Winning the Skills Race. INSTITUTION Council on Competitiveness, Washington, DC

DOCUMENT RESUME

ED 448 278 CE 081 037

TITLE Winning the Skills Race. INSTITUTION Council on Competitiveness, Washington, DC. ISBN ISBN-1-889866-19-9 PUB DATE 1998-05-00 NOTE 91p.; Sponsored by the Dr. Scholl Foundation. AVAILABLE FROM Council on Competitiveness, Publications Office, 1401 H Street, NW, Suite 650, Washington, DC 20005; Tel: 202-682-4292, Fax: 202-682-5150; E-mail: [email protected]; Web site: http://www.compete.org ($25.00; $3.50 shipping and handling domestic and $12.50 overseas). PUB TYPE Opinion Papers (120) -- Reports - Descriptive (141) EDRS PRICE MF01/PC04 Plus Postage. DESCRIPTORS Accountability; Adjustment (to Environment); Adult Education; Change; Change Strategies; Competition; Cooperative Planning; Economic Change; *Education Work Relationship; Educational Change; Educational Cooperation; Educational Environment; Educational Improvement; *Educational Needs; Educational Practices; Educational Principles; Educational Quality; Educational Technology; Elementary Secondary Education; Employment Patterns; Employment Qualifications; Free Enterprise System; Information Technology; Innovation; *Job Skills; *Labor Force Development; Labor Needs; Partnerships in Education; Population Trends; Position Papers; Postsecondary Education; Program Evaluation; *School Business Relationship; Shared Resources and Services; Strategic Planning; Success; Synthesis; Theory Practice Relationship; Training Methods; Training Objectives; Transfer of Training; Trend Analysis; *Vocational Education; Work Environment IDENTIFIERS *Economic Competitiveness; Impact Studies; Task Force Approach

ABSTRACT This document reports on how key stakeholders in work force preparedness nationwide are responding to pressures of the skills race.Part 1 presents an overview of the skills challenge and theeconomic and social consequences of failing to meet the challenge. Part 2examines the impact of the skills shortage on major stakeholders and explains howthe build-up of pressure has pushed U.S. employers, workers,educators, trainers, community leaders, and government officials to join forces to strengthenthe transition from school to work, pool their resources to improve trainingquality and reduce training costs, and respond to market demand for greater access to training and greater portability of skills. Part 3 details some of the more creative developments in work force development and distills eightwinning principles for success in the field. An agenda for change is proposedthat includes the following items:(1) build public awareness;(2) fill information gaps;(3) leverage technology;(4) focus on metrics (measurement of results);(5) tighten accountability;(6) share best practices; and (7) encourage personal initiative. Lists of the taskforce members, executive committee members, national affiliates, and 11 related publicationsconclude the document. (Contains fifteen figures and 55 sectionendnotes.) (MN)

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BEST COPYAVAILABLE 4 Overview: Winning the Skills Race 9-13

Part One:The Stakes 17-25

Part Two:The Players 29-47

Part Three:Success in the Field 51-84

Picking Up the Pace 85-86

Task Force 87-88

List of Executive Committee, Members and National Affiliates 89-92

List of Publications 93-94

Acknowledgments

The Council on Competitiveness Ameritech was a tremendous resource coordinating visits, researching issues, would like to thank all of the individ- who devoted significant amounts of and refining the end product. Former uals and organizations that helped his time to reviewing drafts and Senior Fellow Howard Samuel develop this report. The ability to rec- offering advice. provided essential counsel throughout. ognize team efforts in the field demanded a team effort at the Council. Council Senior Fellow Amy The Council wishes to acknowl- Kaslow took charge of the project, edge the Dr. Scholl Foundation, Special thanks go to our fine providing strategic oversight and Council members, and other corporate Workforce Task Force for providing direction throughout the two-year sponsors of this initiative. Finally, we feedback, information, and general effort. She and former Council would like to recognize all the people guidance throughout the process and to Associate Gretchen Rhines conducted we interviewed in the field who gener- the three chairmen Richard all of the site visits and many other ously shared their stories, perspectives, Notebaert, George Becker, and Hal interviews that shaped the final analy- and insights with us. Their compelling Ravechd for their commitment to sis. Ms. Rhines served as a superb examples and anecdotes give this these issues. Marvin Bailey of day-to-day manager of the project, report its unique flavor. 111

...the demand

a for increased skills is rising much faster than the capacity of U.S. companies, workers, or the nation's eZ educational system to respond.

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- , .S. prosperity in today's knowledge- into entry-level jobs over the next driven economy demands the five years. world's most skilled and productive ...members of workforce. Members of the Council This Council report on upgrading on Competitiveness have singled out worker capabilities provides fresh insights the Councilon worker skills as the greatest competitive from across the country on how key Competitiveness challenge the nation faces over the next stakeholders in workforce preparedness singled out decade. Their concern reflects broad rec- employers, workers, educators, trainers, worker skills as ognition among leaders from business, and government officialsare responding the greatest labor, and universities that we facecom- to the pressure of the skills race. Under pelling pressures to upgrade the U.S. the guidance of a Task Force made up of competitive skills base: widely respected experts and practitioners, challenge the the Council combined focus groups in nation faces Information technology has become a Washington with more than a year of site over the next defining feature of the American work- visits in the field to companies, labor decade. place, turning computer literacy intoa unions, educational institutions, and non- basic skill requirement and creating a profit organizations. demand for knowledge workers that is Our research and writing team trav- not being met. eled to every region of the country to search for examples of best practice in Global competition has intensified, in- community workforce development. They creasing the economic premium on spent hours on the ground with workers, high skills and leaving unskilled Amer- union representatives, trainers, managers, ican workers in an increasingly vulner- and senior executives in companies large able position. and small. They visited community col-

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THE SKILLS RACE 8 9 pooling resources to improve the quality 4010111iiiMW - The Council's firsthand look at efforts to meet the skills challenge and to reduce the costs of training, and responding to market demand for greater Employers in all validates a simple but fundamental point: the demand for increased skills is rising access to training and for greater portabili- industries are much faster than the capacity of U.S. ty of skills. Progress has been uneven, but scrambling for companies, workers, or the nation's edu- longstanding walls between employers and workers who cational system to respond. Distressing schools, schools and workers, and the private and public sectors are gradually canadapt numbers of workers cannot read or do simple math, while the need to upgrade breaking down. quickly to new the skills of incumbent workers is out- Part DI looks beyond the trends into tasks and new stripping the capacity of virtually all com- the specifics of local solutions to shared market panies. Employers in all industries are problems approaches that document demands. scrambling for workers who can adapt what works through a rich set of examples quickly to new tasks and new market from across the country. A number of demands. Workers recognize the link be- strategic insights can be distilled from tween higher skills and higher wages, but these examples: many feel deeply insecure about the pace of change in job requirements. Few can Collaboration defines best practice count on spending their careers at one in training and education. No single company, and many are struggling to business, group of workers, educational make themselves employable. Community institution, or government agency can colleges and four-year schools face rising tackle the challenge alone. All parties expectations to shorten and sharpen the need to be fully engaged in the design learning cycle, along with growing de- and execution of pace-setting pro- mands to provide remedial education. grams: employers provide learning op- Governments at every level face compar- portunities, workers devote time and able pressure to streamline public sector energy to learning, and schools teach training programs and to adapt them to marketable skills. Collaboration is most local needs. likely when employers clearly define Part I of this report provides an over- their needs, workers have an up-front view of the skills challenge. It describes stake in learning new skills, and today's crunch as more than the result of providers of training are attuned to tight labor markets it is structural in market demand. origin. If we do not meet the challenge, the economic and social costs will be Success is most likely when training profound: future growth will be cut; the outcomes are measured and when all income gap will widen further; competi- parties are held accountable for their tion for low-skilled jobs will increase; performance. Best practice in commu- and U.S. companies will look increasingly nity college training, corporate pro- offshore to meet their high-skill grams, and publicly funded employ- requirements. ment and training centers is linked Part II examines the impact of the invariably to good metrics and real skills shortage on major stakeholders. The accountability. These factors produce build-up of pressure has pushed employers, winning results across the board. Work- workers, educators, community leaders, ers gain upward mobility and greater and public officials to cooperate more employability; firms gain increased closely. They have joined forces in areas of productivity; providers gain revenues; shared interest. They are strengthening the and communities benefit from transition from school into the workplace, economic growth.

10 Council on Competitiveness 3 Work-related learning is increasingly The Council's inquiry shows collabo- job-specific, on-site, and just-in-time. ration on the rise in every part of the There is a clear trend away from country, especially to bridge the gap be- subject-driven, off -site, classroom-style tween schools and the skill demands of education and training. Instead, the the workplace. Companies, unions, and compression of time puts a greaterpre- educational institutions are looking be- mium on convenience and customiza- yond their own immediate needs toexer- tion. Best practice today focuseson cise leadership in workforce development providing on-demand training from desktop computers, promoting interactive learning on-site, and shortening the cycle of formal training courses.

New learning technologiesare transforming education and training by overcoming barriers of time, distance, and availability. The computer- based and Internet-based tools thatare being deployed throughout the United States have vast potential to reduce costs, increase access, and customize the learning process. Best practice allows both employers and workers to tap into resources at their own pace and convenience. But electronic toolsare not readily accessible to everyone and are not a cure-all. They must be incorporated into broader strategies of skills development.

o Outstanding training initiatives anticipate as well as respond to jY change. Not all best practice addresses the immediate shortfall in skills. Many notable efforts have been launched to meet over-the-horizon challenges. The imminent retirement of manufacturing 0

workers in the Midwest, the population 41L explosion in the far West, and constantly changing impact of technologyon skill requirements are some of the developments that have sparkednew at the community level. Strengthening the approaches. What sets these initiatives talent pool has become a centerpiece of apart is their readiness to commit state-led and community-led growth strat- resources now to prepare for future egies. needs. The direction of change may be positive, but its pace clearly is not fast

THE SKILLS RACE lo BEST COPY AVAILABLE 11 enough. Despite their pressingneeds and 3) Leverage Technology. World leadership in information technology should the well-documented payoffof invest- give the United States a clear edge in Strengthening ments in skills, employers'spending on training and education. Internet-based the talent pool formal training lags behind thegrowth of the workforce on a per capita basis.The clearinghouses, for example, expand has become a costs and risks of training both for the flow of information to communi- centerpiece of companies that fear loss of investment ties around the country on workforce state-led and through early turnover and forworkers needs, learning opportunities, and best practice. State-of-the-art resources also community-led who wonder what the return willbe individuals act as multipliers, increasing theavail- growth still thwart change. Too many and institutions are unaware ofhow to ability of cost-effective, online learn- strategies: partner their way to upgradingskills, or ing tools, which particularly benefit small and mid-sized firms, the coun- are not ready to makethe commitment to try's most prolific job creators but the do so. The temptation to pointthe finger at others for the skillsshortage short- lowest spenders on training. sighted employers, unmotivatedworkers, deficient K-12 education, or poorly exe- 4) Focus on Metrics. Training succeeds when employers, workers, educators cuted government programs remains and government agencies are able to high. Americans can unite around an action gauge the impact ofinvestment on agenda to win the skills race. TheCoun- outcomes. Today's limited efforts to vigorously ex- cil's assessment of best practicein the measure results must be field underscores seven items thatbelong panded. Good metrics require determined efforts to track the outcome on this agenda: of training on job placement and job 1) Build Public Awareness. Aconcerted performance, as well as the company's effort to upgrade worker capabilities bottom line. requires broad public support.Leaders from every sector of the economy 5) Tighten Accountability. Improved should reinforce the message that the metrics should make it easier to hold United States has a vital stake inwork- providers of training responsible for force preparedness and that collabora- their performance. Government agen- tion is the most effective way to meet cies can tighten accountability through the challenge. extensive use of performance-based funding. Companies, in turn, can raise train- 2) Fill Information Gaps. Increasedcol- the stakes to ensure that in-house laboration requires labor marketinfor- ing competes with the best available. mation that is timely, accurate, and easily available. Federal and state 6) Share Best Practices. Individuals, agencies can contribute leadershipand organizations, and communities all resources, but mostinformation has to need more exposure to the experience has be collected and disseminated atthe and success of others. Government local level. This is where most work- a particular contribution tomake in ers find out aboutlearning opportuni- benchmarking and sharing best prac- ties, small companies pool resources, tice in communitywide workforce and corporations share their workforce development. Companies, unions, and lead needs with educators trainers, supplier community colleges must take the basis to spread the firms, and potential hires. on a peer-to-peer

Council on Competitiveness 12 word on strategies that produce the skills race must find and support a best results. cadre of initiators. The Council will engage its members 7) Encourage Personal Initiative. and national affiliates over the coming The most effective agents of change year to move this agenda forward. We will in strengthening worker skills are share our findings with public and private people who reach outside their own sector leaders, gather additional examples organizations to create networks. of best practice, and publish a profile These initiators ask, "What are my benchmarking U.S. workforce capabili- needs? Who shares my concerns? ties. The stakes are high, and the need for What can I contribute? What resources greater collaboration has never been more can I tap?" Every stakeholder in the compelling.

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Richard C. Notebaert George F. Becker Harold J. Raveche Ameritech Corporadon United Steelworkers of America Stevens Institute of AFL-CIO, CLC Technology

Chairmen of Winning the Skills Race

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William R. Hambrecht Charles M. Vest Jack Sheinkman W.R. Hambrecht & Co., LLC Massachusetts Institute of Technology Amalgamated Bank of New York

Chairman and Vice Chairmen of the Councilon Competitiveness

THE SKILLS RACE 13 4,7 VI 12 America cannot afford to lose the skills race. We will all fall short of the hurdles unless we work together toward a comprehensive education and training strategy.

J , , 4,-Tz ;'-'-.,. . :5 ,,S7,1,,,, Pr ' 1:,:: ;74,-k:::,e'.; 1 '' -,4,,,,,.r..._r ''+' 1- `6.''..--'1 .. . . I t : '-. 1!1V .V.Z/..A-:!.: .- - ,,.. :'... :,.. ,,, ''e ....,i ''''-Lot14:4 .,,,T;;-, ,...`ciI',\.- ., .n-,,- '"i... , 4....-z. 4., ''-''''' , ,' ,4 ''..4.ilY. -t,r. 1,, s:"-C'<,12.', , lif ,-*-,' ,.__,...,_,,,,,...4,...,, _ t,,E;i-r-,s4,,,,_, i'"'F. ...yrf lo,t .4;7;14 - ft- "--"-*';,-4,22;,s'rvk I ( A , .9"::".i.% J.::: -,A- .^:". " /' z ever before has the appearance of rent labor needs has become manage- working America been so deceiv- ment's most absorbing responsibility. ing. With the strong comeback There isan from the relatively high rate of In parts of the Sun Belt, populations acute skills joblessness of the late 1980s and early are growing at staggering rates. US shortage in 1990s, the outlook seemsvery bright. West Communications is unable to Record numbers of people are working, meet service demands in Arizona, Col- every part of and the unemployment rate is the lowest orado, and Nevada, where many newly the country that it's been in decades. built homes have no access to tele- threatens the But the reality behind the numbers phone service. With an infrastructure foundation of is troubling. There is an acute skills short- originally designed to meet the needs American age in every part of the country that of a small, rural population, US West threatens the foundation of American cannot keep pace with today's con- competitiveness. competitiveness. struction rate. The speed of changepre- Our findings are based ona year of sents serious training challenges travel across the United States, listening as the company seeks to improve effi- to people in the field talk about their ciency while simultaneously trying most pressing concerns. Their problems to prosper in a highly competitive and potential solutions are certainly industry. not limited to any particular place or time. Nor are they restricted toone level Nowhere is the bidding war for skilled of the workforce, or to one specific busi- technicians hotter than in California's ness. The issues are very real across the Silicon Valley, where some 80 percent spectrum. of the jobs require specialized learning and basic technical knowledge. What In the Midwest, for example, business puts those skills at a premium is the is booming, and skilled labor is constant churning among incumbent nowhere to be found. A major employer workers, who jump to new joboppor-

in Milwaukee, the automation firm tunities. Hard-pressed companies rely Allen-Bradley, has been particularly on local educational institutions like hard-hit. Like many companiesacross DeAnza College in Cupertino tocon- the nation, its workforce is aging; with- tinually tailor training programs to tran- in 10 years an estimated 80 percent of sition workers from one job to thenext. its employees will retire. Withan Whether the courses are conductedon- unemployment rate of less than four site at corporate headquarters and percent, local labor pools have all dried plants, offered at the schoolcampus, or up. To avoid hemorrhaging, the available on-line, the learningprocess company is scouring both local and is geared toward immediate and practi- distant schools to find qualifiednew cal application in the workplace. entrants. The fixation on meeting cur- Part One

THE SKILLS RACE 17 15 Service sectors in areas like Orlando, Florida, are scrambling to satisfy massive, short-term hiring needs. Rapid turnover only exacerbates problems for .wtir firms like Walt Disney World Company, which is hiring thousands of workers, above and beyond its current payroll, to staff its new park and convention center and resort. Around " the corner, Universal Studios plans to more than triple its workforce (from 6,000 currently to more than 20,000 employees) by 2005. The market is already very tight given the competition for new hires between these two big entertainment companies. But supplier firms and ancillary businesses, growing in response to the big companies' expansion, are competing for

I I I much of the same labor. Nearby

-74 Valencia Community College has turned a potential problem into its own business opportunity by establishing a , 100 pipeline of workers through its 90 Hospitality and Tourism Institute. Pro- Skills of New Workers grams provide on-the-job training to 80 help students move directly into super- Skills of New Jobs visory or mid-management positions in 70 lodging, food service, and tourism. 60 The skills crunch is not merely the °E; 50 result of tight labor markets. It is deeper o-iv 40 and more structural in character. The Schaumburg, Illinois-based Motorola 30 Corporation finds only one qualified ap-

20 plicant out of every 10 that it screens for entry-level positions. Even though all of 10 the electronics firm's nationwide appli- 111 cants have earned high school diplomas, 0 t NMIII Level 1 Level 2 Level 3 Level4 Level 5 Level 6 an average of half of them cannot pass seventh-grade math and ninth-grade read- The bars on the left represent the Kind skill levels of new workers (the percent of 21 to 25 year-olds entering the labor market). The hors on the right represent skill levels needed for new jobs (the percent of ing tests. jobs anted). Motorola is hardly alone. The national Level 1: Has reading vocabulary of 2,500 words and reading rates of 95-125 words per minute. (an write simple sentences. job picture shows an American workforce Level 2: Has reading vocabulary of 5,000 words and reading rotes of 190.215 words per minute. (an write compound sentences. that is not prepared: almost a fifth of em- Level 3: Can read safety rules and equipment instructions and write simple reports. ployees in the United States have a zero Level 4: Con read journals and manuals, and write business letters and reports. level 5: Can read scientific and tedvical journals and fi nancial reports, and write journal articles and speeches. or minimal literacy level in reading and Level 6: Has same skills as Level 5 but more advanced.

Source: Fp. k The Hudson Institute and U.S. Department of labor. Chartreproduced from 'The Demopolis and Economic Imperatives,' Human Capital and America's future (Arnold Parker, 19911. Council on Competitiveness BEST COPY AVAI LABLE Figure B x. CEOs Who Say Lack of Skilled Workers Is NumberOne Barrier to Growth k

70 math, two skills essential for workplace success) The outlook is no better for the 60 majority of new graduates, who leave the 50 nation's high schools withouta solid foundation in academics. Now, and for the -E. 40 foreseeable future, there is and will bea oc, premium on the ability to read manuals, ci12 30 technical journals, and financial reports 20 and to write business letters, factualre- ports, and other detailed accounts. Yet 10 almost 80 percent of new workerscannot 0 write even the most rudimentaryreports 1993 1994 1995 or read the simplest of instructions.' (See 1996 1997 The CEOs surveyed represent product, trade andservice companies that range in size from approximately Simeon Figure A.) to $50 million in revenue/sales Corporate America is well aware of the challenges ahead. In 1997, twiceas many corporate leaders pointed to the skills shortage as the numberone barrier to growth, compared to the number ofre- spondents in 1993. (See Figures B and C.) The limitations are not restrictedto the low-end of the workforce. Companies across the board are struggling to find skilled hires. One of the most acuteexam- ples is in the information technology industry. Payrolls in U.S. computer and JI software companies, for example, have practically tripled in the past decade, and their demand for personnel continuesto explode. But the dearth of qualified workers can be found in a wide range of businesses outside of information technology. 60 Limited choices have forced many employers to venture overseas for foreign Skilled Worker Shortages workers with technology skills. Some 50 144,000 workers in "specialty" categories IIIUnskilled Worker Shortages primarily skilled technicians immi- 40 grated to this country in fiscalyear 1996. According to data from the Immigration 830 15 and Naturalization Service and the Ameri- a_ can Electronics Association, they 20 accounted for about half of the nation's overall increase in technology jobs last 10 year.' Unless U.S. firmscan create "home- grown" technicians, by increasing adult 0 training opportunities and by expanding April-1995 July-1997

Source: fig. 8: Coopers & Lybrand LLP. survey of growth-company chiefexecutives. (: National Association of Business Economics.

THE SKILLS RACE Figure D Education Matters More: Growth in Mean family Income by Educational Attainment of Householder Over the Age of 25, 1979-1996 college graduates in computer and engi- IIELliffir neering programs, they will move their operations abroad or import talent from overseas. The shortage of skilled workers exacerbates another troubling trend: wage gaps among American workers. Even though the U.S. economy has expanded at a healthy clip and unemployment has dropped to new lows, the gulf continues to widen between the salaried employee with a relatively higher education and the hourly worker with limited schooling and skills. Only those equipped with at least a college degree have seen their real family ,o0e0\ e6e 6e9",:e incomes increase over the past two 6 . -e;5c4 oe44c40cp,...60 c;eq decades, while those with less education OS have suffered income losses.` (See Figure

Income in 1996 (P1-1.1-XI adorsted dollars D.) A major cause of this widening in- Note. Data after 1990 ore not completely comparable due to changes come gap is the long-term slump in job in the educational attainment questions earnings for much of working America.' Hardest hit are unskilled workers, whose real hourly wages have eroded the most. (See Figure E.) The skills and income divides are not new.' Across the country, there are many, often dueling, perspectives on the major causes of income inequality. Some ana- lysts argue that international commerce is pitting U.S. workers against laborers from low-wage countries. The expansion of global trade, they say, leads to a polariza- $11 00 tion of wages between the skilled and un- $1050 skilled. But others point out that most oo Americans work in industries unaffected by trade, making it difficult to conclude $950 that international competition is the sole c" $900 determinant of U.S. wages.' T3$8 50 Indeed there are a host of contributing 1) $8 00 factors, including technological change, $7 50 immigration, the productivity slowdown, weaker unions, deregulation, the growth 3 $700 of the service sector, and the dilution of $6 50 the minimum wage.' Of these, technology $600 is getting much of the attention. 1./ '1 t"'Ic' 1k/11 1c4 ci\ 931' 0 csb 9i) %13 9;1 cbcb q q\ qr1' qrb q C11) New information technologies skew \q \q \q \q \CI \q \CI \CI \CI \CI \CI\CI \CI 1CI NCI \CI \CI \CI Nq \CI NCI NCI Nq Entry level is defined as 1-5years of experience Source: Fp. D: Bureau of the Census, Marth Current Pcpukrtion Survey. Fig. E Economic Piny Institute analysis of U.S. Bureau of the Comes Current Population Survey data. BEST COPY AVAILABLE 20 Gatingon Competitiveness the earnings distribution by placinga pre- into hours or years allocated for school mium on skilled labor and by reducing the and work. Those distinctions arenow demand for, and wages of, the lesser blurred schooling continues in the ...skills make skilled. This is not only the prevailing workplace, and beyond. or break worker viewpoint of private sector economists;9 To accommodate this, schools andcor- employability the concept has gained momentumamong porations are increasingly pressed to short- U.S. policymakers. U.S. Deputy Treasury en and sharpen the learning cycle. Indeed, and business Secretary Lawrence Summers, forexam- this development is both part and product productivity. ple, points to fast-paced technological of rapid technological change. More and change and the highly cultivated informa- more, the time needed to earn a degree is tion society as "far more responsible for one year vs. two, two years vs. four. changes in the wage structure in this Training sessions are truncated to help country than is international trade."' individuals move quickly into jobs. Noone Whatever the precise mix of variables can afford to wait, now that individual eco- may be, one fact is inescapable: skills nomic security depends on employability make or break worker employability and instead of job or career stability. business productivity. And they will take on even greater importance as the United Global Competition. The rapid growth of States moves toward a knowledge-driven global competition means that now,more economy. than ever, workers need the education and training to produce value-added goods What Is Propelling the Race for Skills? and services that domestic andoverseas Technological Strides. The advance consumers want to buy. Government of information technology over thepast statistics show exports generated roughly 20 years has greatly expanded the demand one-third of all U.S. economic growth for skilled workers and diminished the during the past decade, and export-related demand for the unskilled. Thepace of jobs pay 15 percent more than theaverage technological change is powered, in part, wage. The trend toward export-generated by workers who can learn quickly and economic growth is obvious, but itcan apply new skills. And even in the best cir- only be ensured with an increasingly cumstances, technology advancements skilled workforce. often push the expectation for higherpro- There is another very compelling ductivity cycles beyond the capacity of reason to boost the skills of American the American workforce because employ- workers. The global economy puts the ees are not adequately trained to meet low-skilled and unskilled at a competitive ever increasing demands. Those who fail disadvantage by depressing their pay, at to absorb new skills are left behind or lose best, or by eliminating job opportunities their jobs to foreign competition. altogether. American workers are compet- The speed of change has createda ing against their counterparts in rapidly new definition of worker responsibility. growing emerging markets where labor is With hierarchies flattening andaccount- available at a fraction of the cost in the ability pushing down to the ranks,em- United States The higher the skills, the ployees are much more involved inmany, better the prospects for American competi- if not all, aspects of their businesses.It is tiveness. Without them, many Americans up to workers to continuously update their will spin their wheels, working multiple skills, and that makes learninga full-time jobs and logging longer hours, with little proposition. Life is no longer segmented mobility or income gains to show for their efforts.

3.7 ig THE SKILLS RACE 21 Lost Ground to Make Up. Too many people trying to enter the workforce fall far short of the most minimal criteria. While this is not a K-12 study, it is important to repeat a constant refrain heard in interviews and site visits nationwide: secondary schools are failing to turn out enough people ready to work and learn. Education not only boosts productivity in the workplace; it can also help close the gap between the skilled and the unskilled as more workers are able to perform sophisticated jobs. Global comparisons show how poorly prepared our youth are for the world of work. In the U.S. Department of Edu- cation's most recent international study, U.S. eighth graders placed an embarrass- ing 28th in the world in ma and 18th in science." Fewer than half of U.S. high school graduates complete Algebra H or Chemistry, prerequisites for college math and science.12 Despite the dynamism of the economy, troubling numbers of new entrants are unprepared for work. Several months after commencement exercises, the unemployment rate for 1996 high school graduates was 24.4 percent.'3

Workforce Changes. The United States has an aging workforce and a youth population that is largely unprepared, creating a polarization that threatens the survival, much less the competitive edge, of U.S. firms. The U.S..Bureau of Labor Statistics (BLS) estimates that by 2005, the number of workers 55-64 years old will jump 50 percent from 1995 levels. Companies are seeing vast portions of their skilled workforce retire, and they are scrambling to fill the void. In the coming years, new entrants to the workforce will present an even tougher challenge: they are projected to be the least prepared and the most ethnically, racially, and gender diverse in history.

H11.1: U.S Census Burette.

Council on Competitiveness While in the 1950s most immigrants Figure G came from European countries, today Educational Attainment of Civilian Labor Force, 1996 (Age 25 years and older) more than half of the roughly 800,000 legal immigrants who enter the country each year come from seven developing countries: Mexico, the Philippines, Viet- nSodmeeg l I High school dropout 11% nam, the Dominican Republic, mainland China and Taiwan, Korea, and India. The majority of today's immigrants are far less ^.,!r skilled than the majority of U.S. born 1t 4 workers. Male natives are two and a half times as likely to have finished high Associate r ; High school school as immigrants are.'4This is a degree 9% graduate, strong signal that basic skills education is no college 33% critical to placing incoming immigrants in College graduate 28% work that is both productive and a means toward self-sufficiency. Across the labor pool, the skills ...the cycle of poverty will not be shortage is no longer an imbalance. It's broken. The widening of the income an urgency. distribution contributes directly to child poverty because the sharpest loss in real A Race We Must Win incomes has been to young people just The stakes are high for the U.S. econ- beginning their working lives.'6More omy. More than eight years of record eco- than a third of all America's poor children nomic expansion have failed to signifi- belong to families in which at least one cantly boost incomes among middle parent works all year, but whose earnings Americans, reduce the levels of poverty, can't lift the family above the poverty or afford low-skilled workers higher liv- level." The connection between education ing standards. A drop-off in economic and earnings is unmistakable: forty percent growth can only hurt the outlook. If we of parents in working poor families are ignore the skills shortage: high school dropouts. Another 35 percent have no education or specialized training ...the income gap will widen further. beyond high school.° The vast majority of American families have experienced either modest income ...U.S. workers with limited education growth or an actual erosion in their living and training will be left behind. standards in recent years, while the small Although the economy is improving, the minority of upper-income families had living standards of many working families income growth.° While families certainly are not. Over the past 20 years move between income quintiles, it is dis- (1975-1995), the earnings of high school turbing that, between 1989 and 1996, the dropouts did not even keep up with infla- lowest quintile of families saw their in- tion, and high school graduates barely comes decline eight percent, while the kept pace. While it is troubling that little top quintile's grew five percent.(See. more than a fourth of the entire civilian Figure F) labor force has a college degree, it is striking that this portion of the workforce is the only one that has been able to keep up

Source: Fig 6: Bureau of Labor Statistics

THE SKILLS RACE 21 23 with inflation.' If these patterns continue, lifetime earnings differences between high and low levels of education will become even more dramatic. (See Figures G and H.)

...competition for low-skilled jobs will Figure H Lifetime Earnings for Year-Roun , Full-Time Male Workers increase, especially as welfare recipients move off the rolls. The 1996 welfare $4,500,000 reform bill has already begun to move 4,000,000 waves of chronically unemployed heads of dependent households off of public 3,500,000 assistance. A robust economy has helped 3,000,000 reduce the number of welfare families by 2,500,000 almost one-quarter since January 1995, to 2,000,000 a current level below four million. But 1,500,000 these people were the easiest to place in 1,000,000 the workforce, because they typically have some secondary education and work 500,000 experience. And there is no guarantee that even a minority of this group will actually stay employed. The biggest obstacle lies ahead as recipients with marginal educa- tions and no work experience are shifted Highest Degree Earned off the rolls. Even under the best conditions, the current glut of low-skilled workers which has already reached a startling 15 applicants per open position in some Midwestern urban areas will increase' Without the proper education and training, they will have nowhere else to Figure I Educational Attainment of 25-Year-Old Women, by turn. (See Figure 1.) Length of Time on Welfare America cannot afford to lose the -13011*. _Aix skills race. We will all fall short of the

12 Months hurdles unless we work together toward a comprehensive education and training 1.1 1 Months strategy. Encouragingly, the key players business leaders, workers, educators, J None and government agencies see that they can best accomplish their common goals as a team. The winning examples cited throughout this report demonstrate that these problems are not insoluble. They are models for what can be championed through collaboration.

Source: fig. H: Based on US Census Bureau income data coladated over the yews of 18 to 64. Fs I: Bodes, Gory. "lhe Employment Prospects of Welfare Recipients.' The Work Alternative: Wellare Reform and the Realities of the Job Maria Demetra Nightingale and Robert Hausman, Eds. Washington, DC Urban Institute Press, 1995.

Council on Competitiveness 22 End Notes: that the supply of skills in the U.S. economy hasnot kept place with the growing demand. 1 Nickell, S. and Bell, B. "Changes in the Distribution 7 Burtless, Gary. "Worsening American Income of Wages and Unemployment in OECD Countries." Inequality: Is World Trade to Blame?" The Brookings American Economic Review. May 1996, pp. 302-308. Review. Spring 1996, pp. 27-31. Uses data from the 1995 OECD Literacy Survey. 8 Richard Freeman is among the many economists who 2 The Hudson Institute and U.S. Department of Labor. have tried to analyze why the U.S. is experiencing 3 Behr, Peter. "Cultivating a New Crop of Workers: growing income inequality. Source: Freeman, Richard Training and Nurturing Replace Bidding Wars." The B. When Earnings Diverge: Causes, Consequences, Washington Post. December 1, 1997, p. Al. and Cures for the New Inequality in the U.S. Washington, DC: National Policy Association, 1997. 4 Statistics like real median household income and real earnings are affected by the consumer price index 9 Robert Lawrence of Havard's John F. Kennedy School (CPI). The Boskin Commission estimated that the of Government and Paul Krugman at the Massachusetts current CPI overstates inflation by 1.1 percentage Institute of Technology are the leading advocates of points per year. Although removing CPI bias would this position. change some of the details of productivity and income 10 Shepherd, Bill. "Defusing Globalization: A View trends, it would not alter our views of an increase in From Washington." Global Finance. November income inequality over the past two decadesor the fact 1997, p. 38. that real wages are growing more slowly than in the 1950s or 1960s. Source: U.S. Department of Labor. 11 U.S. Department of Education, Office of Educational Economic Report of the President. February Research and Improvement. Third International 1997, p. 71. Mathematics and Science Study (TIMSS), 1997. 5 Wages make up roughly three-quarters of total family 12 National Research Council. Cited in Information income with the remaining quarter madeup of capital Technology Association of America's Help Wanted: income, such as rent, dividends, interest payments, and The IT Workforce Gap at the Dawn ofa New capital gains. Century.Arlington, VA, 1997. 6 For more than a decade, concern has been growing 13 U.S. Department of Labor, Bureau of Labor about the relationship between competitiveness and Statistics. "College Enrollment and Work Activity of the inadequate skills of American workers. In 1983, 1996 High School Graduates." July 1997. in "A Nation at Risk," the National Commissionon Information from the Current Population Survey. Excellence in Education chillingly concluded that a 14 Cassidy, John. "The Melting Pot Myth." The New "rising tide of mediocrity threatens our very futureas Yorker. July 14, 1997, p. 41. a nation and a people." That was followed by the Hudson Institute's "Workforce 2000" (published in 15 There are a lot of government data and policygroups 1987), which stressed the long-term implications ofa that make this point. This was drawn from Mishel, growing skills shortage in the United States. In June Bernstein, and Schmitt. The State of Working 1990, The Report of The Commissionon the Skills of America 1997. Economic Policy Institute, p. 50. American Workforce "America's Choice: High Skills 16 Freeman, Richard B. When Earnings Diverge: or Low Wages!" was released, warning that the coun- Causes, Consequences, and Cures for the New try was, without realizing it, choosing a road to low- Inequality in the U.S. Washington, DC: National wage jobs. The only solution was to upgrade our edu- Policy Association. 1997, p. 46. cation and training systems. Finally, the Secretary's Commission on Achieving Necessary Skills (SCANS) 17 U.S. Bureau of the Census, March 1994 Current published its initial report, "What Work Requires of Population Survey data. Cited in: Annie E. Casey Schools" in 1991, which concluded that schoolswere Foundation,Kids Count Data Book. 1996, p. 5. not teaching students the basic skills needed to suc- /8 Annie E. Casey Foundation, Kids Count Data Book. ceed in the workplace. The Commission recommend- 1996, p. 7. ed that the nation's school systems make SCANS foundation skills and workplace competencies explicit 19 U.S. Bureau of the Census. Current Population objectives of instruction. These four reports have Survey data. made headlines around the nation and raised concerns 20 Cited in The Wall Street Journal. July 29, 1997,p. Al.

THE SKILLS RACE 25 tot 2.3 kc,

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,''-i- . , THE PYERS Employers, workers, the education and increased demand to develop skills. Their training community, and government future depends on being able to success- agencies are the four major stake- fully place graduates into the market. holders in workforce preparation. All Federal, state, and local government share a vital interest in expanding the ca- agencies see that their efforts in work- pabilities of the U.S. workforce: force development programs must be Employers seek increased productivity more focused and more localized to to strengthen the bottom line. This goal generate economic growth. requires a workforce that can adapt This chapter outlines the interests quickly to new tasks and to new market of the stakeholders and shows why they demands. Workers seek higher wages cannot run alone. and job market security, which theycan attain only by investing in theirown skills. Educators and trainers face rising expectations from students, workers, employers, and communities to meet the Part Two

THE SKILLS RACE 26 29 Ames Rubber Corporaiion is acutely aware that the mismatch between workers and jobs hurts the firm's ability to grow and prosper. Located in a rural, farming community in northern New Jersey, Ames Rubber is particularly limited by the area's low unemployment levels and geographic isolation. Charles Roberts, vice president of total- quality, Iden- tifies many of the problems and prospects:

"It's almost impossible to find skilled labor. Even though our lifetimes. For those who maintain and improve their skills, the requirements are minimal (workers with basic verbal skills who changes should bring increasing rewards. For those who fall are able to do calculations and performmath at an eighth-grade behind the curve, the way out is more costly, and more remote. level), we are compelled to put a lot of time and resources into remedial efforts because our recruiting options are so poor. Job We realize that remedial education is a short-term, band-aid solu- applicants are told up-front that they will be tested for basic com- tion and that real change has to happen through KI 2 reform. petencies and that those without basic skills will need to bring The schools are not graduating students with the necessary skills. themselves up to speed if they expect raises and promotions with- We need to be better about articulating our skill needs, dissemi- in the company. nating them to the schools, and assisting in redesigning curricula.

We feel we're giving workers a second chance by helping them School-to-work that marries meaningful work-based learning ex- improve their basic literacy skills, but it's a difficult undertaking periences with challenging academics is considered by many to be for many. Although we are committed to not laying off workers a best practice, although it has not yetbeen brought to scale any-

due to quality improvements, those workers who refusetoup- where in the United States. Partnerships between business, grade their skills face a dim future not only for this job, but schools, and other community players can help improve learning

down the road when workplaces demand even more sophisticated and can give students an early glimpse at what competencies are skill sets. Employability is key to job security. And to stay employ- needed to excel in the world of work."

able, workers must be willing and able to learn throughout their

30 27 Council on Competitiveness and services are being introduced every Why Business Can't Run Alone year, placing new demands on all employ- Companies like Ames Rubber are ees from the factory floor to senior overwhelmed by how multidimensional management. their training needs are. They not only Training requirements are ratcheted up have a baseline requirement for workers in the knowledge-based economy, and they who can read and do simple math, but now outpace the capacity of firms to res- also are calling on increasing numbers of pond. Although employers spent an employees to communicate well, use tech- estimated $55.3 billion in 1995 on formal nology, solve problems, think critically, training for the civilian workforce, em- and understand the larger business ployer-provided training does not appear to context. The training agenda for business starts with basic skills and workplace I :lo eo fundamentals. Entry-level workers unfa- miliar with the work environment must learn how to meet even the simplest requirements to show up on time and 8 notify superiors of absences. Yet many workers (even those with high school diplomas) lack basic competencies in read- 6 C ing, writing, math, and computers. Unless Eastman Kodak Company employees 4 have a solid understanding of basic math, for example, they cannot comprehend how I ;r: to build or use formulas on an Excel 2 spreadsheet. For companies like Kodak that have spent millions of dollars on sta- 0 tistical process control systems, poor math oe 050 preparation is a major stumbling block that e, ,s10,0) ,c-14.,63101c' often hinders their ability to quickly roll ,macON out sophisticated operational conversions. Beyond the fundamentals, pressure is mounting to continuously upgrade the have kept pace with the increase in the skills of incumbent workers. More than number of workers over the past 15 years' ever, employed workers are participating in Training expenditures per worker appear to skill improvement training for their current have fallen,4 despite the fact that training jobs.' Rapid workplace changes mean pays off. Employers achieve an 8.6 percent workers' knowledge has to be continuously improvement in productivity for every year updated. More than half of companiessur- of worker education.' (See Figure AA.) For veyed in a Bureau of Labor Statistics that same year, employees who receive (BLS) study provided training to upgrade training enjoy wages as much as 16 per- or reorient worker skills in response to cent higher than comparable workers who changes in technology, production meth- do not receive training (even after control- ods, or both.' This level of continuous ling for education levels and a variety of learning isn't surprising to firms like Hewlett-Packard, where new products

Source: fig. AA: National Center on the Educational Quality of the Workforce. 'Tire Other Shoe: Education's Contribution to the Productivity of Establishments' 1995.

THE SKILLS RACE 28 31 other factors that affect earnings) .° Figure BB The response of U.S. firms to rising Growth of Corporate Universities demands for training is, at best, uneven. Only a small fraction of private industry IIINumber of Corporate Universities invests in preparing its overall workforce. Indeed, workplace training tends to favor 1200 the advantaged; although those with college degrees represent only 25 percent 1000 of the workforce, they received 38 percent of the training in 1991. Conversely, those 800 with a high school education or less got 38 percent of the training but represent 53 percent of the workforce.' The 70 percent of employers that do conduct formal training assign particular priority to what feeds into the bottom line of company operations. While companies routinely invest in computer training, for example, a very small percentage of all establishments offer formal training in basic reading, writing, arith- metic, and English language skills.' Yet, in surveys done by the Olsten Corporation, almost half of employers reported that their workers needed to enhance their reading or math skills in 1994 twice as many who reported so just three years earlier.9 Data like this are common and point to basic skills training needs that far

Figure (C exceed employers' efforts to provide Firms With formal Training Programs by Establishment Size such training. Some of the biggest companies are Percentage with demonstrating their commitment to learn- Formal Training Programs ing by creating education/training units 100 within the corporate structure. These 90 "corporate universities" have grown from . i80 400 in 1988 to more than 1,000 in 1995 (now estimated at 1,200 to 1,500).10 70 (See Figure BB.) But a significant portion 60 of these training expenditures are by large d Es 50 manufacturing firms and directed to pro- 01 40 fessional and managerial staff, not front- line workers. 30 Large firms like Xerox Corporation, 20 which invests substantial sums in training 1 0 its workforce, are exploring more decen-

Source: fig. BB: Quality Dynamics Inc. 1996 Survey of Corporate University Future Dredions. ,e 09Iees Fig. CC Bureau of Labor Statistics, 1993 Survey of EmployerProvided Training. cp("1" ce Council on Competitiveness VS14o6% '153 20 tralized strategies that allow employees to mance-based evaluation systems. All of pursue the training and educational oppor- this means time away from the job and tunities they deem appropriate. Managers lost productivity, for both the trainer and within each business division identify trainee. And because worker training can learning opportunities for employees, be expensive, small firms in particular based on their selected career paths. As fear that their employees will take their corporate training departments shrink," new skills and knowledge and go else- firms are relying on such decentralized where for employment. This issue came strategies to ensure that the workforce up repeatedly during our own focus group continues to improve its skills and that discussions, although studies have shown employees have the learning opportunities that participation in employer-provided they need to move up the ranks. This training actually reduces the likelihood of trend puts added pressure on each division an employee leaving the employer.° And of large companies to make smart, cost- given the job churning in today's market, effective investments. small firms are particularly sensitive to Small and mid-sized companies are the costs of locating and training replace- major job generators in the U.S. economy, ment workers costs that can quickly yet their workers operate at a distinct dis- become prohibitive. advantage. The BLS studies show that New training requirements have left smaller firms are far less likely than their all firms in a state of flux. Employersare larger corporate counterparts to train their struggling to determine where to allocate workers. Small firms spend approximately resources, which training tools to use, and one-third as much per employee on for- how to maximize their impact. mal training as do large employers.I2Yet, small business training needsare critical. These firms not only provide the first work experience for two out of three workers, they are also important providers/suppliers to larger companies that rely on services/goods of smaller firms to beat global competition. Many small firms are severely limited by a lack of personnel, funding, and the benefit of economies of scale. As Figure CC shows, almost all private sector establishments with 50 or more employeespro- vided some formal trainingprograms for workers. But just 69 percent of employers

with fewer than 50 employees provided 4 any formal training." And, according to the Small Business Administration, less than one-fifth of firms with fewer than 25 employees have comprehensive training

programs.' . 4 Smaller firms have trouble rationaliz- .A,k; ing the costs of formal training, whichcan include employee testing and assessment, employee development plans, and perfor-

THE SKILLSRACE 30 33 ..;t1

As a member of United Steelworkers of America Local 1010, Nick Nash and other hourly workers at Inland Steel Flat Products Company in East Chicago, Indiana, are the beneficia- ries of a labor-management contract that sponsors on- site classes through the JobLink 2000 center. Nick has taken advantage of the opportunity to take courses relating to eersonal development, retirement, or - future academic needs, at -ivetrver' no cost. JobLink, he says, has opened new doors for him:

"I first took a class in Residential Wiring in 1994. I was doing sophisticated desktop publishing and spreadsheets. And most some work on my home and wanted topick up the skills recently, I took flying lessons with the money available through needed to rewire my garage. I enjoyed it so much I enrolled in the Tuition Assistance Program offered by Inland.

Carpentry I and II and Advanced Carpentry I and 11.1 then had the skills to build a deck around my house. Knowing how to do The experiences have really helped me think about what I'll do it by myself saved me a lot of money, and it was very reward- after I leave Inland. Jobs are no longer secure in this industry, ing to complete such a major project. and there's always retirement. I think I want to build a log cabin for myself, possibly in New Mexico. And in the meantime,

I continued with other home-improvement classes, each lasting I have improved my reading abilities, sharpened by math skills, about four months, but then I also began branching into com- and gained a lot of confidence about being a 'student' again. I puter courses. Joblink offers courses ranging from the basics plan to keep taking classes as long as I can." like keyboarding, word processing, and using the Internet to

34 31. Council on Competitiveness Why Workers/Unions Can't Run Alone workers and managers. To increase job Workers, like Nick Nash, ever lesssecure opportunities within the firm, the steel about their positions and prospects,are producer instituted something called "cri- increasingly aware of the need to boost terion referenced instruction" a com- their skills and marketability. But often, plex system that clearly identifies the they lack the perspective and opportunity skills and knowledge needed tosuccess- to realize that goal. fully perform 400 jobs in the plant. Overall, U.S. workers get roughly the Because of the constant introduction of same share of job-related training as in other major countries. (See Figure DD.) But formal training is biased toward the haves. It typically favors: the college educated; men, who have both a longer histo- 1111 Percentagewith Formal Training Programs ry in the workforce and who pose little 45 threat of leaving work for child rearing; whites over blacks and other minorities; 36 and workers between the ages of 35 and 44 a group that has logged enough time on the job to be valuable and nottoo 27 much time to soon be considered obsolete.16 a- 18 Unionized workers, makingup roughly 10 percent of the industrial workforce, are more likely to receive 9 formal company-provided training than nonunionized workers." For workers looking to transition into new jobs within the same company, those in unionized firms often benefit from job training programs that are a product of labor- new equipment and new processes, labor management collaboration. Collective and management wanted to devisea sys- bargaining objectives have shifted from tem that clearly laid out job qualifications, job security, or keeping one's present encouraging workers to upgrade their position, to employment security, which skills and making it easier to obtainnew ensures workers opportunities in the positions within Inland. broader job market. Labor and manage- Beyond training in the workplace, ment work together to provide oppor- some firms underwrite the schooling costs tunities for union members who receive for workers. By 1995, 65 percent of training and education to improve employees at medium and large firms existing skills or to learn new skills for were eligible for job-related tuition bene- greater employability. fits, and 18 percent could get financial For example, through the collective help for courses not related to their jobs.'s bargaining process, Inland Steel has And workers are taking advantage. Nearly committed to training 10 percent of its half of the 14.2 million college and uni- unionized workforce at any particular versity students in the United Statesare time. These worker education programs over 24 years old, and that percentage of have proven so effective that the number is more like 25 percent accordingto Source: fq. DD: Orgmikation for Emmen Cooperation and Development, Education at a Glance: OECD indicates, Indicator P8,1995.

THE SKILLS RACE fft ftri." 3 2 35 older students most of them coming courses they are taking, often on an ad back to school after years in the work- hoc basis, are tooling them with the force is still rising.' The 1998 tax law "right" skills. And although the training recognizes this trend and offers several may be valuable, most individuals do not different kinds of credits that can be used receive portable credentials or certifica- to help offset college costs. tion unless they pursue full degrees. But those workers who, on their own, For would-be new entrants and in- choose to pursue education and training cumbent workers, the problem is two- through outside sources, are by no means pronged. First, individuals themselves are guaranteed that their investments will pay not taking the initiative, often because off in higher wages or career opportuni- they lack good information about what ties. While work-based training increases skills they need, how they can be ac- individual earnings, the benefits are not as quired, and where they can be applied. clear when individuals go it alone Second, for those with the motivation, Even the most reputable education learning opportunities are often severely and training programs do not always en- limited by time, expense, and lack of sure that their programs are tailored to availability. As learning becomes a life- business needs. In too many instances, long need, no worker will reach his or her workers have no way of knowing if the potential without ready access to quality skills training. I A

Valencia Community College in central Florida has been ahead of the national pack in designing education/ vocational programs that connect its participants directly to the job market. Susan Kelley, Valencia's vice president of resource development and governmental relations, has worked closelt with government agencies and private firms to rationalize the costs associated with workforce prepared. - ness. She's intent on showing results:

"That's what community colleges can do and should do; it's why track job placements and survey employers on their skill needs,

industry pays taxes. Valencia is an active partner in local eco- and it's paying off Valencia has earned back more than its

nomic development. We anticipate opportunities for economic 20 percent every year.

expansion and work directly with businesses to maximize those

opportunities. Everyone wins, and the region's economy is We partner with all Central Florida businesses, from entertain-

boosted. ment and hospitality to health care and the film industry. Our students must be trained so they leave ready to work in a good

I was an early supporter of performance-based funding and paying job...a job that exists. This is especially critical with the

budgeting for public educational institutions in Florida. Colleges effects of welfare reform. An estimated 45,000 welfare recipi-

now must risk 20 percent of their funding and prove tothe ents will try to leave the Central Florida's rolls over the next

state that they can successfully place graduates in promising two years. We have to ensure that our education and training

fields identified by the state's occupational forecasts. This ele- programs are designed to meetthe needs of the long-term un-

ment of competition keeps everyone sharper. We regularly employed and satisfy job requirements."

37 THE SKILLS RACE 3 4- Figure EE Remedial Education in Higher EducatiOn Institutions (1995)

Why Educators and Trainers 40 Public Public Can't Run Alone I= 2-year 4-year Educators like Susan Kelley recognize 32 that the success of schools is very much Private Private j 2-year 4-year dependent on the economic success of the 111 5 24 communities in which they reside. No E matter what level of post-secondary institution from the research universities ; 1 6 to community colleges the value of all education and training providers is 0- 8 measured by their direct contribution to economic development. A particular challenge for post-sec- 0 ondary schools is the number of students Reading Writing Mathematics who leave high school unprepared for higher learning. In most medium-sized to

%"F large four-year colleges, at least one- .15%r fourth of the freshmen require remedial 0 ' education in mathematics and reading before they can do college-level work." And two-fifths of freshmen in public two- year colleges register for remedial courses. As Figure EE shows, America's well- regarded system of higher education is de- voting too many resources to re-do what should have been done already. Meanwhile, schools are enrolling more and more older students, who are motivated by increasing educational I I I requirements for employment, changing life circumstances, and personal growth. 80 Currently, more than 50 percent of higher 70 education students work and their goals are to upgrade, retrain, or advance!' 60 Because four-year universities, in general, 50j have not emphasized learning for work, students looking for practical educational 40 avenues into the workplace often turn to

30 community colleges. Education for work has long been a 20 key component of the community college mandate. These institutions are within 10 commuting distance for most of the popu- 0 lation; they are community-centered and 1,06 c O° .34 agibbe(' t(cer 4ecO°Aoc often have ties to business and industry; to0' _or Cv ..40 v Source: fig. EE: U.S. Department of Education, National Center for Education Statistics, ,100 ov Remand Education at Higher Education Institutions in Fall 1995. ,ebv Flo. FF: Developing the World's Best Workforce: An Agenda for Americas Community Id' I, Colleges. Community College Press, 1997. 3S' Council on Competitiveness they are relatively inexpensive; and their Standard & Poor's 400 Industrials over open enrollment policies make them the past two years." accessible to all. (See Figure FF.) Post-secondary education, whether But as the hubs of continuous learn- publicly or privately funded, will have to ing, community colleges are beingpres- meet the rising demands of workers and sured to do more than just provide flexi- employers for marketable skills, as wellas ble, cost-effective courses. Thepressures the expectations of community leaders are from students and employers those for economic development. who receive the training and those who finance it who demand a clear return on their investment. Successful community colleges are increasingly customer conscious and responsive to firms large and small. Valencia Conununity College's Office of Corporate Services actively seeks out Orlando-based firms that would benefit from on-site needs assessments and evaluations, training and education, customized course development, and continuing professional education courses. With less than four percent unemployment, local businesses are clamoring for the school's help in educating both entry-level and incumbent workers. And the school's client base (which has grown ten-fold since 1992) not only expands its reach in the community, it reaps additional revenue. If community colleges do notmeasure up, firms can turn to alternate sources. Many newcomers in the education and training field are cashing in on a skyrock- eting demand for their services. Some of the stiffest competitors are private providers responding to the wave of firms out- sourcing many of their training functions. The combined sales of Knowledge Universe, a Los Angeles-based holding company of training and consulting firms, were forecast to reach $1 billion by 1998. According to one estimate, the market for information technology education and training services alone was $4.4 billion in 1996 and is expected to grow to $7.4 billion in 2001." The American Society for Training & Development (ASTD) recently found that the market value of firms providing customized training hasappre- ciated at more than twice the rate of THE SKILLS RACE 3 39 Washington State's Workforce Training and Education Coordi- nating Board, which advises the governor and legislature on workforce development policy, deals directly with Washington's employers and workers. Only after identifying the major gaps in the supply anddemand for training can the Board strategize how to best serve its customers. Board Chair Betty Jane Narver explains:

"Education and training are critical to the economic growth of to increase over the next five years. Community andtechnical

Washington. If employers cannot find trained workers locally, colleges need to market their offerings better by showing stu-

they will look to other states or nations, or they will have to dents how valuable a two-year degree is in the market. In partic-

design new jobs that do not require high skills or pay high ular, degrees in computer science and computer engineering are

wages. The state has to coordinate its economicdevelopment in high demand. and workforce training programs to encourage the growth of

high-performance firms where workers participate in decisions, Firms are also in need of retraining services for their incumbent

work in cross-functional teams, and manage their own career workforces. Although the students who attend community and

development. technical colleges for workforce training are generally satisfied, many employers perceive amismatch between the kinds of

Shortages are particularly critical in occupations that require training they are seeking for their current workers and that

technical training beyond the high school level. A recent survey offered by public providers.

found that 81 percent of employers who tried to hire workers

with a vocational degree or certificate had difficulty finding It is the Board's job to ensure that the state's workforce training

qualified applicants. Each year, the state produces less than and education system meets these needs. And to do that, we

21,000 graduates with two years of post-secondary vocational have to give both of our customers business and labor a

training, although there are about 28,000 job openings per voice and the opportunity to shape education and training in

year. And many businesses expect theirneed for such workers their local communities."

317 40 Council on Competitiveness that such investments pay off in terms of Why Government Can't Run Alone new jobs and long-term economic growth. Washington State's intensive efforts to The federal government is a level Withan match education and training with market removed from the firing line of workforce eye toward demands are emblematic of efforts in state development. Federally sponsored job economic capitals across the country to keep and training programs are designed for mostly development, attract high-wage jobs. States like Wash- disadvantaged workers who would not ington recognize that competition for eco- receive such training from an employer or 47 states now nomic development can be won or lost by could not pay for it themselves. The annual offersome type the availability of trained workers. To win federal investment in targeted programs, of customized this battle against other states and against estimated at $25 billion, is geared mostly job training locations around the world, they are de- to at-risk groups such as dislocated veloping and delivering comprehensive workers, low-income individuals facing program to employment services designed to serve significant bathers to employment, and existing or their local populations, including labor youths who have the potential to benefit new businesses. market information, training, job counsel- from second-chance programs?' ing, and placement. On the whole, these targeted federal With an eye toward economic devel- programs have received low marks for opment, 47 states now offer some type of effectiveness. Critics contend that the customized job training program to exist- multitude of narrowly focused programs ing or new businesses. States have are competing for clients and funds, while stepped up their investments in economic administrative overlap makes the system development, on average, by about 29 inefficient and difficult to navigate. In percent a year over the last 10 years (to- 1995, the General Accounting Office con- taling $2 billion in 1994). This and other cluded that approximately 40 percent of analysis by the National Alliance of Busi- the federal employment and training pro- ness shows that states that have a more grams could not accurately identify how educated workforce and that devote more many people they served per year. Less state and local resources to education see than half of these programs tracked partic- improved economic performance.24 ipants' success in getting jobs. Only a But there are risks in the intense com- quarter collected data on wages eamed.26 petition among states to keep or attract In response, the federal government is corporate investment. The AFL-CIO, for directing state and municipal governments instance, takes issue with states that are to improve administration and increase too anxious to accommodate business access by implementing programs at the needs and may, in effect, distort the origi- local level. The U.S. Department of Labor nal purpose of training dollars to attract provides funds to assist states in develop- firms. The labor organization points to the ing one-stop career centers that help with 1993 case in which Alabama enticed recruitment, training, and hiring for both Mercedes to build an automobile plant job-seekers and employers." One-stop within its borders by extending tax abate- centers provide a single entry point by ments that actually reduced resources for unifying the patchwork of fragmented a state special education trust fund. employment and training programs, Although a new governor stepped in with thereby creating a more efficient system. an alternative incentive for the company, In addition, the federal government is the AFL-CIO and other critics still ques- increasingly becoming an initiator and a tion whether such decisions are the best catalyst for a series of major national pro- use of limited resources. But states argue grams that go beyond specific classes of 3g THE SKILLS RACE 4,, 41 workers. Two of the most promising fed- recruitment costs drop and experience less eral initiatives, school-to-work and occu- turnover among new hires." And students pational skill standards, address workforce benefit from the work experience. A recent challenges that the private sector cannot study found that a student who went be expected to meet on its own. Both of directly into the workforce after high these initiatives (discussed in this chapter) school and worked a substantial number recognize the power of devolution by of hours during school (15-20 hours a providing for implementation at the local week), drew significantly and substantively level. higher earnings.29 The school-to-work concept has Why the Players Need to Run Together started to catch on even without the Industry, workers, educators, and govern- catalyst of federal grants. Intel's lead in ment officials are not always natural part- New Mexico, for example, is typical of ners, but they are pooling their resources many firms turning to education partners and expertise to tackle issues that they for a reliable supply of skilled workers. cannot manage on their own. Their core The hands-on science learning centers shared interests are the following: developed by company managers proved 1) to improve the pipeline from K-12 so successful that they were adopted by to work, the New Mexico State Department of 2) to leverage scarce training resources, Education. Intel also introduced special and manufacturing classes at the K-12 schools 3) to respond to market pressures. statewide, arranged work-site opportunities for students, and offered teacher Improving the Pipeline from K-12 to Work internships. The current enrollment of Public and private sector leaders have more than 1,500 in the post-secondary begun to work in partnership across the manufacturing technology degree program country to ease the transition from K-12 developed by Intel shows that students are to the workplace. starting to see the opportunities. Congress created a framework to pro- In Milwaukee, an area that lost mote such partnerships, the School-to- 60,000 high-wage manufacturing jobs in Work Opportunities Act of 1994, which the 1980s, manufacturers have banded provides temporary planning and imple- together to regain the community's confi- mentation grants to states and local com- dence in vocational education. Parents, munities on a competitive basis. The ra- students, and guidance counselors had tionale is that states and localities should turned away from this blue-collar track be able to design systems that reflect their because it was not considered a pathway own economies and that respond to their to a high-paying career. In recent years, own labor market needs. For school-to- however, local manufacturing firms and work to be successful, businesses, labor unions have established school-to-work unions, schools, parents, local officials, links and youth apprenticeship opportuni- and community-based organizations must ties to renew interest in fast-growing work together. School-to-work programs occupations that do not require four-year give all students academic and technical degrees. Today Milwaukee's school-to- training and link learning in school with work program is much heralded for its the demands of the workplace. efforts to teach all children in an applied Early evaluations suggest that school- fashion, beginning in elementary school. to-work is a success story in progress. A nationwide coalition of service sec- Businesses that participate have seen their tor firms has formed a network of

42 3cf Council on Competitiveness The National Sch of -to -World grams, students receive broad exposure to issues and Office has identified eightcore stalls related to theircareer of interest, rather than learn- principles th tare keyto ing isolated task- or job-specific skills. developing school-to-work systems. 5)Employers and labor unions playa key role in building school-to-work systems. 1)School-to-work opportunitiesare intended Employers and unions are equal partners with education, for all students. although their involvementmay vary. Firms can offer job All students induding the disabled, school dropouts, shadowing, sponsor teacher internships, develop skill and academically talented learners benefit from chal- standards, and/or offer full work-based internships. lenging, contextual learning. Unfortunately, many misun- Unions often concentrate on job training and workplace derstand school-to-work and treat it as enhanced voca- health and safely issues. tional education for the "non-college bound." But allstu- dents can benefit from learning that is benchmarkedto 6)learning is organized around career majors, Whichpro- high academic standards. vide a context for learning and allow forconnections between school-based and work-based learning. 2) School-to-work elements are incorporated throughout the Career majors help students learn how their strengths school curriculum. and career goals match witha variety of occupations. The Career awareness and exploration must beginas early as application of lessons at an earlyage is key to steering possible. School-to-work principlescan be put into simple students toward post-secondary and employmentoptions. exercises for younger students, while high schoolerspar- ticipate in sophisticated work-based learning opportuni- 7)States identify a "roll-out strategy" to local ties. The system builds incrementally, preparing students partnerships. for each progressive step. Because system-building is a long-term activity,states

must have plans for spreading school-to-work toevery 3)All partners involved in implementing school-to-work community. Local partnerships are usually required to must be trained and given staff development demonstrate through a competitiveprocess that they are opportunities. ready to implement school-to-work. Teachers and career counselors needto work directly with employers to learn about particular industries and work- 8)All partners are responsible for ensuring that theirsys- place practices. Staffmay also require training in contex- tems yield results, which are measurable and drivecon- tual learning, portfolio assessment, and the use of tech- tinuous improvement efforts. nology. Employers and unions needto learn how to Successful school-to-work systemscan document im- develop work-based learning experiences, mentoring cur- provement of academic performance, students' develop- ricula, and skill standards. ment of job skills, high level of involvement by employ-

ers and schools, and favorable labor market experience 4)School-to-work systems enable students to explore "all of graduates. For school-to-work to establish itselfas a aspects of an industry." self-sustaining, national movement, grantees will have Building on an area first emphasized in tech-preppro- to demonstrate their success in qualitativemeasures like these.

THE SKILLS RACE 43 "academies" within high schools that with the nearby Center for Employment prepare students, many of whom are con- Training (CET) that has generated sub- Employers see sidered "high risk" for dropping out, for stantial benefits for both the fi rm and the school-to-work careers in the financial services andtravel school. The company shares its technical skills courses, donates materials, and as a way to and tourism industries. This National Academy Foundation (NAF) has a invites teachers to shadow company secure for strong track record in exposing students to employees so that the teachers can learn themselves a job and career opportunities through stu- more about the industry and its math and pipeline of dent internships. For the students, the science requirements. In turn, workers spend time in the classrooms as teachers' graduates work experience reinforces the importance of schooling and gives them new aides and student sponsors. The exchange whose skills incentives to graduate. For businesses, breeds results: Solectron now regularly meet their soon-to-be new entrants who work in their hires CET graduates and regards the school needs. industries help the employers build pools as a great recruiting opportunity. of qualified workers. Virtually all students The Wisconsin Regional 'fraining involved in NAF programs graduate from Partnership is a local alliance of small high school, and more than 90 percent go businesses and labor organizations that on to college. work together to improve workers' skills Employers see school-to-work as a and to support high-performance work- way to motivate students to performin places. The members of the industry con- high school and to secure for themselves sortium see its greatest values as providing a pipeline of graduates whose skills meet opportunities to learn from their peers, their needs. improving access to public sector services, and developing joint training programs. Leveraging Scarce Training Resources Even the largest companies, with The magnitude of the training challenge plenty of trainers on hand, are looking has prompted many firms to form alliances outward to meet worker demands for cer- with other firms and organizations in their tification and portable degrees from high- communities that offer specialized exper- quality institutions. More and more cor- tise, information links, and economies of porate universities are pairing up with scale. Learning partnerships are of special accredited schools. Companies like Berlitz value to small and medium-sized International, Ford Motor Company, companies: General Electric and Xerox have certified Oregon-based Merix Corporation, a their employee training programs so that medium-sized electronics manufacturer, their employees can earn college credit for has developed a network of ties with local training. This means workers can take educational institutions two and four- their achievements with them to find jobs year universities, technical schools, com- in other fields or geographic areas. munity colleges to meet its training Motorola has long established rela- needs. Often, the schools are hired to tionships with universities and community develop the class material, and Merix does colleges in every region in which it has a the training at the corporation's facilities. corporate presence, although it has its Merix has found these outside educational own university at its headquartersin Illi- suppliers, who know Merix's business, to nois. But now, it is establishing alliances be especially productive partners. in regions of the country where it antici- Solectron, a surface mount technology pates launching new facilities. In Rich- manufacturer in Milpitas, California, has mond, Virginia, where its new computer forged a long-term learning partnership chip plant will be built, Motorola is work-

44 41 Council on CompetitivenessIMveness ing with J. Sargeant Reynolds Commu- mately, their job performance. nity College to recruit and train prospec- A more comprehensive approach is tive employees. Instructors from the col- the federally sponsored and locally exe- lege are being certified to teach courses cuted Manufacturing Extension Part- designed by Motorola University. This nership (MEP), which provides informa- ensures J. Sargeant Reynolds a new crop tion, resources, and services to small and of students. medium-sized manufacturers. MEPs use The pressure to leverage resources is federal seed money to attract state, local, being felt across the board. and private funding for a wide range of management services on a firm-by-firm Responding to Market Forces basis. MEP workplace assistance activities Increased demand for higher skills has often include helping firms to evaluate spurred new initiatives to improve the ac- their training needs and to locate training cess of employers and workers to training service providers in the area. But MEP ad- and to increase the portability of skills. ministrators are quick to point out that What sets these initiatives apart is their smaller firms are only willing to embrace reliance on implementation at the local training if they see it as part of a larger level. strategy to achieve business goals. In Illinois, Governor Jim Edgar's A recent national initiative on skill office designed the Prairie State 2000 standards looks beyond the issue of access program, which offers training vouchers and seeks to improve the operation of to individuals and grants to small and labor markets. The goal of this congres- medium-sized businesses. The premise of sionally sponsored effort is to develop the program is that individuals and com- broadly accepted measures of worker panies are in the best position to meet capabilities on an industry-by-industry their own training needs. The program has basis. Since 1994, the National Skills hit a positive chord with many businesses Standards Board has attempted to build pressing to keep up with technology consensus on these measures by bringing improvements and related training together representatives of business, labor, demands. Preliminary findings show indi- academia, and community organizations. viduals receiving wage increases of more If national skill standards are successfully than eight percent during each of the first implemented, each of the players in the two years of the program. And employers skills race should benefit. Business will be are reporting high job retention rates for able to recruit and hire more effectively. those workers who have been retrained. Unions and workers will benefit from Tennessee has taken a different route, enhanced career and job opportunities. based on the results of a startling survey Educators and trainers will be better that showed its workforce is both under- equipped to meet business requirements educated and undertrained compared to and to improve the school-to-work its 19 neighboring and regional states. In transition. response, Tennessee's Skills Net targets In all of these instances, the walls that employers that have been hesitant, typi- have traditionally separated employers cally, to invest in workers who lack a and schools, schools and learners, govern- solid foundation of skills. Skills Net makes ment and the private sector, are gradually self-paced, computer-based classes avail- breaking down. And what's emerging are able over the Internet. For a minimal in- interests, once narrowly defined, working vestment, businesses can help adult work- together toward shared solutions. ers improve their basic skills, and ulti-

THE SKILLS RACE 4-2 45 End Notes: their employers). The National Organizations Survey (1990-91) found that 16 percent of establishments reported offering training to improve remedial skills to 1 U.S. Department of Education, National Center for their workers. These are probably the most reliable Education Statistics. National Household Education estimates. Other sources include a 1997 Industry Survey, 1991 and 1995 (adult education component). Report done by Training Magazine that finds 18 percent 2 U.S. Department of Labor, Bureau of Labor Statistics, of firms with more than 100 employees provide remedi- 1993 Survey of Employer-Provided Training. Cited in: al training, and a 1994 American Management Associa- Frazis, Harley J., Diane F. Hertz, and Michael W. tion survey that reported 20 percent of firms offered Horrigan. "Employer-Provider Training: Results From remedial training. 1995, a New Survey." Monthly Labor Review. May 9 Olsten Corporation, Skills for Success. Melville, NY, p. 3-17. 1994, p. 4. Cited in The ASTD Training Data Book 3 Formal training is generally defined as having a set cur- 10 Quality Dynamics, Inc. 1996 Survey of Corporate riculum and structure, whether it takes place in a class- University Future Directions. room, lab, or via technology. Informal training,which is more prevalent, is spontaneous instruction thattypically 11 Demonstrated by interviews conducted by The occurs on the jobone employee teaching a fellow Conference Board in Rethinking Human Resources: A worker how to perform a task. Source: Bassi, Laurie, Research Report. New York, 1995. Cited in the Amer- The American Society for Training & Development ican Society for Training & Development's Trends (ASTD), using data from the Bureau of Labor Statistics, Report, 1996, p. 7. the U.S. Department of Education, the Economic Report 12 Frazis, Harley J., Hertz, Diane F. and Horrigan, of the President, and ASTD's Benchmarking Forum. Michael W. "Employer-Provided Training: Results 4 Bassi, Laurie, Gallagher, Anne, and Schroer, Ed . From a New Survey." Monthly Labor Review May The ASTD Training Data Book. 1996, p. 3. 1995, p. 3-17. 5 National Center on the Educational Quality of the 13 Ibid. Workforce. "The Other Shoe: Education's Contribution 14 Job Training Approaches and Costs in Small and to the Productivity of Establishments." 1995. Large Firms. February 1993. Lexington, KY: Univer- 6 Bassi, Laurie and Van Buren, Mark. "The ASTD Report sity of Kentucky. Prepared for the U.S. Small Business on the State of the Industry." Training &Development. Administration by The University of Kentucky. January 1998. Alexandria, VA: American Society for 15 Lynch, Lisa M. "Private-Sector Training and the Training & Development. Earnings of Young Workers." American Economic 7 U.S. Department of Labor, Bureau of Labor Statistics, Review. Vol. 82, No. 2.1992, p. 151-156. 1991 Current Population Survey. Studies by Lynch 16 Based on 1991 Current Population Survey data. (1992) and Bishop (1994) also show that firm-provided Thomas Amirault. "Training to Qualify for Jobs and training is much more likely to be obtained by more Improve Skills." Monthly Labor Review. September, educated employees. See Lynch, Lisa M. and Bishop, 1992. John. "The Impact of Previous Training on Productivity and Wages," in L. Lynch ed. Training and the Private 17 Lynch, Lisa M. "Private Sector Training and the Sector: International Comparisons. 1994. Chicago: Earnings of Young Workers." American Economic University Press of Chicago. Review. Vol. 82, No. 1. March 1992, p. 299-312. Cited in The ASTD Training Data Book 8 Estimates of the percentage of firms providing remedial or basic skills training may vary, but all arerelatively 18 Cited in Jay Matthews. "Balancing Acts." The low. The Bureau of Labor Statistics' 1993 Survey of Washington Post Magazine. November 9,1997, Employer-Provided Training found that only two per- p. 25-36. cent of private sector establishments offer basic skills 19 Ibid. training. A supplement to the 1991 Current Population Survey of worker training experiences found that only 20 The Hudson Institute. Workforce 2020. 1997, p. 137. six percent of workers reported receiving skill-improve- 21 The Bureau of Labor Statistics found in a 1996 study ment training in the basics from any source (not just that 52 percent of full-time college students were part

46 Council onCompetitiveness of the nation's labor force, as were 86 percent of part- time college students. 22 Research by Dataquest, a market analysis firm that covers information technology training. Cited in: Galagan, Patricia A. "Go With the Cash Flow." Training & Development. November 1997. Alexandria, VA: American Society for Training & Development. 23 Bassi, Laurie, Cheney, Scott, and Van Buren, Mark. "Training Industry Trends 1997." Training & Development. November, 1997, Alexandria, VA: American Society for Training & Development. p. 57. 24 National Alliance of Business. "High Stakes, High Skills." Workforce Economics. September 1997, p. 5. 25 U.S. General Accounting Office. "Multiple Employment Training Programs, Major Overhaul Needed to Create a More Efficient, Customer-Driven System." Washington, DC: U.S. General Accounting Office, 1995. 26 Ibid. 27 U.S. Department of Labor. "One Stop Investment." 1996. Cited in ASTD's Responding to Workplace Change. 28 Results of the National Employer Survey, by the U.S. Department of Education, National Center on the Educational Quality of the Workforce. Cited in the National School-to-Work Office's "1996 School-to- Work Report to Congress." 29 Crawford, David L., Johnson, Amy W. and Summers, Anita A. "Schools and Labor Market Outcomes." Economics of Education Review. Vol. 16. No. 3. 1997. pp. 255-269.

THE SKILLS RACE 47 The following pages detail some of the more creative developments in the field. From the best examples of collaboration, we distilled eight winning principles. The players involved have made real progress in preparing and retooling American workers, and raising their living standards in the process. They lead by example. A t b 4 ' Ae

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. 4 0,---,.,.....-k''. It's not just a matter of a labor market that is competitive. Even those who are available for hire fall far below the hiring needs of employers. To triumph in this very trying environment, Santa Clara, California-based Intel Corporation has pieced together a strategy with schools, government, and Intel Corporation: Community Alliances workers. Its effort in New Mexico is a Boeing Corporation: Training in Schools leading example of a collaboration at work. Jane Addams Resource Corporation:Sharing The arrival of Intel's pentium chip Learning Resources plant in the Albuquerque area meant substantial change for the previously quiet Manufacturing Extension Partnership:Helping community. Its large workforce put new Manufacturers Compete demands on a school district that lacked adequate revenues. To ensure the company's best understanding of New Mexico's Intel's own management and employees. priorities, Intel hired Bill Garcia, the State's former Secretary of Economic Training in the Schools Development, to help forge a productive Schools that adapt to market needs estab- relationship with local officials. Garcia was lish winning relationships with industry. an inspired choice: he had maneuvered This is seen in the case of the Boeing well through the state's politics and agen- Company, a manufacturer in a cyclical cies and had cultivated important relation- business with a huge backlog of orders, a ships with grassroots organizations. relatively senior workforce, and serious With a tie to the state, the company skill challenges that require immediate won a generous financial incentive pack- attention. The company has partnered age in exchange for a commitment to help with schools in an attempt to push some the region improve its workforce develop- of its entry-level training costing hun- ment through partnerships with secondary dreds of thousands of dollars back into schools and community colleges. It the Seattle schools. In conjunction with pledged, in turn, to build a new high the federal government and local schools, school and to hire a minimum of 60 per- Boeing has worked an arrangement that cent of its fast-growing workforce locally. refines the curriculum to suit Boeing's To meet the hiring commitment, the com- needs, although the skills it develops are pany must beat some tremendous odds: a portable to many other work arenas. The majority minority population with one of result: Boeing has a ready source of labor, the highest illiteracy rates in the nation and workers are better prepared for rapid and a working population that is, on bal- technological change and can expect ance, unskilled. To attract new workers to brighter earnings prospects. the plant, Intel offers attractive starting After securing a grant of almost half a salaries, stock options, bonus plans, edu- million dollars from the National Science cation and training opportunities, and Foundation, Boeing and other area man- more. Intel's urgency and the state's prior- ufacturers put together an applied aca- ity has forged important community alli- demics program with a manufacturing ances including the high schools, commu- specialty for distribution to local high nity colleges, municipal government, and. schools. This tech-prep program feeds

THE SKILLS RACE 51 4'1 interested high school students into a barriers to training are the time and cost PRINCIPLE ONE manufacturing technology associate pro- of just researching learning options. Gen- and five erally, small and mid-sized companies are No single business, gram at 13 community colleges not willing do much on their own unless group of workers, technical colleges. educator, or govern- Students who take manufacturing they see an immediate impact on their ment agency can technology courses in their junior and bottom line. There are ways to share the tackle the training senior years of high school earn college costs, however, and the best training alli- challenge alone. credit that can be applied towards a two- ances allow companies to pool their re- year associate degree withparticipating sources and to benefit from economies of colleges. During the summer before they scale. Both workers and companies bene- graduate, selected students do internships fit from a broader choice of training at Boeing and other companiesthat intro- opportunities that would likely be unaf- duce them to career opportunities in man- fordable otherwise. ufacturing, teach them basic factory skills, Not all alliances are company-driven. and assist them in selecting specialty On the outskirts of Chicago, the Jane fields within manufacturing. Addams Resource Corporation (JARC) The work pays off: after completing a has managed to create an informal net- year or two of communitycollege, stu- work of collaborators. JARC is a commu- dents are eligible to work at Boeing as nity-based, non-profit training provider entry-level technicians earning $27,000 a that receives funds from the state. Its ex-

(the This alliance betweenbusiness (Boeing), the union International Associationof Machinists and Aerospace Workers), the stateand federal governments,and our local colleges, is customerdriven."

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year. And Boeing gets provenworkers pertise is in basic skills training for work- who are already familiar with manufac- ers in the metal stamping industry. turing and are therefore likely to be pro- JARC's business clients know that train- ductive quickly. ing translates into improved productivity on the shop floor, and they areextremely Sharing Learning Resources loyal to the trainers. Not all companies are able or willing to In fact, although the firms compete in commit the time and investment that the same industry, they often collaborate Boeing is in Seattle. This is especially on curriculum design and donateequip- true for small firms. Some of the biggest ment to JARC for training purposes.

Council on Computrilveness 52 48 Basic shop skills are certainly transferable Like other businesses, the metalcompany within the industry, but JARC finds that has to accommodate a multilingual work- the companies most generous with their force: classes are taught in English, training do not lose employees because Spanish, and Polish. The program has those workers are able to transfer to paid off. Since it began, the company has higher positions within their original generated 30 percent sales increases, and companies. employment has jumped 20 percent. CMC and its community college partners do Helping Manufacturers Compete joint visits and engagements with clients, Partnerships can help small manufacturers bringing a broader array of services than that are struggling to compete. Because either entity could do alone. It also helps small companies are the foundation of the colleges gain access to and understand many products sold worldwide, their ca- how to work with the small manufacturer pacity to produce goods reliably, andat a that is otherwise hard to reach. Together, competitive cost, has direct bearingon the CMC and the colleges develop education success of the larger companies that they and training programs that are responsive service. And, of course, without thatsuc- to the unique needs of small employers. cess, the small suppliers that form the backbone of U.S. competitiveness, would not exist. The Chicago Manufacturing Center (CMC), part of the MEP system ofcenters across the country that help small manufacturers modernize their productioncapa- bilities, builds partnerships between local educational institutions and community and economic developmentgroups in the Chicago metropolitan region. Because CMC gets private sector support and assistance from federal, state, and local government, it can offer its services at rates affordable to small companies. De- spite the dramatic drop in the region's overall manufacturing employmentover the past 15 years, a surprising number of manufacturers in the area must hirenew employees for skilled technical positions. Since the average age of the typicalman- ufacturing worker is quite high,many ON workers are eligible for retirement,opening up new job opportunities. Some firms need assistance inensur- ing the ongoing skill development of their 1 current workforces. For instance, CMC helped Chicago Metal Rolled Products develop a companywide learningprogram that included basic education, job-specific training, and computer skills training.

THE SKILLS RACE 53 4 c1 t Training for High Performance It used to be that employees entrusted major decisions affecting their work life to the organizations that employed them. The result was an environment that created a dependent employee. For employees earnin today, responsibility is at a premium, with all levels of workers conscious of the reality that the quality of their work impacts US West Communications and the Communication the company's success. Increasing num- Workers of America: Working Together bers of firms are nurturing employee ini- Lockheed Martin Control Systems: Training for New tiative because they recognize that for workers to feel a stake in the company's Markets success, they must be afforded a greater Rockwell Automation's Allen Bradley and the role in organizational decisions. Training figures prominently in this formula. United Electrical, Radio & Machine Workers of Workers are participating in quality America: Retraining to Keep Jobs at Home circles, flexible teams, and continuous learning:They track company finances, thanks to open-book management, and more mechanisms for reorganizing work suggest ways to trim costs. Companies than have non-manufacturing firms.' offer employees the chance to enjoy Research shows that high perfor- incentives and share in profits if they mance work practices are frequently ac- meet performance standards and corporate companied by increased training. When goals. Because workers are increasingly addressing education and training, it is responsible for the firm's success, they critical to balance the employer's interest must advance their skill levels. High- in performance with the workers' desire to performance workers need to be able to maintain job security and worker employ- create and apply knowledge, to adapt and ability. Unions typically press for training be flexible, and to work in teams with programs designed not merely to enable people of diverse backgrounds. workers to do their existing jobs, but to The payoff to high-performancd develop skills and abilities needed down restructuring is improvements for all: the the road. company gains improved productivity and The minority of firms that have greater competitiveness; customers get bet- embraced high-performance strategies ter service and quality; the empowered includesUS West Communications,the workers earn higher wages. A national sur- largest of the "baby bell" telecommunica- vey of nearly 1,000 companies finds statis- tion companies in terms of geographical tically and substantively significant area. In an industry that launches new evidence that high-performance workplace products every six to eight weeks, US practices produce lower employee turn- West faces stiff competition. The company over, higher productivity, and superior has already undergone massive downsiz- financial performance.' ing and streamlining efforts, but the 1996 An estimated one-fourth to one-third Telecommunications Act brought addi- of U.S. firms have made some kind of tional challenges as new competitors high-performance changes.' On average, threaten to infiltrate US West's territory. manufacturing firms have implemented The company is under tremendous

THE SKILLS RACE 55 51 lower ees (both inside and outside the organiza- PRINCIPLE TWO pressure to enhance productivity, expenses, increase quality, and boostsales. tion). US West workers were given re- All parties must buy Management has had a history of con- sponsibility for developing the tasks on into training for it frontation with the Communication the new online system a logical move to be effective; each Workers of America (CWA). Over the since the employees are also the end us- player must have past decade, when it slashed payroll in a ers. Both managers and employees quick- an up-front stake time of austerity and downsizing, relations ly saw that worker feedback not only in designing and improved the program, but also gave instituting continuous were particularly strained. Butin 1996, workers a stake in its success. learning. US West cooperated with the union to establish a new Internet-based training Additionally, trial runs by the users helped system. A joint management/labor deci- remove most of the bugs before the sys- sion-making body was given the task of tem was distributed to thousands of other streamlining the company's operations and employees. increasing productivity. These changes Managers have been amazed by the would not have been possible if manage- improvements in efficiency. Employees

"I went to Joblinkclasses when one of theplants closed a few and yearsback. I got my GEDand took a class in heating refrigeration. I've got a -newjob at Inland nowthanks to Whit advantage of the I learned, and I'mtelling others to take opportunity to pick up newskills."

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ment had not taken the time to explain to now have more time to sell US West ser- workers the larger competitiveness issues vices since all the tools they need are at in the telecommunications industry and their fingertips on the company Intranet. given workers a role in the restructuring Because it is easy to make content chan- process. ges, the Intranet acts as a simple and con- This has been a formidable challenge, sistent communications medium for given that, typically, labor has spurned employees. The company is ahead of the technology because it often means the curve in web-based training, one ofonly a elimination of jobs. But technology can handful of large companies that makes all also bring new opportunities to employ- training accessible on the web.

56 5 2 Council on Competitiveness In this case, US West and CWA Bessey, involved in one of the com- shared the responsibility for learning. pany's most promising ventures, becamea Only when employer and employee have shining example of how other companies a stake in the results can companies bank could make necessary conversions. He has on improved performance and employees been crisscrossing the country, leading acquire the necessary skills to advance in seminars and networking with colleagues the labor market. in the field who want to emulate Control Training for New Markets System's success. Perhaps most exemplary in the Control Systems story is how One of several top contractors for the Bessey and his coworkers have persuaded Pentagon, Lockheed Martin Control state and federal governments to help fund Systems watched its sales plummet after their project that brought new opportuni- the end of the Cold War. Bothmanage- ties to would-be displaced workers. ment and the 1,000 rank and file felt vul- The federal government saw the firm nerable, but the firm turned a downturn as a pioneer in efforts to convert its prod- into a new business dimension. By the uct for the commercial market and to pro- mid 1990s, this Johnson City, New York- tect the jobs of its employees. In 1995, the based division of what has become the Federal Defense Diversification Program world's largest aerospace firm moved made the Control Systems groupone of aggressively into commercial markets. Its its 17 grantees by helping to pay foran goal was to integrate its knowledge of intensive retraining program. Thatyear it controls and other high-tech electronics, awarded Control Systems a $315,000 once geared toward military purposes in grant; in 1996 it made another $622,000 the air, into civilian use on the ground. grant.' All told, the money helped toup- Early on, David Bessey, amanage- grade the commercial skills ofsome 450 ment engineer with the company, recog- employees whose jobs were in jeopardy. nized that Control System's conversion For the workers, the funds helped them from defense to commercial markets retrain for new jobs. For the firm, it would eventually pick up the slack caused helped to create a future businessopportu- by the downturn in military spending. nity: Lockheed Martin, the world's When government contracting seemed in biggest defense conglomerate,may an irreversible slide, Bessey and his fel- soon supply Amtrak with high-speed rail low engineers pushed uppermanagement equipment to build locomotive systems in plants that If the federal government playeda once churned out aerospace defense prod- vital role in Control Systems' earlier in- ucts. At first, they hit a brick wall: Control carnation, with a steady demand for the Systems built aircraft, and aircraft only, defense firm's products, its endorsement said company superiors. Butsoon the of Control System's commercial transfor- naysayers saw the potential of winning mation was essential to "converting" the multi-million dollar contracts, and the workforce. But the linchpin in thecompa- firm began to apply defense-related elec- ny's ability was the buy-in of the workers tronic technology to new products. It who watched the downsizing of theaero- designed hybrid taxis and buses, locomo- space industry and feared layoffs or clo- tive electronics, emissions and noisecon- sure of the manufacturing facility. trol systems, and electriccars. Within Although they had to take a pay cut (the three years, 44 percent of its saleswere company had to bring wages in line with commercial, compared with only five the private market), the workerswere able percent in 1991. to avoid being displaced altogether, and

THE SKILLS RACE 53 cal, Radio & Machine Workers of PRINCIPLE TWO they gained new opportunities to learn marketable skills. Today the plant is well America. Logically, the union has an in- on its way to being profitable.Its training terest in retaining in Milwaukee those po- program, considered exemplary byother sitions that increase skill development, re- firms in its field, is perhaps the most wide- ward greater responsibility, and provide ly discussed case study in the industry. enhanced career opportunities for incumbent workers. Retraining to Keep Jobs at Home A few years ago, Allen-Bradley When management and workers collabo- agreed not to outsource certain high-skill, rate to define the skill sets needed in the high-wage jobs if the union would submit future, they design a more effective train- to qualification tests to determine which ing system and heighten the value of workers were eligible for the jobs. The learning. California-based Rockwell In- company and union pooled efforts to de- ternational, with operations in almost 80 termine how to better prepare workers for countries, is constantly reassessing how advanced positions within the company. and where it manufactures. Its largest Management agreed to keep the test automation division is Milwaukee-based results confidential, allowing those who Allen-Bradley, which designs, manufac- failed to re-take the test. Employees tures, and supports a broad range of prod- responded to testing demands because ucts including logic processors, power and they saw that by doing so, they were motions control devices, sensors, and helping to keep valuable jobs in Milwa- software. ukee, rather than at one of Rockwell's As this $4 billion automation unit non-union facilities. struggles to determine where best to produce its products, it often comes head-to- head with its union, the United Electri-

54 I I I High-Performance Work PRINCIPLE THREE Effective tr'aimtrain grequiresthat cill parties do The Wisconsin Regional Training Partnership (WRTP) is a jointly gov- theirs part: employerrmutthirovide learning erned consortium established by business opportunities; evote the time and labor leaders in support of high- performance workplaces and jobs with learningisciTolmust4t each the United Auto growth. Five unions marketable skills. Workers, the International Association of Machinists, the United Steelworkers of America, the United Electrical Workers, Wisconsin Regional Training Partnership: High and the United Paperwork's International Union and two dozen firms concen- Wages and Profits for All trated primarily in metalworking, electron- Inland Steel Corporation and the United Steel ics, and related durable goods industries, participate in the consortia. The Executive Workers: After-Hours Learning Committee is composed of an equal num- Pennsylvania College of Technology and Toyota: A ber of management and labor representa- Ready Pool of Mechanics tives and a smaller number of public sector representatives, including the state's la- Albuquerque Technical Vocational Institute: Health bor secretary, and the directors of the area Care Training for the Low-Skilled technical colleges and private industry councils. ualized as possible. It's a worker-centered The WRTP emerged out of the man- approach that more educators are using as ufacturing sector's massive restructuring they refine their own skills in providing during the 1980s, when the job base shift- workplace education and training. ed to the low-wage service industry. An External resources from state govern- unfortunate consequence has been a sharp ment and national foundations were critical reduction in living standards, given that during the start-up phase. Now, the WRTP service jobs pay about one-third less, on is self-sufficient through local funding average, than manufacturing jobs. from training and modernization service The survival of those manufacturers providers. They have an interest in invest- that remain depends on their ability to ing since WRTP boosts demand for in- acquire new technologies, develop new creasingly sophisticated services and helps ways to organize work to spread responsi- them achieve their missions. And member bility and elicit employee participation, companies are taking an interest in train- and draw on a skilled workforce. ing. Workers have increased their training In response, those employers formed hours and hiring is on the rise. State and WRTP to define job performance stan- local officials have also called upon the dards and the training necessary to ensure WRTP to troubleshoot problems that are skill development. Management agreed to common to employers across the state. provide learning opportunities with the condition that labor would share the re- After-Hours Learning sponsibility for improving performance. Training doesn't just mean lecturing to The local Waukesha County Technical College is helping to reconfigure the man- workers or formal classroom instruction. ufacturing education and training system Self-directed learning is fast becoming the most effective way to boost skills so that training is easily accessible, offered at flexible hours, and is as individ- and incomes.

59 THE SKILLS RACE 55 Inland Steel. Whether the classes are in PRINCIPLE THREE At East Chicago, Indiana-based In- land Steel Corporation, many workers wiring, masonry, computers, or small Effective training are acutely aware of how important this engine repair, they all incorporate basic requires that all parties do their part: is. In the mid 1980s, Inland Steel began a skills. Carpentry math, for instance, employers must volatile period of massive restructuring involves working with word problems, provide learning and layoffs. Downsizing, and all the reading a tape measure, reducing and opportunities; worker anxiety that accompanies it, con- computing fractions, and using a calcula- workers must tinues today. Not knowing what the future tor. The company institutes pre- and post- devote the time held for Inland or the industry, manage- tests to capture the results. After a and energy to ment wanted to give the workers a chance Residential Wiring and Carpentry class, learning; schools to expand their skills and knowledge on for example, some workers saw their must teach their own time. So United Steel Workers math scores improve by as much as 1,900 marketable skills. Local #1010 prodded the company to set percent! JobLink 2000 pushes workers to up a workplace skills program to better gain new portable skills and provides the cushion workers from a hard fall. The company with performance result is Job Link 2000. improvements.

',111=111110EINIIIII111=1111E "Penn College is giving me hands-on experience on how-to fix radios, radar, and navigation systems. Without this chance, I'd be working for minimum wage on a factory floor, like my Dad. Once I get my avionics degree, I'll be making $10 or $15 an hour. It would take me 10 years of working at my Dad's factory to earn that." I . 1 II I I'11 I

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Although Inland funds JobLink 2000, Market-Responsive Schools the workers are responsible for register- As the demand for continuing education ing for and committing time for the class- expands into the workplace, higher edu- es. Taught by instructors provided by a cation institutions are tapping into a lu- local suburban college, employees often crative market. Pennsylvania College of take functional home-improvement class- Technology, a wholly owned affiliate of es in anticipation of future employment Penn State University, is flourishing in options at the company or outside. The Williamsport, a small community in workers are always wary of where they northern Pennsylvania. Despite its re- will be in the next corporate restructur- mote, rural location, Penn College has ing, and they are anxious to have income secured strong partnerships with some of possibilities during their retirement. the world's major industries. Companies Some use the courses to start their own are so convinced of the school's ability to plumbing businesses, others pick up train workers, they are willing to donate home repair skills as a hobby, others pur- major technical support. hardware, sue employability in other departments of

60 56 Council on Competitiveness match: enrollmentis training materials to jobs. It's a logical software, and other for general classesis inex- learning open; tuition Penn College for general pensive; classes areheld at all hours; purposes. counselors are on hand toprovide support manufactur- The United States-based services; and marketdemand for health ing arm of Toyota,for instance, devel- care serviceswill rise as thepopulation oped automotiveclassrooms at Penn the school's trans- ages. College to enhance With 100 percentplacement rate of its portation technology program.Since respiratory therapygraduates, for exam- 1990, Toyota has beensending its and ple, TVI hasengendered confidence employees to PennCollege to learn the support from localbusiness. In fact, the latest techniques.For the past seven years, donated much of the training aids, curricu- private sector has Toyota has donated lab's $100,000 worthof capital equip- lum, and vehiclesfor the students to learn ment, includingstate-of-the-art computer- simulated electrical sys- fail- from firsthand. A ized systems thatsimulate respiratory tem from aToyota Camry isavailable for ure. Theclinical simulationshelp students students to troubleshootand repair prob- refine their criticalthinking and decision- lems. Given thetechnological advancements of automakers,repair work is central to a manufacturer'scompetitiveness. The investments intraining are very worthwhile, say Toyotaofficials. Although the program'sstart-up costs totaled $300,000, thefirm figures it made up the costs inthe first year and canrely churn out a on theWilliamsport school to ready pool of mechanics.The hands-on training pays off forstudents, who move easily into jobs aftergraduation. The marketresponsiveness of schools is proving critical tolocal economies. Albuquerque's TechnicalVocational Institute (TVI), alreadyNew Mexico's college, is creating largest community making skills in lifethreatening situations. for itself with tailor-made new business The American HeartAssociation produced programs forhigh-growth industries. package that allowsstudents to desperate for a software Those industries are recognized certificates which welfare depen- receive nationally workers in a state in and advanced cardiac drop out rates, and in basic life support dency, high-school life support withoutleaving the computer illiteracy are way abovethe national aver- fast-expanding health care ser- lab. age. The Strides made at PennCollege in vices, including NewMexico's hospitals in Albuquerque, for a Williamsport and at TVI and HMOs, are in aconstant search the support of govern- technicians. TVI is intent enabled in part by wide variety of ment and privateindustry, create new enough respiratorythera- on turning out skills and incomeopportunities for a pists to meet thegrowing demand. And whole new generationof workers. the school is targeting avirtually untapped market for retraining:the unskilled and minimum wage workersstuck in dead-end 61

THE SKILLS RACE 1 5 '7 Si r At DeAnza College's Occupational PRINCIPLE FOUR Training Institute (OTI) in Cupertino, ucatimi,anaitra L...ining not endsilto themir California, education and training are ,41-,40-0.44043111:WiM4 WA- frrl seen as steps toward employment. OTI is sellies;-ratherotheytareiessentialmiecini for .r.kr tPOT eS . designed to help dislocated workers and creating mor er,employability upward,inobilify, the economically disadvantaged enter Apt. it,,tr (or re-enter) the workforce. These non- skills portabiliiy,tand,,fitmigo.productivity., traditional students will only pursue education and training that promises to pay off in increased skills, new opportunities, DeAnza College's Occupational TrainingInstitute: and/or higher wages. To help motivate Matching Trainees with Jobs students to stay in school, OTI offers a Valencia Community College: TrackingGraduate wide range of employment-related services such as career advisors, study skills Success workshops, and job search training. Both Michigan State's Human ResourcesDevelopment, before and during enrollment at DeAnza, Inc.: Emphasizing Employability 011 counselors help students make the vital connection between education and Lansing Area Manufacturing Partnership:Opening opportunities in the labor market. Up Apprenticeships to Youth OTI puts a priority on maintaining close relationships with major employers Laborers International Union of NorthAmerica: in the Santa Clara Valley region, and it Giving Students an-Eye into the Industry frequently reviews those relationships to ensure that training programs meet the more successful than its counterparts needs of the local market. Roughly 85 across the country in designing educa- percent of OTI clients find employment tion/vocational programs that connect after completion of training, with 75per- their participants directly to the jobs. The cent moving into their chosen field. college entrusts the issue to an initiator. Susan Kelley, vice president of resource Tracking Graduate Success development and government relations, States are moving to simplify and consoli- has determined from the outset that date workforce programs ranging from Valencia must lead the way in eliminating training to job placement to welfare. This the overlap among and between federal provides employers and workers ready and state agencies. Valencia was just one access. Employers want a system that is of many public and private sector partners easy to use and provides qualified job in a five-county area in central Florida that candidates. Job seekers need timely and designed a new customer-driven work- reliable information about job openings force education and employment system. and skill requirements. These new sys- The partners successfully consolidated tems, governed by "workforce develop- activities of the Job Training Partnership ment boards," provide a host of services, Act ()TPA), one-stop career centers, and but priority is generally on job search, community colleges. The federal govern- counseling, and related assistance. Pro- ment sees this as a model that can be grams are increasingly being judged by replicated around the country. Kelley has how well they place participants. taken Valencia's success beyond the Working on behalf of the broad cen- school's Orange County base. She pushes tral portion of the state, Florida's Valencia for statewide change and holds her school Community College has been bolder and as an example. Through Kelley's public

THE SKILLSRACE 5q 63 Emphasizing Employability PRINCIPLE FOUR efforts and tireless networking, she is nationally recognized and called on to Today's workers are taking more of an Education and training share Valencia's strategies with colleagues interest in their own learning, knowing are not ends unto across the country. that employability is key to their work- themselves; rather, Community colleges in Florida and place success. In a heavily unionized state they are essential other states are beginning to survey em- in which the economy has undergone dra- means for creating ployers on their skill needs and to track matic changes, Michigan State's Human worker employability, job placements of their graduates. To upward mobility, skills Resources Development, Inc. (HRDI) portability, and firm enhance the competition, the state pub- exemplifies how organized labor can be productivity. lishes data from each participating college instrumental in developing innovative regarding its graduates' wage rates and ways to boost workers' skills. Michigan job retention. This allows interested stu- HRDI serves many clients by providing dents to compare Valencia's results, for technical assistance on employment and example, with other colleges and public training issues to labor, industry, and pub- schools. And it makes it easier for lic sector agencies. Aligning with employ- employers to locate training opportunities ers that need workers, the non-profit orga- for their workforces. nization ensures that in the education and

"We've got more jobsthan we can fill. As a communitycollege, we havethe responsibility toprovide students of all back- . grounds and ages with thejob readiness skills theyneed to move intohigh-demand jobs and besuccessful."

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Obviously, such responsiveness is a training process, employment is the great multiplier for economic develop- final result. ment. Companies can bank on expansion Written off a decade ago as a Rust because they can dip into an adequate and Belt state, Michigan has in recent years ready pool of trained/trainable workers; hit record highs in jobs created and new students can expect to find jobs that lows in unemployment. The gyrations in match their skills; government can market demand have created new chal- streamline and pare down costly pro- lenges in workforce preparation. If the grams from outplacement centers to 1980s were the days of painful downsiz- welfare coverage. ing for General Motors (GM), Ford, and Chrysler, now the Big Three are trying to squeeze all the available production capacity out of existing plants. After ex- hausting layoff lists and the jobs bank, 64 (O Council on Competitiveness the three automakers are now faced with unionized, it will later be able to recruit overwhelming recruitment, screening, hir- students into the union. That union is one ing, and training challenges. The Big of the players involved with giving stu- Three estimate that between 1995 and dents in Lansing and Detroit the opportu- 2003 nearly one-half of their hourly work- nity to participate in work-based learning ers may need to be replaced as some experiences, along with the state's Bureau 260,000 skilled workers enter or are eligi- of Apprenticeship Training, the Michigan ble for retirement. Even though the com- Department of Education, and the Michi- panies offer generous pay and benefit gan Jobs Commission. The union loaned packages the average Big Three work space to the students, even though employee earns $43 an hour in total com- the students are not required to join the pensation this will be a struggle. union to participate. Anticipating this hiring boom, labor is taking action by developing school-to- work programs that introduce automotive careers to high school students. For example, the Lansing Area Manufacturing Partnership (LAMP) is a school-to-work program in which students learn about production-level union jobs through work- based learning experiences on the floor of GM plants in the Lansing area. To ensure that the union was fully involved, GM largely turned over to the United Auto Workers (UAW) responsibility for developing the curricula with a vocational-technical center that serves 12-13 local school districts in the Lansing area. GM and UAW see this as a national model that will be replicated. The unions are also devising "school- to-registered apprenticeship" programs. A new law on the books has sparked interest in registering high school students as apprentices. The Michigan State Legislature passed a $2,000 tax credit for businesses that take on a registered apprentice (union The apprentices-in-training work full- or non-union). The $2,000 can help firms time over the summer before their senior cover such costs as wages or training tools year of high school and part-time during for apprentices, and many firms are taking their senior year. They return to full-time advantage of this incentive. work after graduation, while they also The unions recognize that the lack of pursue a post-secondary degree at a qualified entry-level workers is hurting nearby community college. The work their ranks. In particular, one of the con- hours count toward the required 6,000 or struction industry unions, the Laborers 8,000 hours of training time they have to International Union of North America, log to become state-registered apprentices. is hoping that by giving students an early look at the trade and the benefits of being

THE SKILLS RACE 65 61 ti

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62 Across the Hudson River from New PRINCIPLE FIVE -.uip..-.., , York City, Stevens Institute of Learning vaccomaccomplish when-- 4- ..4 ,iiito,-...ee 'A Technology has put together a very effec- t

tive coalition. The Hoboken, New Jersey- it is.convenientith available more. based institution is one of the country's oldest private technical colleges andone of the best examples of how a university can become a vibrant contributor to work- Stevens Institute of Technology's Advanced force development. Stevens' Advanced Telecommunications Institute (ATI) Telecommunications Institute and Bell Atlantic: operates with funding from government Learning Online and industry. Supported by the Bell Boeing Company: Just-in-lime Training Atlantic and Transwitch corporations, ATI is a highly developed laboratory to Disney University: Training as Teams research the latest telecommunication Xerox Corporation and the Institute for Research technologies. It breaks down into three components: research and development; on Learning: Integration of Learning and Work technology transfer from the college labo- DeAnza College: Degrees in High Demand ratory to industrial circles; and educational Western Governors University: Convenience Education programs, from short-term technical courses to promote staff development to full master's and doctoral programs. Students at the Stevens Instituteare driven, off-site, classroom-style training helping Bell Atlantic to use technologyas and toward job-specific, on-site, just-in- a workplace learning tool. By developing time training. It is getting harder to sell an online, multimedia course that company training in the traditional two- or three- electricians can access remotely fromany day seminar format because the compres- web server, workers don't have to leave sion of time mandates that learning be their work to attend class at another loca- convenient and customized. Increasingly, tion. The company saves time and travel employees who need job-related informa- expenses. Technicians and engineers who tion will pull up online repositories and are often on the road benefit from just-in- extract the appropriate data. At the Boeing time learning that can be dialedup from Company, factory workers already con- any desktop computer. Highly visual sult such brief videos for instant illustra- lessons, replete with easy-to-follow graph- tions of many tasks involved in building ics, on how to do new service installations, airplanes. Computer-based learning for example, can be learned at thevery breaks down traditional courses into place where the installation is needed. learning "nuggets," giving the learner just Workers can simply use the onlinesupport what he or she needs to perform and just as a reference. And other online classes when it's needed. help keep them up to speed on the latest Other organizations are training their developments in the industry, yet they do employees in their normal work teams to not require users to take in all the informa- ensure that lessons learned can be applied tion at once. immediately. The informal interaction Learning Just-in-Time and at Work between workers often reinforces learning and is more likely to result in performance Although corporate universities abound, improvements. A few years ago, Disney there is a clear trend away from subject- University realized that too many

THE SKILLS RACE 67 et : 7 63 years, the company had relied on old sys- PRINCIPLE FIVE employees were not retaining and apply- ing the skills they learned during training. tems of customer profiles that segregated Learning helps accom- The trainers concluded that too much of customer service, billing, and account plish work-site goals the learning took place in classrooms far inquiry and phone support. Integrating the when it is convenient away from the actual work site. So train- three departments into a single unit would and available in require the staff to learn multiple jobs. smaller, more targeted ing was restructured and now focuses on With the help of IRL, phased interac- increments. helping an entire work team learn as one unit, on-site. In addition to job-related tive learning was introduced in September training, Disney's performance consult- 1996, allowing workers to learn in a com- ants offer courses in the important social munal environment and to apply training dimension of work effectiveness: conflict as they progressed. Instead of undergoing resolution, listening skills, and other weeks of training on how to answer cus- interventions designed to help work units tomer calls, representatives were taught operate smoothly. the basics in a classroom and then al-

4.04 '104 ,14' 44 "More and more, industry-ledcurricula are determining the kinds of technical degrees people areearning. Community colleges have been pretty quick toadapt, and they are learning how to accommodate industry needs. We'veworked to shorten programs,and we're looking for new ways tochange curricula."

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The Institute for Research on lowed to start taking real calls to get a Learning (IRL) specializes in under- feel for the job. Workers were given a standing how people learn and designing chance to apply lessons, coach peers, and strategies and practices for effective interact in the real workplace setting, learning. Founded in 1987 as a national which minimized time away from work non-profit center by Xerox, IRL recently and encouraged a supportive social struc- helped Xerox to rethink its training prac- ture. By fostering the proper work envi- tices for the company's customer service ronment and by leveraging the learning center in Lewisville, Texas. The customer that naturally takes place in small work service representatives were frustrated groups, the company improved work that they didn't have the knowledge they processes and boosted morale at the same needed to meet customer needs. For time. In addition, millions in recurring

68 6 Council on Competitiveness savings were documented as customer and strate competencies not to log seat employee satisfaction increased. time to earn a WGU certificate or de- Degrees in High Demand gree. Where learning takes place will no longer be as important as whata student Just-in-time also means that schools and actually learns. vendors are shortening their classes, mak- Courses will be available through ing them more flexible and task-specific. various media, including CD-ROMs, the DeAnza College in Silicon Valley offersa Internet, interactive video, e-mail, satel- medical technician program that has mini- lite, and 500 television channels. An mal entry requirements and is designedto Internet-based catalog will not just list place graduates quickly into positions in various courses. The catalog is designed the health industry. Instead of havingto to help students assess their existing skills attend school for two years to earn an as- and knowledge and determine whatcours- sociate degree, students can be certified in es they need and are prepared to take. just one year. DeAnza designed the curricula in 1990 in response to growing privatesec- tor demand for trained workers, and the college is successfully turning welfare recipients and dislocated workers into employable workers. Enrollment immediately jumped 300-400 percent when the "time to degree" was shortened. Butem- ployers need workers so quickly that they cannot afford to wait one year. Now DeAnza is under more pressure to make the learning time shorter and to offer mini-certificates that can be earned in just one-quarter's worth of classes and work experience (12 weeks total). The ultimate in convenience education is the newly developed virtual Western Governors University (WGU). Like other learning institutions hopingto attract a host of diverse learners, WGU is making learning available "anytime,anywhere," and offers many options. Bypass- ing traditional classrooms, WGUuses advanced technology to expand educational opportunities to reacha wider array of students using courses from multiple institutions. WGU is not expectedto sup- plant the traditional campus setting; rather, it has set its sights on the would-be students wishing to return to school and those disenfranchised from the higher education system. WGU is breakingnew ground by requiring students to demon-

THE SKILLS RACE 69 65 , G6 e , 4 A, \ The development of interactive tech- PRINCIPLE SIX nologies is transforming the way workers Jechnologyibasedjearmn7can ihrmiificoaccefii7 learn and how companies do business. pr- The percentage of people currently using ancEreduie-cost,i information technology directly in their trainingstrateg jobs has tripled since 1970.6 Andmore and more firms are using computersto deliver education and training. No longer IBM: Connecting Employees are annual seminars and training sessions the only means for employees to improve Sun Microsystems: ClassroomTraining Fillsa Need their skills. Instructional technologies that Hewlett-Packard and StanfordUniversity: Interac- emphasize group work, problem solving, tive Classes and collaboration are increasingly available. Simulations, while costly,are often National Technological University:Distance Learning the ultimate tool. That Hits Home Many companies see technology solutions as less expensive andmore effective Maricopa Community College:Degrees on the Net than traditional ways of providing learn- Pacific Gas & Electric's TechnicalLearning Ser- ing. For firms with workers scattered vices: Simulated Drills across time zones, technology is an ideal way to reduce costs. Flexible delivery Andersen Consulting and theInstitute for the choices expand the reach of training be- Learning Sciences: Multimedia Self-Study yond costly training facilities, whichre- quire workers to travel and lose work U.S. Robotics: Making ComputersFun time. Distance learning options reduce the Dartmouth College's Amos TuckSchool: Wired: A cost of instructor and student travel, while Competitive Edge broadening access for many other workers who may not otherwise be able to partici- with work. Naturally, this relieson a com- pate. Technology brings learning to the puter-literate workforce and putseven desktop or workstation so that it is avail- greater pressure on firms to bring workers able when and where employees need it. up to technological speed. However, technology solutions are More and more companies like IBM not a natural fit for all work-site training. are vigorously pursuing ways to bring Classrooms provide invaluable interac- learning to the personal workspace. In the tion, teamwork, and remediationopportu- United States, about 55 percent of IBM nities that neither firms nor schoolsare employees are "teleworking" in someway willing to part with. At least notyet. working from customer locations, Integrating Technology home, or elsewhere during somepart of the working week. That makes the The now commonplace computer has smart, timely use of technology evenmore changed the way organizationsoperate; important in the effective delivery of skill nearly 60 percent of employed workers development and continuous learning under the age of 50 alreadyuse a com- opportunities. Employees take responsi- puter at work and usage continues to bility for their own employability, and grow. The indirect, but rising costs of IBM provides the supporting tools and training, such as travel and off -site classes, resources. are pushing companies to make training The company estimates that three- accessible from the desktop and integrated quarters of its training budget goes to

THE SKILLS RACE 617 71 work bases allow students and teachers to share PRINCIPLE SIX cover employee travel time and lost hours alone. It can no longer afford to information, work in teams, and ask and Technology-based send its far-flung employees to training answer questions. A traditional class that learning can improve when learning can be brought to the desk- takes five days might be extended over 20 accessibility and days time, making it easier for workers to reduce cost, but top. An audio-enabled computer with web join training at their convenience. it is not a complete browser is the key tool, because learning Additionally, because LearningSpace is training strategy via computer reduces costs associated by itself. with instructor/student travel; puts instruc- based in Lotus Notes, which is an inte- tor expertise to better use; and allows grated software package being rolled out teams of workers to collaborate, compare, companywide at IBM, learning will also and enhance their own performance. For be available on demand for all employees employees seeking career counseling, at the click of a button. Tutorials and self-assessment tools, and other profes- quick help boxes give just-in-time hints to sional development workshops, the com- workers, regardless of whether they are pany has devised a National Career enrolled in any formal online classes. Fitness Intranet website that is available to

Look "We're building strategicpartnerships with universities. That's who we at the top fivebusiness schools in the country. want to develop adistance learning programwith."

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all its workers, anytime and anywhere. By 1998, IBM plans to have 40 per- IBM's subsidiary, Lotus Develop- cent of its training in the United States be ment Corporation, developed "Learning technology-based. Space," a complete technology solution Sun Microsystems, which has devel- that combines the benefits of distance. oped many of the core networking tech- learning with the collaborative advan- nologies at the heart of the Internet, sees tages of a traditional classroom. Classes web-based learning as a way to augment, still have instructors and regular assign- not replace, classroom learning. Sun uses ments, but interactive discussion data- technology to cover basic material, but

Council on Competitiveness 72 :68 its employees still logged 20,000 instruc- computer, audio, and video). Distance tional classroom hours in 1996. It ispar- learning is popular because it provides ticularly striking that Sun, one of the students with access to the most skilled most advanced technology firms in the teachers in the world. But it does requirea country, believes that classes offer an large number of people to be cost-effec- invaluable human factor that technology tive, and the up-front investment makes it cannot provide. unaffordable for most firms. Technology Options Palo Alto, California-based Hewlett- Packard has found a low-tech way to Technology has the potential to bring provide distance education. To maintain training closer to the user and can bevery the most cutting-edge workforce possible, valuable in certain circumstances. Learn- the company encourages its employees to ers like it because it offers greater conve- pursue further study at the post-graduate nience, immediate feedback, and theop- level by making Stanford University's portunity to determine their ownpace. engineering and computer science classes Organizations like it because it reduces available on-site and at no cost. For the learning time, provides a consistent Palo Alto-based workers, courses arepro- model, and is easy to update. Technology vided via a television network. comes in many forms, each with advan- When Hewlett-Packard moved its tages and drawbacks: microwave division to Santa Rosa, Cali- Computer-based Training (CBT) has fornia, north of San Francisco in 1972, the been around the longest and is used for new site was out of television range. some applications by roughly a third of Stanford agreed to videotape the lectures U.S. organizations with more than 100 and to send them to Santa Rosa. For each employees, according to Training Maga- class, a full-time Hewlett-Packard engi- zine's 1997 Industry Report.' CBT neer was chosen (and approved by is essentially one method of presenting Stanford) to be course facilitator. The training, using information drawn from facilitator is responsible for leading the a hard drive, laser disc, or CD-ROM. students in discussion for and ensuring Computer-based lessons often helpusers that the class works as a group. learn faster and remembermore compared Stanford's Dean of Engineeringsaw to instructor-led training. In particular, the this new mode of teaching as an opportu- use of CD-ROMs as a delivery platform nity to set up an educational experiment for CBT has increased.' CD-ROMscan comparing the effectiveness of attending incorporate large media files without fear class, watching via television link, and of network bottlenecks, but the drawback receiving videos. Stanford has collected is that course content becomes obsolete data for every single quarter over the past quickly and cannot be updated. Andmany 25 years, and it has found some astonish- firms find that CBT is not adequatelycus- ing results: the students who are taught tomized to company needs. Often organi- with "tutored videotape instruction"con- zations have no choice but to buy off -the- sistently outperform campus-based shelf versions because theyare unwilling Stanford students and others learning via to pay the high development costs ofcus- television. tomizing in-house. Although low-tech, this learner- Distance Learning is a delivery meth- managed method is practical. Learners od that allows learners to "attend class"at can hit pause during the videotape lec- locations remote from the point of instruc- tures if they miss a point or want to re- tion using a variety of media (including view for clarity. Hewlett-Packard students

THE SKILLS RACE ;,q 73 high risks or where cost and consequence PRINCIPLE SIX stop the tape approximately every three to five minutes throughout the entire lecture. of error is high. Pacific Gas and Elec- This is truly accessible learning avail- tric's Technical Learning Services, for able in small increments and just-in-time. example, invested in simulation trailers Some teachers are changing the way that park right outside the power plants, they teach when they go on-line acting allowing workers to run through the drill more as moderators than as teachersin the of shutting down a plant just before they old-fashioned pedagogical sense. National actually do it themselves. And companies Technological University (NTU), the do not have to take valuable resources leading university for satellite delivery of off -line for education and training. But advanced technical education, regularly because the technology is so sophisticated, broadcasts seminars to firms. To make the simulators are exorbitantly expensive, and coursework as applicable as possible, very few firms have made the investment. NTU staff visit participating companies Andersen Consulting is an excep- ahead of time to get a sense of how the tion: it spent $2 million to have North- lessons can be applied to each firm and western University's Institute for the tailor their broadcasts appropriately. Learning Sciences develop a 15-module, Internet-Based Training delivers indi- multimedia self-study program that train- vidualized instruction over computer net- ees take at their respective local offices. works and is displayed by a web browser. The international firm was spending so The biggest advantage to using the much money on travel and lodging just to Internet over computer-based technology shuttle people to training, that it found the is that it is easy to update without recall- investment worthwhile. And the learn-by- ing diskettes or reprinting CD-ROMs. The doing approach of the self-study program information is therefore current, timely, helps Andersen trainees grasp concepts and consistent. Courses delivered via the more easily. If designers of simulation web require only a modem and Internet technology could establish a common access. Because the Internet connects peo- platform for simulation that could be mar- ple in virtual communities of learners, it is keted widely, and therefore less expen- expected to not only be the medium of sively, more companies could use this choice in the near future, but to funda- valuable training resource and refine it to mentally change learning. However, cur- their specifications. rently limited bandwidth capabilities While the consistency and conve- make it unable to handle large media files. nience of technology-based training are Undaunted, the Maricopa Community indisputable, there are still large barriers: College system in Arizona is expecting to development time and cost. Organizations offer an associate of arts degree entirely need to research their options carefully over the Internet in the near future. when investing in technology to ensure Company Intranets (simply the Internet that it meet their needs. Not all business deployed within the company and protect- cultures are ready for CBT. U.S. ed with firewalls) are significant training Robotics*, a Chicago-based manufactur- vehicles. ing firm, has instituted a company Intranet Computer learning environments can to help workers build computer skills and also be used to simulate the operation of the comfort level to be able to maneuver actual equipment or real-life experiences. through computer programs without fear. Simulation allows users to learn from And technology-based options are their mistakes on-line, before they are only part of a larger education and thrown into work environments that have U.S. Robotics merged with 3-(orn on Juno 12,1997

74 7o Council on Competitiveness training design for most firms, colleges, and government agencies. The American Society of Training & Development's Benchmarking Forum has found that 70 percent of the time, large companies still use traditional classrooms to deliver formal training .° While 300 colleges and universities offer virtual degrees, the vast majority require time on campus.'° The government has been using technology to deliver training for years, but many courses remain classroom-based. Technology clearly has a vital role in the education and training approaches of many firms and schools across the country. One of the very real potentials of technology is not to replace classroom learning, but to address the everyday learning needs of those individuals who are not making it to classes.

Getting Schools and Teachers Up to Speed Clearly, technology will play a greater role as large numbers of firms and schools demand learning in shorter increments. Just-in-time learning is catching on and technology can bring learning opportunities to the desktop. Business schools are beginning to get in on the action, with top schools competing to be the most techno- logically sophisticated. Dartmouth Col- lege's Amos Tuck School recently invested 20 percent of its annual budget on a technology renovation. Still, of the nation's 700 business schools, only about 35 offer M.B.A. degrees partly through how to use technology as a learning tool remote instruction." before they are certified to teach. While And the greatest technological inade- schools had 5.8 million computers (about quacies are in the nation's secondary one for every nine students) in 1995, schools, where both up-to-date physical fewer than half of the teachers regularly equipment and properly trained instructors used computers in their instruction. Only are sorely lacking. It does little good to 10 percent of new teachers in 1994 felt provide classrooms with technology if the that they were prepared to integrate new teachers are unable to use it effectively. technologies into their instruction. Fewer To best serve students, teachers them- than half of experienced teachers had par- selves must sharpen their technology ticipated in professional development on skills. But many teachers at the K-12 the uses of new technologies.' level and beyond are not being trained

THE SKILLS RACE 75 rl2.t

a l In all aspects of business, there is a PRI I drive to get more for less, and the training area is no exception. Some firms have rig- Performance measurement strengthens trainin -.441f401: orous evaluations in place to ensure that increasing.accountability' and .transparency. every training dollar is spent effectively. Because the best training benefits the company's bottom line, the shift from Sun Microsystems: Training Profitably simply offering training to evaluating performance improvement is one of the most Pacific Gas & Electric: Performance Consulting important developments in the field. Massachusetts Career Centers: Quality Service But measuring performance has been challenging for many companies. It's much easier to measure the number of performance is not being achieved. A firm training hours and scores on training tests must be able to clearly state its business than to capture the effects of training on objectives and metrics for success. Pacific performance. Gas & Electric (PG&E) is a model At Sun Microsystems, in Silicon example. Valley, training equals profits. A leader A few years ago at PG&E, Technical in computer network technology, Sun's Learning Services (TLS) embraced the product lines change every six months. concept of "performance consulting." That makes continuous learning opportu- Rather than referring workers to training nities absolutely critical. Yet, Sun has without first assessing the problem, TLS managed to make its training profitable. sends performance consultants out into Business units within the company can the field to get a first-hand look at work get training from the corporate university, processes and to recommend appropriate known as SunU. But if SunU falls short of interventions. It relies less on academic what the training needs are, Sun depart- models of classroom learning, and prefers ments can go to outside vendors. So SunU more practical learning opportunities at has become fiercely competitive. Its offer- the 14 plants scattered all over the utility's ings are so popular and effective that 70,000 square mile territory. SunU is now turning a profit on its train- The TLS program taps into the plants ing programs for Sun employees. In 1996, "best and brightest" workers to fill the with a budget of $4 million for research performance consulting jobs. PG&E and design of learning materials, SunU understands that for training to be effec- brought in $21 million in revenue. tive, the consultants must understand both Because of its remarkable success in management and worker perspectives. recovering its costs, the university will not Greg Thwing is one of those pulled from receive any Research & Development the rank and file to serve in management. funding up-front from Sun Microsystems He knows how to troubleshoot on the fac- in 1998. tory floor and is acutely aware of worker sensitivities. As a veteran dues-paying Why Performance Measurement? union member, he brings instant credib- Performance measurement requires firms ility to management. And he can enlist to evaluate how training leads to the trans- workers to develop the changes manage- fer of skills, improves performance, and ment seeks. accomplishes specific business goals. In Us has had tremendous success in many firms, training is often recom- using methods that are far less expensive mended without first understanding why thaillditionalclassroom learning to

THE SKILLS RACE 73 ilsc000N\IN\l-N'6\-77 develop employee skills just-in-time and the return on investment in training and PRINCIPLE SEVEN for use on the job. Like SunU, PG&E's education. Although companies, schools, Performance TLS is strictly accountable. Because train- and governments are all under increasing measurement ing budget allocations were replaced by a pressure to demonstrate results, progress strengthens training by billable hours system, TLS has to prove has been slow in developing effective increasing its value to, and remain current with, the tools that define, measure, and improve accountability and training results. Even members of the transparency. various business units within PG&E that buy its services. For every dollar invested American Society for Training & Devel- in performance consulting in 1996, TLS opment's Benchmarking Forum made was able to document a savingsof $3.50. up of large companies that invest heavily Not surprisingly, Us has now become in education and training are not likely the prototype for other technical schools to apply strict evaluations of training. at PG&E and a model for other industries Only 11 percent of forum member courses across the country. were evaluated in terms of skill transfer to the job in 1996. Just two percent of cours- Effective Measurement Tools es were evaluated for business impact's Research shows that learning adds imme- The success of those companies that do diate value to both the individual and the invest heavily in workforce development organization by raising wages, may well be the most illustrative.

is built in. "The best measurementof our training success must pay for Suntraining That's because allSun departments they can go to and rationalize the cost.If they don't like us, outside suppliers."

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productivity, and/or profits. Studies show Customer-Driven that a year of formal on-the-job training Some state-run programs are demon- raises wages for non-college youth as strating their value by competing directly much as a year of college." And increased with other learning providers. Massachu- company-provided training can raise setts Career Centers, the state's new productivity of a business by 16 percent one-stop shops for employment and train- or more.'4 ing funded .by a $11.6 million grant to the But most human resource profession- state from the U.S. Department ofLabor, als are struggling with how to measure

78 74 Council on Competitiveness are customer-driven, outcome-focused, Centers that perform inadequately must and locally administered. But the state improve quickly or go out of business. doesn't automatically operate the centers. And one-stop career centersare cost State agencies must compete with private effective. By eliminating the waste and firms for the Career Center contracts, and duplication of the old system, which the winners must then compete for clients. spent well over $100 million each year to The system is guided by the state, but ad- provide services throughout the state, ministered locally by Regional Career Centers has successfully stream- Employment Boards consisting of busi- lined the system. Massachusetts estimates ness, labor, education, government, and that the roll-out of the centersacross the community leaders. These local boards state will cost $60 to $70 million and will have the power to configure the opera- provide better quality service. Here isan tions as they please. Instead ofa state-run obvious measure of success: asurvey of monopoly of one-size-fits-all centers,a 200 Massachusetts businesses revealed variety of non-profit, for-profit and public that 82 percent of owners or personnel organizations run the Career Centers at managers would be likely to use a Career the local level. Center, while only 3 percent were likely Because Centers are commissioned to use any of the employment programs for a period of no more than threeyears, that were formerly offered by they are held accountable for their perfor- Massachusetts public agencies. Therea- mance and customer that is, both em- son: the Career Centers can offer users a ployer and the job seeker satisfaction. faster and more tailored response. 1 What's Ahead? PRINCIPLE EIGHT Leaders like Jodie Glore often guideorga- only meefshint nizations and provide the necessary lead- . ership that anticipates change. One of the and take early': best ways to become distinguishedas a leader is through community outreach. Whether supporting the arts center, revamping the high school math and sci- Ameritech Ohio: Moving Aheadin Skill Standards ence curricula, or instituting flexible hours Lucent Technologies: Technical Skillsof the Future to accommodate broader family needs, Western Governors University Glore is always looking to make Allen- and Motorola: Bradley an employee-friendlycompany Expanding Access and Portability and Milwaukee a livable city. NYNEX, the InternationalBrotherhood of But a dynamic personality is not enough. All players must understand the Electrical Workers, and theCommunication Workers challenges ahead and begin taking action of America: Sending WorkersBack to School now to ensure worker readiness. Hungry for workers, Ameritech Ohio is taking practical steps to establish Cleveland community. In fact,some of skills standards by working with the Ameritech's direct competitorsare hiring Cleveland Chamber of Commerce,area from this new pool of workers. But community colleges, and other local Ameritech knows that it has a better organizations to help train workers for chance of preparing entry-level candidates entry-level jobs throughout the communi- by being part of a joint initiative than by cations field. going it alone. Cleveland firmsare now The goal of the Ameritech skillspro- spending less to hire more and have lower gram is to organize recruitment and train- attrition rates since the student skills ing processes that will createa flow of match industry needs. Schoolsare getting qualified workers into two occupational much needed assistance from Ameritech tracks in which workers are always in and other companies. And students know high demand: customer servicerepresen- that if they meet the standards, theyare tatives and communication technicians. ensured jobs in the local community. The Ameritech and other Cleveland employers program is easily replicable, and with similar needs are developing skill Ameritech plans to take it to othercom- standards, incorporating them into exist- munity colleges across the country. ing community college curricula, and Additionally, Ameritech is looking offering work-based learning opportuni- into developing a welfare-to-work training ties to spark student interest in theseoccu- program to bring the unemployed coming pations. Participating employersare ex- off the rolls into customer service posi- pected to hire students who successfully tions at Ameritech and other industries. earn related associate degrees, meet skill Customer service is a major entry-level standards, and pass company-specific position, and many companies would ben- employment tests. efit from an enlarged labor pool. With Although Ameritech has driven the unemployment so low in the Midwest, focus on workforce development for its Ameritech and other firms will haveno own stock of employees, the company is choice but to help raise the skill levels of sharing the benefits with thegreater the unemployed to fill their openings.

THE SKILLS RACE 81 77 Technical Skills of the Future "off -the-shelf' courses that they can inte- PRINCIPLE EIGHT grate into existing academic and training Trying to build the technical skills the The best training manufacturing industry will need five programs. This means valuable economies of strategies not only years out, Lucent TechnologiesFounda- scale; because courses meet industry stan- meet short-term tion established a manufacturing work- dards, manufacturers and educators will needs, but anticipate force collaborative. Leading the effort are change and take early not have to invest time and resources to a consortium of advancedtechnology cen- action. develop their own. Further, those who the ters at post-secondary schools across learn, regardless of whether in the class- country known as the National Coalition room or via distance technology, willbe of Advanced Technology Centers able to easily transfer their skills within (NCATC) and the Iacocca Institute at the industry. Lehigh University. The NCATC, a coalition that helps industry keep pace with new and emerging practices and equipment with support services and the

"People are our long-termadvantage. The key is to getthem in the door and thenmake them better. But todo that we've got skilled to help schools prepareenough people for highly manufacturing jobs. That'scritical to our competitiveness."

I I . III o

transfer of technology, will distribute the Skills Development: Expanding Access Lucent-funded curricula nationwide to its and Portability 94 community college members in 36 State leaders are throwing their politi- states. cal clout behind the revolutionary Western The technical curriculum includes a Governors University (WGU), which will broad range of technical and workplace offer a new way to deliver higher skills. In addition to a necessary comfort education and training. As mentioned level with computers and technology, to- earlier, what makes this virtual university morrow's factory floor workers will need unique is that it coordinates the needs of decision-making, teamwork, and bench- corporate education and individuallife- marking skills. long learners by drawing from course- The program is designed to be work that universities and corporations dynamic. By using the Internet and have already demonstrated to be effective. document-sharing software, this virtual In anticipation of exploding popula- education network will make it easy to tion growth in western states, the 18 gov- adjust courses to accommodate new re- ernors are investing intechnology rather quirements. This gives educators and than additional bricks and mortar to serve manufacturers fast access to high quality,

R*04,-') Council on Competitiveness 82 '7 g t 13 the expected surge of students. Realizing Sending Workers Bock to School that one policy maker alone couldnot successfully remove the barriers ofregu- The fast pace of workplace changere- lation, bureaucracy, tradition, and turf, the quires that firms take a forward-looking governors have bonded together to pio- approach to learning. Its absence will in- neer this innovative concept of a virtual evitably mean a loss in productivity. Com- education. Governor Leavitt of Utahsees panies that are left scrambling to bringex- the change as inevitable: "We simplymust isting workers up to speed and to fill align our public policies with what isoc- available positions quickly recognize that curring in the marketplace. Eventually,the their human resources are a key competi- inexorable forces of advanced technology tive advantage. Rather than discard and will drive many of the changescontem- replace employees, some companiesare plated in the WGU. But wecan make the taking steps to build tomorrow's work- transition faster, and in amore organized force with today's existing payroll. fashion and with less disruption to and NYNEX* and its two unions, the more collaboration with traditional institu- International Brotherhood of Electrical tions if all segments of societycon- Workers (IBEW) and the Communica- cerned with education cooperate in this tion Workers of America (CWA), have development." 16 partnered with community collegesacross Technology-based teaching and learn- New York and New England to offer ing are a potentially powerfulmeans of union employees the opportunityto making educational services muchmore acquire an associate degree in applied widely available. As employees takeon science with a focus on telecommunica- additional training responsibilities, they tions technology. The company wantsto are likely to demand that corporations expand worker knowledge already award them with credentials certifying accrued through in-house training and their skills, knowledge, and relevantexpe- job experience and to bringa higher level riences. To have a certificate in hand gives of skills to an increasingly demanding an employee an important credential when marketplace. looking for another job opportunity inside Known as the Next Step Program, it his or her firm, or in anothercompany is a four-year educationalprogram deliv- where the skills are also valued. ered at 25 community collegecampuses, Motorola is presently trainingmore on company time and at company than 140,000 workers annually in thedis- expense. Selected employees attend class cipline of microelectronics/computer chip one day a week and work four days a manufacturing. While the skills theyare week. All the while they continueto learning are highly useful and marketable receive a full week's pay. At the end of in today's business environment, the the training, NYNEX workersare entitled workers do not receive portable creden- to a higher wage. Workers gain valuable tials. So, in response to demands from technical competencies and general their rank and file, Motorola, Intel, Mi- employability skills including teamwork, cron, and other companies are looking to customer focus, quality, and communica- the WGU to develop courses for their tions skills. employees, complete with assessment Most of the colleges participating in methodologies. Next Step initially lacked the capacityto provide state-of-the-art content, and the faculty were not up on the latest industry changes. NYNEX and its unions worked

' NYNEX merged with Bell-Aflantic on August 15,1997

THE SKILLS RACE 83 closely with all faculty to focus the Next 8 Kemske, Floyd. "A Comprehensive Study PRINCIPLE EIGHT Step curriculum around relevant technical of CBT and Multimedia as Instructional Delivery Systems." Hingham, MA: SB skills and knowledge, while also empha- Communications, 1996. sizing customer focus, teamwork, project leadership, and critical-thinking skills. All 9 Bassi, Laurie and Cheney, Scott. students and faculty receive laptop com- "Results from the 1997 Benchmarking Forum." Alexandria, VA: American Society puters on which they can communicate, simulate labora- for Training & Development, 1997. The prepare assignments, and Benchmarking Forum's membership is virtual tory exercises, thereby creating a comprised of more than 50 large learning environment that extends well companies. beyond the reach of the traditional 10 Dixon, Pam. "Virtual College." Cited in classroom. Newsweek magazine, March 10, 1997. This curriculum customization and enhancement of faculty knowledge has 11 Lublin, Joann S. "Schools Boot Up to been accomplished through a series of Offer On-Line M.B.A.s." The Wall Street faculty institutes and other developmental Journal, September 24, 1996. opportunities sponsored by NYNEX. 12 White House Office of Technology Assessment. "Teachers and Technology: End Notes: Making the Connection." 1995. 13 Lynch, Lisa M. "Private Sector Training 1 Rutgers University, published in the and the Earning of Young Workers," Academy of Management Journal. American Economic Review. March, 2 Kerka, Sandra. High Performance Work 1992, p. 299-312. Organizations. 1995. 14 Bartel, Ann. "Productivity Gains from the 3 Bassi, Laurie. "Upgrading the U.S. Implementation of Employee Training Workplace: Do Reorganization, Education Programs." NBER working paper #3893, Help?" Monthly Labor Review. May 1995. 1992. And Bishop, John. "The Impact of Previous Training on Productivity and 4 Under Title III of the Job Training Wages," in Lynch, ed. Training and the Partnership Act (JTPA), the federal government transfers money to the states toassist Private Sector: International Compari- Chicago people who are victims of plant closings sons. Chicago: University of and other large layoffs. In addition to in- Press, 1994. come support, JTPA Title III covers career 15 Bassi, Laurie and Cheney, Scott. ASTD counseling, job search assistance, and Benchmarking Forum 1997 Comparative training opportunities (all of which are Report. Alexandria, VA: American Society largely implemented by the states). for Training & Development, 1997. 5 Michigan Jobs Commission web site. 16 Leavitt, Michael 0. "The Western Governors University: A Learning Enter- 6 Carnevale, Anthony. "Training Should Be prise for the CyberCentury." The Western Teamed with Smart HR Practices," Governors University web page. Corporate University Review, March/April 1996. Cited in the Lotus Institute White Paper, "Distributed Learning: Approaches, Technologies and Solutions." August 1996. 7 Thirty-six percent of companies reported using computer-based training via CD- ROM, and 28 percent reported using computer-based training via disks.

Council on Competitiveness 84 0 ommunities across the United Schools, in turn, need to be respon- States are making great strides in sive to the skill needs of employers. By the skills race through alliances of establishing strong links, secondary and While the business leaders, workers, educa- post-secondary institutions can not only shortfalls in tors, and government agencies. Their direct their graduates to higher-paying workplace cooperation produces striking results jobs, but also equip them with a solid when the partners break out of their old foundation for further skills development. preparedness roles to focus on making connections If properly applied, the nation's world are national across organizations, across town, even leadership in information technology will in scope, the across the country. give educators a clear edge in preparing race is won The examples of success documented workers. locally. in this report show that while the short- Workers, often led by unions, can take falls in workforce preparednessare na- an active part in making their own train- tional in scope, the race is won locally. ing more effective. After evaluating their Conditions are too varied and timepres- own capabilities, they can commit the sures too great for a grand design drawn time and effort to their own advancement, in Washington. But governmentcan con- and look to the future with anticipation, tribute vision and resources and create not anxiety. Only a joint employer- vital links among partners. employee commitment to training will The lessons drawn from coalitions work in today's environment. that work can and should be applied Government agencies_at all levels can across the nation. Before any of us can ensure that public investments in educa- become part of the solution, one has to tion and training meet actual market consider: What is my individual stake? needs. This means providing reliable Who shares my concerns? When these information to workers and employers, PICKING UP THE PACE questions have been answered,one can tailoring programs to local conditions, and determine: What can I contribute? How adopting performance-based funding that can I tap into resources? ensures training providers are held account- By creating learning opportunities, for able for the quality of their example, employers can engender the loy- services. Government is uniquely posi- alty and commitment of their workers and tioned to benchmark and share best can enhance the prospects of their own practices. business. By articulating their skill needs What we need most are coalition build- to educators, firms can give studentsan ers who can bring players together. early look at career opportunities. Employers and schools can make great headway by identifying self-starters and

THE SKILLS RACE SI 85 giving them the power to lead by exam- and welfare rolls are shrinking. We may 111101011Vitml-'*- ple. CEOs who look beyond senior man- be in the strongest position ever to effect What we need agement know that some of the most change. But if we miss the opportunity, effective change agents may be far down demographics and global competitive most are the ranks or even outside the organization. pressure will work powerfullyagainst us. coalition Joined by leaders from companies, Already, we are preoccupied with builders who keeping our aging workforce up-to-date unions, and community colleges, govern- canbring ment officials can send a clear message to and flexible and with training too many players the public that collaboration is vital. new entrants to learn in remedialclasses We are at a natural point to confront what they should have mastered in together. the skills challenge. The economy is school. There are high hurdles ahead. booming; job creation is high; unemploy- We have to pick up the pace to clear ment is low; real wages are on the rise; them.

,f, e Council on Competitiveness 86 BEST COPY AVAILABLE g2 Task Force John Cone Wendell Jones Warrington Parker, Jr. Vice President Senior Vice President, Director, Chairmen Dell University Technology Services Executive/Organization Dell Computer Corporation National Association of Development Richard Notebaert Securities Dealers, Inc. Rockwell International Chairman and CEO Claudia J. Davis Corporation Ameritech Director, Corporate Jill Kanin-Lovers Education Vice President, Human Jeffrey Peck George Becker Hewlett-Packard Company Resources, USA Managing Director, Office President IBM Corporation of Government Affairs United Steelworkers William Easley Andersen Worldwide of America Senior Vice President Henry Kelly Springs Industries, Inc. Assistant Director, Robert Pleasure Harold Raveche Technology Assistant to the President, President Phyllis Eisen Office of Science and Education and Training Stevens Institute of Director of Government Technology Policy AFL-CIO Technology Affairs National Association of Renee Lerche Curtis Plott Members Manufacturers Director of Education, President Training and Development American Society for Marvin Bailey Lin Erickson Ford Motor Company Training & Development Vice President, State Director of Workforce Technology Programs Development Larry Mahoney Ralph Richardson Ameritech Indiana Iacocca Institute Manufacturing Group Publisher Lehigh University Technical Leader Thomas Publishing Ed Bales Saturn Corporation Company Director of Education, Jeffrey Giappetta External Systems Director, Manufacturing Linda Darnell Martin Charles Roberts Motorola, Inc. Technology Training Corporate Director, Vice President, Total Chrysler Corporation Government Affairs Quality Wendy Belsky Boeing Company Ames Rubber Corporation Senior Vice President Patrick Gross Chase Manhattan Vice Chairman Jane McDonald-Pines Glenn Rudolph Corporation American Management Executive Assistant Project Manager Systems, Inc. Human Resources Senco Products, Inc. Mark Bobes Development Institute Global Manager, Training Hans Gutsch Anthony Sanniento and Education Senior Vice President of James Mc Kenney Assistant Director, The Goodyear Tire Human Resources Director of Economic Department of Education & Rubber Company Compaq Computer Development AFL-CIO Corporation American Association Chris Caine of Community Colleges Ellen Scully Vice President, Peter Henschel Assistant Director of Governmental Programs Executive Director Van Doom Ooms Learning Systems IBM Corporation Institute for Research on Committee for Work & Technology Learning Economic Development Institute Debi Coleman Chairman and Chief Roberts Jones Robert Osterhoff John Sellers Executive Officer President & CEO Director of Executive Vice President Merix Corporation National Alliance of Corporate Quality United Rubber Workers Business Xerox Corporation Conference USWA

THE SKILLS RACE 83 87 Mark Troppe Manager, Workforce Programs/Manufacturing Extension Partnership

Brian Turner President Work & Technology Institute

James Van Erden Senior Vice President, Workforce Development National Alliance of Business

Frederick Williamson Director of Imaging Technology Policy Eastman Kodak

Emory Zimmers Deputy Director Iacocca Institute Lehigh University

88 I Council on Competitiveness Sandra Feldman Ray Stata Samuel W. Bodman American Federation of Analog Devices, Inc. Cabot Corporation Chairman Teachers, AFL-CIO William R. Hambrecht William C. Steere, Jr. Lee C. Bollinger W. R Hambrecht & Co., LLC George M.C. Fisher Pfizer Inc University of Michigan Eastman Kodak Company University Gary L. Tooker Ray Bowen Vice Chairman Raymond V. Gilmartin Motorola Inc. Texas A&M University at Charles M. Vest Merck & Company, Inc. College Station Massachusetts Institute of John A. Young Technology Katharine Graham Hewlett-Packard Company David L. Burner The Washington Post The BFGoodrich Labor Vice Chairman Company General Company Jack Sheinkman Membership Amalgamated Bank of Jack Harding Stephen G. Butler New York Cadence Design Roger Ackerman KPMG Peat Marwick Systems Inc. Corning Incorporated Co-Industry Richard L. Byyny Vice Chairmen Jerry J. Jasinowski Lester M. Alberthal, Jr. University of Colorado, Donald R. Beall National Association of Electronic Data Systems Boulder Rockwell International Manufacturers Corporation C. Michael Armstrong Albert Carnesale Thomas G. Labrecque AT&T University of California, Joseph T. Gorman The Chase Manhattan Los Angeles TRW Inc. Corporation Lionel Baldwin National Technological Gerhard Casper Executive Committee Peter Likins University Stanford University F. Duane Ackerman University of Arizona BellSouth Corporation Jack Barry George Chamillard Richard A. McGinn International Brotherhood Teradyne, Inc. Paul A. Allaire Lucent Technologies, Inc. of Electrical Workers Xerox Corporation Vance Coffman Emmit McHenry George Becker Lockheed Martin Richard C. Atkinson Net Com Solutions United Steelworkers of Corporation University of California International America, AFL-CIO, CLC Robert Cohn William R. Brody Thomas J. Murrin Steven C. Beering Octel Messaging Johns Hopkins University Duquesne University Purdue University Lucent Technologies, Inc.

Linda Chavez-Thompson Richard C. Notebaert Robert Berdahl Jared Cohon AFL-CIO Ameritech Corporation University of California, Carnegie Mellon Berkeley University G. Wayne Clough Michael E. Porter Georgia Institute of Harvard University Alfred R. Berkeley Mary Sue Coleman Technology NASDAQ Stock Market University of Iowa Heinz C. Prechter Thomas E. Everhart ASC Incorporated J. R. Beyster Lewis Col lens California Institute of Science Applications Illinois Institute of Technology David E. Shaw International Corporation Technology D. E. Shaw & Co, LP Gordon Binder Philip M. Condit Amgen Inc. The Boeing Company

11 a THE SKILLS RACE OS 89 Talbot D'Alemberte Richard J. Elkus, Jr. Jay Henis Gloria Ma Florida State University Voyan Technology Orex Pharmaceutical XXsys Technologies, Inc. Corporation George David Thomas J. Engibous Diana MacArthur United Technologies Texas Instruments Michael Hooker Dynamac International, Corporation Incorporated University of North Inc. Carolina at Chapel Hill Haile Debas Saul K. Fenster Thomas J. Malone University of California, New Jersey Institute of Klaus von Horde Milliken & Company San Francisco Technology MEMC Joel D. Marvil Michael S. Dell Bernadine Chuck Fong Irwin M. Jacobs Ames Rubber Corporation Dell Computer Corporation Foothill College QUALCOMM, Incorporated William E. Mayer C. W. Denny Edward T. Foote II Development Capital LLC Square D Company University of Miami Dean Kamen DEKA Jay Mazur Kenneth T. Derr Paul C. Gianini UNITE Chevron Corporation Valencia Community Richard A. Kashnow College Raychem Corporation Richard L. McCormick Papken S. Der Torossian University of Washington Silicon Valley Group, Inc. E. Gordon Gee James Kelly Brown University United Parcel Service of James F. McDonald L.D. DeSimone America, Inc. Scientific-Atlanta, Inc. 3M Company Louis V. Gerstner, Jr. IBM Corporation Nannerl Keohane Patrick J. Mc Govern James L. Donald Duke University International Data Group DSC Communications Charles M. Geschke Corporation Adobe Systems William E. Kirwan Dana G. Mead University of Maryland Tenneco Inc. Rodger B. Dowdell, Jr. Malcolm Gillis American Power Rice University J.A. Krol Alan G. Merten Conversion Dupont George Mason University Gerald Greenwald Robert C. Dynes UAL Corporation Ralph S. Larsen Arthur Moore University of California, Johnson & Johnson Sheet Metal Workers' San Diego M.R.C. Greenwood International Association University of California, Kenneth P. Lazarus Robert J. Eaton Santa Cruz Active Control eXperts, James C. Morgan Chrysler Corporation Inc. Applied Materials, Inc. William R. Greiner Richard Egan State University of New Richard G. LeFauve Marc S. Newkirk . EMC Corporation York at Buffalo General Motors University Lanxide Corporation

David Eisenhaure Patrick W. Gross Ben Levitan Gregory M. St. L. O'Brien Sat Con Technology American Management james martin + co University of New Orleans Corporation Systems, Incorporated H. William Lichtenberger Rev. Leo O'Donovan Walter Y. Elisha James Hackett Praxair, Inc. Georgetown University Springs Industries, Inc. Steelcase Inc. Ernest Lofton International Union, UAW

90 56 Council on Competitiveness J. Tracy O'Rourke Judith Rodin Steve Vana-Paxhia Varian Associates, Inc. University of Pennsylvania INSO Corporation

Douglas Olesen Allen B. Rosenstein James L. Vincent Battelle Memorial Institute Pioneer Magnetics, Inc. Biogen, Inc.

Ruth M. Owades Duane Roth David Ward Calyx & Corolla Alliance Pharmaceutical University of Wisconsin- Corporation Madison Alan J. Patricof Patricof & Co. Jim Roth Josh S. Weston GRC International, Inc. Automatic Data John Pepper Processing, Inc. The Procter & Gamble George Rupp Company Columbia University Mark Wrighton Washington University Lawrence Perlman David K. Scott Ceridian Corporation University of Massachu- Joe B. Wyatt setts at Amherst Vanderbilt University Peter Peterson The Blackstone Group Ivan Seidenberg Henry T. Yang Bell Atlantic University of California, Eckhard Pfeiffer Santa Barbara Compaq Computer John W. Shumaker Corporation University of Louisville John B. Yasinsky GenCorp, Inc. Mark Pigott Albert J. Simone PACCAR Inc. Rochester Institute of Gregory J. Yurek Technology American Superconductor Arnold Pollard Corporation Chief Executive Magazine Frederick W. Smith Federal Express Stanley R. Zax Frank Popoff Corporation Zenith Insurance Company The Dow Chemical Company Michael T. Smith Hughes Electronics Philip J. Quigley Corporation SBC Communications, Inc. Andy Stern Harold J. Raveche Service Employees Stevens Institute of International Union Technology W. R. Timken, Jr. Hunter R. Rawlings The Timken Company Cornell University Curtis J. Tompkins W. Ann Reynolds Michigan Technological The University of Alabama University at Birmingham Alex Trotman Sanford R. Robertson Ford Motor Company BancAmerica Robertson Stephens

THE SKILLS RACE g7 91 National Affiliates Business Executives for Institute for Research onn National Security, Inc. on Learning e *e Agility Forum Business-Higher Institute of Electrical and itsrp: American Association Education Forum Electronics Engineers, ohn hoc for the Advancement Inc.-United States of Science Center for Creative Studies Activities IS

American Association of Center for Strategic and Labor-Industry Coalition Engineering Societies International Studies for International Trade

American Business Civil Engineering National Alliance Conference Research Foundation of Business

American Council Committee for National Action Council on Education Economic Development for Minorities in Engineering American Electronics Computer Systems Association Policy Project The National Center for Manufacturing Sciences American Management The Conference Association Board, Inc. National Coalition for Advanced Manufacturing American Productivity Congressional Economic and Quality Center Leadership Institute National Foreign Trade Council, Inc. American Savings Council for Education Council Chemical Research National Policy Association American Society for Design Management Engineering Education Institute Securities Industry Association American Society for Economic Policy Institute Training & Development Semiconductor Industry Economic Strategy Association American Society of Institute Mechanical Engineers U.S. Telephone International Health Industry Association Manufacturers Association Aspen Institute Work and IC2 Institute Technology Institute American Society for Quality Control Industrial Research Institute, Inc. Association for Manufacturing Technology Information Technology Industry Council Association of American Universities The Institute for Intercon- necting and Packaging Association of Technology Electronic Circuits Business Councils Institute for International The Brookings Institution Economics About the Council Highway to Health: Transforming U.S. Health Care in the Information Age Who We Are A follow-on to the Council's NH applications confer- The Council on Competitiveness is a nonpartisan ence, this report illustrates how the NH can be harnessed forum of 140 corporate chief executives, university presi- in conjunction with market forces to address the needto dents, and labor leaders working together to set a national control costs at a time when the demand for healthcare action agenda to strengthen U.S. competitiveness. services is rising. It identifies the principle barriers The Council defines competitiveness as our nation's preventing the development of four robust health care capacity to produce goods and services that succeed in market segments"Remote Care," "Individual Health international markets while maintaining or boosting the Information and Management," "Integration of Health real incomes of U.S. citizens. Information Systems," and "Health Care Research and Education" and recommends steps to overcoming those How We Operate barriers. March 1996 ($25) The Council shapes the national debate on competitiveness by concentrating on a few critical issues. These Building on Baldrige: American Quality for issues include technological innovation, workforce devel- the 21st Century opment, and the benchmarking of U.S. economic perfor- This report reviews the effectiveness of and givesrec- mance against other countries. ommendations for the continuation and expansion of the The Council focuses on two major initiatives a year. Malcolm Baldrige Quality Award program in promoting Members and Council staff work together to assemble data, quality principles and practices. July 1995 ($5; copies) develop consensus-based recommendations and implement folloW-up strategies in every region of the country. This Human Resources Competitiveness Profile approach allows us to combine rigorous policy analysis This report looks at a life cycle approach to competi- with the practical insights of leaders from industry, acade- tiveness and human resource issues in four areas: family mia, and organized labor. In addition, chief executives from and early childhood, primary and secondary school educa- more than 40 of the country's most prominent nonprofit tion, university education, and training. U.S. performance research organizations, professional societies, and trade in these areas is compared with other countries. associations contribute their expertise as national affiliates April 1995 ($15) of the Council. Our work is guided by a 25-member Executive Committee. A full-time staff of 13 provides Breaking the Barriers to the National Information research and operational support. Infrastructure The third in a series of policy documents, this report Publications highlights the Council's September 7-8, 1994, NII applications conference. It lists and examines the barriers users 1996 Competitiveness Index: A Ten-Year are facing in manufacturing, education, electronic com- Strategic Assessment merce, health care, and entertainment in order to set the This tenth-anniversary report assesses U.S. gains and stage for a more constructive national policy debate. vulnerabilities in competitiveness over the past decade. December 1994. ($25) The report explores U.S. gains in recapturing global market shares, growth of per capita GDP, the reduction of both the Critical Technologies Update 1994 budget and the deficit, and job creation. Top leaders in An update from the Council's Gaining New Ground business, education and labor provide personal report, this document re-evaluates America's performance commentaries. October 1996 ($25) in 94 critical technologies. September 1994 ($10)

Endless Frontier, Limited Resources: U.S. R&D Economic Security: The Dollar$ and Sense of Policy for Competitiveness U.S. Foreign Policy The report examines research and development trends This report analyzes eight case studies involving in six key industry sectors, provides policy guidelines to recent foreign policy decisions, with emphasis on export meet the challenges confronting the stakeholders in controls and export sanctions, and tallies their cost to America's R&D enterprise, and sets the agenda for a the United States in terms of lost exports and jobs. national discussion on the future of R&D by focusing February 1994 ($25) on industry/ government/university partnerships. April 1996 ($25)

THE SKILLS RACE 93 Competition Policy: Unlockingthe National Information Infrastructure this statement The second in a seriesof NH policy reports, of the offers the best thinkingfrom a broad cross-section driving the private sector on thecompetitive pressures evolution of the U.S.-basedcommunications industry. December 1993 ($25) and Roadmap for Results:Trade Policy, Technology, American Competitiveness ability to This book examines theU.S. government's It docu- address the trade problemsof high-tech industries. and ments the failingsof the current trade policy process recommends a new approach. June/July 1993 (Book: $40;Report: $25)

Vision for a 21st CenturyInformation Infrastructure statement The first in a series ofNII policy reports, this defines informationinfrastructure, assesses the U.S. position relative to its foreigncompetitors, and addresses the roles of governmentand the private sector. May 1993 ($15) in the U.S.; * Shipping/handlingfor publications is $3.50 check or money overseas $12.Pre-payment only; make order (cash accepted in persononly) payable to the Council on Competiveness,1401 H Street, N.W., Suite 20005. For orders of five or more 650. Washington DC ship- publications, please contactthe council for metered ping rates. Payments received outsidethe U.S. must be drawn on an Americanbank through New York

90 Council on Competitiveness 94 Council on Competitiveness 1401 H Street, NW Suite 650 Washington, D.C. 20005

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