Why is it Essential for Workforce Development & Economic Development to Join Forces in Each Region?

Presented by: Colleen LaRoseNorth East Regional Employment and Training Association

All Rights Reserved

Blueprint for community and regional success

Teamwork..not silos of service… "Collaboration is the stuff of growth"

Anonymous

DefinitionsWorkforce Development:Coordination of skillsdevelopment initiatives thatprepare individuals forcurrent and futureoccupations, givingbusinesses the human capitalnecessary to meet demand.  

Economic Development:

Implementation of businessdevelopment and quality oflife policies that influence thegrowth and restructuring of aregion to improve its overalleconomic well-being.

ComparisonWorkforce Development1. Job Development (who has jobs)2. Collaborative3. Federally funded 4. Attempts to be a system5. Employer services related to

acquiring employees (job postings, screening, OJT, etc)

6. Jobseeker services (Eligibility/Resumes)

7. Coordination of education providers8. Youth Support9. Coordination of social services

supports 10. Holistic support system

Economic Development1. Job Creation (make jobs)2. Compete locally/regionally 3. Locally and state funded4. Not a system5. Business recruitment/retention

services such as Tax Incentives, Location Hunting

6. Infrastructure/transportation support

7. Business development support8. Community Development support9. Bottom-Line $$$10. Quality of Life (eg. Parks)

Economic Developers say, “Workforce Development is #1”

Workforce development is the number one reason that businesses now choose their location…surpassing tax incentives, low cost of business, transportation, and even quality of life!

What’s the workforce worth…GDP is a measure of income, not wealth. (values flow of goods/services, not assets).Gauging economy by GDP: like judging a company by quarterly profits, without peeking at balance-sheet.

UN/Cambridge University published balance-sheets for 20 nations. 3 Kinds of Assets: 1) natural capital (land, forests, fossil fuels, minerals)

2) manufactured, physical capital (machinery, buildings)

3) human capital (education and skills)

The real wealth of nations, The Economist, June 30, 2012

What’s the workforce worth?Can we assess the workforce in terms of cold hard cash?

$ Total cash in the world is about 45 T $ Total assets in the world about 500T(not including human capital)

$ US wealth – + = 58T

+ + = 118T US-4.5 % of world’s population, 12% of the hard assets wealth

By the way, US debt is 16T…one fourth of all physical assets. About $50,000 per every man, woman and child in the US)

75% of the US total wealth is its human capital!

The real wealth of nations, The Economist, June 30, 2012

Workforce Investment System—In what are we investing?

SUPPLYHuman capital

average years of schooling (education) the wage workers can command (skills) Number of years of expected work before they retire/die

Jobseekers taxpayers….(human capital)

DEMANDEntrepreneurs, small business, medium business, large business (Is business a resource?…or an investment? )Need a diversified “portfolio” –

(risky and not so risky investments) Anticipated returns?

Employment and Training?Workforce Investment System

includes business owners….Entrepreneurship is employmentMust rethink traditional

models of employmentNeed more than training

to grow out of this economic crisis

Reality Check: There are not enough jobs!!!

146 million in total US labor market (includes 13 million on ui) - so that is 133 million wage earners supporting total US population of 315 million (world pop 7 billion)

Only 3.5 million jobs now available in US13 million people actively on unemployment (and another ten million (conservatively) who have exhausted ui claims

That’s seven people

for every job currently available!

So, even if we spend all workforce dollars to train everyone perfectly for every job currently available….

There would still be six people in line waiting for a job for every job that was filled…

Or conservatively over 18 million people still out of work!SIMPLY PUT…

WE NEED MORE JOBS!

JOB CREATIONWhat does job creation mean?

(Entrepreneurship? Innovation? Start-ups? Collateral growth? Growing companies? Importing companies? ) Who is responsible?

(Economic development? Politicians? Business leaders? Educational institutions?) Is there a role for workforce development in JOB CREATION?

New paradigm of “work?” – Seeding/training entrepreneurs? Helping companies recognize expansion opportunities? Providing HR support/onboarding? Providing workforce management? (change management, org. development, team training, etc.)

Liaison to economic development and funders?

Understanding the Potential….

75% of businesses in the US have no employees…. 52% of all small businesses are home basedSmall business employs half of all private sector employeesStage 2 businesses (10-99 employees) are the major employers! Creating 90% of all new jobs in America

Workforce development professionals must become more than training providers!

They must begin contributing to Job Creation!

Bottom of the rank

Top ten states with greatest percent of self-employed

Problem….

Workforce Investment Boards are not treated as leaders in their communities because they are seen, (and often act) as program managers. 

Effect….

WIB’s are usually not invited to be part of community planning. Because they are not part of the decision-making for the community. they have little say in the direction their region is going. Because WIB’s have little/no authority, they have difficulty making significant impacts. WIB’s are not seen as “job creators” or “huge impact makers”

Solution….

Integrate WIB’s with their regional planning bodies (politicians and economic development) so that they become part of the ONGOING planning and strategizing process. 

Give WIB directors leadership and

economic development planning training so that they can “hold their own” in these discussions.

Benefits…. 1) Not managers strategic planning leaders 

2) Elevates the standing of workforce development, (more program $$$?) 

3) Supports new business start-ups, (may force change on some bad rules that thwart business start-ups) 

4) Communities seen as engines of growth – Asset-based planning (not business recruitment). Not apathy, but looking within the community for hope and possibilities!

5) Team environment (ed, wd politicians, business) in each region... All planning and strategizing together. Equally responsible for decisions and outcomes. 

6) Assures business owners get all services they need because all are now responsible to provide every possible business benefit consideration 

Can you imagine the power of hundreds of teams like this across the US?

Stepping into Leadership

Mind shift for everyone – Not service providers strategic planners! Not social service oriented $$$ oriented! Not jobseeker and employer services BUSINESS and workforce services

WIB Directors will need training in leadership and economic development planning basics

Steps to aligning economic and workforce development

1) Evaluate local economic/workforce strengths and weaknesses.2) Evaluate community’s place in the broader regional economy.3) Evaluate community’s economic development and workforce

development vision and goals.4) Evaluate community’s strategy to attain its goals.5) Evaluate connections between economic development, workforce

development and other local policies.6) Evaluate the regulatory environment.7) Evaluate local economic development and workforce stakeholders and

partners.8) Evaluate the needs of your local business community.9) Help create an environment that supports the start-up, growth and

expansion of local businesses.10) Evaluate community’s economic development and workforce development message.

Inspired by a report from National League of Cities and IEDC:

The Role of Local Elected Officials in Economic Development. 10 things you should know.

Coordinating …no one said this was going to be easy!

3033 counties nationally, and 285 cities with more than 100,000 people380 EDD Regions, 568 WIB regionsMultiple economic development partners (county, city, state, regional, private, public etc.) who are competing with one anotherSome regions have no active economic development planningWorkforce development seen as service provider, (job seeker focused)Workforce development - “new kid on the block”

Goal Setting Challenges

Dynamic Environment business cycles impact amount of capital companies can invest in expansion/growth (ie tax revenue to fund eco dev), the public workforce system can be limited in investments it can make (Incumbent worker training in good economic times/OJT in bad economic times).

Forecasting is an inexact scienceConflicting priorities (Globalization/Buy American) Economic Gardening vs. RecruitmentInfrastructure support/growth vs. tax base (new schools, new neighborhoods, more traffic, etc)Business vs. environmental/quality of lifeBusiness vs. sustainable wages

25% of jobs in the US pay below the poverty line,(less than $23,000 yr for family of 4)50% of the jobs in the US pay less than $34,000 a yearFrom Economic Policy Institute

Come to the table bearing gifts

Money (grant opportunities, etc)Connections (other collaborative partners who bring value)IdeasTrainingLeadership succession planningOther resources (talent, technology, staff, etc)

Both Workforce Development and Economic Development

Work with same employersAssure employers have trained workforceUse labor market information (career cluster studies)Entrepreneurship support

Work with same employers???

Customer Resource Management (CRM)

Shared database to coordinate contact with businessesExamples: Zoho, Salesforce , Sage, ACT!, Goldmine, Microsoft Dynamics,

Assure Employers have a trained workforce?

Mobilize Eastern Maine

How many jobs createdHow many jobs retained

Regional labor market planningUse labor market information

(career cluster studies)

Oh - Penn

Durham, North Carolina

Structural change (WIB Director also Director of Economic Development)

Virginia -CEDS38 WIBs have participated in CEDS.WIB Director should be in the CEDS planning

WIB Director is a professional planner Chairs come and go Chairs do not have the depth in workforce

system that the Director has Chair is private sector (may have their own

agenda)

Comprehensive Economic Development Strategy Under EDA - The CEDS should:1) analyze the regional economy2) serve as a guide for establishing regional goals and objectives 3) develop and implement a regional plan of action by identifying investment

priorities and funding sources.CEDS integrates a region's human and physical capital planning in the service of economic development.

CEDS planning committee: Majority private sector Public officials Community leaders Representatives of workforce development boards Higher education reps Minority and labor groups and Private individuals

.

CEDS Plan of ActionPlan of action:Promotes economic development and opportunity; including:

Transportation access; Environmental protection; Workforce development (consistent with State or local workforce strategy); Technology (such as access to high-speed telecommunications);Balancing of resources through sound management of physical development; and obtains and utilizes adequate funds and other resources

Entrepreneurial Support

Introducing entrepreneurshipInvesting in scalable companiesAccess to funding:

o Micro loanso Venture Capitalists/Angel Investorso Non-traditional funding opportunities

New markets tax creditsCrowd fundingDPO’s (BALLE – Business Alliance for Local Living Economies)

Growth of Gigging….

The new workforce paradigm …Women now own 29% of businesses in US but generate 4% of all business revenues… will own 50% of all business by 2020. How do we improve their revenue generation? How do we turn these small start-up businesses into employers?

Preparing for the futureCreative Molecular Economy -

Molecular captures that the future system mirrors biological/organic principles (opposed to physics principles, the dominate science in the industrial economy).

Molecular encompasses networks, ecosystems, where rigid structure is less effective than adaptable open structures where more persons can be involved and engaged.

Transformational vs.reformingWhat if:

There was a public work system? There were no more employers…and everyone worked for

themselves? Training was entirely self-directed? All types of intelligence were $ equal? All levels of jobs were equal?

Social Media Use modern strategies of online media to:Make conversations more inclusive (more people involved)Allow for more robust conversations

(more ideas can be heard/no time constraints)Allow for greater collaboration

How do we prepare people for jobs that don’t exist yet?

AdaptableTechnology savvyProblem solving skills/Critical thinkingTeam simulations (experiential learning)Imagination/Creative thinkingCuriosityTrustTransferable skillsCollaborativeEntrepreneurialID strengthsIn charge of destinyNew thinking for safety nets (health ins, ui)

SummaryWorkforce development must see themselves as leadersNeed training/awareness of economic development (asset-based approach)Employ collaborative strategies that help workforce development be seen as planning leadership (ceds, social media, crm’s, $, connections, ideas)Potential systemic or structural changesFocus on entrepreneurship/business –

JOB CREATIONFuture focus

NERETA Currently Linked In groups: Linkd.in/nereta.org Linkd.in/workforcesurvivalEnvisioned to be an online social media site Increase collaboration, share info on issues and legislation,

promote public image of public workforce system and

support entrepreneurship

 

Conference for economic and workforce development professionals in the north

east?

ContactColleen LaRose

Founder

North East Regional Employment and Training Association

Email: Colleen@nereta.org

Phone (908) 995-7718

Cell (908) 239 6030

Website: www.nereta.org

Twitter: @neretaorg

Linked In group: http://linkd.in/neretaorg