These two initiatives, High Growth and Community College, focus discretely on training workers in a project-based environment. But over the last several years, the importance and value of talent and skilled labor has placed education and training programs in a more central role in our economy. Economic development surveys now confirm this fact, showing that the availability of skilled labor is the #1 most important factor for companies in determining where to locate a business.

In response to this development, we have launched an ambitious new initiative called Workforce Innovation in Regional Economic Development or WIRED. WIRED is our attempt to integrate the activities of economic development and talent development into a single economic strategy. It 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.

We need to look no further than Silicon Valley to understand the concept of regionalism. Palo Alto, San Jose and Berkeley are all separate political jurisdictions, but the IT industry and now the country correctly identify them as a single region and the hot-bed of innovation in this country.

WIRED began almost a year ago when we selected 13 regions to be a part of the First Generation of WIRED and invested $15 million in each of those regions. We have added another thirteen regions with investment of $5 million each and are now conducting a competition for a third generation of regions. What our work in WIRED has taught us is that this funding is capable of acting as seed capital, spurring investment from an array of other groups including other federal agencies, foundations, regional partners, and the state.

So why should this matter to ITAA or to your member companies?

First, many of these regions have targeted IT as an industry of focus. The best example is probably in Denver, Colorado where the region investing heavily in IT programs at levels of education to produce a workforce capable of growing the IT cluster in the area.

Rio Grande Valley, Texas is another, where they are leveraging a Community College grant as part of their WIRED project to serve over 1,000 individuals seeking the skills to become IT professionals.

Second, many of these regions have targeted industries of which IT is a major component. Northeast Pennsylvania comes immediately to mind where they are developing the systems to serve as a back-up for all financial data generated on Wall Street. They will be laying two 125 mile high speed cables from New York City and will need large numbers of IT-trained professionals to set up and administer the program, in addition to the financial services workforce.

And finally, one of the major goals of the WIRED Initiative and the overarching goal of all of the regions is to create a self-sustaining innovation economy. This is modeled in a diagram known as the innovation lifecycle. I was introduced to it about a year ago, and I have to admit, it took a little while for it to grow on me, but now I believe that it is single best representation of the dynamics each region must create to achieve that overarching goal.

It begins with knowledge creation. Investments in research and development and protection of intellectual property allow universities, research institutions, and companies 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 spun-out of large companies 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 successful clusters to reinvest in research and development and start the innovation lifecycle again.

Information technology companies can found all across this innovation lifecycle, from creating new technologies, software, or hardware, to transferring it to small businesses or spinning out new tech companies, to then growing into large companies and beginning the process again.

In fact, IT companies and professionals are better positioned to drive this process than universities or manufacturers or others in the arena. That is because IT has brought with it a culture of open sourcing, allowing lots of people to contribute to and improve on existing applications. It is this collaborative approach that has proven most effective in creating the environment for innovation.

Over the last generation, information technology has transformed the way work and the way we live. I believe that the pace and scale of this change will only increase in the years and generations ahead. That keeps information technology skills an IT companies at the heart of a competitive economy.

I hope we can continue to work with IT associations and their member companies to design programs that help meet the industries workforce needs and provide jobs and careers for millions of Americans.

Thank you for the opportunity to speak today and, Phil, I'm happy to take some questions and continue the dialogue if we have time.