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Why is it Essential for Workforce Development & Economic Development to Join Forces in Each Region?Presented by: Colleen LaRoseNorth East Regional Employment and Training Association All Rights Reserved

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Blueprint for community andregional successTeamwork..not silos of service…"Collaboration is the stuff of growth" Anonymous

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Definitions Workforce Development: Coordination of skills development initiatives that prepare individuals for Economic Development: current and future Implementation of business occupations, giving businesses the human capital development and quality of necessary to meet demand. life policies that influence the growth and restructuring of a region to improve its overall economic well-being.

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ComparisonWorkforce Development Economic Development1. Job Development (who has jobs) 1. Job Creation (make jobs)2. Collaborative 2. Compete locally/regionally3. Federally funded 3. Locally and state funded4. Attempts to be a system 4. Not a system5. Employer services related to 5. Business recruitment/retention acquiring employees (job postings, services such as Tax Incentives, screening, OJT, etc) Location Hunting6. Jobseeker services 6. Infrastructure/transportation (Eligibility/Resumes) support7. Coordination of education providers 7. Business development support8. Youth Support 8. Community Development support9. Coordination of social services 9. Bottom-Line $$$ supports 10. Quality of Life (eg. Parks)10. Holistic support system

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Economic Developers say,“Workforce Development is #1” Workforce development is the number one reason that businesses now choose their location…surpassing tax incentives, low cost of business, transportation, and even quality of life!

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What’s the workforce worth…GDP is a measure of income, not wealth.(values flow of goods/services, not assets).Gauging economy by GDP: like judging a company by quarterly profits, without peeking at balance-sheet.UN/Cambridge University published balance-sheets for 20 nations .3 Kinds of Assets:1) natural capital (land, forests, fossil fuels, minerals) 2) manufactured, physical capital (machinery, buildings)3) human capital (education and skills) The real wealth of nations, The Economist, June 30, 2012

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What’s the workforce worth?Can we assess the workforce in terms of cold hard cash?$ Total cash in the world is about 45 T$ Total assets in the world about 500T(not including human capital)$ US wealth – + = 58T + + = 118TUS-4.5 % of world’s population, 12% of the hard assets wealthBy the way, US debt is 16T…one fourth of all physical assets.About $50,000 per every man, woman and child in the US)

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75% of the US total wealth is its human capital!The real wealth of nations, The Economist, June 30, 2012

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Workforce Investment System—In what are we investing?SUPPLY Human capital  average years of schooling (education)  the wage workers can command (skills)  Number of years of expected work before they retire/die Jobseekers taxpayers….(human capital)DEMAND Entrepreneurs, small business, medium business, large business (Is business a resource?…or an investment? ) Need a diversified “portfolio” – (risky and not so risky investments) Anticipated returns?

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Employment and Training? Workforce Investment System includes business owners…. Entrepreneurship is employment Must rethink traditional models of employment Need more than training to grow out of this economic crisis

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Reality Check:There are not enough jobs!!!146 million in total US labor market (includes 13 million on ui) - so that is 133 million wage earners supporting total US population of 315 million (world pop 7 billion) Only 3.5 million jobs now available in US 13 million people actively on unemployment (and another ten million (conservatively) who have exhausted ui claims That’s seven people for every job currently available!

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So, even if we spend allworkforce dollars to traineveryone perfectly for everyjob currently available…. There would still be six people in line waiting for a job for every job that was filled… Or conservatively over 18 million people still out of work! SIMPLY PUT… WE NEED MORE JOBS!

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JOB CREATION What does job creation mean?(Entrepreneurship? Innovation? Start-ups? Collateral growth? Growing companies? Importing companies? ) Who is responsible? (Economic development? Politicians? Business leaders? Educational institutions?) Is there a role for workforce development in JOB CREATION? New paradigm of “work?” – Seeding/training entrepreneurs? Helping companies recognize expansion opportunities? Providing HR support/onboarding? Providing workforce management?(change management, org. development, team training, etc.)Liaison to economic development and funders?

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Understanding the Potential…. 75% of businesses in the US have no employees…. 52% of all small businesses are home based Small business employs half of all private sector employees Stage 2 businesses (10-99 employees) are the major employers! Creating 90% of all new jobs in AmericaWorkforce development professionals mustbecome more than training providers!They must begin contributing to Job Creation!

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Top ten states with greatest percent of self-employed Bottom of the rank

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

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

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Solution…. Integrate WIB’s with their regional planning bodies (politicians and economic development) so that they become part of the ONGOING planning and strategizing process. Give WIB directors leadership and economic development planning training so that they can “hold their own” in these discussions.

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Benefits….1) Not managers strategic planning leaders 2) Elevates the standing of workforce development, (more program $$$?) 3) Supports new business start-ups, (may force change on some bad rules that thwart business start-ups) 4) Communities seen as engines of growth – Asset-based planning (not business recruitment). Not apathy, but looking within the community for hope and possibilities! 5) Team environment (ed, wd politicians, business) in each region... All planning and strategizing together. Equally responsible for decisions and outcomes. 6) Assures business owners get all services they need because all are now responsible to provide every possible business benefit consideration Can you imagine the power of hundreds of teams like this across the US?

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Stepping into Leadership Mind shift for everyone – Not service providers strategic planners! Not social service oriented $$$ oriented! Not jobseeker and employer services BUSINESS and workforce servicesWIB Directors will need training in leadershipand economic development planning basics

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Steps to aligning economic and workforce development 1) Evaluate local economic/workforce strengths and weaknesses. 2) Evaluate community’s place in the broader regional economy. 3) Evaluate community’s economic development and workforce development vision and goals. 4) Evaluate community’s strategy to attain its goals. 5) Evaluate connections between economic development, workforce development and other local policies. 6) Evaluate the regulatory environment. 7) Evaluate local economic development and workforce stakeholders and partners. 8) Evaluate the needs of your local business community. 9) Help create an environment that supports the start-up, growth and expansion of local businesses. 10) Evaluate community’s economic development and workforce development message.Inspired by a report from National League of Cities and IEDC:The Role of Local Elected Officials in Economic Development. 10 things you should know.

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Coordinating …no one said this was going to be easy! 3033 counties nationally, and 285 cities with more than 100,000 people 380 EDD Regions, 568 WIB regions Multiple economic development partners (county, city, state, regional, private, public etc.) who are competing with one another Some regions have no active economic development planning Workforce development seen as service provider, (job seeker focused) Workforce development - “new kid on the block”

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Goal Setting Challenges Dynamic Environment business cycles impact amount of capital companies can invest in expansion/growth (ie tax revenue to fund eco dev), the public workforce system can be limited in investments it can make (Incumbent worker training in good economic times/OJT in bad economic times). Forecasting is an inexact science Conflicting priorities (Globalization/Buy American) Economic Gardening vs. Recruitment Infrastructure support/growth vs. tax base (new schools, new neighborhoods, more traffic, etc) Business vs. environmental/quality of life Business vs. sustainable wages25% of jobs in the US pay below the poverty line,(less than $23,000 yr for family of 4)50% of the jobs in the US pay less than $34,000 a yearFrom Economic Policy Institute

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Come to the table bearing gifts Money (grant opportunities, etc) Connections (other collaborative partners who bring value) Ideas Training Leadership succession planning Other resources (talent, technology, staff, etc)

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Both Workforce Development andEconomic Development Work with same employers Assure employers have trained workforce Use labor market information (career cluster studies) Entrepreneurship support

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Work with same employers???Customer Resource Management (CRM) Shared database to coordinate contact with businesses Examples: Zoho, Salesforce , Sage, ACT!, Goldmine, Microsoft Dynamics,

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Mobilize Eastern Maine How many jobs created How many jobs retained

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Oh - PennRegional labor market planningUse labor market information (career cluster studies)

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Durham, North Carolina Structural change (WIB Director also Director of Economic Development)

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Virginia -CEDS 38 WIBs have participated in CEDS. WIB Director should be in the CEDS planning WIB Director is a professional planner Chairs come and go Chairs do not have the depth in workforce system that the Director has Chair is private sector (may have their own agenda)

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Comprehensive Economic Development Strategy Under EDA - The CEDS should: 1) analyze the regional economy 2) serve as a guide for establishing regional goals and objectives 3) develop and implement a regional plan of action by identifying investment priorities and funding sources. CEDS integrates a regions human and physical capital planning in the service of economic development. CEDS planning committee: Majority private sector Public officials Community leaders Representatives of workforce development boards Higher education reps Minority and labor groups and Private individuals

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

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Entrepreneurial Support Introducing entrepreneurship Investing in scalable companies Access to funding: o Micro loans o Venture Capitalists/Angel Investors o Non-traditional funding opportunities  New markets tax credits  Crowd funding  DPO’s (BALLE – Business Alliance for Local Living Economies)

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

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Preparing for the future Creative Molecular Economy - Molecular captures that the future system mirrors biological/organic principles (opposed to physics principles, the dominate science in the industrial economy). Molecular encompasses networks, ecosystems, where rigid structure is less effective than adaptable open structures where more persons can be involved and engaged. Transformational vs.reforming What if:There was a public work system?There were no more employers…and everyone worked for themselves?Training was entirely self-directed?All types of intelligence were $ equal?All levels of jobs were equal?

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Social Media Use modern strategies of online media to: Make conversations more inclusive (more people involved) Allow for more robust conversations (more ideas can be heard/no time constraints) Allow for greater collaboration

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How do we prepare people forjobs that don’t exist yet? Adaptable Technology savvy Problem solving skills/Critical thinking Team simulations (experiential learning) Imagination/Creative thinking Curiosity Trust Transferable skills Collaborative Entrepreneurial ID strengths In charge of destiny New thinking for safety nets (health ins, ui)

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Summary Workforce development must see themselves as leaders Need training/awareness of economic development (asset-based approach) Employ collaborative strategies that help workforce development be seen as planning leadership (ceds, social media, crm’s, $, connections, ideas) Potential systemic or structural changes Focus on entrepreneurship/business – JOB CREATION Future focus

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NERETACurrently Linked In groups: Linkd.in/nereta.org Linkd.in/workforcesurvivalEnvisioned to be an online social media site Increase collaboration, share info on issues and legislation, promote public image of public workforce system and support entrepreneurship Conference for economic and workforce development professionals in the north east?

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ContactColleen LaRoseFounderNorth East Regional Employment and Training AssociationEmail: Colleen@nereta.orgPhone (908) 995-7718Cell (908) 239 6030Website: www.nereta.orgTwitter: @neretaorgLinked In group: http://linkd.in/neretaorg