Seedco ED WD Policy Report

8/14/2019 Seedco ED WD Policy Report

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A Ta T SstsLinking Economic DEvELopmEnt anD WorkforcE DEvELopmEnt

A RepoRT Rom The Seedco policy cenTeR

MAY 2009

ped td rese p, Ws Sle, nc


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crt 2009 Strutur et e dt crrat (S). A rts rsr.

AcknowledgemenTS

We grateully acknowledge Seedcos Ben Seigel or helping to

guide this report to completion, Demetra Smith Nightingale

or her guidance on the Policy Advisory Council, and the

Joyce Foundations Whitney Smith or her support, crit ique,

and patience. Thanks as well to the many people, too many tolist, who read and provided invaluable eedback. Finally, this

report would not have been possible without the thoughtul

contributions o the hundreds o eld leaders, practitioners

and policymakers who took the time to talk with us.

This report was unded by the Joyce Foundation with

additional support rom the Ford Foundation, which

supports a range o Seedcos workorce and economic

development activities.

DESIGN: Red Rooster Group, NY

Seedco is a national nonproft intermediary that works

with local partners to create economic opportunities

or disadvantaged job seekers, low-wage workers, and

neighborhood entrepreneurs. Seedcos policy research

oers a practitioners perspective on workorce and

economic development policy implementation, pre-

senting a pragmatic assessment o the opportunities

and obstacles inherent in developing programs and

accomplishing systemic reorm.

915 Braa, 17t r, n yr, ny 10010

Tel: 212 473-0255 Fax: 212 473-0357

Email: [email protected] www.seedco.org

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TABle o conTenTS

2 Introduction

7 Lessons rom the Field

12 Putting Lessons into Action

13 Appendix

pEnnSyLvania 13

pldel 14

Philadelphia WorkforceDevelopment Corporation 15

1199C Trainin Fund 15

Philadelphia Workforce Investment Board 16

The Colleiate Consortium 17

Lse 18

Lancaster Workforce Investment BoardCluster Initiative 18

north caroLina 20

te ped td re 22

Associates Proram in Applied Science,Forsyth Technical Community Collee 22

Piedmont Triad Partnership 23

Dell Computer 24

Wese re 25

Reional Hih Technoloy Center 25

Tri-County Community Collee

Advanced Machinin Trainin 25

Advantae West Reional Partnership 26

iLLinoiS 28

c 29

Illinois Job Trainin andEconomic Development 30

Reional Healthcare Initiative 30

ManufacturinWorks and ServiceWorks 32

pe 33

TalentForce 21 33

Pathways to Successful Healthcare Careers 34

36 Index

A Ta T Ssts

Linking Economic DEvELopmEnt anD WorkforcE DEvELopmEnt

Neil Kleiman, Emma Oppenheim and Carl Voel with Luke Weisber

MAY 2009

execUTive SUmmARy

Initiatives aimed at linking economic development

and workorce development have emerged across

the country, oering governments the opportunity to

boost their economic competitiveness and increase

their workers skills simultaneously. These efforts

have achieved varying degrees o success, and many

programs have resulted in limited tangible outcomes.

Using in-depth case studies o regions in three states,

Pennsylvania, North Carolina, and Illinois, this report

details opportunitiesand cautions against pitalls

commonly encountered by those attempting to link

two complementary but very dierent systems.


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pAge 2 A TALE OF TWO CITIES: LINKINg ECONOMIC DEVELOPMENT AND WORKFORCE DEVELOPMENT

Even beore we ound ourselves in a crisis, the public

sector had begun to experiment with business devel-

opment practices by aligning economic and work-

orce development eorts. In response to the needs

o businesses in new growth industries, such as green

development and biotechnology, and in more tradi-

tional labor-intensive industries, such as healthcare

and manuacturing, policymakers initiated eorts to

coordinate investments in business with investments

in the local labor orce.

On paper, it all draws up very nicely. Businesses needemployees, especially in industries that have trouble

attracting and maintaining a skilled and reliable

workorce. Workers need jobs, and need help becom-

ing prepared or and nding good job opportunities.

Customized job training and initiatives designed to

work with specic economic sectors can simultane-

ously serve the needs o business and o workers. The

two elds dedicated to helping businesses and help-

ing workerseconomic development and workorce

developmentshould work together, the thinking

goes, maybe even be merged.

Key changes in the economic and policy worlds have

ueled this connection: the end o welare, the

decline o actory jobs and the rise o the knowledge-

based economy, ederal mandates or workorce to

serve both workers and employers equally. At all levels

o government, policymakers have been experiment-

ing with ways to unite economic development and

workorce developmentcall it ED/WD. The U.S. De-

partment o Labor (DOL) launched Workorce Innova-

tion in Regional Economic Development (WIRED) and

the Community-based Job Training Initiative to more

directly link businesses and workers within regional

economies. State and local agencies have drated new

plans, held statewide summits, selected priority eco-

nomic sectors, and even merged their employment and

business agencies. Behind all o it has been a bevy o

policy reports urging legislators and administrators to

link the two systems.

We are past the point o imagining this type o link-

ageit is here. These eorts are a cornerstone strategy

or localities, regions, and states seeking to build a

strong economic oundation. Now is the time to ask

hard questions about this approach: how well it cur-

rently works, how it should work, and how to ensure

that it is implemented in the best way possible.

We set out to do just that in this report. Here we

examine, in depth, how these ideas are playing out on

the ground. We looked at key regions in three states

Pennsylvania, North Carolina and Ill inoisthat hada history and reputation or innovative links among

job-training, employment strategies, and economic

planning. Over the course o two years we interviewed

more than 150 practitioners and policymakers in

those states with the goal o describing how ED/WD

programs do their workand what the results o those

eorts were.

inTRodUcTion

With crisis comes opportunity. The undamentals o our economy are in turmoil,

creating a moment in which we can move away rom short-sighted growth

strategies and reshape our investments in regions and workers. As governments,

philanthropists, and nonprots react to the economic crisis, we need to lay the

oundation or healthy regions and productive workers; crating smart business

and human capital development strategies is key to that goal.


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A REPORT FROM THE SEEDCO POLICY CENTER pAge 3

oUR pRoceSS

Our research revealed an absence o wholly inte-

grated economic and workorce development systems.

Without ully ormed models to tout, we decided to

document the practices and approaches that work in

economic and workorce development, with on-the-ground examples at the state, regional, and local levels.

In-depth case studies o initiatives in Pennsylvania,

Illinois, and North Carolinathree states recognized

or leading the eldormed the core o our research.

We ocused on creative programs including sector-

based initiatives, customized training, regional eorts,

and partnerships with institutions o higher learning,

especially community colleges. We interviewed dozens

o experts and administrators in each state to ascer-

tain the key opportunities, challenges, successes, and

ailures o every program.

O course, we are examining a moving target; the

research, conducted rom 2006 2007, oers us a

broad sketch rather than a precise snapshot. Programs

are bound to evolve and change, but while some o

the details we outline below may have changed, the

lessons they oer others in the eld have not.

Brie overviews o the states studied are included below,

with 16 case studies included as an appendix to this

report.

pennSylvAniA

Pennsylvania has been reeling rom a series o eco-

nomic setbacks or nearly a century. Controlled by the

strong business interests o steel, coal, and the rail-

roads in the 19th century, Pennsylvania was in a poor

position to emerge rom the era o industrialization.

The Keystone State experienced an economic depres-

sion that lasted rom 1928 to 1965, with an unemploy-

ment rate during these decades that was higher than

any other state except West Virginia. Throughout the

1990s, the state ranked near-last in population growth

and employment, and number one or absolute loss oyoung workers.

As a result, ew states in the union have been as xated

on economic development; workorce development

largely did not register until recently. While Pennsylva-

nias last three governors prioritized aligning workorce

eorts with economic development, the state did not

see tangible results until the current administration.

Most notably, the state created a $20 million initiative

that unds worker training programs in high-growth

elds. Pennsylvania has since become a recognized

innovator in ED/WD programming and attracted

substantial private oundation dollars to support these

eorts. Despite its progress, though, not all areas o the

state have been able to benet rom the new programs,

and much o the success is occurringin isolated pockets.

noRTh cARolinA

During the rst hal o the 20th century, North

Carolinas economy depended on agriculture and

manuacturing including urniture, cigarettes, and

textiles. These jobs demanded little education, and

North Carolina ranked near the bottom o the states

in terms o residents educational attainment. For de-

cades, though, the states politicians overwhelmingly

supported education and training as essential tools oeconomic development.

North Carolina has taken a long-range and strategic

approach to its economic growth. The state made a se-

ries o deliberate investments in its workorce over the

last hal-century, including the creation o the nations

rst community college system in 1957; the creation o

Research Triangle Park, a public-private research park

in the Raleigh-Durham area; and the Golden LEAF

Foundation, created with tobacco settlement unds, to

und economic and workorce development projects.

Parallel to these sound investments, North Carolinaalso has a track record o costly expenditures on busi-

ness recruitment as it competes to lure business invest-

ment to the state.

illinoiS

The th-most populous state in the nation and home

to Chicago, the third-largest city in the U.S., Illinois is

sometimes seen as a microcosm o the United States.

With Chicago as a transportation hub and nancial

StatES fEaturED in thiS rEport

ilpA

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A TALE OF TWO CITIES: LINKINg ECONOMIC DEVELOPMENT AND WORKFORCE DEVELOPMENTpAge 4

center, and economic sectors throughout the state

ranging rom agriculture to industry to natural re-

sources, Illinois has long had both a diverse economy

and a diverse workorce.

Illinois pioneering eorts to link economic and work-

orce development have been innovative, but plagued

by problems. Although the state was ahead o the

curve, launching new ED/WD programs beore most

other states, the eorts have not been overwhelmingly

successul. Moreover, many initiatives were launched

in parallel to the states continued investment in

traditional economic development rooted in large in-

rastructure. Recent initiatives to support the develop-

ment o local and regional eorts hold more promise.

The view Rom The gRoUnd

We ound connecting economic and workorce

development is not as easy as it sounds. Even in these

stand-out states, programs that promoted ED/WD

policies were not universally successul. In some cases

they have not worked at all.

Linking economic development and workorce devel-

opment takes years and must take root regionally or

locally in order to succeed. In states that have tried

agency unication, rustration is typically the end

result. Even at metro or regional levels, most attempts

to unite economic development and workorce de-

velopment have ailed to reach a notable scale in any

industry other than healthcare or manuacturing.

Creating a successul ED/WD program requires over-

coming many diculties: under-unding, a lack o a

committed constituency, clashing philosophies, and

institutional inertia all pose problems. But the big-

gest challenge is simply that economic development

and workorce development have dierent cultures,

missions, perormance measurements, and histories.

Connecting them is much harder to do than it would

appear in theory.

Programs linking economic and workorce develop-

ment canand dowork under the right conditions.

To succeed, policymakers need to understand the bar-

riers to success, take these barriers into account, and

provide the necessary supports to overcome them. The

greater misortune in seeing other programs ail would

be to abandon the entire concept. Economic develop-ment and workorce development need each other like

never beore and can work exceedingly well together.

It just isnt oreordained.

This report reveals that i done well ED/WD can lead

to an improved economic climate and more and better

jobs. It is also a call to understand how to better align

economic development and workorce development.

We have ocused on programs that provide worker

training and job-placement as a tool to help specic

rms or sectors, beneting both workers and compa-

nies. Certainly there are other types o economic andworkorce development programming (e.g. rst-source

agreements on economic development incentives),

but they are not part o this report.

Two goAlS ThAT mATch

Finding, training, and then upgrading a workorce are

challenges aced by the increasing numbers o rms

that cannot rely on low-skilled or mis-skilled workers

or the kind o production or services they provide.

A convenient, steady pipeline o prepared workers isa benet to many companies, and regions or cities

that can provide it have an advantage in attracting

and retaining rms.

Training and education are currently the best hope

or workers to nd a well-paying, career-bound job,1

but without local rms that are hiring, workorce

development doesnt have much o a chance. With

rms increasingly willing and able to change locations

a strong local or state economic development program

is an essential component o programs designed to

assist workers.

A number o activities can directly serve both workers

and businesses. Customized training, like that done

by a local college, helps businesses design training

programs or open positions and helps workers access

training that will lead to a job. Sector initiatives can

ocus on the needs o businesses in a specic industry,

including labor shortages, and can help workers ad-

dress issues o skill development and career mobility.

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Two SySTemS ThAT clASh

There are distinct dierences between economic

development and workorce development, historically,

in their missions and in their goals. Understanding

how these two elds dont t together is as important

as seeing how they do i any true ED/WD program isto succeed.

Workorce development has historically sought to help

disadvantaged individuals better compete in the labor

market. Job-training programs prepare people or em-

ployment and job-matching programs act as a search

and reerral service; both are ultimately intended to

enhance an individuals economic and social prospects

through employment.

Federal policy has usually driven workorce develop-

ment. The rst incarnations o modern employment

programs trace their roots to the antipoverty programs

o the New Deal, created explicitly as a social benet

intended to relieve the suering o needy individuals.

Building on these programs, the ederal governments

antipoverty movement o the 1960s used the Manpow-

er Development and Training Act and other employ-

ment policies to serve the chronically unemployed.2

Economic development, on the other hand, has

traditionally ocused on attracting, supporting, and

growing businesses to bring jobs, tax dollars, leader-

ship, philanthropy, and all the other civic benets that

come with a thriving regional or local economy. Thenations vibrant post-World War II economy succeeded

with a hands-o approach to economic development

rom the ederal government. Typically driven by

individual states, economic development has oten

ocused on luring rms rom old industrial areas to

growing regions o the country with subsidized loans,

tax breaks, and even direct payments to companies

that might relocate.3

Since the 1980s, both economic and workorce

development have refected undamental shits in

the economy and policy. Technological advancesin the global marketplace intensied the pace o

innovationand increased the penalties or industries

and regions that ailed to keep up.4 In economic

development, states launched a vast array o entrepre-

neurial economic development programs, including

loan unds, small business assistance centers, lm

oces, oreign trade oces, business incubators, and

early versions o empowerment zones. In many states,

economic development agencies grew in importance

and their budgets and access to various pots o money

increased signicantly.

At the same time, unding or workorce development

programs dropped dramatically. Policy overhauls at the

ederal level severely limited the elds ability to design

fexible and responsive programming. Both Ronald

Reagan and Bill Clinton, aced with allegations o

mediocre outcomes rom existing training programs,

attempted to improve workorce development peror-

mance and accountability and to bring employers into

the picture with business-controlled oversight boards.

Under welare reorm in 1996 and the 1998 overhaul

o ederal workorce programs through the WorkorceInvestment Act, ederal policies mandated a strict

work rst orientation. States and localities were

expected to quickly place the disadvantaged in jobs;

there was little time or money available or longer-

term training or employment assistance.

The cASe oR linking economic

And woRkoRce developmenT

Many states and localities began to look or new,creative workorce programming more closely tied

to business concerns. Industry organizations such

as Public/Private Ventures, Jobs or the Future, and

Workorce Strategy Center have written about how

to assist employers as a means to improve the

economic prospects o workers. By engaging with

local businesses, many workorce agencies sought

to ensure that the programs they were designing

culminated in real-world jobs.

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A TALE OF TWO CITIES: LINKINg ECONOMIC DEVELOPMENT AND WORKFORCE DEVELOPMENTpAge 6

At the same time, hiring and training issues were

coming to the ore among those working to serve

business. Companies, especially desirable technology

and science-based rms, increasingly needed skilled,

educated workers. The economic boom o the mid-

1990s and the accompanying growth in demand or

skilled jobs made this trend undeniable. Governmentsat all levels realized they needed to develop skilled

labor to boost their competitive edge.5

States and cities began to explore new ways to link the

two elds. Today, nearly every state in the union has

made changes based on this new paradigm, and orga-nizations such as the National Governors Association

have advocated the linkage.6 Many states and munici-

palities have merged their employment and business

agencies, created new programs to train workers in

high-growth areas, and established planning commis-

sions to identiy and address industry workorce needs.

The cASe oR A meASURed

AppRoAch To linking economic

developmenT And woRkoRcedevelopmenT

Problems oten arise when linking economic develop-

ment and workorce development. The two systems

operate under dierent cultures, and oten strive or

dierent goals. Yet, the underlying issues are more

substantial than a culture clash, and arent likely to

be erased with just time and trainings. Throughout

our research, we did not nd a single example o a

completely integrated, ully-unctioning economic and

workorce development system. A closer look at regions

that have attempted to merge or align unctions

reveals that the two elds still act in many ways in

independent silos. Even more telling, both elds have

not changed all that much: most economic develop-

ment organizations are still about deal-making with

businesses, and workorce development is still primar-

ily ocused on placing people in any available job.

For example, Michigan and Minnesota are oten cited

as examples o states that have attempted to ully

integrate their economic development and workorce

development agencies. Their experiences suggest that

wholesale and top-down integration o the two areas

is not as easy as it seems.

In Michigan, two successive governors attempted to

address the states substantial economic woes by

merging the economic development and workorce

development agencies, only to have to separate them

again due to internal tensions and external pressures.

Despite the merging and unmerging, there were

modest successes, notably the creation o the Michigan

Regional Skills Alliance, which oers seed unding

to regional eorts to connect employers to workorce

development eorts. The state has also won three

WIRED grants rom the ederal DOL to encourage

planning to link economic development and

workorce development eorts at the regional level.

In Minnesota, Governor Tim Pawlenty merged the

states economic development and workorce devel-

opment agencies, in hopes o bringing the nimble

culture o the states economic development agency to

its workorce agency. Though the interaction is still at

an early stage, economic development and workorce

development proessionals say that the two systems

unction separately, with little integration.

Traditional economic development does not always

consider local workorce concerns. Economic develop-

ment agencies are charged with wooing businesses,

usually through benets such as tax breaks, changes to

zoning regulations, and new inrastructure. Economicdevelopers may even lure companies by helping to

bring in skilled workers rom outside the local labor

pool. Supporting and attracting businesses in these

ways may eventually create jobs or local workers, but

it does not do so directly. Similarly, while workorce

activities such as adult basic education and job-match-

ing or low-skilled workers may create a stronger labor

orce in the long run, these unctions do not address

businesses immediate needs.

Furthermore, businesses and their workers sometimes

nd themselves at odds. Businesses are driven to maxi-mize protability in part by keeping expenses, includ-

ing labor, low, while workers want to maximize their

compensation. Economic development advocates try to

help companies come, stay, and remain protable, while

workorce developers try to help workers make a good

living. Although some businesses take a high road

approach to their labor orce, oering higher wages

and investing in workers skills, they are the exception

rather than the norm.7 Oten, the goals o serving busi-

nesses and those o serving workers align imperectly.

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Combining economic and workorce development does

not ollow one clear strategy. In act, we ound a wide

variety o ways to approach the goal. In our research,

we encountered programs initiated by state governors,

local nonprots, oundations, and city departments.

We ound programs that viewed merging or aligning

economic and workorce programming as a primary

goal and others that did so only as a means to an end.

We saw programs that were open or a ew years and

some that have lasted decades.

Even among such a diverse set o economic and

workorce development programs, we saw remarkably

consistent actors that led to success or ailure. In some

instances, the programs architects clearly incorporated

these ideas into their planning. In many other cases,

the program ound the right combination more by

happenstance. As current programs operating around

the country are tweaked and new ones launched, we

suggest that paying attention to the ollowing actors

will increase the likelihood o an ED/WD program

surviving and fourishing.

STATeS Role

Stat t ts t r bst as

a surt, a at a r rs

rtust ra a a tats.

oveRview

All three states we put under the microscope sought to

bolster economic development through state-initiated

planning or regional workorce programming, using

a combination o incentives and mandates to push re-

gions to link the two together. These programs tended

to founder on the same rocks: what states do best is

provide unding and a policy structure or regional

and local activity. Economic development and work-

orce development goals only work together in on-the-

ground programming; state-mandated eorts rarely

have enorcement mechanisms and are thus unable to

push or deep, long-term change.

On the other hand, state government policies that

encourage ED/WD programs and supply unding and

direction, but leave the regional and local entities to

design and implement eective programs, have suc-ceeded in providing the resources and other supports

to allow promising ground-level initiatives to fourish.

SUcceSSeS

North Carolinas New and Expanding Industry Train-

ing (NEIT) program is the states largest customized

training program. NEIT provides training grants to

companies in growth industries or which training will

lead to new jobs. The program is implemented through

the community college system, ensuring that most o

the programs investment is retained within the statescolleges as increased capacity. Tri County Community

College in a remote corner o the state used NEIT to

revive its ormerly deunct machinist training pro-

gram, lled a demand or skilled workers rom existing

manuacturers, and ensured that the areas handul o

industrial companies could stay and remain competitive.

In Illinois, the states Critical Skills Shortage Initiative

(CSSI), created in 2003, unded the implementation

o Chicagos Regional Healthcare Initiative. The eort

had already completed an action plan by the time CSSI

unds were made available, but without additionaldollars it had remained largely unimplemented. The

CSSI unding allowed or the creation o 12 separate

healthcare training eorts under the regional initiative

aimed at improving the capacity and quality o the

area workorce.

Pennsylvanias Industry Partnership (IP) program

had supported nearly 80 initiatives across the state

by January 2009. For example, IP grants have allowed

Lancaster Countys ood manuacturers to oer their

LESSonS from thE fiELDleARning Rom oTheRS

Ater looking at more than 16 ED/WD programs at the state, regional, local, and

community levels in three states over two years, certain trends became apparent.This section captures what seems to work in successul collaborations between

workorce and economic development programs and what common problems

tend to undermine and even end programs.


10/38


workers advanced training. The initiative brought

together rms rom eight dierent counties to discuss

common needs and exchange best practices. Through

this clustering, the IP unded trainings that cut across

the industry, bringing the cost to train an individual

employee down signicantly and strengthening the

industry, a cornerstone o the areas economy.

Programs that have fourished with encouragement

and support rom the state, have typically been in

smaller communities. While our sample size was not

large enough to truly weigh in on geographic di-

erences, our ndings suggest it may be easier or a

smaller market to take advantage o state resources.

Lancaster Countys ood manuacturing initiative or

the training o machinists in North Carolinas Western

Region may have been easier, or example, in areas

where there is a narrower range o activities competing

or attention and dollars.

chAllengeS

Pennsylvanias IP programs were created in 2005 as a

central part o the new gubernatorial administrations

strategy to develop a skilled workorce and attract

and retain business. The eort awards competitive

grants to workorce projects whose applications show

broad-based planning and participation o stakehold-

ers such as industry associations, workorce agencies,

and training providers. Importantly, the IP program

eschews mandated collaboration among agencies.While IP avors projects in high-growth and high-wage

industries, applicants dene the parameters o their

eorts and the geographic regions in which they oper-

ate. But because grant unding or ED/WD initiatives

is competitive, not all regions have been able to take

advantage o the unding.

North Carolinas state-level ED/WD initiative, on

the other hand, carved the state into seven regional

economic development partnerships. In 2003, the

legislature asked each region to conduct a strategic

planning process that involved representatives rom

economic development and workorce entities: higher

education institutions, chambers o commerce, and

more. The regions were asked to identiy limitations in

their economies, their labor orces, and their education

and training resourcesand to create a plan to bridge

those gaps. North Carolina did not oer the regions

additional unding to implement those plans,

and many o the local entities such as community

colleges, economic development agencies, and

municipal governments have yet to ollow the plan.

Illinois CSSI similarly divided the state into ten

regions, requiring each to engage community col-

leges, workorce agencies, and businesses in a plan-

ning process. The state made grant unding available

or sector initiatives, but total unding was relatively

small, and was made up o WIA discretionary dollars

diverted rom other workorce eorts. Furthermore,in areas where sector eorts arose primarily to take

advantage o the new CSSI unds, ew projects appear

to be sustainable.

Unding

n a at aa surt a a

t r bt tt a ut.

oveRviewIn blending workorce development with economic

development, the temptation is to simply reallocate

unds already dedicated to each eld into a merged

program. Yet building a new system requires more

than that, and our research has shown that extra

unding provides the support to overcome the

initial bumps o creating something truly new.

SUcceSSeS

North Carolinas Golden LEAF Foundation, created

with hal o the dollars rom the states settlement withcigarette manuacturers, is an example o the impact

that dedicated unds can have. The Foundation ocuses

its support on ED/WD projects, and has been integral

to the success o many o the states initiatives. For

example, the North Carolina Biotechnology Center is

a unique economic development organization created

to support the growth o the lie sciences industry be-

yond its existing concentration in the Raleigh-Durham

Research Triangle region. With oces spread through-

out community colleges and universities, the eort

has supported the development o niche biotechnol-

ogy clusters and the creation o specialized workorce

training programs across the state.

Pennsylvanias IP programs allotment o $20 million

a year, part o the states $100 million Job Ready PA

initiative, goes to support cluster programs throughout

the state. A crucial use o those unds has been the

dedication o $5 million a year or intensive economic

research and long-term planning to ensure that invest-

ments go toward high-wage and high-growth industries.


11/38


chAllengeS

Meanwhile, in Illinois, the state has unded its CSSI

program solely with diverted WIA unds, leaving it

with a limited impact and ew creative local initiatives

in its portolio. At its highest unding level, in 2005,

there was about $9 million available to the states 10

workorce areas. In an attempt to push the regions to

directly und their locally-grown programs, the state

reduced that amount by hal in the second year and

dropped it to zero in the third.

BUSineSS involvemenT

T bussss b sr ust a

a ra r rr asssta.

oveRview

Unless companies already need help with their work-

orce, and see it as something that makes them more

competitive or protable, economic development

representatives are unlikely to prioritize workorce de-

velopment issues. Successul ED/WD programs targeted

industries that listed workorce issues as a primary

issue or their continued operations. Importantly,

employers can be valuable resources or guidance, but

they rarely have the time or inclination to tackle the

minutiae o operational challenges.

SUcceSSeS

Healthcare programs were the number one example o

an ED/WD eort that ound traction in our research;

every region we looked at had an ED/WD healthcare

initiative. For example, Lancaster, PAs healthcare IP

program had little trouble recruiting area healthcare

employers. Many operated long-term care acilities

with severe stang shortages, and improved recruit-

ment and management training were among their

key concerns. The Pathways to Successul Health-

care Careers training program in Peoria, IL, was theonly successul ED/WD initiative to emerge rom the

regions extensive TalentForce 21 planning eorts.

Indeed, both Chicagos regional healthcare initiative

and Philadelphias 1199C training und preceded any

encouragement rom government. In Philadelphia,

area employers agreed to pool their resources and con-

tribute a percentage o their payroll expenses toward

training and education programs or their incumbent

workers; in Chicago, area employers gathered to create

a plan or attracting and training workers even beore

the state decided to support their programs with CSSI

unds.

Manuacturing also has signicant workorce needs

due largely to computerization and other technological

improvements that make the work more complex as

well as the assumption among potential workers that

it is a dying sector. Chicago has ocused on the areas

industrial sector, establishing ManuacturingWorks, a

One-Stop service center designed to serve manuactur-

ing employers. The eort has moved beyond helping

rms with hiring, and now helps businesses improve

their practices and support long-term skill develop-

ment or workers. A collaboration among economic

development, workorce development, and community

colleges in North Carolinas Piedmont Triad helped to

enhance the regions training capacity when it cre-

ated a customized training curriculum or Dells newcomputer manuacturing plant. The college went on to

develop an advanced manuacturing training program

to serve the areas broad range o high-tech industrial

employers in need o a skilled manuacturing workorce.

Successul initiatives oten institutionalize the process

o business oversight and eedback, recognizing that

programs designed rom aar by academics and work-

orce agencies may not be a good enough match to

hire graduates. Lancaster, Pennsylvanias ood manu-

acturing initiative brought business representatives

together relatively inrequently, but just enough, to

share high-level knowledge and air concerns. The work

o the sector coordinator was directly inormed by thatinormation, which led to the development and imple-

mentation o well-designed and responsive trainings.

A business advisory council helped pave the way or a

new biotechnology degree at North Carolinas Forsyth

Tech. The council guided the programs inception and

helped the college understand the nature and scope

o business workorce challenges, but implementa-

tion was let to the college. Forsyth Tech cultivated its

own internal knowledge o industry needs by hiring

hele s wee e be e

ele ED/WD e d

ese; ee e we led d

ED/WD ele e.


12/38


a department head and instructors directly rom local

rms; part o their job was to work through the daily

details o building an eective program

chAllengeS

Eorts to serve industries with less urgent workorceneeds have been ar less successul. When the Philadel-

phia Workorce Investment Board created an initiative

to serve the nancial services sector, the banks had

expressed a strong interest in recruiting and training

a more diverse workorce to better serve their diverse

clientele. Bank ocials had stated they would sup-

port the program by giving incumbent sta time o

to attend trainings, paying a portion o the training

costs, and hiring new program graduates. But because

the service was an enhancement, not a necessity, they

reneged on their commitment, choosing in the end

to not contribute to the training costs and hiring veryew o the programs graduates.

leAdeRShip

prra ars tat s str, sstt,

a tt as a r.

oveRview

Every good program can use an eective leader, o

course. But because economic development and work-

orce development are dierent systems with dierent

goals, successul programs were oten helped tremen-dously by an individual who had a true ED/WD vision,

the savvy to nd a way to make it happen, and the

dedication to keep going when problems arose. Most

important o all, successul leaders are able to speak

the language o business while maintaining a commit-

ment to workorce development goals.

SUcceSSeS

In Pennsylvania, Sandi Vito, Governor Rendells top

workorce administrator, brought energy and vision to

her position and quickly achieved signicant agency

reorms. An administrator with little background in

workorce, Vito drove the states bold and innovative

strategy that both allocated signicant new unds

toward ED/WD initiatives and spurred local areas to

develop creative initiatives to draw down those unds.

Bob Bowmans leadership o the Collegiate Consortium

in Philadelphia brought together college presidents

usually territorial and deensive o their own campus-

es resourcesrom across state lines in New Jersey and

Delaware to create a unique collaboration that built

new, industry-responsive educational programming.

Bowman helped to transorm a limited eort to retrain

shipyard workers displaced by the closing o a naval

yard into an ongoing collaboration among higher

education institutions to respond to industry

education and training needs.

In Chicago, Mayor Richard Daleys steadast support

o ED/WD ostered an environment in which agency

heads and other stakeholders were encouraged to

design and implement creative new ideas. With the

cultivation o a skilled workorce a cornerstone o the

mayors economic agenda, Daleys workorce agency

created ManuacturingWorks, a unique eort to utilize

the inrastructure o One-Stop workorce centers to

support the citys industrial sector. The mayor hasmore recently pushed city workorce agencies and

schools, under the guidance o a business advisory

council, to work together to holistically address the

needs o our targeted economic sectors.

ShARed incenTiveS

esur tat t stars a

s t atat as

ar tru st a rras suss.

oveRview

Partnering agencies missions and goals must closely

track the mission and goals o an ED/WD initiative.

Without a natural institutional imperative to see a new

program succeed, organizations are likely to lose interes

in programs or divert resources to core activities. Given

organizations need to protect their sel-interests, shared

perormance measurements and payos or workers

W l sl ee

see ew seed, zs

e lel lse ees s

de eses e es.


13/38


served, job placement gures, businesses helped, and

jobs created can help to push them to meet the needs o

both the workers and the businesses. And i workorce

agencies, economic development partners, and commu-

nity colleges are given the institutional responsibility to

work in concert, they will be ar more likely to do so.

SUcceSSeS

The various stakeholders participating in Chicagos

Regional Healthcare Initiative may have had an insti-

tutional responsibility to respond to the communitys

needs, but those most actively involved also stood to

prot rom the venture. Businesses were desperate or

skilled workers, and convened the eort themselves

in order to nd a solution to their constant challenges

nding qualied candidates. Education providers

would see a nancial payo rom the increased enroll-

ment o students in the new programs.

Similarly, the entities behind the construction o

downtown Winston-Salems new research park needed

to innovate or risk suering nancially in the uture.

Wake Forest University sought to grow the research

arm o its medical center as a strategy to boost the

regions growth and prosperity because, as a medical

provider, its long-term nancial viability depends on a

robust population that is able to purchase and pay or

medical services.

chAllengeS

In many cases without institutionalized incentives,

local workorce boards or planning entities had

diculty mobilizing stakeholders to execute the

regions plan or ED/WD activities. Many o the

entities in North Carolinas Piedmont Triad only

implemented the pieces o the regions strategic plan

that were most relevant and useul to their existing

mission and operations. The initial plan called or a

total o 120 action steps to be taken in seven target

industry sectors, but the only projects that moved were

the ones that participating entities knew would benetthemselves. Guilord Technical Community College,

or example, signed on to the Transportation and

Logistics cluster and built an aviation centerbut it

had already been planning such a project, based on

its existing relationship with area aviation employers.

incUBATion

d t ju a rra t ast;

sussu rras ta a t atur.

oveRview

Because they do require changes in culture, mission

and programming, ED/WD programs should not be ex-

pected to blossom immediately. The programs with the

most impressive results in our research are either long-

standing initiatives or are operating in an environment

that values ED/WD programming. Provided reasonable

benchmarks are being met, policymakers should be

willing to invest in creating a true ED/WD culture.

SUcceSSeS

Chicagos ManuacturingWorks One-Stop center was

built on longstanding and wide-ranging eorts to

revive and restore the citys industrial sector. A wide

range o actors had already prioritized the reinvigora-

tion o the citys industrial economy, including the

new Chicago Manuacturing Renaissance Council and

the mayor himsel, who charged the citys workorce

development agency and others with supporting the

eort. The workorce agency set out to put those ideas

into practice, creating a center that serves the indus-

trys hiring needs as well as pushes or improved busi-

ness practices and long-term skill development.

North Carolina has a long and successul tradition ousing workorce programs to support economic develop-

ment, making it perhaps the strongest case or long-

range ED/WD planning. The states ED/WD model works

well in large part because o the relationships built over

time and longstanding policies with which everyone is

amiliar. Forsyth Techs new lie sciences degree program

is a prime example o this, beneting rom a history and

culture in the states community college system that

emphasizes industry relevance and worker preparedness.

The college, already closely connected to the business

community because o longstanding expectations or

individual campuses set by the system oce, knew that

the small but growing cluster o biopharmaceutical com-

panies in the area was struggling to nd skilled labora-

tory technicians. It secured unding to develop the new

academic program rom the states Golden LEAF Founda-

tion, a unding stream dedicated to supporting long-

range economic development projects. And it tapped

a local entrepreneur who was a member o its business

advisory council to act as the new head o the program,

ensuring its relevance and responsiveness to business.


14/38


oR The edeRAl goveRnmenT

eura a a ra rra tat s

a rr t tru rat

rras su as dols wiRed a cut c-

rat tats, t str-us tats

u t Ara Rr a Rstt

At (ARRA), a t Strt et

custrs t oraz Ra Suss (SecToRS) Atrt tru crss. Ts rts su

continue and be expanded, and the federal government

a bt r ua r strutur ts ta-

ts as as r u.

esur t rastrutur r a ua

ata rt s a b st rras

a ssts tat bt bussss a rrs a,

sa r uat.

Balance exibility and accountability in the funding

stras tat surt busss a rr t.A art rstrts ra u stras

urrt a t ut r stats a rs

t us rat rras tat

t a rr t; as

ts uts u a a t ura

at a t rra.

oR STATe goveRnmenTS

us surs u a

us rs t rrtz t st rs

rjts, a a a rrs a ra a-

. Stats a ara bu t aa t tr

rssbts t st t sta r a a ra

a rr t rra

t at u a rra us. Asr a r stats ts at, t su

t sss tr r rs.

oR locAl goveRnmenTS

B aru tat ed/wd stts ar s s

a r rjts tat ar a tru at r bt

bussss a rrs, t a s st. i

busss t strat s a t

rjts, a rrut artrs t a st trst

t rjts suss. la ars su ta

tr rssbt t bu a str a sustaab

r srus; t r tut t ars

a asssta t ra a stat rts,

t s ats a rs tat a t r r

sstt bussss a rrs.

putting LESSonS into actioni t ast ts, t r strutur ur ata as b sa t ts r.

w au, t urrt rss rsts rs t t rtut t t t rt ts t

t rtut t st bussss a rrs a a surt -tr strat

rt. T rats ar ta r t sss ar tru urextensive research on the topic.


15/38


Pennsylvania nonetheless reveals just how hard it is

to truly link workorce and economic development.

The state has taken incredible strides orward, but at

considerable time and eort, and not all o the states

regions have beneted equally. Philadelphia created

a number o innovative programs led by a set o

dynamic workorce entrepreneurs. But without a

citywide commitment to the eld, many have altered.The semi-rural region o Lancaster, on the other hand,

has most eectively made the connection by main-

taining a clear ocus, linking with regional partners,

and receiving an ongoing fow o state and ederal

dollars to support the work.

goveRnoRS Ridge & SchweikeR

Pennsylvania has historically ocused on economic

development, but workorce development barely

registered. That all changed with the election o Tom

Ridge in 1994. In a 1999 strategy document, A UniedPlan or Workorce Investment, the Ridge administra-

tion called or increased eciency by coordinating

the ve major workorce agencies through a council o

the agency chies. In addition, the plan recommended

links or economic development to be better connected

to the states business growth programs.

The plan was considered bold and directed. In Penn-

sylvania, economic development and workorce devel-

opment are synonymous, claimed a 2000 report rom

the National Governors Association. But on the ground,

little o Ridges plan came to ruition. There were virtu-

ally no linkages established between economic devel-

opment and workorce development, and a scathing

assessment o the strategic plan by the states Auditor

General in 2004 exposed a breakdown in coordination,

concluding that workorce and economic developmentwere no closer despite the reorms stated goals.

What happened? Certainly one contributing actor was

Ridges early exit rom the state in 2001 to become the

Secretary o Homeland Security in the Bush adminis-

tration. But many observers believed the entrenched

bureaucracies at the state level resisted coordination.

You cannot just will these olks to work together,

noted one state ocial.

At the local level, agencies were now aced with a new

set o state policies. But the localities tended to wait it

out rather than shit operations. The Ridge plan came

with no additional unding to support change and no

way to penalize agencies that didnt comply. As one

state ocial noted, Its ne and good to say you want

more coordination, but you have to make it happen.

These agencies do not naturally move in that direc-

tion.

Ridges replacement, Mark Schweiker, was in oce

or two years. He maintained a ocus on workorce,

pEnnSyLvania: StatE rEviEWOn the surace, Pennsylvania would seem to possess signicant

economic development and workorce development connections.

Ater suering severe declines in its traditional industries

o steel, coal, and railroads, the state aggressively pursued

economic development and more recently workorce develop-

ment. It has become a recognized innovator in both areas, and the last three

governors made alignment o employment programs a top priority. Additionally,

Pennsylvania has attracted a substantial share o private oundation dollars locally

and nationally to support these eorts throughout the state.

pEnnSyLvania

philAdelphiA

lAncASTeR

Appendix: cASe STUdieS


16/38


including the creation o the Critical Job Training

Grants, a sector-based training und that was jointly

administered by the labor, economic development,

and welare agencies.

The cURRenT AdminiSTRATion

First elected in 2002, Pennsylvanias current governor,

Ed Rendell, is the ormer mayor o Philadelphia. He

was described in a recent Pew report as possessing,

guile, optimism, and erocious energy, and was

reerred to as, Americas mayor long beore New

Yorks Rudolph Giuliani received that appellation.

In many respects, Rendell has achieved an incredible

amount o reorm around workorce development in a

short time, driven in large part by a team headed and

assembled by Sandi Vito, his head o workorce devel-

opment at the state Department o Labor and Industry.

Vito was charged with responsibility to make all work-

orce programs work eectively together. We moved

so ast because Sandi is so good and eective. She is

very close to the governor, a real intellectual, and most

importantly she is very good at operationalizing action

steps, one state observer says.

As in the Ridge years, Vitos reorm plan emphasized

increased coordination between economic develop-

ment and workorce oces. The core eort encouraged

more workorce programming around ten high-priori-

ty sectors, including energy, lie sciences, and commu-

nications services. But Vitos implementation strategy

was dierent in two undamental ways. First, signi-

cant new unds were put towards the eort under a

$100 million campaign called Job Ready Pennsylvania.

Second, instead o mandating collaboration between

agencies, the administration chose partners where it

made sense.

The state has allocated $20 million a year since 2006

or the new Industry Partnership program, which sup-

ports sectoral programs and training. Fully $5 million

o the annual investment is spent on developing a deep

understanding o industry to ensure that the mostpromising sectors are targeted with the smartest invest-

ments. And rather than parsing out unding by legisla-

tive district, the program allows promising initiatives

rom all over the state to apply or grants. Local work-

orce groups submit an initial strategy and are selected

based on evidence o real industry need in high-growth

and high-wage sectors, and then asked to continuously

submit progress reports. By 2008, 89 new partnerships

were ormed with more than 6,100 businesses involved.

More than 53,000 workers have been trained, with an

average gain in wages o 13 percent, and businesses

have reported an 85 percent retention rate.

Pennsylvania possesses one o the weakest community

college systems in the nation. There are only 14 com-

munity colleges in a state o 12 million residents, and

there is no governance structure. Vito crated a series

o programs around high-priority sectors, includ-

ing $44 million in economic development stipends

or community colleges that taught courses in high-

demand sectors. This program now reaches more than

38,000 students enrolled in 734 community college

programs.

Vito was initially more hands o with the economic

development agency, choosing instead to lay the

groundwork or uture collaboration by rst enhancing

the strength o workorce agency internally. That

approach has paid o, and now in concrete ways

theyre building some links, tangible programs where

connected, says one o Vitos top administrators.

The Workorce and Economic Development Network

o Pennsylvania, or WEDnetPA, gives existing or

incoming businesses a point o contact within the

states education and training institutions through

which to apply or and connect to customized training

The program is closely coordinated with the states

workorce development activities and Industry

Partnership program.

The Rendell administrations eorts are having agenuine impact, but not consistently across the state.

Many localities do not even pull down the unds or

use them in ways that are not strategically aligned

with broader economic development and workorce

development goals. But or the areas that are primed

to make the workorce and economic development

connection, the unds and thinking behind them are

critical to moving orward.

philAdelphiA

Philadelphias economic transition has been dramatic.

With the exception o pharmaceutical production, the

citys manuacturing has suered dramatic cutbacks.

Meanwhile, nancial services, transportation, utilities,

insurance, real estate, healthcare, and business support

services have risen to prominence.

The city is also home to some o the countrys most

innovative workorce programs. Philadelphias Tran-


17/38


sitional Work Corporation is the countrys largest

transitional jobs program or public assistance clients.

The citys 1199C training und is the largest union-

sponsored training initiative ocused on both union

members and local residents. Arbor Inc., the largest

proprietary workorce organization in North America,

is headquartered there. And in the public sector,Philadelphias workorce agency uses the majority o

its Workorce Investment Act dollars or customized

business trainingunheard o in any other major

cityand leading local universities have partnered

with the city around a strategy to retain a high-skilled

workorce.

The city government itsel, however, had not exhibited

a strong or consistent commitment to either economic

development or workorce development until recently.

Its economic development approach was primarily

deal-oriented, ocusing on hotel and stadium construc-tion, and City Hall had not been motivated to produce

a workorce agenda. The vacuum around workorce

and economic development policy at the municipal

level also meant that the entrepreneurs behind each

successul workorce initiative had rarely partnered

or linked to a broader citywide agenda.

More recently, a number o Philadelphias ED/WD

initiatives have grown and matured to take on a

broader region-wide and strategic ocus. In addition,

the mayor Michael Nutter has committed to workorce

development as one his top three priorities, including

pursuing greater partnership and collaboration among

Philadelphias ormerly isolated agencies and programs.

philAdelphiA woRkoRce

developmenT coRpoRATion

Innovative customized training program

WIA dollars available directly to employers

In a major break rom other large cities, Philadelphias

workorce agency, the Philadelphia Workorce Develop-

ment Corporation (PWDC), allocated 75 percent o itsederally unded workorce dollars or customized busi-

ness trainingsome o which went directly to employ-

ers. Use o ederal Workorce Investment Act dollars

or such purposes is virtually unheard o; only a small

portion o local regionsand no other major cities

have done so on any level.

More than 3,000 workers were trained annually be-

tween 2003 and 2006 through the program. About 30

businesses, ranging rom large corporations to small

businesses to public authorities, received services, and

training programs ranged rom large trainings or new

hires o a TJ Maxx retail warehouse to training o our

new exterminators or Steves Bug O. About hal o

the trainings were conducted in-house by the employ-

er, and the rest delivered by a mix o local nonprots,colleges, and private training providers.

To help ensure the unds went or true workorce ben-

et, rather than subsidizing costs the business would

have paid or anyway, PWDC demanded that the busi-

ness contribute to the training. Unlike most customized

training which is typically oriented toward those al-

ready on the job, this was dedicated solely to new posi-

tions. The program allowed PWDC to directly place its

typical clientsomeone transitioning o o welare or

recently laid o rom workin a job. One ocial notes,

Look, I am a social worker, but we did this because itwas born o the rustration o not nding people work.

This puts someone right into a job. It works.

Despite the programs popularity, it had no real link to

other citywide eorts or vision o workorce or eco-

nomic development. PWDC is a quasi-public agency

with a history o being isolated rom the city. Founded

in the 1980s by its executive director to be distanced

rom the politics o the city, the agency can hire

people aster than traditional government agencies and

pay them closer to market value, and it has the ability

to design and implement new initiatives with little

outside intererence. But its status has also given it a

reputation or secrecy, operating its job training unds

without much public oversight, and it is not well con-

nected to other agencies.

More recently, however, the program has enjoyed

stronger connections. Peter Longstreth, the Chairman

o PWDC or the last two years, is also the head o the

citys economic development agency, and there is a

reinvigorated ocus on collaboration and partnership.

1199c TRAining Und

Large-scale, long-standing training program

r atar rrs

Support from employers and union

Both incumbent and new workers are served

The 1199C Training Fund is one o the most com-

prehensive and long-standing sector initiatives in

the country. The und trains nearly 20,000 union


18/38


and non-union workers every year in healthcare oc-

cupations, including nearly 20 percent o the locals

membership. 1199Cs work in healthcare has become

a national model, and its success is rooted in a single-

minded ocus on the industry, consistent leadership,

and access to an ongoing source o unds that employ-

ers are required to provide.

The initiative was an outgrowth o a labor-manage-

ment negotiation in 1974. Then, employers had a

shortage o trained mid-level workers and workers had

diculty accessing traditional education and training

providers. The trust is unded in part by a set-aside

o 1.5 percent o gross payroll rom the 55 healthcare

employers spanning the Philadelphia and southern

New Jersey region, managed by a board that is evenly

split between the 1199C local o the National Union o

Hospital and Health Care Employees and participating

healthcare and human service employers.

Such a large pool is rare, but what makes it unique is

that it also includes outside dollars. At the inception

o the und, its creators included a clear goal to serve

a constituency beyond the unions membership. So

oundation dollars and millions in government con-

tracts have been procured to serve local residents and

prepare them or jobs in healthcare. The und has been

a major beneciary o the states sectoral unding. It

has received three separate Industry Partnership grants

and recently was awarded a new contract to develop a

career pathway or direct care workers.

The program can customize its oerings to meet in-

dustry demands as well as worker needs. Many work-

ers need remediation to improve their basic educa-

tion beore they can enroll in college-level courses,

or example, so the training und has established a

customized bridge program. 1199C also works with

employers to develop industry-recognized intermediate

career steps or those on the road to, but not yet ready

or, ormal training. All programs support workers with

career coaching and supportive services.

The model o Heres your course, sign up, and go,doesnt work or our students, says 1199C Executive

Director Cheryl Feldman. They need supports: an

inormation and resource broker and also a mentor.

But you also need to hold students accountable to their

responsibilities to the program. Its not an easy role.

That balance is denitely an art.

philAdelphiA woRkoRce

inveSTmenT BoARd

Sectoral programs in several different industries

Entrepreneurial approach to identifying projects,

with mixed results

Promising work in life sciences and other industries

The Philadelphia Workorce Investment Board (PWIB)

became active around sectoral programming beore

the state started unding such eorts. It has taken a

uniquely entrepreneurial and experimental approach

to its sectoral work, pursuing pilot projects in a wide

range o industries. It then uses its initiatives to deepen

its own understanding o the work and integrates those

lessons into subsequent projects.

The WIB chose projects as they arose, pursuing thosethat made sense strategically. But it approached each

industry project dierently. In some cases, it dedicated

only small amounts o unding and took on relatively

small goals; in others, it launched ambitious and in-

depth initiatives in industries with greater need and

more promise.

For example, an early project targeted the restaurant

industry, a sector with a number o employers who

expressed a real need or assistance nding and keep-

ing good workers. The WIB saw an opportunity to

place workers with limited education in an industrythat, although low-paying, allows employees to pursue

continuing education outside o the workplace. Local

One-Stop career centers screened candidates, and new

hires were given training materials and a short orien-

tation program. In the end, the program achieved its

modest goals: It placed 100 people in jobs, and the new

hires job retention proved to be higher than those

hired o the street.

The WIB did not apply or Industry Partnership und-

ing or the project rom the state because it knew that

restaurant jobs would not meet the states denition

o a high-growth sector. But, as Sallie Glickman, CEO

o the PWIB, explained, This is a certain kind o

sector work. Industry Partnerships are a much more

mature and robust approach. This doesnt meet those

requirements, but that doesnt make it any less valid.

Although the WIB believed that the jobs could be ideal

rst steps or those with employment obstacles, the

local career centers expressed concern that they were

placing clients in dead-end jobs. The restaurant eld


19/38


20/38


21/38


workorce ocials in hopes o making training grants

to entire industry clusters. We tried selling the idea to

the economic development ocials, but they werent

interested. But the workorce development ocials in

the new administration led by Deputy Secretary Sandi

Vito were looking or a bold idea, he says.

Sheelys approach was distinct rom most public sector

initiatives. Rather than kick o the eort with a major

summit, the pragmatic approach was developed and

implemented quietly. While the WIB distributed the

money and provided a ramework or operations, busi-

nesses actually decided on the use o the unds with

the help o project managers, oten hired directly rom

the industry themselves, who typically saw their role

as being responsive to the sector, not just to the WIB.

Since most o the sectors were not tied to traditional

county or WIB boundaries, most o the initiatives work

in conjunction with the surrounding nine counties.And the convening bodies and boards were 100 per-

cent populated by employers.

With a structure in place, work began simultaneously

in healthcare, agriculture, ood processing, commu-

nications, construction, biotechnology, automotive

services, and metals. Sector priorities are fexible, creat-

ing dierent sets o deliverables. For example, health-

care initiated a broad advertising campaign to improve

recruitment in the perennially under-staed eld and

established a core set o supervisory trainings. Metals

and metal abricating initially ocused on management

training and has increasingly ocused on traditional

hands-on training o welding and machining.

Food manuacturing is a good case study. Launched

by three WIBs representing eight dierent counties in

2004, the Consortium looks or commonalities among

very dierent companies and builds trainings that cut

across their dierent needs, including management

training, product labeling, and industrial mainte-

nance. To be successul and sel-sustaining, theres

got to be tangible benets, otherwise theres no reason

to spend time and energy to attend meetings. And a

[big attraction] is the cost o training, which has gone

down rom $10,000 to $3,000 per employee by work-

ing [in partnership], says Glenn Wol, technical train-

ing manager at Cadbury Schweppes near Gettysburg.

Primarily oriented to incumbent worker training, these

sector activities have also connected to overall eco-

nomic development eorts. The WIB is oten consulted

on economic planning and any major business retention

or attraction deals, or example, and workorce issues

became a cornerstone o the countys major economic

development strategic planning process in 2004.

Almost all o the larger sectoral initiatives have been

regional in nature, due in part to natural advantages

or collaboration: The regions are similar in demo-

graphics, economic potential, population density,

inrastructure, and transportation, and local industries

are relatively evenly dispersed geographically. It also

helps that the various workorce leaders in each area

ound they could easily work together: No WIB

directors were political appointees, and each was

the ounding director o a new structure ocused

on creating new programs.

Perhaps most important was the availability o new

state unds or regional collaboration around cluster

eorts. The money surely helped bring us together,

says Bob Garraty, ormer executive director o the

South Central Workorce Investment Board and now

director o the Pennsylvania Workorce Investment

Board. One would like to think we saw the impor-

tance o regional cooperation, and thats a part o it,

but we knew that we had a better chance o gaining

state dollars i we worked together, so we did.


22/38


The election o the states only our-term governor,

Jim Hunt, is emblematic o North Carolinas approach

to economic development. Governor Hunt, who served

rom 1977 to 1985 and rom 1993 to 2001, remains

one o the nations strongest proponents o education

reorm, with a tenure marked by a wide range o

initiatives that linked education, workorce prepara-

tion, and economic development.

commUniTy collegeS

Founded in 1957, North Carolinas community col-

lege system was the rst in the country. The systemincludes 58 collegesevery state resident has a com-

munity college located within 30 miles o his or her

homeand the schools serve about 800,000 students

a year.

Designed rom the outset to support the states long-

term economic development goals, the community

colleges were envisioned as a tool in North Caro-

linas transition rom an agricultural to an industrial

economy. The community college system was initially

pairedand later mergedwith a system o industrial

education centers. This history has ensured that thecommunity colleges remain tied to workorce prepara-

tion, economic development, and the business com-

munity. To ensure that individual campuses remain

closely aligned with business needs, each college has

dedicated liaisons to local businesses, oers incentives

to encourage aculty to spend time in industry to re-

resh their skills, and requires that all degree programs

are overseen by business advisory councils.

ReSeARch pARkS

Around the time North Carolina launched its com-

munity college system, the state also created Research

Triangle Park, a public-private research park in the

Raleigh-Durham area. Designed to be an economic

development engine or the state, RTP oered re-

search companies access to physical inrastructure

and resources rom the regions three top-tier research

universities and eight other colleges and universities.

The park now has more than 20 million square eet

o research space or 157 companies and more than

39,000 ull-time employees.

Based on RTPs success in attracting and nurturing

both the companies and their workers, North Caro-

lina has begun to replicate the model. The Centennial

Campus at North Carolina State University has os-

tered additional collaborations between business and

higher education, and most campuses o the University

have or are giving consideration to development o

their own research parks.

TRAining UndS

North Carolina has created dedicated customized

training unds to oer companies access to training or

new or existing workers. Administered under a hand-

ul o dierent programs, these unds make it possible

or companies to share the cost o training workers,

and most o its grants are delivered through the com-

munity colleges.

north caroLina: StatE rEviEWNorth Carolina has, perhaps more than any other state in

the country, taken a long-range and strategic approach to

its economic transition. A series o deliberate investments

in workorce development over the last hal-century werespurred rst by the rapid decline o the states agricultural

economy and, later, the more recent breakdown o its industrial base in the urniture,

tobacco, and textile industries. The result is that North Carolina has strong and capable

worker education and training systems that work hand-in-hand with economic develop-

ment toward the goal o boosting the states competitiveness in attracting and growing

business. However, in North Carolina, economic development continues to be dichoto-

mous. Even as the state has supported education and training, it has continued a strong

tradition o costly expenditures on business recruitmentwith diminishing returns.

north caroLina

piedmonTTRiAd Region

weSTeRnRegion


23/38


The New and Expanding Industry Training (NEIT)

program is the states largest pool o business-oriented

training dollars, and oers grants to companies on the

condition that training must support the creation o

at least 12 new jobs. The program has grown steadily

since its creation, spending close to $10 million in

2006-2007, unding a total o 208 projects that trainednearly 20,000 workers. Another program, Focused In-

dustrial Training (FIT), oers nearly $6 million to tra-

ditional manuacturing industries in need o improved

equipment and training.

North Carolina also created the Golden LEAF Founda-

tion as a continual source o unding or economic

development and workorce preparedness projects.

Setting aside hal o the dollars received rom the 1998

legal settlement with cigarette manuacturers, North

Carolina and Virginia were the only two states to have

dedicated ully 50 percent o its settlement dollars totraining and workorce development. The oundation

ocuses on projects with long-term economic impact,

preerably in counties ormerly dependent on tobacco.

Many o its grants go to workorce preparedness such

as university and community college-based training

centers in engineering, construction, machining, and

allied health. For example, the oundation supported

the creation o the Biomanuacturing and Training

Center, housed within North Carolina States Millen-

nial Campus; the Biomanuacturing Research Institute

and Technology Enterprise housed at North Carolina

Central; and the aliated Bionetwork centers housedat six community colleges statewide.

RegionAl pRogRAmming

In the early 1990s, three o the states regions, the Re-

search Triangle, Piedmont Triad and Charlotte, created

their own regional economic development organiza-

tions. In 1994 the North Carolina General Assembly

created our additional regional economic develop-

ment organizations in the predominately rural areas

o the state, creating a statewide regional economic

development system through which each o the states

100 counties became aliated with one o the seven

regions. In 2003, based on pioneering work done by

the Research Triangle Regional Partnership, the North

Carolina General Assembly gave each o the regions

$250,000 to develop their own ve-year economic

development vision plans. Most o the regions plans

included strategies and recommendations intended

to better coordinate and align the agencies and

organizations carrying out both economic develop-

ment and workorce development programming.

The partnerships have successully gathered the right

stakeholdersrepresentatives rom the local economic

development entities, workorce boards, community

colleges, universities, school systems, and more

around the table to plan and strategize. However,

the regional organizations have struggled to move

the plans rom concept to reality, especially in thoseregions brought together due to the legislative man-

date. Basically what I expect to get out o it is some

action steps that make sense or what the partnerships

are talking about doing. But there are way too many

ideas to support all o the clusters, some are localized,

some are not even clusters but a wish list, says Chris

Beacham, the ormer assistant secretary o policy,

research, and strategic planning at the North Carolina

Department o Commerce.

economic developmenT incenTiveSNot every economic development project in North

Carolina aims to blend with workorce development.

Deal-making that originates rom the state Depart-

ment o Commerce and the local economic develop-

ment entities is still very much rooted in the practice

o bualo hunting. In 1996, North Carolina passed

the William S. Lee Act to provide tax incentives that

allowed the state to compete with other states eco-

nomic development activities. By the 2006-2007 scal

year, direct incentives in North Carolina totaled $1.3

billion, or 95 percent o the states economic develop-

ment spending. In comparison, in 2007-2008, the state

assembly appropriated $12.7 million to the community

colleges or customized training and business assis-

tance and $14.4 million to the University o North

Carolina or their economic development and small

business support services.

William Schweke, vice president o learning and inno-

vation at the Corporation or Enterprise Development,

an economic development think tank, explained that

North Carolinas progression toward big economic de-

velopment incentives was driven in part by increased

economic competition: Twelve to 16 years ago, NorthCarolina was not a big incentive state. Initially, [then-

Secretary o Commerce] Rick Carlisle came up with

ways to do it that were very good, transparent. But

now you have exponential competition or ootloose

private investment projects and its very hard to stop

that. In some ways its never been worse in terms o

incentive competition.


24/38


The piedmonT TRiAd Region

The Piedmont Triad, with its three major cities o Win-

ston-Salem, Greensboro and High Point, was built on

the tobacco, textile, and urniture industries. Formerly

home to the headquarters o some o the countys larg-

est companies, including R.J. Reynolds, Hanes, and theThomasville and Lexington urniture companies, the

region began to suer severe job losses when manuac-

turing jobs began going overseas in the 1980s.

The Triad region was quicker than most to see the writ-

ing on the wall. Blessed with state inrastructure and

a civically oriented business community still wealthy

enough to invest in the regions uture, the Triad pro-

actively sought to redene itsel as a hub or high- and

bio-tech industry. The area has lured large companies

and nurtured home-grown ventures, many o which

are closely linked to the areas our public universi-ties, seven private universities, and nine community

colleges. The majority o the regions economic good

ortune, however, has remained clustered in the main

cities, and its rural counties have struggled to keep up.

ASSociATeS pRogRAm in Applied Science,

oRSyTh TechnicAl commUniTy college

A new biotechnology associates degree from a

ut

Launched by a college president who was focused

rr t a r t

ursu t rra

State funding and other support allowed the

rra t r

The biotechnology sector in North Carolinas Pied-

mont Triad has grown as much as any newcomer to

the biotechnology game. Elsewhere in the country, de-

velopment initiatives are oten led by local politicians

or economic development proessionals. The Piedmont

Triad, in comparison, was helped signicantly by an

initiative rom Forsyth Technical Community Collegein Winston-Salem. Forsyth now oers the largest bio-

technology associate degree program in the state and

one o the nations leading degree programs in lie sci-

ences. This program complements the growth o Wake

Forest Universitys medical school and Piedmont Triad

Research Park in downtown Winston-Salem, which

houses much o Wake Forests medical research.

Our legacy industries were urniture, textiles, and

tobacco. While 10 years ago that sounded like a diverse

economy, they all went at the same time. This was a

community that was searching or its economic uture,

and it was a prime time or the community college to

step up as part o a community eort to redene the

economy, says Gary Green, president o Forsyth Tech.

The local business community rallied around bio-

technology as the next big thing, and the nearby

Research Triangle Park was already host to some o the

largest biopharmaceutical companies in the country.

Although the Triad was home to only a ew start-up

companies, the presence o strong research universities

and, in particular, a strong medical research commu-

nity centered on Wake Forest University, were seen

as real assets. Forsyth Tech has taken on this idea o

training people or jobs that arent even here yet. Nine-

ty percent o biotech is in the Triangle, but as biotech

grows in the state, there will be companies that want

to be somewhere cheaper, said Justin Catanoso, editoro the Triad Business Journal.

With a signicant grant rom the ederal Department

o Labor to nurture the biotechnology industry, For-

syth Techs Applied Science Associate Degree program

ocially opened in 2003. It is strongly connected to

industry, hires instructors with signicant business

experience, requires internships, and eatures lab-

ready skills training, including tissue culture, animal

handling, chromatography, and laboratory mathemat-

ics. The program now enrolls about 120 students per

semester, and graduates work primarily or compa-

nies involved in the production o pharmaceuticals.

Employers participate in the centers advisory board,

donate equipment, and host interns.

The state community college systems BioNetwork

initiative, supported in part by the Golden LEAF Foun-

dation, has provided

Documents

Seedco ED WD Policy Report