Fast-growing companies are amalgams of talented people and fresh ideas; colleges and universities produce both. Consequently, economic growth depends in large part on the effectiveness and quality of schools. Amy Gutmann, a political theorist, has been president of the University of Pennsylvania since 2004. We asked her how what's happening on campus now will affect businesses down the line. She spoke recently with Inc. editor-at-large Leigh Buchanan.

A lot of people seem to think the current crop of students
the so-called millennials is a new species that must be trained and managed in new ways. What have you found works in the classroom?

One of the characteristics of millennials, besides the fact that they are masters of digital communication, is that they are primed to do well by doing good. Almost 70 percent say that giving back and being civically engaged are their highest priorities. We see this in the classes they select. For example, they flock to academically based service-learning courses. That's where they get credit for doing projects out in the community, like helping the American Cancer Society to develop a new fundraising model. So to the extent that employers can, they should offer work that in some way contributes to society.

Those are pretty high expectations. Won't these graduates be in for a rude awakening when they enter the work force?

The key with the millennials is to provide structure for them in the workplace and at the same time find ways to channel their energy, engagement, and desire to help solve problems. It's up to businesses to provide opportunities that drive profit while also encouraging these young professionals to take on ever-larger challenges and apply what they've learned.

Any ideas on how employers might do that?

The millennials want to be out in the field with clients, where they can work in teams and solve problems collaboratively, not just sit at desks. And they expect to be rewarded for their creativity and productivity. A lot of very prominent businesses have found that offering new, extremely talented employees the ability to do pro bono work and to do something that has high social impact is a big draw. So pro bono work is no longer something that is pushed off on your least talented employees but has become something used to reward your most talented.

With the job pool so shallow, many new grads are opting to stay in school and pursue advanced degrees. Does that foretell a future of companies with supereducated staffs?

I think the last decade was unusual, in that students had such large incentives to go straight out into the work force, particularly in consulting and finance. That meant fewer students entering graduate and professional schools. We are seeing signs of improvement in hiring — recruiters on Penn's campus have increased over the last recruiting season. But we've also seen an increase of 30 percent in applicants to our schools of engineering and applied science and nursing. More students are going to law school.

If more people have advanced degrees, does that place downward pressure on the premium employers pay for such backgrounds?

The premium on having an advanced degree has increased over time. Even if that increase slows down, it is very unlikely to disappear.

What are universities doing to develop the kinds of leaders business will need?

Leadership is rarely learned from a book. It is learned from practicing with excellent mentors and role models. That's why a lot of leadership education goes on outside the classroom. Students mentor other students, consult with nonprofits and small businesses, start ventures on and off campus. At Penn, Wharton professor Michael Useem teaches leadership in the classroom, but he also takes students and business people on mountain-climbing trips, where they work together to achieve goals under challenging conditions. That's a great metaphor for leading a business forward.