Emily Stover DeRocco Speech
Economic Development Symposium
September 22, 2005
Arlington, VA
Thank you very much, Mr. Gido, and good afternoon everyone. It is a pleasure to be here today, following such luminaries as Governor Barbour and Governor Engler.
The theme of the day has obviously been economic development. For those of you who have been in this business for awhile, you know that economic development was always synonymous with targeted tax breaks. Cities and regions would design incentive packages to entice companies to locate operations in their area.
In the static, industrial-based economy of the 20th century, this type of tactical economic development was effective. But the world has changed. We are no longer competing against one another, but against countries from across the globe.
And this new economy requires a new strategic approach to economic development. It means that we must establish, through policy and actions, the conditions that best encourage innovation, entrepreneurship, and economic growth.
The Council on Competitiveness, in their groundbreaking report Innovate America, identified the three key areas needed for economic growth. The first is infrastructure. Do regions have the transportation system to support a robust economy and do they have the technology assets required to succeed?
The second is investment. Is the capital available to support the risk required in today's economy? Are the government's policies designed to encourage capital risk-taking or restrict it?
Together, these two areas provide the basic tools required for economic development. But they are also useless without the third and, in my opinion, most important component of an economic strategy, the development of human talent.
It is the development and use of talent that will ultimately decide the fate of the United States and every other country in the global economy. To stay ahead of the global competition then, we must look at and improve the way we develop our talent. And that means bringing reform to our education and training systems.
Education, as all of you know, is a locally controlled activity in this country. Schools vary considerably across districts and states. This diversity, though, is part of our strength. Communities on the East Coast are not like communities in the Great Plains and our schools should reflect that.
However, regardless of where you live or what you expect to do in life, there are foundational skills in math, reading, and science that are critical to success. That is the basis for the No Child Left Behind Act and the President's new High School Initiative.
But while much of the focus in government, in the media, and by ordinary Americans remains on grade school and high school education, it is really what happens after high school that determines the opportunities available to individuals. It is the post-high school education and training where talent development occurs.
As the Assistant Secretary of Labor for Employment and Training, it is my job to oversee the public investment in workforce preparation-and our focus is on post-secondary education and training. Each year, the government invests over $15 billion in job training services that are delivered through a nationwide network of 3,500 career centers.
This system was created back in 1933 as one of the many New Deal programs, and, in too many areas, it still reflects its roots as a social services program. For example, the process of helping an individual is still more important than the results of our services. This is evident from the language of the law, which describes in painstaking detail how and in what order services should be delivered.
This situation leads rather naturally to a system where employers are regarded merely as the end of the process rather than customers or even partners. This mentality must be overcome if the public's investment in talent development has any chance of showing a positive return.
The Administration has moved to reform the system by creating the High Growth Job Training Initiative. By partnering with employers and engaging educational institutions, the High Growth Initiative would demonstrate to our system how to put employers back in charge of talent development.
Through the process of engaging employers, it became clear that many face the same challenge; they are unable to find the workers they need to fill their available jobs. It isn't that there are not people looking for work, but rather that those people do not possess the skills that are needed in today's workplace.
The best example of this can be found in the manufacturing industry. The first Friday of each month we learn that manufacturing has dropped several thousand more jobs. Yet at the same time, manufacturers cannot keep up with the increasing number of orders.
That is because manufacturing is in the midst of an historic transformation. Since Henry Ford invented the assembly line, good jobs were available in manufacturing for unskilled labor. But in the last five years, those jobs have been replaced by robots and automated systems. As a result, the jobs that are now available require individuals with the skills to create, program, and repair those automated systems. In effect, jobs in manufacturing are now available only to skilled labor.
Of course, it isn't just manufacturing. Energy, construction and transportation all are seeing their jobs change rapidly while new industries like biotechnology are growing and rapidly hiring.
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