Workforce Development: The Economic Development Connection

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Workforce Development The Economic Development
Connection
Workforce Development

• THE OHIO STATE UNIVERSITYS NATIONAL
  DISSEMINATION CENTER
• Professional Development Speaker Series
• November 19, 2001
• Jeff Finkle
• President and CEO

International Economic Development
Council
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Workforce Development-The Economic Development
Connection

• Why is Workforce Development Important?
• Who is involved?
• Trends and Cases
• Conclusions

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Workforce -Economic Development Connection

• Workforce development has become one of the most
  important economic development issues because
• Knowledge has become the driving force of
  economic growth
• There is a lack of skilled labor
• Critical demographic shifts
• Policy changes

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Demographic Changes

• Major demographic changes are taking place in the
  US population
• Aging
• By 2010, number of workers 45-54 will grow 30
• By 2020, almost 20 of the U.S. population will
  be 65

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Demographic Changes

• Ethnic shift
• According to the Office of Science and Technology
  Policy by
• 2050, 74 of the labor force will be women and
  minorities, groups traditionally least prepared
  in science and math skills
• 2010, 50 of all school children will minorities
• 2020, 42 of all 18-24 year olds will be
  minorities, as compared to 30 in 1995

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Economic Changes

• 75 of net new jobs will be in executive,
  managerial and technical fields
• Job growth will be in math intensive fields

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For Economic Development

• Workforce availability factors, especially in
  high skill areas drives business location,
  development, and expansion decisions

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Community Economic Development

• To connect workforce and economic development
  issues communities must
• Combine and coordinate job creation and job
  placement activities more tightly
• Find ways to involve their business sector in
  workforce development decision-making
• Make better use of Labor market and other
  relevant information gathered economic
  development activities (i.e. database, retention
  surveys, regular interaction with business).

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Workforce Investment Act (WIA) of 1998

• Workforce Investment Act of 1998 is the federal
  governments response to workforce development
  training challenges. Its importance stem from
  its requirements that
• Economic developers play important role in
  Workforce Development Boards (WIBs)
• System serve both employer and job seekers
• Program be flexible to respond to local
  conditions

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Who is involved in Workforce Development?

• Workforce development is provided, in partnership
  or alone, by
• Businesses
• Economic Development groups
• Community Colleges and Universities

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Workforce Development Training Partners
Community colleges and Universities
The Essential Partnership Triad
Economic Development Organizations (EDOs)
Businesses
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Businesses

• Traditionally businesses represent the largest
  providers of workforce development training
• businesses now use it competitively to keep their
  employees skills current and relevant

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Businesses

• Businesses provide workforce development
  training in a number of ways
• In-house capacity
• Contract to third parties such as training
  professionals, and community colleges and
  universities
• Pooling together with industry partners

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Economic Development Organizations

• Act more like a broker in workforce development
  training.
• reconcile labor demand and supply.
• Provide workforce development training in concert
  with community colleges and universities
• Use workforce development training as a
  competitive tool for their communities
• Tap into large unused labor force (youth,
  hard-to-serve populations, etc.)

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Community Colleges and Universities

• In recent years, have tried to adapt to new
  economy
• have increased their partnership with both
  businesses and economic development
  organizations
• tailor their programs to meet existing job needs
• Work with partners to define different needs

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Economic Development

• Workforce development partnership efforts should
  concentrate on
• Serving needs of communities and their existing
  businesses
• Make better use of community assets and resources
  (especially community colleges and universities)
• Improving communitys overall economic development

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Economic Development

• special efforts have to be made to assist ED
  clients such as
• Hard-to-serve populations (i.e. youth, former
  convicts, etc.)
• Smaller businesses, backbone of community, often
  have difficulty keeping up with fast- changing
  economic pace

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Workforce Development Training Trends and Cases

• Current workforce development training trends
  include
• Customized Job Training
• Industrial Clusters
• Business Consortia
• Partnerships
• State Initiated Networks

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Customized Job Training

• Is tailored to the labor needs of businesses
• Community colleges and private training groups
  are important providers
• Funded by both public entities and private
  businesses or in combination

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Customized Job Training

• Incumbent worker and small firm focus
• Performance based contracting
• a good way to help interested employees
  increase their wage

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California Employment Training Panel

• Employers participate through a their
  contributions to California Employment Fund,
  created especially for the program
• They get reimbursed for costs associated with
  developing and implementing customized training
  for new or existing employees
• Reimbursements are made for employees who remain
  on the job 90 days or more after training

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California Employment Training Panel

• Eligibility is limited to companies that
• Contribute to the Fund
• Face out-of-state competition and need to train
  or retrain new or existing employees
• Need to upgrade workers in areas where there are
  skills shortage
• Hire and train unemployed workers eligible for
  unemployment insurance
• Have special training needs in areas such as
  defense conversion or emerging technologies

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California Employment Training Panel

• ETP has helped
• Employers
• Increase productivity
• Improve employer retention through training and
  career development
• Employees
• gain more meaningful employment
• Increased wages

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Industrial Clusters

• Industrial clusters are concentrations of
  interdependent, complementary and/or competing
  businesses that trade with each other. They
• Act as powerful magnets for business location
• Attract new suppliers that congregate nearby to
  increase their efficiency
• Thrive on steady stream of skilled workers,
  finance, infrastructure and good business climate.

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Industrial Clusters

• Regions and businesses use clusters in workforce
  development training to identify
• Shared skill needs and standards
• Alleviate concern over talent poaching
• Develop joint training curriculum
• Identify immediate and medium-term labor needs

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Connecticut Industry Cluster

• Connecticut has initiated cluster initiatives in
  the following sectors
• BioScience
• Aerospace Components Manufacturers
• Software Information Technology
• Metals Manufacturing
• Maritime
• Agriculture Aquaculture
• Plastics

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Aerospace Components Manufacturers (ACM)

• Founded in 1999 by a core group of aerospace
  components manufacturers
• Funding has 20-80 funding ratio from public
  and private sources
• Goalstrengthening the state aerospace sector by
  improving the sub-tier suppliers community in
  three areas
• Productivity
• Knowledge
• Skills and operating costs

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ACM Cluster AIMS

• ACMs program has four main elements progressive
  manufacturing, workforce development, business
  practices and special projects. Its workforce
  development goals aims is to
• Offer a standing curriculum to raise competency
  of incumbent workforce by
• Launching workforce development team from member
  companies
• Conducting sector-subjects specific training in
  areas such math and blueprint reading.

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ACM Cluster Results

• The cluster has joined with other manufacturers
  to launch the manufacturing Resource Center with
  positive results
• Eight participating companies reporting a net
  economic impact of more than 7.9 million
• 54 companies participating in training and other
  center events
• Increased participation of area high school in
  center training and events
• Increased contact with smaller manufacturers
  (2000 in fiscal year 2000 alone).

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Business Consortia

• Businesses that work together to achieve a common
  set of goals
• Are used by small businesses with limited
  resources to overcome cost challenges in training
  new and incumbent workers
• By businesses (especially small) in the same
  field to identify skill needs and invest in
  shared training

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Wisconsin Regional Training Partnership (WRTP)

• WRPT is the regional training board for the
  greater Milwaukee area of Southeastern Wisconsin
• It houses and promotes a series of sectoral
  training consortia, including the Wisconsin
  Manufacturing Training Consortium (WMTC)

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Case Wisconsin Manufacturing Training Consortium
(WMTC)

• The Wisconsin Manufacturing Training Consortium
  (WMTC)
• is the most developed of all the WRTP consortia
• includes close to 20 firms covering
  approximately 30,000 workers
• is concentrated in the metalworking and
  electronic controls industry

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Wisconsin Manufacturing Training Consortium (WMTC)

• To be members of the consortium firms are
  required to
• Benchmark a growing percentage of payroll to
  training frontline workers
• Train according to standards set on a suprafirm
  basis
• Gear hiring and internal labor market promotions
  to worker achievement on those standards
• Administer the enhanced training budgets
  (resulting from their benchmarked contributions)
  through joint labor-management committees

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Workforce Development Training Partnerships

• Workforce Development training Partnerships
  include close cooperation between and among
• Businesses
• Economic Development Organizations (EDOs)
• Community Colleges and universities

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Partnerships

• Businesses, like in the past, will continue to
  provide the bulk of workforce development
  training to workers
• The success of their workforce development
  training efforts, however, will become more
  dependent on the level of their cooperative
  partnerships with EDOs, and community colleges
  and universities

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Case Semiconductor Industry-Education
Partnership (SIEP)

• The SIEP partnership was launched in response to
  the high-etch labor shortage of the region. It
  includes
• SEMATECH, the research consortium of the 10
  major U.S. semiconductor manufacturers,
• Semi-SEMATECH, an association of more than 200
  industry suppliers

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Semiconductor Industry-Education Partnership
(SIEP)

• SIEP includes
• The Maricopa Community College District
• Phoenix area EDOs
• Phoenixs area vocational-technical high
  schools

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Semiconductor Industry-Education Partnership
(SIEP)

• The first phase of SIEP, in 1996, was funded by
  a grant from the National Science Foundation
  (NSF). Since then, financing has been taken over
  by the participating businesses. The results
  have been overwhelmingly positive.

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Semiconductor Industry-Education Partnership
(SIEP)

• Since the launching of SIEP in 1996
• the areas community colleges have experienced
  increased enrollment
• more industry suppliers and other high tech
  related products have relocated to the area
• the partnership has extended its operations to
  many other communities (70) outside of the
  phoenix area

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State Workforce Development Training Initiatives

• State Workforce Development Training Initiatives
  are part of many states efforts to improve their
  business climate and overall economic
  development.

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California Business Resource, Assistance and
Innovation Network (BRAIN)

• BRAINs mission is to
• Develop and conduct assessment of human resource
  needs of their critical high growth industrial
  sector
• develop and conduct resource inventory of
  service providers
• Identify scope of each region
• Identify gaps in service needed by region

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California Business Resource, Assistance and
Innovation Network (BRAIN)

• State funded
• Program and activities are performance-based
• Develop plan, strategies and activities based on
  regional and local needs and conditions
• Require a collaborative component between
  community colleges, businesses and local
  communities

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California Business Resource, Assistance and
Innovation Network (BRAIN)

• Since its start in 1997, Brain has
• Extended its network to more than 100 regional
  centers focusing on clusters in
• Biotechnology
• Multimedia
• Environmental technologies
• Helped participating businesses
• Increase their wages
• Increase their number of employees
• Attain higher cost benefit ratios and ROI than
  other businesses

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Conclusion

• Workforce development training will continue to
  play a critical role well into the future because
  the economy will continue to
• Experience major changes
• Have increasing need for skilled labor

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Conclusion

• Workforce development training is a partnership
  effort that needs the active involvement and
  leadership of
• Businesses
• Local government
• Local economic development players
• Educational system

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Conclusion

• Workforce development training needs to
• Focus on both short and long term, respond to
  local conditions
• Be flexible and adaptable to continuous
  changing economic conditions
• Make effort to use all available resources of
  community

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Conclusion

• A successful workforce development needs to be
  led by private industry in close cooperative
  Partnerships between with EDOs and CCUs and
  serve both employers and job seekers

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Conclusion

• Workforce development training efforts need
• Better Community coordination of job creation and
  placement services
• To make use of flexible and reliable data and
  other ED information gathering tools

International Economic Development Council