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A Ta T SstsLinking Economic DEvELopmEnt anD WorkforcE DEvELopmEnt
A RepoRT Rom The Seedco policy cenTeR
MAY 2009
ped td rese p, Ws Sle, nc
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crt 2009 Strutur et e dt crrat (S). A rts rsr.
AcknowledgemenTS
We grateully acknowledge Seedcos Ben Seigel or helping to
guide this report to completion, Demetra Smith Nightingale
or her guidance on the Policy Advisory Council, and the
Joyce Foundations Whitney Smith or her support, crit ique,
and patience. Thanks as well to the many people, too many tolist, who read and provided invaluable eedback. Finally, this
report would not have been possible without the thoughtul
contributions o the hundreds o eld leaders, practitioners
and policymakers who took the time to talk with us.
This report was unded by the Joyce Foundation with
additional support rom the Ford Foundation, which
supports a range o Seedcos workorce and economic
development activities.
DESIGN: Red Rooster Group, NY
Seedco is a national nonproft intermediary that works
with local partners to create economic opportunities
or disadvantaged job seekers, low-wage workers, and
neighborhood entrepreneurs. Seedcos policy research
oers a practitioners perspective on workorce and
economic development policy implementation, pre-
senting a pragmatic assessment o the opportunities
and obstacles inherent in developing programs and
accomplishing systemic reorm.
915 Braa, 17t r, n yr, ny 10010
Tel: 212 473-0255 Fax: 212 473-0357
Email: info@seedco.org www.seedco.org
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TABle o conTenTS
2 Introduction
7 Lessons rom the Field
12 Putting Lessons into Action
13 Appendix
pEnnSyLvania 13
pldel 14
Philadelphia WorkforceDevelopment Corporation 15
1199C Trainin Fund 15
Philadelphia Workforce Investment Board 16
The Colleiate Consortium 17
Lse 18
Lancaster Workforce Investment BoardCluster Initiative 18
north caroLina 20
te ped td re 22
Associates Proram in Applied Science,Forsyth Technical Community Collee 22
Piedmont Triad Partnership 23
Dell Computer 24
Wese re 25
Reional Hih Technoloy Center 25
Tri-County Community Collee
Advanced Machinin Trainin 25
Advantae West Reional Partnership 26
iLLinoiS 28
c 29
Illinois Job Trainin andEconomic Development 30
Reional Healthcare Initiative 30
ManufacturinWorks and ServiceWorks 32
pe 33
TalentForce 21 33
Pathways to Successful Healthcare Careers 34
36 Index
A Ta T Ssts
Linking Economic DEvELopmEnt anD WorkforcE DEvELopmEnt
Neil Kleiman, Emma Oppenheim and Carl Voel with Luke Weisber
MAY 2009
execUTive SUmmARy
Initiatives aimed at linking economic development
and workorce development have emerged across
the country, oering governments the opportunity to
boost their economic competitiveness and increase
their workers skills simultaneously. These efforts
have achieved varying degrees o success, and many
programs have resulted in limited tangible outcomes.
Using in-depth case studies o regions in three states,
Pennsylvania, North Carolina, and Illinois, this report
details opportunitiesand cautions against pitalls
commonly encountered by those attempting to link
two complementary but very dierent systems.
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pAge 2 A TALE OF TWO CITIES: LINKINg ECONOMIC DEVELOPMENT AND WORKFORCE DEVELOPMENT
Even beore we ound ourselves in a crisis, the public
sector had begun to experiment with business devel-
opment practices by aligning economic and work-
orce development eorts. In response to the needs
o businesses in new growth industries, such as green
development and biotechnology, and in more tradi-
tional labor-intensive industries, such as healthcare
and manuacturing, policymakers initiated eorts to
coordinate investments in business with investments
in the local labor orce.
On paper, it all draws up very nicely. Businesses needemployees, especially in industries that have trouble
attracting and maintaining a skilled and reliable
workorce. Workers need jobs, and need help becom-
ing prepared or and nding good job opportunities.
Customized job training and initiatives designed to
work with specic economic sectors can simultane-
ously serve the needs o business and o workers. The
two elds dedicated to helping businesses and help-
ing workerseconomic development and workorce
developmentshould work together, the thinking
goes, maybe even be merged.
Key changes in the economic and policy worlds have
ueled this connection: the end o welare, the
decline o actory jobs and the rise o the knowledge-
based economy, ederal mandates or workorce to
serve both workers and employers equally. At all levels
o government, policymakers have been experiment-
ing with ways to unite economic development and
workorce developmentcall it ED/WD. The U.S. De-
partment o Labor (DOL) launched Workorce Innova-
tion in Regional Economic Development (WIRED) and
the Community-based Job Training Initiative to more
directly link businesses and workers within regional
economies. State and local agencies have drated new
plans, held statewide summits, selected priority eco-
nomic sectors, and even merged their employment and
business agencies. Behind all o it has been a bevy o
policy reports urging legislators and administrators to
link the two systems.
We are past the point o imagining this type o link-
ageit is here. These eorts are a cornerstone strategy
or localities, regions, and states seeking to build a
strong economic oundation. Now is the time to ask
hard questions about this approach: how well it cur-
rently works, how it should work, and how to ensure
that it is implemented in the best way possible.
We set out to do just that in this report. Here we
examine, in depth, how these ideas are playing out on
the ground. We looked at key regions in three states
Pennsylvania, North Carolina and Ill inoisthat hada history and reputation or innovative links among
job-training, employment strategies, and economic
planning. Over the course o two years we interviewed
more than 150 practitioners and policymakers in
those states with the goal o describing how ED/WD
programs do their workand what the results o those
eorts were.
inTRodUcTion
With crisis comes opportunity. The undamentals o our economy are in turmoil,
creating a moment in which we can move away rom short-sighted growth
strategies and reshape our investments in regions and workers. As governments,
philanthropists, and nonprots react to the economic crisis, we need to lay the
oundation or healthy regions and productive workers; crating smart business
and human capital development strategies is key to that goal.
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A REPORT FROM THE SEEDCO POLICY CENTER pAge 3
oUR pRoceSS
Our research revealed an absence o wholly inte-
grated economic and workorce development systems.
Without ully ormed models to tout, we decided to
document the practices and approaches that work in
economic and workorce development, with on-the-ground examples at the state, regional, and local levels.
In-depth case studies o initiatives in Pennsylvania,
Illinois, and North Carolinathree states recognized
or leading the eldormed the core o our research.
We ocused on creative programs including sector-
based initiatives, customized training, regional eorts,
and partnerships with institutions o higher learning,
especially community colleges. We interviewed dozens
o experts and administrators in each state to ascer-
tain the key opportunities, challenges, successes, and
ailures o every program.
O course, we are examining a moving target; the
research, conducted rom 2006 2007, oers us a
broad sketch rather than a precise snapshot. Programs
are bound to evolve and change, but while some o
the details we outline below may have changed, the
lessons they oer others in the eld have not.
Brie overviews o the states studied are included below,
with 16 case studies included as an appendix to this
report.
pennSylvAniA
Pennsylvania has been reeling rom a series o eco-
nomic setbacks or nearly a century. Controlled by the
strong business interests o steel, coal, and the rail-
roads in the 19th century, Pennsylvania was in a poor
position to emerge rom the era o industrialization.
The Keystone State experienced an economic depres-
sion that lasted rom 1928 to 1965, with an unemploy-
ment rate during these decades that was higher than
any other state except West Virginia. Throughout the
1990s, the state ranked near-last in population growth
and employment, and number one or absolute loss oyoung workers.
As a result, ew states in the union have been as xated
on economic development; workorce development
largely did not register until recently. While Pennsylva-
nias last three governors prioritized aligning workorce
eorts with economic development, the state did not
see tangible results until the current administration.
Most notably, the state created a $20 million initiative
that unds worker training programs in high-growth
elds. Pennsylvania has since become a recognized
innovator in ED/WD programming and attracted
substantial private oundation dollars to support these
eorts. Despite its progress, though, not all areas o the
state have been able to benet rom the new programs,
and much o the success is occurringin isolated pockets.
noRTh cARolinA
During the rst hal o the 20th century, North
Carolinas economy depended on agriculture and
manuacturing including urniture, cigarettes, and
textiles. These jobs demanded little education, and
North Carolina ranked near the bottom o the states
in terms o residents educational attainment. For de-
cades, though, the states politicians overwhelmingly
supported education and training as essential tools oeconomic development.
North Carolina has taken a long-range and strategic
approach to its economic growth. The state made a se-
ries o deliberate investments in its workorce over the
last hal-century, including the creation o the nations
rst community college system in 1957; the creation o
Research Triangle Park, a public-private research park
in the Raleigh-Durham area; and the Golden LEAF
Foundation, created with tobacco settlement unds, to
und economic and workorce development projects.
Parallel to these sound investments, North Carolinaalso has a track record o costly expenditures on busi-
ness recruitment as it competes to lure business invest-
ment to the state.
illinoiS
The th-most populous state in the nation and home
to Chicago, the third-largest city in the U.S., Illinois is
sometimes seen as a microcosm o the United States.
With Chicago as a transportation hub and nancial
StatES fEaturED in thiS rEport
ilpA
nc
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A TALE OF TWO CITIES: LINKINg ECONOMIC DEVELOPMENT AND WORKFORCE DEVELOPMENTpAge 4
center, and economic sectors throughout the state
ranging rom agriculture to industry to natural re-
sources, Illinois has long had both a diverse economy
and a diverse workorce.
Illinois pioneering eorts to link economic and work-
orce development have been innovative, but plagued
by problems. Although the state was ahead o the
curve, launching new ED/WD programs beore most
other states, the eorts have not been overwhelmingly
successul. Moreover, many initiatives were launched
in parallel to the states continued investment in
traditional economic development rooted in large in-
rastructure. Recent initiatives to support the develop-
ment o local and regional eorts hold more promise.
The view Rom The gRoUnd
We ound connecting economic and workorce
development is not as easy as it sounds. Even in these
stand-out states, programs that promoted ED/WD
policies were not universally successul. In some cases
they have not worked at all.
Linking economic development and workorce devel-
opment takes years and must take root regionally or
locally in order to succeed. In states that have tried
agency unication, rustration is typically the end
result. Even at metro or regional levels, most attempts
to unite economic development and workorce de-
velopment have ailed to reach a notable scale in any
industry other than healthcare or manuacturing.
Creating a successul ED/WD program requires over-
coming many diculties: under-unding, a lack o a
committed constituency, clashing philosophies, and
institutional inertia all pose problems. But the big-
gest challenge is simply that economic development
and workorce development have dierent cultures,
missions, perormance measurements, and histories.
Connecting them is much harder to do than it would
appear in theory.
Programs linking economic and workorce develop-
ment canand dowork under the right conditions.
To succeed, policymakers need to understand the bar-
riers to success, take these barriers into account, and
provide the necessary supports to overcome them. The
greater misortune in seeing other programs ail would
be to abandon the entire concept. Economic develop-ment and workorce development need each other like
never beore and can work exceedingly well together.
It just isnt oreordained.
This report reveals that i done well ED/WD can lead
to an improved economic climate and more and better
jobs. It is also a call to understand how to better align
economic development and workorce development.
We have ocused on programs that provide worker
training and job-placement as a tool to help specic
rms or sectors, beneting both workers and compa-
nies. Certainly there are other types o economic andworkorce development programming (e.g. rst-source
agreements on economic development incentives),
but they are not part o this report.
Two goAlS ThAT mATch
Finding, training, and then upgrading a workorce are
challenges aced by the increasing numbers o rms
that cannot rely on low-skilled or mis-skilled workers
or the kind o production or services they provide.
A convenient, steady pipeline o prepared workers isa benet to many companies, and regions or cities
that can provide it have an advantage in attracting
and retaining rms.
Training and education are currently the best hope
or workers to nd a well-paying, career-bound job,1
but without local rms that are hiring, workorce
development doesnt have much o a chance. With
rms increasingly willing and able to change locations
a strong local or state economic development program
is an essential component o programs designed to
assist workers.
A number o activities can directly serve both workers
and businesses. Customized training, like that done
by a local college, helps businesses design training
programs or open positions and helps workers access
training that will lead to a job. Sector initiatives can
ocus on the needs o businesses in a specic industry,
including labor shortages, and can help workers ad-
dress issues o skill development and career mobility.
E deele d we
deele eed e e le ee
bee d w eeedl well
ee. i s s eded.
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A REPORT FROM THE SEEDCO POLICY CENTER pAge 5
Two SySTemS ThAT clASh
There are distinct dierences between economic
development and workorce development, historically,
in their missions and in their goals. Understanding
how these two elds dont t together is as important
as seeing how they do i any true ED/WD program isto succeed.
Workorce development has historically sought to help
disadvantaged individuals better compete in the labor
market. Job-training programs prepare people or em-
ployment and job-matching programs act as a search
and reerral service; both are ultimately intended to
enhance an individuals economic and social prospects
through employment.
Federal policy has usually driven workorce develop-
ment. The rst incarnations o modern employment
programs trace their roots to the antipoverty programs
o the New Deal, created explicitly as a social benet
intended to relieve the suering o needy individuals.
Building on these programs, the ederal governments
antipoverty movement o the 1960s used the Manpow-
er Development and Training Act and other employ-
ment policies to serve the chronically unemployed.2
Economic development, on the other hand, has
traditionally ocused on attracting, supporting, and
growing businesses to bring jobs, tax dollars, leader-
ship, philanthropy, and all the other civic benets that
come with a thriving regional or local economy. Thenations vibrant post-World War II economy succeeded
with a hands-o approach to economic development
rom the ederal government. Typically driven by
individual states, economic development has oten
ocused on luring rms rom old industrial areas to
growing regions o the country with subsidized loans,
tax breaks, and even direct payments to companies
that might relocate.3
Since the 1980s, both economic and workorce
development have refected undamental shits in
the economy and policy. Technological advancesin the global marketplace intensied the pace o
innovationand increased the penalties or industries
and regions that ailed to keep up.4 In economic
development, states launched a vast array o entrepre-
neurial economic development programs, including
loan unds, small business assistance centers, lm
oces, oreign trade oces, business incubators, and
early versions o empowerment zones. In many states,
economic development agencies grew in importance
and their budgets and access to various pots o money
increased signicantly.
At the same time, unding or workorce development
programs dropped dramatically. Policy overhauls at the
ederal level severely limited the elds ability to design
fexible and responsive programming. Both Ronald
Reagan and Bill Clinton, aced with allegations o
mediocre outcomes rom existing training programs,
attempted to improve workorce development peror-
mance and accountability and to bring employers into
the picture with business-controlled oversight boards.
Under welare reorm in 1996 and the 1998 overhaul
o ederal workorce programs through the WorkorceInvestment Act, ederal policies mandated a strict
work rst orientation. States and localities were
expected to quickly place the disadvantaged in jobs;
there was little time or money available or longer-
term training or employment assistance.
The cASe oR linking economic
And woRkoRce developmenT
Many states and localities began to look or new,creative workorce programming more closely tied
to business concerns. Industry organizations such
as Public/Private Ventures, Jobs or the Future, and
Workorce Strategy Center have written about how
to assist employers as a means to improve the
economic prospects o workers. By engaging with
local businesses, many workorce agencies sought
to ensure that the programs they were designing
culminated in real-world jobs.
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WorkforcE EconomicDEvELopmEnt DEvELopmEnt
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A TALE OF TWO CITIES: LINKINg ECONOMIC DEVELOPMENT AND WORKFORCE DEVELOPMENTpAge 6
At the same time, hiring and training issues were
coming to the ore among those working to serve
business. Companies, especially desirable technology
and science-based rms, increasingly needed skilled,
educated workers. The economic boom o the mid-
1990s and the accompanying growth in demand or
skilled jobs made this trend undeniable. Governmentsat all levels realized they needed to develop skilled
labor to boost their competitive edge.5
States and cities began to explore new ways to link the
two elds. Today, nearly every state in the union has
made changes based on this new paradigm, and orga-nizations such as the National Governors Association
have advocated the linkage.6 Many states and munici-
palities have merged their employment and business
agencies, created new programs to train workers in
high-growth areas, and established planning commis-
sions to identiy and address industry workorce needs.
The cASe oR A meASURed
AppRoAch To linking economic
developmenT And woRkoRcedevelopmenT
Problems oten arise when linking economic develop-
ment and workorce development. The two systems
operate under dierent cultures, and oten strive or
dierent goals. Yet, the underlying issues are more
substantial than a culture clash, and arent likely to
be erased with just time and trainings. Throughout
our research, we did not nd a single example o a
completely integrated, ully-unctioning economic and
workorce development system. A closer look at regions
that have attempted to merge or align unctions
reveals that the two elds still act in many ways in
independent silos. Even more telling, both elds have
not changed all that much: most economic develop-
ment organizations are still about deal-making with
businesses, and workorce development is still primar-
ily ocused on placing people in any available job.
For example, Michigan and Minnesota are oten cited
as examples o states that have attempted to ully
integrate their economic development and workorce
development agencies. Their experiences suggest that
wholesale and top-down integration o the two areas
is not as easy as it seems.
In Michigan, two successive governors attempted to
address the states substantial economic woes by
merging the economic development and workorce
development agencies, only to have to separate them
again due to internal tensions and external pressures.
Despite the merging and unmerging, there were
modest successes, notably the creation o the Michigan
Regional Skills Alliance, which oers seed unding
to regional eorts to connect employers to workorce
development eorts. The state has also won three
WIRED grants rom the ederal DOL to encourage
planning to link economic development and
workorce development eorts at the regional level.
In Minnesota, Governor Tim Pawlenty merged the
states economic development and workorce devel-
opment agencies, in hopes o bringing the nimble
culture o the states economic development agency to
its workorce agency. Though the interaction is still at
an early stage, economic development and workorce
development proessionals say that the two systems
unction separately, with little integration.
Traditional economic development does not always
consider local workorce concerns. Economic develop-
ment agencies are charged with wooing businesses,
usually through benets such as tax breaks, changes to
zoning regulations, and new inrastructure. Economicdevelopers may even lure companies by helping to
bring in skilled workers rom outside the local labor
pool. Supporting and attracting businesses in these
ways may eventually create jobs or local workers, but
it does not do so directly. Similarly, while workorce
activities such as adult basic education and job-match-
ing or low-skilled workers may create a stronger labor
orce in the long run, these unctions do not address
businesses immediate needs.
Furthermore, businesses and their workers sometimes
nd themselves at odds. Businesses are driven to maxi-mize protability in part by keeping expenses, includ-
ing labor, low, while workers want to maximize their
compensation. Economic development advocates try to
help companies come, stay, and remain protable, while
workorce developers try to help workers make a good
living. Although some businesses take a high road
approach to their labor orce, oering higher wages
and investing in workers skills, they are the exception
rather than the norm.7 Oten, the goals o serving busi-
nesses and those o serving workers align imperectly.
oe, e ls se bsesses d
se se wes l eel.
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A REPORT FROM THE SEEDCO POLICY CENTER pAge 7
Combining economic and workorce development does
not ollow one clear strategy. In act, we ound a wide
variety o ways to approach the goal. In our research,
we encountered programs initiated by state governors,
local nonprots, oundations, and city departments.
We ound programs that viewed merging or aligning
economic and workorce programming as a primary
goal and others that did so only as a means to an end.
We saw programs that were open or a ew years and
some that have lasted decades.
Even among such a diverse set o economic and
workorce development programs, we saw remarkably
consistent actors that led to success or ailure. In some
instances, the programs architects clearly incorporated
these ideas into their planning. In many other cases,
the program ound the right combination more by
happenstance. As current programs operating around
the country are tweaked and new ones launched, we
suggest that paying attention to the ollowing actors
will increase the likelihood o an ED/WD program
surviving and fourishing.
STATeS Role
Stat t ts t r bst as
a surt, a at a r rs
rtust ra a a tats.
oveRview
All three states we put under the microscope sought to
bolster economic development through state-initiated
planning or regional workorce programming, using
a combination o incentives and mandates to push re-
gions to link the two together. These programs tended
to founder on the same rocks: what states do best is
provide unding and a policy structure or regional
and local activity. Economic development and work-
orce development goals only work together in on-the-
ground programming; state-mandated eorts rarely
have enorcement mechanisms and are thus unable to
push or deep, long-term change.
On the other hand, state government policies that
encourage ED/WD programs and supply unding and
direction, but leave the regional and local entities to
design and implement eective programs, have suc-ceeded in providing the resources and other supports
to allow promising ground-level initiatives to fourish.
SUcceSSeS
North Carolinas New and Expanding Industry Train-
ing (NEIT) program is the states largest customized
training program. NEIT provides training grants to
companies in growth industries or which training will
lead to new jobs. The program is implemented through
the community college system, ensuring that most o
the programs investment is retained within the statescolleges as increased capacity. Tri County Community
College in a remote corner o the state used NEIT to
revive its ormerly deunct machinist training pro-
gram, lled a demand or skilled workers rom existing
manuacturers, and ensured that the areas handul o
industrial companies could stay and remain competitive.
In Illinois, the states Critical Skills Shortage Initiative
(CSSI), created in 2003, unded the implementation
o Chicagos Regional Healthcare Initiative. The eort
had already completed an action plan by the time CSSI
unds were made available, but without additionaldollars it had remained largely unimplemented. The
CSSI unding allowed or the creation o 12 separate
healthcare training eorts under the regional initiative
aimed at improving the capacity and quality o the
area workorce.
Pennsylvanias Industry Partnership (IP) program
had supported nearly 80 initiatives across the state
by January 2009. For example, IP grants have allowed
Lancaster Countys ood manuacturers to oer their
LESSonS from thE fiELDleARning Rom oTheRS
Ater looking at more than 16 ED/WD programs at the state, regional, local, and
community levels in three states over two years, certain trends became apparent.This section captures what seems to work in successul collaborations between
workorce and economic development programs and what common problems
tend to undermine and even end programs.
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pAge 8 A TALE OF TWO CITIES: LINKINg ECONOMIC DEVELOPMENT AND WORKFORCE DEVELOPMENT
workers advanced training. The initiative brought
together rms rom eight dierent counties to discuss
common needs and exchange best practices. Through
this clustering, the IP unded trainings that cut across
the industry, bringing the cost to train an individual
employee down signicantly and strengthening the
industry, a cornerstone o the areas economy.
Programs that have fourished with encouragement
and support rom the state, have typically been in
smaller communities. While our sample size was not
large enough to truly weigh in on geographic di-
erences, our ndings suggest it may be easier or a
smaller market to take advantage o state resources.
Lancaster Countys ood manuacturing initiative or
the training o machinists in North Carolinas Western
Region may have been easier, or example, in areas
where there is a narrower range o activities competing
or attention and dollars.
chAllengeS
Pennsylvanias IP programs were created in 2005 as a
central part o the new gubernatorial administrations
strategy to develop a skilled workorce and attract
and retain business. The eort awards competitive
grants to workorce projects whose applications show
broad-based planning and participation o stakehold-
ers such as industry associations, workorce agencies,
and training providers. Importantly, the IP program
eschews mandated collaboration among agencies.While IP avors projects in high-growth and high-wage
industries, applicants dene the parameters o their
eorts and the geographic regions in which they oper-
ate. But because grant unding or ED/WD initiatives
is competitive, not all regions have been able to take
advantage o the unding.
North Carolinas state-level ED/WD initiative, on
the other hand, carved the state into seven regional
economic development partnerships. In 2003, the
legislature asked each region to conduct a strategic
planning process that involved representatives rom
economic development and workorce entities: higher
education institutions, chambers o commerce, and
more. The regions were asked to identiy limitations in
their economies, their labor orces, and their education
and training resourcesand to create a plan to bridge
those gaps. North Carolina did not oer the regions
additional unding to implement those plans,
and many o the local entities such as community
colleges, economic development agencies, and
municipal governments have yet to ollow the plan.
Illinois CSSI similarly divided the state into ten
regions, requiring each to engage community col-
leges, workorce agencies, and businesses in a plan-
ning process. The state made grant unding available
or sector initiatives, but total unding was relatively
small, and was made up o WIA discretionary dollars
diverted rom other workorce eorts. Furthermore,in areas where sector eorts arose primarily to take
advantage o the new CSSI unds, ew projects appear
to be sustainable.
Unding
n a at aa surt a a
t r bt tt a ut.
oveRviewIn blending workorce development with economic
development, the temptation is to simply reallocate
unds already dedicated to each eld into a merged
program. Yet building a new system requires more
than that, and our research has shown that extra
unding provides the support to overcome the
initial bumps o creating something truly new.
SUcceSSeS
North Carolinas Golden LEAF Foundation, created
with hal o the dollars rom the states settlement withcigarette manuacturers, is an example o the impact
that dedicated unds can have. The Foundation ocuses
its support on ED/WD projects, and has been integral
to the success o many o the states initiatives. For
example, the North Carolina Biotechnology Center is
a unique economic development organization created
to support the growth o the lie sciences industry be-
yond its existing concentration in the Raleigh-Durham
Research Triangle region. With oces spread through-
out community colleges and universities, the eort
has supported the development o niche biotechnol-
ogy clusters and the creation o specialized workorce
training programs across the state.
Pennsylvanias IP programs allotment o $20 million
a year, part o the states $100 million Job Ready PA
initiative, goes to support cluster programs throughout
the state. A crucial use o those unds has been the
dedication o $5 million a year or intensive economic
research and long-term planning to ensure that invest-
ments go toward high-wage and high-growth industries.
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A REPORT FROM THE SEEDCO POLICY CENTER pAge 9
chAllengeS
Meanwhile, in Illinois, the state has unded its CSSI
program solely with diverted WIA unds, leaving it
with a limited impact and ew creative local initiatives
in its portolio. At its highest unding level, in 2005,
there was about $9 million available to the states 10
workorce areas. In an attempt to push the regions to
directly und their locally-grown programs, the state
reduced that amount by hal in the second year and
dropped it to zero in the third.
BUSineSS involvemenT
T bussss b sr ust a
a ra r rr asssta.
oveRview
Unless companies already need help with their work-
orce, and see it as something that makes them more
competitive or protable, economic development
representatives are unlikely to prioritize workorce de-
velopment issues. Successul ED/WD programs targeted
industries that listed workorce issues as a primary
issue or their continued operations. Importantly,
employers can be valuable resources or guidance, but
they rarely have the time or inclination to tackle the
minutiae o operational challenges.
SUcceSSeS
Healthcare programs were the number one example o
an ED/WD eort that ound traction in our research;
every region we looked at had an ED/WD healthcare
initiative. For example, Lancaster, PAs healthcare IP
program had little trouble recruiting area healthcare
employers. Many operated long-term care acilities
with severe stang shortages, and improved recruit-
ment and management training were among their
key concerns. The Pathways to Successul Health-
care Careers training program in Peoria, IL, was theonly successul ED/WD initiative to emerge rom the
regions extensive TalentForce 21 planning eorts.
Indeed, both Chicagos regional healthcare initiative
and Philadelphias 1199C training und preceded any
encouragement rom government. In Philadelphia,
area employers agreed to pool their resources and con-
tribute a percentage o their payroll expenses toward
training and education programs or their incumbent
workers; in Chicago, area employers gathered to create
a plan or attracting and training workers even beore
the state decided to support their programs with CSSI
unds.
Manuacturing also has signicant workorce needs
due largely to computerization and other technological
improvements that make the work more complex as
well as the assumption among potential workers that
it is a dying sector. Chicago has ocused on the areas
industrial sector, establishing ManuacturingWorks, a
One-Stop service center designed to serve manuactur-
ing employers. The eort has moved beyond helping
rms with hiring, and now helps businesses improve
their practices and support long-term skill develop-
ment or workers. A collaboration among economic
development, workorce development, and community
colleges in North Carolinas Piedmont Triad helped to
enhance the regions training capacity when it cre-
ated a customized training curriculum or Dells newcomputer manuacturing plant. The college went on to
develop an advanced manuacturing training program
to serve the areas broad range o high-tech industrial
employers in need o a skilled manuacturing workorce.
Successul initiatives oten institutionalize the process
o business oversight and eedback, recognizing that
programs designed rom aar by academics and work-
orce agencies may not be a good enough match to
hire graduates. Lancaster, Pennsylvanias ood manu-
acturing initiative brought business representatives
together relatively inrequently, but just enough, to
share high-level knowledge and air concerns. The work
o the sector coordinator was directly inormed by thatinormation, which led to the development and imple-
mentation o well-designed and responsive trainings.
A business advisory council helped pave the way or a
new biotechnology degree at North Carolinas Forsyth
Tech. The council guided the programs inception and
helped the college understand the nature and scope
o business workorce challenges, but implementa-
tion was let to the college. Forsyth Tech cultivated its
own internal knowledge o industry needs by hiring
hele s wee e be e
ele ED/WD e d
ese; ee e we led d
ED/WD ele e.
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pAge 10 A TALE OF TWO CITIES: LINKINg ECONOMIC DEVELOPMENT AND WORKFORCE DEVELOPMENT
a department head and instructors directly rom local
rms; part o their job was to work through the daily
details o building an eective program
chAllengeS
Eorts to serve industries with less urgent workorceneeds have been ar less successul. When the Philadel-
phia Workorce Investment Board created an initiative
to serve the nancial services sector, the banks had
expressed a strong interest in recruiting and training
a more diverse workorce to better serve their diverse
clientele. Bank ocials had stated they would sup-
port the program by giving incumbent sta time o
to attend trainings, paying a portion o the training
costs, and hiring new program graduates. But because
the service was an enhancement, not a necessity, they
reneged on their commitment, choosing in the end
to not contribute to the training costs and hiring veryew o the programs graduates.
leAdeRShip
prra ars tat s str, sstt,
a tt as a r.
oveRview
Every good program can use an eective leader, o
course. But because economic development and work-
orce development are dierent systems with dierent
goals, successul programs were oten helped tremen-dously by an individual who had a true ED/WD vision,
the savvy to nd a way to make it happen, and the
dedication to keep going when problems arose. Most
important o all, successul leaders are able to speak
the language o business while maintaining a commit-
ment to workorce development goals.
SUcceSSeS
In Pennsylvania, Sandi Vito, Governor Rendells top
workorce administrator, brought energy and vision to
her position and quickly achieved signicant agency
reorms. An administrator with little background in
workorce, Vito drove the states bold and innovative
strategy that both allocated signicant new unds
toward ED/WD initiatives and spurred local areas to
develop creative initiatives to draw down those unds.
Bob Bowmans leadership o the Collegiate Consortium
in Philadelphia brought together college presidents
usually territorial and deensive o their own campus-
es resourcesrom across state lines in New Jersey and
Delaware to create a unique collaboration that built
new, industry-responsive educational programming.
Bowman helped to transorm a limited eort to retrain
shipyard workers displaced by the closing o a naval
yard into an ongoing collaboration among higher
education institutions to respond to industry
education and training needs.
In Chicago, Mayor Richard Daleys steadast support
o ED/WD ostered an environment in which agency
heads and other stakeholders were encouraged to
design and implement creative new ideas. With the
cultivation o a skilled workorce a cornerstone o the
mayors economic agenda, Daleys workorce agency
created ManuacturingWorks, a unique eort to utilize
the inrastructure o One-Stop workorce centers to
support the citys industrial sector. The mayor hasmore recently pushed city workorce agencies and
schools, under the guidance o a business advisory
council, to work together to holistically address the
needs o our targeted economic sectors.
ShARed incenTiveS
esur tat t stars a
s t atat as
ar tru st a rras suss.
oveRview
Partnering agencies missions and goals must closely
track the mission and goals o an ED/WD initiative.
Without a natural institutional imperative to see a new
program succeed, organizations are likely to lose interes
in programs or divert resources to core activities. Given
organizations need to protect their sel-interests, shared
perormance measurements and payos or workers
W l sl ee
see ew seed, zs
e lel lse ees s
de eses e es.
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A REPORT FROM THE SEEDCO POLICY CENTER pAge 11
served, job placement gures, businesses helped, and
jobs created can help to push them to meet the needs o
both the workers and the businesses. And i workorce
agencies, economic development partners, and commu-
nity colleges are given the institutional responsibility to
work in concert, they will be ar more likely to do so.
SUcceSSeS
The various stakeholders participating in Chicagos
Regional Healthcare Initiative may have had an insti-
tutional responsibility to respond to the communitys
needs, but those most actively involved also stood to
prot rom the venture. Businesses were desperate or
skilled workers, and convened the eort themselves
in order to nd a solution to their constant challenges
nding qualied candidates. Education providers
would see a nancial payo rom the increased enroll-
ment o students in the new programs.
Similarly, the entities behind the construction o
downtown Winston-Salems new research park needed
to innovate or risk suering nancially in the uture.
Wake Forest University sought to grow the research
arm o its medical center as a strategy to boost the
regions growth and prosperity because, as a medical
provider, its long-term nancial viability depends on a
robust population that is able to purchase and pay or
medical services.
chAllengeS
In many cases without institutionalized incentives,
local workorce boards or planning entities had
diculty mobilizing stakeholders to execute the
regions plan or ED/WD activities. Many o the
entities in North Carolinas Piedmont Triad only
implemented the pieces o the regions strategic plan
that were most relevant and useul to their existing
mission and operations. The initial plan called or a
total o 120 action steps to be taken in seven target
industry sectors, but the only projects that moved were
the ones that participating entities knew would benetthemselves. Guilord Technical Community College,
or example, signed on to the Transportation and
Logistics cluster and built an aviation centerbut it
had already been planning such a project, based on
its existing relationship with area aviation employers.
incUBATion
d t ju a rra t ast;
sussu rras ta a t atur.
oveRview
Because they do require changes in culture, mission
and programming, ED/WD programs should not be ex-
pected to blossom immediately. The programs with the
most impressive results in our research are either long-
standing initiatives or are operating in an environment
that values ED/WD programming. Provided reasonable
benchmarks are being met, policymakers should be
willing to invest in creating a true ED/WD culture.
SUcceSSeS
Chicagos ManuacturingWorks One-Stop center was
built on longstanding and wide-ranging eorts to
revive and restore the citys industrial sector. A wide
range o actors had already prioritized the reinvigora-
tion o the citys industrial economy, including the
new Chicago Manuacturing Renaissance Council and
the mayor himsel, who charged the citys workorce
development agency and others with supporting the
eort. The workorce agency set out to put those ideas
into practice, creating a center that serves the indus-
trys hiring needs as well as pushes or improved busi-
ness practices and long-term skill development.
North Carolina has a long and successul tradition ousing workorce programs to support economic develop-
ment, making it perhaps the strongest case or long-
range ED/WD planning. The states ED/WD model works
well in large part because o the relationships built over
time and longstanding policies with which everyone is
amiliar. Forsyth Techs new lie sciences degree program
is a prime example o this, beneting rom a history and
culture in the states community college system that
emphasizes industry relevance and worker preparedness.
The college, already closely connected to the business
community because o longstanding expectations or
individual campuses set by the system oce, knew that
the small but growing cluster o biopharmaceutical com-
panies in the area was struggling to nd skilled labora-
tory technicians. It secured unding to develop the new
academic program rom the states Golden LEAF Founda-
tion, a unding stream dedicated to supporting long-
range economic development projects. And it tapped
a local entrepreneur who was a member o its business
advisory council to act as the new head o the program,
ensuring its relevance and responsiveness to business.
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pAge 12 A TALE OF TWO CITIES: LINKINg ECONOMIC DEVELOPMENT AND WORKFORCE DEVELOPMENT
oR The edeRAl goveRnmenT
eura a a ra rra tat s
a rr t tru rat
rras su as dols wiRed a cut c-
rat tats, t str-us tats
u t Ara Rr a Rstt
At (ARRA), a t Strt et
custrs t oraz Ra Suss (SecToRS) Atrt tru crss. Ts rts su
continue and be expanded, and the federal government
a bt r ua r strutur ts ta-
ts as as r u.
esur t rastrutur r a ua
ata rt s a b st rras
a ssts tat bt bussss a rrs a,
sa r uat.
Balance exibility and accountability in the funding
stras tat surt busss a rr t.A art rstrts ra u stras
urrt a t ut r stats a rs
t us rat rras tat
t a rr t; as
ts uts u a a t ura
at a t rra.
oR STATe goveRnmenTS
us surs u a
us rs t rrtz t st rs
rjts, a a a rrs a ra a-
. Stats a ara bu t aa t tr
rssbts t st t sta r a a ra
a rr t rra
t at u a rra us. Asr a r stats ts at, t su
t sss tr r rs.
oR locAl goveRnmenTS
B aru tat ed/wd stts ar s s
a r rjts tat ar a tru at r bt
bussss a rrs, t a s st. i
busss t strat s a t
rjts, a rrut artrs t a st trst
t rjts suss. la ars su ta
tr rssbt t bu a str a sustaab
r srus; t r tut t ars
a asssta t ra a stat rts,
t s ats a rs tat a t r r
sstt bussss a rrs.
putting LESSonS into actioni t ast ts, t r strutur ur ata as b sa t ts r.
w au, t urrt rss rsts rs t t rtut t t t rt ts t
t rtut t st bussss a rrs a a surt -tr strat
rt. T rats ar ta r t sss ar tru urextensive research on the topic.
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A REPORT FROM THE SEEDCO POLICY CENTER pAge 13
Pennsylvania nonetheless reveals just how hard it is
to truly link workorce and economic development.
The state has taken incredible strides orward, but at
considerable time and eort, and not all o the states
regions have beneted equally. Philadelphia created
a number o innovative programs led by a set o
dynamic workorce entrepreneurs. But without a
citywide commitment to the eld, many have altered.The semi-rural region o Lancaster, on the other hand,
has most eectively made the connection by main-
taining a clear ocus, linking with regional partners,
and receiving an ongoing fow o state and ederal
dollars to support the work.
goveRnoRS Ridge & SchweikeR
Pennsylvania has historically ocused on economic
development, but workorce development barely
registered. That all changed with the election o Tom
Ridge in 1994. In a 1999 strategy document, A UniedPlan or Workorce Investment, the Ridge administra-
tion called or increased eciency by coordinating
the ve major workorce agencies through a council o
the agency chies. In addition, the plan recommended
links or economic development to be better connected
to the states business growth programs.
The plan was considered bold and directed. In Penn-
sylvania, economic development and workorce devel-
opment are synonymous, claimed a 2000 report rom
the National Governors Association. But on the ground,
little o Ridges plan came to ruition. There were virtu-
ally no linkages established between economic devel-
opment and workorce development, and a scathing
assessment o the strategic plan by the states Auditor
General in 2004 exposed a breakdown in coordination,
concluding that workorce and economic developmentwere no closer despite the reorms stated goals.
What happened? Certainly one contributing actor was
Ridges early exit rom the state in 2001 to become the
Secretary o Homeland Security in the Bush adminis-
tration. But many observers believed the entrenched
bureaucracies at the state level resisted coordination.
You cannot just will these olks to work together,
noted one state ocial.
At the local level, agencies were now aced with a new
set o state policies. But the localities tended to wait it
out rather than shit operations. The Ridge plan came
with no additional unding to support change and no
way to penalize agencies that didnt comply. As one
state ocial noted, Its ne and good to say you want
more coordination, but you have to make it happen.
These agencies do not naturally move in that direc-
tion.
Ridges replacement, Mark Schweiker, was in oce
or two years. He maintained a ocus on workorce,
pEnnSyLvania: StatE rEviEWOn the surace, Pennsylvania would seem to possess signicant
economic development and workorce development connections.
Ater suering severe declines in its traditional industries
o steel, coal, and railroads, the state aggressively pursued
economic development and more recently workorce develop-
ment. It has become a recognized innovator in both areas, and the last three
governors made alignment o employment programs a top priority. Additionally,
Pennsylvania has attracted a substantial share o private oundation dollars locally
and nationally to support these eorts throughout the state.
pEnnSyLvania
philAdelphiA
lAncASTeR
Appendix: cASe STUdieS
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pAge 14 A TALE OF TWO CITIES: LINKINg ECONOMIC DEVELOPMENT AND WORKFORCE DEVELOPMENT
including the creation o the Critical Job Training
Grants, a sector-based training und that was jointly
administered by the labor, economic development,
and welare agencies.
The cURRenT AdminiSTRATion
First elected in 2002, Pennsylvanias current governor,
Ed Rendell, is the ormer mayor o Philadelphia. He
was described in a recent Pew report as possessing,
guile, optimism, and erocious energy, and was
reerred to as, Americas mayor long beore New
Yorks Rudolph Giuliani received that appellation.
In many respects, Rendell has achieved an incredible
amount o reorm around workorce development in a
short time, driven in large part by a team headed and
assembled by Sandi Vito, his head o workorce devel-
opment at the state Department o Labor and Industry.
Vito was charged with responsibility to make all work-
orce programs work eectively together. We moved
so ast because Sandi is so good and eective. She is
very close to the governor, a real intellectual, and most
importantly she is very good at operationalizing action
steps, one state observer says.
As in the Ridge years, Vitos reorm plan emphasized
increased coordination between economic develop-
ment and workorce oces. The core eort encouraged
more workorce programming around ten high-priori-
ty sectors, including energy, lie sciences, and commu-
nications services. But Vitos implementation strategy
was dierent in two undamental ways. First, signi-
cant new unds were put towards the eort under a
$100 million campaign called Job Ready Pennsylvania.
Second, instead o mandating collaboration between
agencies, the administration chose partners where it
made sense.
The state has allocated $20 million a year since 2006
or the new Industry Partnership program, which sup-
ports sectoral programs and training. Fully $5 million
o the annual investment is spent on developing a deep
understanding o industry to ensure that the mostpromising sectors are targeted with the smartest invest-
ments. And rather than parsing out unding by legisla-
tive district, the program allows promising initiatives
rom all over the state to apply or grants. Local work-
orce groups submit an initial strategy and are selected
based on evidence o real industry need in high-growth
and high-wage sectors, and then asked to continuously
submit progress reports. By 2008, 89 new partnerships
were ormed with more than 6,100 businesses involved.
More than 53,000 workers have been trained, with an
average gain in wages o 13 percent, and businesses
have reported an 85 percent retention rate.
Pennsylvania possesses one o the weakest community
college systems in the nation. There are only 14 com-
munity colleges in a state o 12 million residents, and
there is no governance structure. Vito crated a series
o programs around high-priority sectors, includ-
ing $44 million in economic development stipends
or community colleges that taught courses in high-
demand sectors. This program now reaches more than
38,000 students enrolled in 734 community college
programs.
Vito was initially more hands o with the economic
development agency, choosing instead to lay the
groundwork or uture collaboration by rst enhancing
the strength o workorce agency internally. That
approach has paid o, and now in concrete ways
theyre building some links, tangible programs where
connected, says one o Vitos top administrators.
The Workorce and Economic Development Network
o Pennsylvania, or WEDnetPA, gives existing or
incoming businesses a point o contact within the
states education and training institutions through
which to apply or and connect to customized training
The program is closely coordinated with the states
workorce development activities and Industry
Partnership program.
The Rendell administrations eorts are having agenuine impact, but not consistently across the state.
Many localities do not even pull down the unds or
use them in ways that are not strategically aligned
with broader economic development and workorce
development goals. But or the areas that are primed
to make the workorce and economic development
connection, the unds and thinking behind them are
critical to moving orward.
philAdelphiA
Philadelphias economic transition has been dramatic.
With the exception o pharmaceutical production, the
citys manuacturing has suered dramatic cutbacks.
Meanwhile, nancial services, transportation, utilities,
insurance, real estate, healthcare, and business support
services have risen to prominence.
The city is also home to some o the countrys most
innovative workorce programs. Philadelphias Tran-
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A REPORT FROM THE SEEDCO POLICY CENTER pAge 15
sitional Work Corporation is the countrys largest
transitional jobs program or public assistance clients.
The citys 1199C training und is the largest union-
sponsored training initiative ocused on both union
members and local residents. Arbor Inc., the largest
proprietary workorce organization in North America,
is headquartered there. And in the public sector,Philadelphias workorce agency uses the majority o
its Workorce Investment Act dollars or customized
business trainingunheard o in any other major
cityand leading local universities have partnered
with the city around a strategy to retain a high-skilled
workorce.
The city government itsel, however, had not exhibited
a strong or consistent commitment to either economic
development or workorce development until recently.
Its economic development approach was primarily
deal-oriented, ocusing on hotel and stadium construc-tion, and City Hall had not been motivated to produce
a workorce agenda. The vacuum around workorce
and economic development policy at the municipal
level also meant that the entrepreneurs behind each
successul workorce initiative had rarely partnered
or linked to a broader citywide agenda.
More recently, a number o Philadelphias ED/WD
initiatives have grown and matured to take on a
broader region-wide and strategic ocus. In addition,
the mayor Michael Nutter has committed to workorce
development as one his top three priorities, including
pursuing greater partnership and collaboration among
Philadelphias ormerly isolated agencies and programs.
philAdelphiA woRkoRce
developmenT coRpoRATion
Innovative customized training program
WIA dollars available directly to employers
In a major break rom other large cities, Philadelphias
workorce agency, the Philadelphia Workorce Develop-
ment Corporation (PWDC), allocated 75 percent o itsederally unded workorce dollars or customized busi-
ness trainingsome o which went directly to employ-
ers. Use o ederal Workorce Investment Act dollars
or such purposes is virtually unheard o; only a small
portion o local regionsand no other major cities
have done so on any level.
More than 3,000 workers were trained annually be-
tween 2003 and 2006 through the program. About 30
businesses, ranging rom large corporations to small
businesses to public authorities, received services, and
training programs ranged rom large trainings or new
hires o a TJ Maxx retail warehouse to training o our
new exterminators or Steves Bug O. About hal o
the trainings were conducted in-house by the employ-
er, and the rest delivered by a mix o local nonprots,colleges, and private training providers.
To help ensure the unds went or true workorce ben-
et, rather than subsidizing costs the business would
have paid or anyway, PWDC demanded that the busi-
ness contribute to the training. Unlike most customized
training which is typically oriented toward those al-
ready on the job, this was dedicated solely to new posi-
tions. The program allowed PWDC to directly place its
typical clientsomeone transitioning o o welare or
recently laid o rom workin a job. One ocial notes,
Look, I am a social worker, but we did this because itwas born o the rustration o not nding people work.
This puts someone right into a job. It works.
Despite the programs popularity, it had no real link to
other citywide eorts or vision o workorce or eco-
nomic development. PWDC is a quasi-public agency
with a history o being isolated rom the city. Founded
in the 1980s by its executive director to be distanced
rom the politics o the city, the agency can hire
people aster than traditional government agencies and
pay them closer to market value, and it has the ability
to design and implement new initiatives with little
outside intererence. But its status has also given it a
reputation or secrecy, operating its job training unds
without much public oversight, and it is not well con-
nected to other agencies.
More recently, however, the program has enjoyed
stronger connections. Peter Longstreth, the Chairman
o PWDC or the last two years, is also the head o the
citys economic development agency, and there is a
reinvigorated ocus on collaboration and partnership.
1199c TRAining Und
Large-scale, long-standing training program
r atar rrs
Support from employers and union
Both incumbent and new workers are served
The 1199C Training Fund is one o the most com-
prehensive and long-standing sector initiatives in
the country. The und trains nearly 20,000 union
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pAge 16 A TALE OF TWO CITIES: LINKINg ECONOMIC DEVELOPMENT AND WORKFORCE DEVELOPMENT
and non-union workers every year in healthcare oc-
cupations, including nearly 20 percent o the locals
membership. 1199Cs work in healthcare has become
a national model, and its success is rooted in a single-
minded ocus on the industry, consistent leadership,
and access to an ongoing source o unds that employ-
ers are required to provide.
The initiative was an outgrowth o a labor-manage-
ment negotiation in 1974. Then, employers had a
shortage o trained mid-level workers and workers had
diculty accessing traditional education and training
providers. The trust is unded in part by a set-aside
o 1.5 percent o gross payroll rom the 55 healthcare
employers spanning the Philadelphia and southern
New Jersey region, managed by a board that is evenly
split between the 1199C local o the National Union o
Hospital and Health Care Employees and participating
healthcare and human service employers.
Such a large pool is rare, but what makes it unique is
that it also includes outside dollars. At the inception
o the und, its creators included a clear goal to serve
a constituency beyond the unions membership. So
oundation dollars and millions in government con-
tracts have been procured to serve local residents and
prepare them or jobs in healthcare. The und has been
a major beneciary o the states sectoral unding. It
has received three separate Industry Partnership grants
and recently was awarded a new contract to develop a
career pathway or direct care workers.
The program can customize its oerings to meet in-
dustry demands as well as worker needs. Many work-
ers need remediation to improve their basic educa-
tion beore they can enroll in college-level courses,
or example, so the training und has established a
customized bridge program. 1199C also works with
employers to develop industry-recognized intermediate
career steps or those on the road to, but not yet ready
or, ormal training. All programs support workers with
career coaching and supportive services.
The model o Heres your course, sign up, and go,doesnt work or our students, says 1199C Executive
Director Cheryl Feldman. They need supports: an
inormation and resource broker and also a mentor.
But you also need to hold students accountable to their
responsibilities to the program. Its not an easy role.
That balance is denitely an art.
philAdelphiA woRkoRce
inveSTmenT BoARd
Sectoral programs in several different industries
Entrepreneurial approach to identifying projects,
with mixed results
Promising work in life sciences and other industries
The Philadelphia Workorce Investment Board (PWIB)
became active around sectoral programming beore
the state started unding such eorts. It has taken a
uniquely entrepreneurial and experimental approach
to its sectoral work, pursuing pilot projects in a wide
range o industries. It then uses its initiatives to deepen
its own understanding o the work and integrates those
lessons into subsequent projects.
The WIB chose projects as they arose, pursuing thosethat made sense strategically. But it approached each
industry project dierently. In some cases, it dedicated
only small amounts o unding and took on relatively
small goals; in others, it launched ambitious and in-
depth initiatives in industries with greater need and
more promise.
For example, an early project targeted the restaurant
industry, a sector with a number o employers who
expressed a real need or assistance nding and keep-
ing good workers. The WIB saw an opportunity to
place workers with limited education in an industrythat, although low-paying, allows employees to pursue
continuing education outside o the workplace. Local
One-Stop career centers screened candidates, and new
hires were given training materials and a short orien-
tation program. In the end, the program achieved its
modest goals: It placed 100 people in jobs, and the new
hires job retention proved to be higher than those
hired o the street.
The WIB did not apply or Industry Partnership und-
ing or the project rom the state because it knew that
restaurant jobs would not meet the states denition
o a high-growth sector. But, as Sallie Glickman, CEO
o the PWIB, explained, This is a certain kind o
sector work. Industry Partnerships are a much more
mature and robust approach. This doesnt meet those
requirements, but that doesnt make it any less valid.
Although the WIB believed that the jobs could be ideal
rst steps or those with employment obstacles, the
local career centers expressed concern that they were
placing clients in dead-end jobs. The restaurant eld
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A REPORT FROM THE SEEDCO POLICY CENTER pAge 19
workorce ocials in hopes o making training grants
to entire industry clusters. We tried selling the idea to
the economic development ocials, but they werent
interested. But the workorce development ocials in
the new administration led by Deputy Secretary Sandi
Vito were looking or a bold idea, he says.
Sheelys approach was distinct rom most public sector
initiatives. Rather than kick o the eort with a major
summit, the pragmatic approach was developed and
implemented quietly. While the WIB distributed the
money and provided a ramework or operations, busi-
nesses actually decided on the use o the unds with
the help o project managers, oten hired directly rom
the industry themselves, who typically saw their role
as being responsive to the sector, not just to the WIB.
Since most o the sectors were not tied to traditional
county or WIB boundaries, most o the initiatives work
in conjunction with the surrounding nine counties.And the convening bodies and boards were 100 per-
cent populated by employers.
With a structure in place, work began simultaneously
in healthcare, agriculture, ood processing, commu-
nications, construction, biotechnology, automotive
services, and metals. Sector priorities are fexible, creat-
ing dierent sets o deliverables. For example, health-
care initiated a broad advertising campaign to improve
recruitment in the perennially under-staed eld and
established a core set o supervisory trainings. Metals
and metal abricating initially ocused on management
training and has increasingly ocused on traditional
hands-on training o welding and machining.
Food manuacturing is a good case study. Launched
by three WIBs representing eight dierent counties in
2004, the Consortium looks or commonalities among
very dierent companies and builds trainings that cut
across their dierent needs, including management
training, product labeling, and industrial mainte-
nance. To be successul and sel-sustaining, theres
got to be tangible benets, otherwise theres no reason
to spend time and energy to attend meetings. And a
[big attraction] is the cost o training, which has gone
down rom $10,000 to $3,000 per employee by work-
ing [in partnership], says Glenn Wol, technical train-
ing manager at Cadbury Schweppes near Gettysburg.
Primarily oriented to incumbent worker training, these
sector activities have also connected to overall eco-
nomic development eorts. The WIB is oten consulted
on economic planning and any major business retention
or attraction deals, or example, and workorce issues
became a cornerstone o the countys major economic
development strategic planning process in 2004.
Almost all o the larger sectoral initiatives have been
regional in nature, due in part to natural advantages
or collaboration: The regions are similar in demo-
graphics, economic potential, population density,
inrastructure, and transportation, and local industries
are relatively evenly dispersed geographically. It also
helps that the various workorce leaders in each area
ound they could easily work together: No WIB
directors were political appointees, and each was
the ounding director o a new structure ocused
on creating new programs.
Perhaps most important was the availability o new
state unds or regional collaboration around cluster
eorts. The money surely helped bring us together,
says Bob Garraty, ormer executive director o the
South Central Workorce Investment Board and now
director o the Pennsylvania Workorce Investment
Board. One would like to think we saw the impor-
tance o regional cooperation, and thats a part o it,
but we knew that we had a better chance o gaining
state dollars i we worked together, so we did.
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pAge 20 A TALE OF TWO CITIES: LINKINg ECONOMIC DEVELOPMENT AND WORKFORCE DEVELOPMENT
The election o the states only our-term governor,
Jim Hunt, is emblematic o North Carolinas approach
to economic development. Governor Hunt, who served
rom 1977 to 1985 and rom 1993 to 2001, remains
one o the nations strongest proponents o education
reorm, with a tenure marked by a wide range o
initiatives that linked education, workorce prepara-
tion, and economic development.
commUniTy collegeS
Founded in 1957, North Carolinas community col-
lege system was the rst in the country. The systemincludes 58 collegesevery state resident has a com-
munity college located within 30 miles o his or her
homeand the schools serve about 800,000 students
a year.
Designed rom the outset to support the states long-
term economic development goals, the community
colleges were envisioned as a tool in North Caro-
linas transition rom an agricultural to an industrial
economy. The community college system was initially
pairedand later mergedwith a system o industrial
education centers. This history has ensured that thecommunity colleges remain tied to workorce prepara-
tion, economic development, and the business com-
munity. To ensure that individual campuses remain
closely aligned with business needs, each college has
dedicated liaisons to local businesses, oers incentives
to encourage aculty to spend time in industry to re-
resh their skills, and requires that all degree programs
are overseen by business advisory councils.
ReSeARch pARkS
Around the time North Carolina launched its com-
munity college system, the state also created Research
Triangle Park, a public-private research park in the
Raleigh-Durham area. Designed to be an economic
development engine or the state, RTP oered re-
search companies access to physical inrastructure
and resources rom the regions three top-tier research
universities and eight other colleges and universities.
The park now has more than 20 million square eet
o research space or 157 companies and more than
39,000 ull-time employees.
Based on RTPs success in attracting and nurturing
both the companies and their workers, North Caro-
lina has begun to replicate the model. The Centennial
Campus at North Carolina State University has os-
tered additional collaborations between business and
higher education, and most campuses o the University
have or are giving consideration to development o
their own research parks.
TRAining UndS
North Carolina has created dedicated customized
training unds to oer companies access to training or
new or existing workers. Administered under a hand-
ul o dierent programs, these unds make it possible
or companies to share the cost o training workers,
and most o its grants are delivered through the com-
munity colleges.
north caroLina: StatE rEviEWNorth Carolina has, perhaps more than any other state in
the country, taken a long-range and strategic approach to
its economic transition. A series o deliberate investments
in workorce development over the last hal-century werespurred rst by the rapid decline o the states agricultural
economy and, later, the more recent breakdown o its industrial base in the urniture,
tobacco, and textile industries. The result is that North Carolina has strong and capable
worker education and training systems that work hand-in-hand with economic develop-
ment toward the goal o boosting the states competitiveness in attracting and growing
business. However, in North Carolina, economic development continues to be dichoto-
mous. Even as the state has supported education and training, it has continued a strong
tradition o costly expenditures on business recruitmentwith diminishing returns.
north caroLina
piedmonTTRiAd Region
weSTeRnRegion
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A REPORT FROM THE SEEDCO POLICY CENTER pAge 21
The New and Expanding Industry Training (NEIT)
program is the states largest pool o business-oriented
training dollars, and oers grants to companies on the
condition that training must support the creation o
at least 12 new jobs. The program has grown steadily
since its creation, spending close to $10 million in
2006-2007, unding a total o 208 projects that trainednearly 20,000 workers. Another program, Focused In-
dustrial Training (FIT), oers nearly $6 million to tra-
ditional manuacturing industries in need o improved
equipment and training.
North Carolina also created the Golden LEAF Founda-
tion as a continual source o unding or economic
development and workorce preparedness projects.
Setting aside hal o the dollars received rom the 1998
legal settlement with cigarette manuacturers, North
Carolina and Virginia were the only two states to have
dedicated ully 50 percent o its settlement dollars totraining and workorce development. The oundation
ocuses on projects with long-term economic impact,
preerably in counties ormerly dependent on tobacco.
Many o its grants go to workorce preparedness such
as university and community college-based training
centers in engineering, construction, machining, and
allied health. For example, the oundation supported
the creation o the Biomanuacturing and Training
Center, housed within North Carolina States Millen-
nial Campus; the Biomanuacturing Research Institute
and Technology Enterprise housed at North Carolina
Central; and the aliated Bionetwork centers housedat six community colleges statewide.
RegionAl pRogRAmming
In the early 1990s, three o the states regions, the Re-
search Triangle, Piedmont Triad and Charlotte, created
their own regional economic development organiza-
tions. In 1994 the North Carolina General Assembly
created our additional regional economic develop-
ment organizations in the predominately rural areas
o the state, creating a statewide regional economic
development system through which each o the states
100 counties became aliated with one o the seven
regions. In 2003, based on pioneering work done by
the Research Triangle Regional Partnership, the North
Carolina General Assembly gave each o the regions
$250,000 to develop their own ve-year economic
development vision plans. Most o the regions plans
included strategies and recommendations intended
to better coordinate and align the agencies and
organizations carrying out both economic develop-
ment and workorce development programming.
The partnerships have successully gathered the right
stakeholdersrepresentatives rom the local economic
development entities, workorce boards, community
colleges, universities, school systems, and more
around the table to plan and strategize. However,
the regional organizations have struggled to move
the plans rom concept to reality, especially in thoseregions brought together due to the legislative man-
date. Basically what I expect to get out o it is some
action steps that make sense or what the partnerships
are talking about doing. But there are way too many
ideas to support all o the clusters, some are localized,
some are not even clusters but a wish list, says Chris
Beacham, the ormer assistant secretary o policy,
research, and strategic planning at the North Carolina
Department o Commerce.
economic developmenT incenTiveSNot every economic development project in North
Carolina aims to blend with workorce development.
Deal-making that originates rom the state Depart-
ment o Commerce and the local economic develop-
ment entities is still very much rooted in the practice
o bualo hunting. In 1996, North Carolina passed
the William S. Lee Act to provide tax incentives that
allowed the state to compete with other states eco-
nomic development activities. By the 2006-2007 scal
year, direct incentives in North Carolina totaled $1.3
billion, or 95 percent o the states economic develop-
ment spending. In comparison, in 2007-2008, the state
assembly appropriated $12.7 million to the community
colleges or customized training and business assis-
tance and $14.4 million to the University o North
Carolina or their economic development and small
business support services.
William Schweke, vice president o learning and inno-
vation at the Corporation or Enterprise Development,
an economic development think tank, explained that
North Carolinas progression toward big economic de-
velopment incentives was driven in part by increased
economic competition: Twelve to 16 years ago, NorthCarolina was not a big incentive state. Initially, [then-
Secretary o Commerce] Rick Carlisle came up with
ways to do it that were very good, transparent. But
now you have exponential competition or ootloose
private investment projects and its very hard to stop
that. In some ways its never been worse in terms o
incentive competition.
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pAge 22 A TALE OF TWO CITIES: LINKINg ECONOMIC DEVELOPMENT AND WORKFORCE DEVELOPMENT
The piedmonT TRiAd Region
The Piedmont Triad, with its three major cities o Win-
ston-Salem, Greensboro and High Point, was built on
the tobacco, textile, and urniture industries. Formerly
home to the headquarters o some o the countys larg-
est companies, including R.J. Reynolds, Hanes, and theThomasville and Lexington urniture companies, the
region began to suer severe job losses when manuac-
turing jobs began going overseas in the 1980s.
The Triad region was quicker than most to see the writ-
ing on the wall. Blessed with state inrastructure and
a civically oriented business community still wealthy
enough to invest in the regions uture, the Triad pro-
actively sought to redene itsel as a hub or high- and
bio-tech industry. The area has lured large companies
and nurtured home-grown ventures, many o which
are closely linked to the areas our public universi-ties, seven private universities, and nine community
colleges. The majority o the regions economic good
ortune, however, has remained clustered in the main
cities, and its rural counties have struggled to keep up.
ASSociATeS pRogRAm in Applied Science,
oRSyTh TechnicAl commUniTy college
A new biotechnology associates degree from a
ut
Launched by a college president who was focused
rr t a r t
ursu t rra
State funding and other support allowed the
rra t r
The biotechnology sector in North Carolinas Pied-
mont Triad has grown as much as any newcomer to
the biotechnology game. Elsewhere in the country, de-
velopment initiatives are oten led by local politicians
or economic development proessionals. The Piedmont
Triad, in comparison, was helped signicantly by an
initiative rom Forsyth Technical Community Collegein Winston-Salem. Forsyth now oers the largest bio-
technology associate degree program in the state and
one o the nations leading degree programs in lie sci-
ences. This program complements the growth o Wake
Forest Universitys medical school and Piedmont Triad
Research Park in downtown Winston-Salem, which
houses much o Wake Forests medical research.
Our legacy industries were urniture, textiles, and
tobacco. While 10 years ago that sounded like a diverse
economy, they all went at the same time. This was a
community that was searching or its economic uture,
and it was a prime time or the community college to
step up as part o a community eort to redene the
economy, says Gary Green, president o Forsyth Tech.
The local business community rallied around bio-
technology as the next big thing, and the nearby
Research Triangle Park was already host to some o the
largest biopharmaceutical companies in the country.
Although the Triad was home to only a ew start-up
companies, the presence o strong research universities
and, in particular, a strong medical research commu-
nity centered on Wake Forest University, were seen
as real assets. Forsyth Tech has taken on this idea o
training people or jobs that arent even here yet. Nine-
ty percent o biotech is in the Triangle, but as biotech
grows in the state, there will be companies that want
to be somewhere cheaper, said Justin Catanoso, editoro the Triad Business Journal.
With a signicant grant rom the ederal Department
o Labor to nurture the biotechnology industry, For-
syth Techs Applied Science Associate Degree program
ocially opened in 2003. It is strongly connected to
industry, hires instructors with signicant business
experience, requires internships, and eatures lab-
ready skills training, including tissue culture, animal
handling, chromatography, and laboratory mathemat-
ics. The program now enrolls about 120 students per
semester, and graduates work primarily or compa-
nies involved in the production o pharmaceuticals.
Employers participate in the centers advisory board,
donate equipment, and host interns.
The state community college systems BioNetwork
initiative, supported in part by the Golden LEAF Foun-
dation, has provided
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