Learning Curves Ahead by ANDY SHAPIRO ashapiro bounce@BLSstrategies.com A ny discussion of the U.S. economy and strategies to confront global competition for jobs and investment must invariably address the workplace and how it is being transformed by knowledge-centered and technology-driven skills and occupations. More often than not, such dialogue takes on an almost apocalyptic tone, painting scenarios of a society verging on a demographic doomsday with shrinking labor markets and growing skill shortages.    While only the ignorant, or the naïve, can afford to be sanguine about the future of the American workforce, there are good examples out there of pioneering workforce development and job-training initiatives that anticipate and respond to these new realities. Programs such as Florida's Great Northwest's WIRED Initiative, North Carolina's BioNetwork and Jobs Ready Pennsylvania exist at the juncture of three recent and very compelling trends. They are characterized by a focus on high growth sectors and jobs; extensive employer engagement and regional collaboration. We'll discuss these solutions shortly, but first the bad news … Workforce Challenges    U.S. labor markets are losing their ability to sustain long-term growth. The most recent Bureau of Labor Statistics projections anticipate an annual growth rate of just 1 percent, versus 2.6 percent during the peak years of the 1970s. Over the longer term the BLS foresees growth coming almost to a standstill. For much of this time, new jobs are expected to grow at more than twice the rate of the labor force. In 2000 Training Magazine reported that one-third of all companies had to provide some form of remedial math, writing and reading to employees.    Among those factors that will continue to affect the size and composition of the nation's work force are:    • The exit of the baby-boomers – this trend is under way, and will be exacerbated by…    • The flattening of labor force participation rates among women, after years of remarkable growth; and    • Increasing diversity, including an even larger share of immigrants (with language and cultural challenges) among all new workers.    These projections reinforce the need for the U.S. economy to do more with less. However, a 2006 survey by a coalition of business and educational organizations that included the Conference Board and the Society for Human Resources Management concluded that "the future work force is here and it is ill-prepared." The survey found that more than 70 percent of recent high school graduates possess substandard academic and applied skills.    In the same poll employers rated the overall preparation of recent college graduates as merely "adequate." Yet, despite these challenges (or perhaps because of them), those who need the training the most often get little or none.    According to The National Council on Educational Statistics, the rank and file receive less skills training than either management or executives. Where are these employees most frequently enrolled? In remedial education programs. In 2000 Training Magazine reported that one-third of all companies had to provide some form of remedial math, writing and reading to employees. The Response: Sectoral Training    Responding to the need to build and sustain a competitive work force, the federal government and many forward-thinking states are designing and funding new training programs based around industry partnerships and regional economies. These "sectoral" training initiatives are so named because they are closely tailored to match the specific hiring needs of high growth industries rather than of a single employer.    The Federal government's new Workforce Innovation in Regional Economic Development (WIRED) initiative is a model for both the sectoral and the regional approach to work-force training. WIRED is a competitive grant program intended to strengthen the capacity of community and technical colleges to train workers in the competencies and skills now required by employers.    When the program was unveiled in 2003, the Department of Labor received more than 100 proposals and selected just 13. The federal government funds over $14 billion a year through the public work-force investment system. However, these programs do not necessarily prepare workers for the high growth, high demand occupations.    WIRED, on the other hand, focuses on innovative strategies to develop skills in talent across regions that have been impacted by the vagaries of the global economy, are overly dependent on a single industry or sector, or are recovering from natural disasters.    WIRED is implemented via regional partnerships. In Florida's panhandle Florida's Great Northwest, a regional economic development organization serving 16 counties, was one of the nation's first WIRED grant recipients. The "WIRED Northwest Florida" initiative provides up to $5,000 per job for employee skills training for new and existing businesses in targeted industries (including defense and aerospace, life sciences, information technology and alternative energy). The program also supplies basic skills training for new employees in targeted industries as well as college-level preparation in areas of math and science.    According to FGNW's Sonya Negley, "We were kind of the pilot WIRED program. Our organization had been purely marketing for economic development prior to the WIRED program.    However, we realized that we had to do more and in addition to promoting the region we are now promoting higher wages for higher skill jobs." To be eligible for WIRED Northwest Florida funding, a job must pay 125 percent of the county median wage, and FGNW's grant must be matched dollar for dollar with local funds (from employers and local economic developers leveraging other state training incentives). By requiring a local match for every grant made, FGNW has turned its $15 million share of WIRED funds into a $30+ million training funding source. "We are real proud of that," noted Negley. Beneficiaries Large and Small    Initial recipients included defense contractor General Dynamics and small companies such as ActiGraph, a medical device manufacturer. Actigraph's President, Jeff Arnett, had been wary of government programs. However, he found the experience to be quite user friendly: "The entire WIRED process was pretty easy and painless and it was a really good environment. Florida's Great Northwest really worked with us."    Actigraph used its funds to provide new employee training for the many processes and technologies that it has designed in-house. These new jobs were in the software and engineering occupations and paid an average of $60,000 per year – precisely the type of economic development that WIRED was designed to encourage. And the firm benefited as well. "We are a small company in a competitive commercial environment. As a result of the WIRED program we were able to get new employees up to speed quicker and to get product out the door faster."    The National Governor's Association has also been championing sectoral training via its Center for Best Practices. The varied, and growing, state sector initiatives catalogued by the NGA share a common focus on customized training for targeted industries, and feature a centralized, often regional organization, around which industry work-force development partnerships can coalesce.    One of the most proactive states has been North Carolina, whose most recent efforts at economic diversity can be traced to the 2000 recession, which has permanently scarred the furniture and textiles sectors, and to the tobacco settlement, which has created a funding mechanism for economic restructuring initiatives. A Boost for Biomanufacturing    One of the sectors that North Carolina has chosen to emphasize is biotechnology and, in particular, biomanufacturing. To help support this initiative, the Golden LEAF Foundation (which oversees the distribution of tobacco settlement funds in the state) committed over $60 million to biomanufacturing work-force development, the General Assembly earmarked another $12 million and private industry pledged $10 million in equipment and in-kind services.    The key work-force intermediary is the North Carolina Biomanufacturing and Pharmaceutical Training Consortium, which coordinates workforce development efforts statewide. The Consortium is a partnership of NC universities, community colleges, industry, the NC Biotechnology Center and the BioNetwork.    The BioNetwork is a community college-based biomanufacturing training organization, that Director Matt Meyer characterizes as having a very entrepreneurial culture. "We try to make sure that our programs are sector driven. It takes a lot of hard work to keep industry happy; there is nothing magical about it."    One such result is BioWork, a unique, 128-hour, entry-level bio-technician training curriculum developed in partnership with the private sector. "Initially we needed to create more than just a course," said Meyer, "but now even that is not enough and what we need is a process that is customized to the specific needs of companies." So, BioWorks is morphing into other skills development programs such as PharmaWorks, which builds off of BioWorks modules but contains specific courses for the pharmaceutical industry.    Joe Fiore, Training and Development Supervisor at Eisai, Inc., and a member of BioNetwork's Advisory Board, had a hand in creating the new PharmaWorks curriculum. "We saw an opportunity to use BioWorks as a template and modified certain modules to meet the needs of the pharmaceutical industry. We are now piloting the new program within North Carolina's community college system."    Fiore said that North Carolina's longstanding efforts to build and diversify its industrial base provide a competitive advantage to such new economy companies as Eisai. "One of the reasons why North Carolina has been so successful is the this particular approach goes back over forty years." Meyer believes that this kind of industry-focused commitment distinguishes North Carolina from many other states. "I think one of the key things is partnership and collaboration. You can't gloss over this or just give it lip service."    Further north, Pennsylvania is proving that an "old economy" state can also be quite nimble. Pennsylvania's sectoral strategy was launched in 2004 with a $5 million investment in a new Incumbent Worker Training Program. The IWTP's objectives were defined by industry partnerships in the life sciences, education, financial services, advanced manufacturing, I/T and logistics sectors, among others.    Within each cluster critical skill shortages were identified and a list of priority occupations was drawn up. Funds were then awarded to sector-specific consortiums of employers and employees.    One of the program's first grants went to four biotechnology companies in suburban Montgomery County. There, Walther Strathy of Emerson Resources was an early participant in a $400,000 Bioscience Partnership Training grant administered by the Life Sciences Career Alliance in Philadelphia. Emerson, which manufactures drugs and drug delivery systems for clinical trials, tapped the program for project management, best manufacturing practices and leadership training. According to Strathy, the training has helped Emerson take their business to the next level: "We were evolving from a pure research company to a clinical manufacturer, so this training was really important for us.    The biggest impact for us was actually the leadership development classes. We went from a company being managed by scientists to a company with real management systems. This has helped us grow by 30 percent in the last few years." Strathy pegged the value of his grant at over $50,000; the program requires a 1:1 private-sector match.    In 2005, Governor Ed Rendell launched the Job Ready Pennsylvania program with an additional $15 million for entry-level worker training of workers in the same high-growth industries. That program had trained more than 7,500 workers at 900 companies by the end of the year. Another $10 million was included to encourage working adults to continue their education.    All together, the Job Ready Pennsylvania program will make almost $100 million in state funds available for new employee training, continuing education in targeted occupations, community colleges, curriculum development and equipment. Conclusions    Upgrading the U.S. work force to meet the onrushing challenges of demography, technology and globalization can seem a daunting task. However, there is great promise in the varied federal and state efforts that place sectoral training initiatives and industry collaboration at the forefront of many economic development strategies.    In addition to the examples in Florida, North Carolina and Pennsylvania, described earlier, Washington State has created the High Skills High Wages program, Massachusetts has BayState Works and Michigan its Regional Skills Alliance, and there are many others.    Employers must be proactive to tap the many benefits available from these programs. Eisai's Fiore recommends reaching out early as hiring and development plans are being put in place. "Make it a point to try to create a dialogue with the local community college system and your local industry partnerships for insights into those programs that provide funding for corporate learning opportunities and continuing education." And be well-prepared. For Jeff Arnett and Actigraph that meant having a good business plan and defensible training goals. As they say, the rest is part of the learning curve.    Andy Shapiro is Managing Director at Biggins Lacy Shapiro & Co. BLS & Co. has been defining the concept of Location Economics to create opportunities and to add value for clients. You can reach Andy at 609-924-9775, or ashapiro bounce@BLSstrategies.com.