning and developing at an early age, and that income does not stand as a barrier."

It's clear that World Bank and the International Monetary Fund are moving toward backing education in developing nations - this Symposium is only one example of its leadership. It's also clear that the strength of diversity in this room breeds common ground and interests, as well as sharing of information and promising practices.

Ultimately, advances in early child development are about quality, leadership in action and the principle that "A better start is likely to lead to a better finish." And since we're talking about leadership in action, the business imperative truly does matter!

Thank you for inviting me to participate in this world of difference discussion.

1 The Business Roundtable/Corporate Voices for Working Families Joint Statement: Early Childhood Education: A Call to Action from the Business Community, May 7, 2003

2 Friedman, Dana E., New Economic Research on the Impact of Preschool (for Smart Start's National Technical Assistance Center and its 2005 Learning Community on Early Childhood Finance Reform)

3 Friedman, Dana E., New Economic Research on the Impact of Preschool

4 Friedman, Dana E., New Economic Research on the Impact of Preschool

5 Shonkoff, Jack P., The Non-Nuclear Option, The American Prospect, April 19, 2005

6 Shonkoff, Jack P., The Non-Nuclear Option

7 Bruner, Charles, with Floyd, Sheri and Copeman, Abby, Seven Things Policy Makers Need to Know about School Readiness, State Early Childhood Policy Technical Assistance Network, January 2005

8 Bruner, Charles, with Floyd, Sheri and Copeman, Abby, Seven Things Policy Makers Need to Know about School Readiness

The Honourable Margaret McCain, Dr. Fraser Mustard: Early Years Studies, www.founders.net

Council for Early Child Development, Ontario: http://www.councilecd.ca

Gordon Cleveland, Michael Krashinsky: The Benefits and Costs of Good Child Care, The Economic Rationale for Public Investment in Young Children - A Policy Study, University of Toronto, 1998; Fact and Fantasy: Eight Myths about Early Childhood Education and Care, University of Toronto at Scarborough, March 2003 www.childcarecanada.org/pubs/other/benefits/bc.pdf


David Dodge: Human Capital, Early Childhood Development and Economic Growth: An Economist's Perspective, Sparrow Lake , May 2003



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