Delaware Valley WIRED Kick-Off

May 23, 2007
Philadelphia, PA

Good morning and thank you for inviting me to Philadelphia and the Delaware Valley today.  It is an honor to join you and so many other leaders from the three states that make up this region.  In fact, the Delaware Valley is the only one of our WIRED regions to encompass parts of three states.  That certainly presents some challenges in coordinating and building a partnership, but it also gives you access to a wider array of resources and assets.

I had the good fortune to grow up in one of those states and spend summers at the beach in the other two, so this region holds a special place for me. 

In fact, it should hold a special place for all Americans because the Delaware Valley has been a leader for most of our country’s history.  From the Declaration to Washington’s Crossing to Valley Forge, you were witness to the beginning.

Then as this country grew through the 19th century, you led the way.  This was the industrial center of the country, represented by the great locomotive plants in Philadelphia, DuPont’s gunpowder and chemical plants in Wilmington, and the steel and iron shops that provided the inspiration for “Trenton Makes, the World Takes”.

By the turn of the last century, Philadelphia was one of the largest cities in the English speaking world and the Delaware Valley defined American might.

Unfortunately, in the 20th Century, the Delaware Valley once again was ahead of the curve, this time as manufacturing jobs moved – first to the south and then finally overseas in search of cheaper labor. 

After a difficult and challenging half century, this region is now back.  From the world class health care companies, hospitals and universities to the top ranked pharmaceuticals manufacturers, you have a tremendous opportunity in the bio-economy.  But that is not all.  One of the world’s largest telecommunications and cable companies is now changing the cityscape behind me.  And Wilmington is now home to one of the largest retail banks in the country. 

What these and the region’s other cutting edge companies understand is their success in today’s global economy depends on a talented workforce more than any other single factor.  And the Delaware Valley, with its strong education assets, including two of the top 10 universities in the world, can provide that talent base.

The projections for the U.S. economy confirm what these companies already know.  90 percent of the fastest growing jobs and 63 percent of all new jobs will require a post secondary education.  A closer look at the numbers reveals that three-quarters of those fastest growing jobs require not just post-secondary education, but a college degree.  And two-thirds of the high-wage, high-growth jobs will require a full Bachelor’s Degree. 

It does not require looking at projections though to understand the importance of education in today’s economy.  Figures from last year show that individuals with a 4-year college degree have half the unemployment rate and earn nearly double the wages of workers with only a high school education.

This is, of course, a dramatic shift from the 20th century.  Both manufacturing and service industries used to offer Americans with a high school diploma strong, secure jobs with wages enough to raise a family, own a home, and save for retirement.  That is simply no longer the case.

Training adults has traditionally been the mission of my agency, the Employment & Training Administration.  I administer a $15 billion system of employment and job training programs that are intended to help individuals gain new skills and find new jobs.

This system had been effective during the 20th century of matching individuals with employers, but in an innovation economy, it takes more than simple job matching or short-term training to be an effective workforce and education broker.

To try to find effective models for talent development, the Administration created a series of initiatives designed to engage both employers and education institutions.  The first is the High Growth Job Training Initiative.  By partnering with employers and engaging educational institutions, the High Growth Initiative hopes to demonstrate to our system how to put employers back in charge of talent development.

The Delaware Valley Industrial Resource Center is one of our partners with a $3 million grant to focus on developing an advanced manufacturing workforce in the area.  The Delaware Workforce Investment Board is as well, with a quarter of a million dollars to focus on a biotech workforce.

Through the High Growth Initiative we recognized that many of the job opportunities available in the 21st century economy are begun with an associate’s degree and the President created a similar but new initiative called Community-Based Job Training Grants.

These grants, which we call the Community College Initiative, are designed to improve the training available at community colleges by connecting employers with the schools to provide more and better teachers, state of the art equipment, and a greater capacity to teach more students.  In short, they will improve the ability of our Community Colleges to develop talent.  Montgomery County Community College is a part of this initiative, with a $1.3 million grant focused on the automotive industry.

All three of these local projects impact not only their organizations, but the entire region, because they are developing the talent base needed in today’s economy.  Indeed, talent development has never been as important to economic development as it is right now. 

For most of its existence, economic development has been synonymous with infrastructure development like buildings and roads and incentives like tax rebates and credits.  But globalization has changed the economic development equation.

Today, economic development also includes access to broadband and the technological infrastructure to support innovation.  But the single most important factor companies consider when deciding where to open or expand a business is the availability of skilled labor.  If the workforce is not present to produce high value goods or deliver just-in-time services, then all the tax breaks and highway extensions are irrelevant.  This creates an opportunity for talent development organizations to not simply respond to economic events, but anticipate and even shape a regional economy.

It was this realization that led the Employment and Training Administration to create Workforce Innovations in Regional Economic Development, our WIRED Initiative.  WIRED is built on the belief that the critical geography in today’s economy is not towns or states but regions, and that an integrated economic and talent development strategy at the regional level can drive transformation.

WIRED began almost a year ago when we selected 13 regions to be a part of the First Generation of WIRED.  Your neighbors just to the north here were one of those regions, receiving a sizable investment from the Labor Department acting as seed capital to bring economic development and job growth to the Northeast Pennsylvania focused on the financial and computer security industries. 

We quickly realized that there was a strong desire around country to integrate workforce and economic development and follow the concepts of WIRED, so last April, we decided to add a second tier of WIRED called the virtual regions.  The Delaware Valley was one of these regions.  So was the Northern New Jersey region centered around Newark.  I had the pleasure of visiting that region yesterday with Commissioner Socolow.  These and the other Virtual Regions received the tools, participated in the Academies, and followed the progress of WIRED, but did so without an investment from DOL.  That has now changed.

In January, we announced a $5 million investment over the next three years in each of these regions, moving them from a twinkle in our eye to the next generation. 

The first thing you should be aware of is that WIRED is not your typical ETA grant.  I actually don’t like to call it a grant at all.  Instead, it is a force; a force for economic and systemic transformation in a region.

Each of our 1st and now 2nd Generation WIRED regions are participating in a 5-step process that we call the WIRED conceptual framework.  Those steps are

1. Define the regional economy by identifying the surrounding communities that share common characteristics;
2. Create a leadership group that represents the major assets in the region;
3. Conduct a regional assessment to fully map the area’s assets and identify the strengths, weaknesses, opportunities, and risks;
4. Develop an economic strategy and corresponding implementation plan that focuses on talent development and identifies specific goals and tasks; and
5. Identify resources from a wide range of public and private sources to execute and support the plan.

The second important point about WIRED is that our $5 million investment is meant to act as seed capital, leverage both new and existing resources. 

For example, ETA sends millions a year to Pennsylvania, New Jersey, and Delaware.  How are those funds and the activities of the Workforce Boards and One Stop Centers going to be aligned with the region’s plan? 

And what about all the other federal agencies?  From Rural Development at the Dept. of Agriculture, to the Small Business Innovation Research programs at the National Science Foundation and the Pentagon, to the Economic Development Administration and the Manufacturing Extension Partnership at the Dept. of Commerce, ETA has developed an extensive partnership network across these agencies that we hope you will utilize and incorporate into your plan.

And that only covers funds from the federal government.  Each state certainly has a vested interest in seeing this region grow.  And beyond the public sector, foundations such as Mott, Kauffman, and Ford are now investing millions of dollars in regions all around the country.  ETA has built relationships with these foundations can identify opportunities for our regions for benefit from their investments.

As you can see, WIRED really isn’t just another federal grant. 

Back when WIRED began, I was searching for something that would easily define the conditions that WIRED is trying to create.  Along the way, several people introduced me to a concept called the Innovation LifeCycle.  Shown in the picture behind me, I believe it shows the economy that all regions must strive to achieve. 

It begins with knowledge creation.  Investments in research and development and protection of intellectual property allow universities, research institutions, and corporations to make the break-throughs that lead to new products, product features and services, and new markets. 

These break-throughs must then be moved out of the university or the laboratory into the marketplace through technology transfer policies.  This includes small business incubators and research parks, and it also includes access to risk-capital that allows our entrepreneurs to get off the ground. 

From there is the growth of products and new industries through commercialization.  And finally, ideas reach maturity as new clusters and business networks form around industries.  This then allows these successful clusters to reinvest in research and development and start the innovation lifecycle again.

There are many important assets that must come together to create this innovation lifecycle, but none is more important than talent.  It is skilled men and women working at all levels across every stage of this lifecycle that ensure its success and create the perpetual motion seen in places like Silicon Valley where R&D and new innovations occur side-by-side with the most successful and powerful companies of the new economy.

I believe that this region can achieve similar success.  From the major universities in this region to the Science Center where we are gathered today to the Philadelphia shipyard and the Wilmington Port south of here, you possess most of the assets required to make this process work and develop an innovation economy across a host of industries.

I am proud that ETA is going to play a part in its growth and I look forward to working with the leadership of this region to build a world-class innovation workforce.

Thank you for the opportunity to speak today.