A Hidden Engine for Southern California : * Education: Local universities provide more than entertaining sports rivalries; they’re vital to a winning economy.

The athletic rivalry between UCLA and USC has provided extraordinary theater for Southern California and for the nation as a whole for almost seven decades. As the two football teams meet Saturday for their annual battle, Californians from San Diego to San Luis Obispo will be choosing up sides.

Those of us who live here have every right to relish this exhilarating week and its wonderful spirit. But beyond the competition for bragging rights, what really makes Saturday’s game special is the juxtaposition of two great universities-- one private, one public, that have been pivotal to the explosive development of this region. And because these two schools continue to provide world-class education, research, cultural enrichment and public service, Southern California has a decisive competitive advantage that will last well into the next century.

Beyond UCLA, USC and neighboring Caltech in Pasadena, the education and research value to the local metropolitan area is further bolstered by UC San Diego, UC Santa Barbara, --all members of the elite Assn. of American Universities. Add UC Irvine, home to two 1995 Nobel laureates. And add another 170 accredited colleges and universities that educate more than a million people, generate hundreds of thousands of jobs and provide a strong technological foundation for a region that needs to diversify and expand its industries to maintain its status as a global center.

We can now recognize higher education for what it is: an unsurpassed repository of intellectual capital and an important “hidden industry” for Southern California. It has attracted billions of dollars and millions of the world’s best and brightest young people into the area.

Treated as a Southern California industry, higher education would be in the same league as tourism, and probably ahead of the recently downsized aerospace industry.

Southern California’s colleges and universities generate roughly $30 billion in regional economic activity annually (more than $7 billion by UCLA and USC alone), and directly support more than 120,000 full-time jobs and indirectly support hundreds of thousands of other jobs.

Like many other industries that do business globally, Southern California’s academic institutions receive tuition dollars from thousands of students from around the world. The strong base of Asian business and government leaders trained here will increase future economic and technological interdependence between Asia and our region.

USC, UCLA and other Southern California colleges and universities attract hundreds of millions of dollars in philanthropic money from outside the region. USC is among the best private fund raisers and UCLA is among the best public fund raisers in American higher education.

Southern California higher education is a huge magnet for federal research dollars. Its five AAU institutions alone bring in about $800 million annually and produce a significant share of the nation’s basic science research.

So while the UCLA-USC rivalries in football, basketball and other sports make for great drama, it is in our long-term interests to acknowledge our combined strengths and work together. The real battle for Southern California is the economic competition it wages against regions in New York, Texas and Taiwan, regions that are far more used to the notion of pooling resources for the common good.

Southern California and the state have lost out in the past because of a lack of teamwork. By any stretch of the imagination, California should have been the natural home to the federal earthquake research center established by Congress in the 1980s. Instead, the center went to New York, whose universities and congressional delegation were a far more unified and effective team.

Southern California could emerge as the global leader in the growth industries of information, entertainment and multimedia in the next decade, but again, will have to face fierce efforts by New York and other areas even though we have a natural advantage in those areas.

So let us cheer on our team of choice in this weekend’s game. But next week, let us reflect not on winners and losers but on how USC, UCLA and their sister institutions together can continue to give Southern California a competitive advantage in the years ahead.