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WIRED to the Innovation Economy. Third Annual Southeastern WorkKeys Conference North Charleston, South Carolina February 2, 2007 Helen N. Parker Regional Administrator. Overview:. Workforce system and its evolution. Defining today’s innovation economy.

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Wired to the innovation economy
WIRED to the Innovation Economy

Third Annual Southeastern WorkKeys Conference

North Charleston, South Carolina

February 2, 2007

Helen N. Parker

Regional Administrator


Overview
Overview:

  • Workforce system and its evolution.

  • Defining today’s innovation economy.

  • WIRED Initiative and talent development – a driver of regional economic growth.


1930s the birth of the workforce system
1930s – The Birth of the Workforce System

  • U.S. Employment Service & Unemployment Insurance Program were created to assist unemployed workers.

  • The economy of the day was industrial with:

    • Interchangeable labor

    • Cyclical layoff and hiring patterns

    • Work that required just a High School diploma.

  • 70 years later, the Employment Service remains virtually unchanged.


1960s to 1990s expansion into job training
1960s to 1990s – Expansion into Job Training

  • An ever-growing job training system was built:

    • The Manpower Development and Training Act (MDTA) - 1962.

    • The Comprehensive Employment and Training Act (CETA) – 1973

    • The Job Training Partnership Act (JTPA) - 1982

  • Had little private sector involvement.

  • Separate from Employment Service.


1998 workforce investment act
1998 Workforce Investment Act

  • The Workforce Investment Act (WIA):

    • Streamline service delivery through One-Stop Career Centers;

    • Strengthen performance accountability;

    • Promote universal access to services;

    • Create business-led state and local boards;

    • Promote individual choice.

  • Strong bi-partisan support.



Evolution of the economy
Evolution of the Economy

  • When the workforce system was first created:

    • U.S. was an industrial economy

    • Labor was virtually interchangeable

  • Now in a knowledge economy – specialized skills are needed.

    • 90% of the fastest growing jobs require education and training past high school.

    • 63% of high wage, high growth jobs in the next decade will require a bachelor’s degree; only 28% of the population has a bachelor’s degree.


Evolution of the economy1

Less than High School

High School Grad

Some College

Assoc. Degree

4-Year Degree and Higher

Employment Growth

(thousands)

-129

87

177

380

723

Average Weekly Earnings

$479

$660

$767

$812

$1243

8.5%

5.0%

4.5%

3.7%

2.7%

Unemploy-ment Rate

Evolution of the Economy

Source: BLS Current Population Survey 2004


Innovation economy
Innovation Economy

  • Economic development must establish the conditions for innovation.

  • CoC’s report Innovate America identified three requirements for innovation:

    • Infrastructure (transportation, technology)

    • Investment (availability of capital)

    • Talent

  • Conditions should be maximized at the regional level – forces of the economy combine to spur growth.


Innovation defined

Innovation resides at the intersection of invention and insight, leading to the creation of social and economic value.

National Innovation Initiative

Innovation Defined


Creating an innovation environment
Creating an Innovation Environment insight, leading to the creation of social and economic value.


What is the innovation economy
What is the Innovation Economy? insight, leading to the creation of social and economic value.

The Rise of the Entrepreneurial Class

  • Jobs! 5-15% of U.S. firms create 2/3 of net new jobs.

  • Innovation. Entrepreneurs account for more than half of all technological innovation.

  • Prosperity. 1/3 of difference in national growth rates is due to entrepreneurship.

  • Presence. 11% of US adult population is trying to start a business.


U s entrepreneurial activity
U.S. Entrepreneurial Activity insight, leading to the creation of social and economic value.

  • 600-700,000 new companies each year

    • “GAZELLES”

      • 5% of new companies

      • 2/3 all new innovations

      • 2/3 all new jobs

The ability to garner the required resources and overcome all impediments by seizing new business opportunities defines entrepreneurship.


Why talent matters
Why Talent Matters insight, leading to the creation of social and economic value.

Factors Rated “Very Important” in

Site Selection*

  • Availability of Skilled Labor 58.5%

  • Highway Accessibility 57.0%

  • State & Local Incentives 54.8%

  • Tax Incentives 54.3%

  • Corporate Tax Rate 49.5%

  • Availability of High-Speed Internet 49.4%

    * 2005 Area Development Corporate Survey


Economic development
Economic Development insight, leading to the creation of social and economic value.

  • Workforce development is more than training effectively for current jobs. Successful workforce investment leads to the creation of new jobs. Talent is an asset, bringing new businesses and industries into communities.

  • Economic development is also experiencing a transformation. Tax breaks and incentive packages are no longer enough.


Workforce innovation in regional economic development
Workforce Innovation in Regional Economic Development insight, leading to the creation of social and economic value.

  • WIRED is focusing on the talent development part of building a regional economy.

  • The Goal:

    • Expand employment and advancement opportunities for workers while simultaneously catalyzing the creation of high-skill, high-wage jobs.


WIRED Initiative insight, leading to the creation of social and economic value.Selected and Second Generation Regions

Regional EconomiesSecond Generation RegionsCombined

Employment and Training Administration

United States Department of Labor


Wired in action
WIRED in Action insight, leading to the creation of social and economic value.

  • Resources to the First Generation Regions:

    • $15 million over 3 years

    • Technical assistance provided by 3 organizations.

      • Council on Competitiveness

      • New Economy Strategies

      • Council for Adult and Experiential Learning

    • Data tool that incorporates economic, research & development, investment, and real-time job information.

      • Picture of regional economy and economic assets.


Wired in action1
WIRED in Action insight, leading to the creation of social and economic value.

  • Activities in support of WIRED Regions:

    • Senior ETA Managers and Emerging ETA Leaders assigned to each region to guide and assist.

    • WIRED Academies focusing on issues with nationally recognized speakers.

    • Connections to USDA, Commerce, and other Federal agencies to identify, understand, access, and leverage additional resources.

    • ETA Issue Area Teams to gather information and identify resources on issues common to WIRED regions (e.g., small business development, investment capital, etc.)


Wired in action2
WIRED in Action insight, leading to the creation of social and economic value.

  • Regional Activities:

    • Formation of a broad-based regional leadership team

    • Assessment of region-wide assets and strengths, risks and weaknesses.

    • Development of a comprehensive implementation plan for the region identifying how WIRED and other resources support regional economic goals and strategies.


The second generation region
The Second Generation Region insight, leading to the creation of social and economic value.

  • Strategy for the Second Generation Regions:

    • Assign ETA Emerging Leaders to each region.

    • Provide WIRED materials and products.

    • Participate in the WIRED Academies.

    • Identify existing and potential resources.

    • Support a regional assessment and development of a regional implementation plan.

    • $5 million over 3 years (announced in January)


The goals
The Goals insight, leading to the creation of social and economic value.

Create and implement a regional strategy that will:

  • Establish and build a regional identity across political jurisdictions.

  • Leverage and align public and private investments.

  • Transform the regional economy through innovative and effective talent development.


Workforce system transformation principles
Workforce System Transformation Principles insight, leading to the creation of social and economic value.

  • The workforce system must operate as a talent development system; it can no longer be defined as a job training system. Its goal is an educated workforce on a U.S or global standard.

  • Workforce system formula funds must be transformed, providing the opportunity for post-secondary education for lifelong learning opportunities aligned with the region’s talent development strategy.


Workforce system transformation principles1
Workforce System Transformation Principles insight, leading to the creation of social and economic value.

  • The workforce system can no longer operate as an array of siloed programs and services.

  • Workforce investment boards must be structured and operate on a regional basis and be composed of regional strategic partners who drive investments, aligning spending with a regional economic vision for talent development.


Workforce system transformation principles2
Workforce System Transformation Principles insight, leading to the creation of social and economic value.

  • Economic and workforce development regions must be aligned, and these regions should adopt common and innovative policies across the workforce, education, and economic development systems and structures that can support talent development and the regional economy.


60 day comment period due february 20 2007
60 Day Comment Period insight, leading to the creation of social and economic value.Due: February 20, 2007

Notice of Proposed Rule Making (NPRM)


Streamlined governance
Streamlined Governance insight, leading to the creation of social and economic value.

  • NPRM makes it easier for local workforce investment areas to engage in regional planning activities.

  • Eliminates the requirement for separate local plans for those areas engaged in regional planning.`


Streamlined governance1
Streamlined Governance insight, leading to the creation of social and economic value.

  • There are currently 3,256 One-Stop Career Centers.

  • The NPRM strengthens the state board’s role in developing and reviewing statewide policies for the One-Stop system.

  • This includes the authority to develop criteria and certifications for One-Stop Career Centers.


Streamlined governance2
Streamlined Governance insight, leading to the creation of social and economic value.

  • Parallel WIA and WP system result in duplication of physical structures as well as services.

  • NPRM gives states and local areas the flexibility to dedicate WIA funding to training.


Increased access to training
Increased Access to Training insight, leading to the creation of social and economic value.

  • Many local areas have instituted mandatory time periods for participation in core and intensive services.

  • The NPRM clarifies that an individual does not need to go through layers of services in order to access training.

  • The provision of training and other services can be provided sequentially, concurrently or in whatever order makes sense for the individual.


Increased access to training1
Increased Access to Training insight, leading to the creation of social and economic value.

  • The NPRM allows Governors maximum flexibility within the law to establish methods of applying for and maintaining the eligibility of providers on a state-approved list of eligible training providers.

  • 86 waiver requests have been received on the eligible training provider issue.

  • For example, Minnesota indicated that without a waiver, training providers would have likely opted out of the system.


Increased access to training2
Increased Access to Training insight, leading to the creation of social and economic value.

  • NPRM allows 16 and 17 year olds to receive Individual Training Accounts.

  • 23 states have received waivers allowing them to issue ITAs for youth. This allows them to enhance delivery of occupational skills training and increase customer choice for youth.


Increased state flexibility
Increased State Flexibility insight, leading to the creation of social and economic value.

  • Provides all governors with the option of using non-merit-staff employees to provide Wagner-Peyser funded employment services.

  • Three states – Massachusetts, Michigan and Colorado – currently have authority to use non-merit-staff employees to perform these functions.

  • These three states are performing successfully based on performance outcomes and the absence of stakeholder or customer complaints.


Streamlined governance request for comment
Streamlined Governance insight, leading to the creation of social and economic value.Request for Comment

  • Many state and local boards have become so large and unwieldy that the boards’ ability to perform their duties is hampered. This problem could be ameliorated by eliminating regulatory language requiring “two or more” representatives of certain groups on these boards.

  • For example, many state boards have over 50 members.


Increased access to training request for comment
Increased Access to Training insight, leading to the creation of social and economic value.Request for Comment

  • NPRM seeks comments on the definition of administrative costs.

  • There is evidence that program funds are being used for what would normally be considered administrative costs. For example:

    • Facility and Utility Costs

    • State and Local Boards Costs

    • Information Systems

    • Report Preparation

    • Removal of Architectural Barriers


Questions? insight, leading to the creation of social and economic value.


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