Skills The Key to Prosperity

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Skills The Key to Prosperity

• Rich Nafziger
• June 14, 2002
• State Board for Community and Technical Colleges

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Prosperity and Competitiveness

• The prosperity of each region in our state is
  dependent on competitive advantage the ability
  of its industries to compete in the global
  economy.

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Competitive Advantage Is About Productivity

• Industries have competitive advantage when they
  make high quality products more efficiently than
  than their competitors ---- when they are more
  productive than their competitors.
• Productivity is about working smarter. Not
  cheaper.
• Increasing productivity and sustaining this
  growth is the only real way to increase the
  standard of living of our citizens.
• Increasing the skills of the workforce are one of
  the key preconditions for increased productivity.
  

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Standard of Living

• Higher Skills are the Key to Prosperity
• Investments in workforce education payoff as
• Higher skills
• Increase productivity
• Creating more wealth
• And higher incomes.

Productivity
Skills
Workforce Education
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Over the next five years, what do you see as the
most significant barriers to your firms
expansion within the region?
Low Access to Skilled Workforce
High Cost of Labor
Distance to RD Centers
High Tax Burden
Business-Unfriendly Political Environment
Note percentages reflect factors that were in
the top five responses for each respondent.
Business executives responded.
Source ontheFRONTIER/Council on Competitiveness
Regional Survey, N546
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Council Findings Human capital and innovation are
fundamental to gaining a competitive advantage in
the modern economy. The success of companies,
industries, and states increasingly depends on an
educated, flexible workforce, their access to new
technology, and their ability to rapidly
innovate. Council Recommendations Washington
should accelerate training of workers for
high-demand fields. This requires not only
training new workers but also upgrading the
skills of existing workers and retraining
displaced workers so that they can reenter the
workforce.
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Washington Employers Still Report a Skills
Shortage
Percentage of employers reporting finding
difficulty finding qualified applicants during
last 12 months (Post 9-11 survey)
Source Bryan Wilson, Associate Director,
Workforce Education and Training Coordinating
Board, Jan. 2002
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Training Levels Required for 2000-2008 Washington
Job Openings
Source Bryan Wilson, Associate Director,
Workforce Education and Training Coordinating
Board, Jan. 2002
9
Consequences of Skill Shortages Percent of Firms
Reporting Result
Source Bryan Wilson, Associate Director,
Workforce Education and Training Coordinating
Board, Jan. 2002
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Any Competitiveness Strategy Should Benefit All
of Our States Citizens

• The economic boom in Puget Sound did not benefit
  many regions of our state and economic inequality
  in our state increased during that period.
• Geographic and economic equality requires a focus
  on a broad variety of industries and occupations
  throughout the state so that all of our states
  citizens can benefit.

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Prosperity Is Not Always Widely Shared Rising
Income Inequality

70
60
90th percentile
50
40
75th percentile
30
Percentage Change in Earnings Since 1961
Median
20
25th percentile
10
0
10th percentile
-10
1960
1965
1970
1975
1980
1985
1990
1995
2000
Source Tabulations of annual March Current
Population Survey Data by David Ellwood, Harvard
University
12
Income Gain For Families From Late 80s to Late
90s in Washington State
Source Economic Policy Institute, April 2002
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Skills Standards Are the Connection

• Skills Standards can help raise productivity by
  helping employers and workers better understand
  how to work smarter.
• Skills Standards can communicate clearly to
  workers what they need to do the job.
• Skills Standards can help faculty understand what
  students must learn to be able to do the job.

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Skills Standards Can Make Washington More
Competitive

• Provide a mechanism for closing the skills gap in
  key industries in each region of the state.
• Anchor education/business partnerships at the
  regional level.
• Allow industry and education to constantly
  upgrade skills and increase productivity on an
  ongoing basis.

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Skills Standards Can Provide Great Opportunity
for all

• Employers seek people who can have the skills
  needed to do the job.
• In the absence of specific skill information they
  rely on proxies like degrees or networks like
  personal knowledge about job candidates or other
  informal information. This system works against
  people without connections to the networks.
• Skills standards allow people pursue specific job
  skills and then move up the job ladder by
  pursuing additional training that specifically
  links previous training to higher skilled jobs.

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Articulation

• The hottest issue in the higher education world
  is known as articulation --- the connection
  between K12, community and technical colleges
  and university programs.
• Legislators and business leaders alike are
  frustrated by occasional bad connections between
  education institutions.
• Skills standards provide a pathway to connect
  skills. Learned in K-12, community and technical
  colleges and baccalaureate degrees.
• And if we work hard at it we can provide a
  pathway that links low-skills students to high
  wage jobs over time.

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Partnerships Are The KeyBusiness

• Only businesses can identify what skills are
  needed now and in the future.
• For skills standards to succeed, business must
  use them align their personnel qualification
  requirements with skills standard based
  certificates of competence.
• Businesses must demand that educational partners
  use skills standards.

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Partnerships Are The KeyEducation

• Educators understand the science and art of
  instruction. Educators know what instructional
  techniques result in learning.
• For skills standards to succeed, educators must
  be involved in their development from the very
  beginning and at each stage of development.

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Partnerships Are The Key Students

• Students plan their own careers. Students can
  help define career pathways based on standards.
• Students must see the value of skills standard
  based credentials.