Emily Stover DeRocco Speech, Employment & Training Administration (ETA)

Emily Stover DeRocco Speech

American Association of Community Colleges
Workforce Development Institute

Phoenix, AZ
January 27, 2005

Thank you and thank you for the opportunity to speak to all of you today.

This is an incredibly exciting time for our country. Technology and globalization are presenting us with vast opportunities and great challenges. Some of our oldest and most dependable industries are transforming or disappearing entirely while new, almost futuristic industries are bursting onto the economic landscape. These new industries are not measured in bushels, or tons, or even gigabytes. Instead, they are measured by levels of innovation.

In the 21st century economy, the competition can come from the company across the street - or across the ocean. Someone, somewhere on the globe will always be able to produce existing goods or provide standardized services at a cheaper price, but only the United States has possessed the freedom and resources and talent to continuously discover and produce "the next big thing." Today however, there are competitors on the horizon.

Foreign-owned companies and foreign-born individuals now account for nearly half of all U.S. patents.

In 2003, China overtook the United States as the world leader in direct foreign investment.

And today, Asian countries now spend as much on nanotechnology as the United States.

It's no wonder then that in a major report issued last month, the non-partisan Council on Competitiveness concluded that innovation is the single biggest factor influencing America's future economic success. If we are to remain the world's leading economy and successfully compete with growing Asian competitors, we must transform to an innovation economy.

As much as we might need to innovate though, it doesn't happen by formula or fiat. The innovation economy is fundamentally different from the industrial or even the information economy. It requires a new vision, new approach and new action agenda.

The United States must create the conditions that will stimulate individuals and enterprises to innovate and take the lead in the next generation of knowledge creation, technologies, business models and dynamic management systems. A new relationship among companies, government, educators and workers is needed to assure a 21st century economic environment that can successfully adapt and compete with global challenges.

This new vision will require new focus on: Infrastructure, Investment, and Talent. We in this room have little impact on policies regarding intellectual property or venture capital, but we have a major impact on the talent of our workforce, and we must succeed in our challenge if the changes in investment and infrastructure are to be effective.

Our nation's employers already understand the importance of talent. Surveys show that businesses consistently rank the availability of skilled labor as one of the top factors influencing their decision on where to build, relocate or expand operations. Employers know that employees are their greatest asset and the key to their ability to compete and grow in a changing, challenging economy.

And that is why President Bush has committed to an aggressive education and workforce strategy. Too often in the past, education and employment were two separate and distinct parts of your life. You went to school to get an education, then went into the workforce and learned how to do your job. That is a luxury we can no longer afford.

The success of workers today depends upon a continuum of education. It starts with a solid foundation in math, science, and communication skills learned in school. The President's initiatives in this area are critical, setting high standards, inspiring excellence and demanding accountability in our nation's public schools.

But that is not enough. Eighty percent of the jobs in the fastest-growing fields require education or training beyond high school. These are the fields that are driving innovation and will provide the good-paying jobs of tomorrow.

It falls to us, the workforce and community college professionals of this country, to provide the training in the skills needed to succeed in this dynamic economy. I am proud to say that you in the community college system have taken up this challenge and people have noticed.

Throughout his time in office, the President has made it a point to visit community colleges around the country. He knows these flexible, demand-driven institutions are on the front line of preparing workers - both young people just out of high school, and more experienced workers retraining for new careers - for the innovation economy of the 21st century.

Less than two weeks ago, President Bush visited the Florida Community College at Jacksonville. It was there that he unveiled the government's plans.

First, the President announced a plan to expand and reform the Pell Grant program to help more students take advantage of the educational opportunities available at community and 4-year colleges. And when students commit to courses that train for in-demand skills, they will be rewarded with a greater Pell Grant. This is investing in the talent of American workers and a smart bet for getting a return on that investment.

Second, the President renewed his commitment to the $250 million Community-based Job Training Grants, or as I like to call it, the Community College Initiative. As more people look to you to provide them with the skills to succeed, then you must have the faculty and programs to meet their needs.

There are already programs at many community colleges that partner with employers to provide those skills and we hope that these grants will build and expand on those successful models. We are in the process of developing the grant competition right now and I very much look forward to seeing the proposals that you submit.

And finally, the President called for a comprehensive reform of our workforce investment system. It is here where I believe that we can make the biggest difference. For this is not just an increase in funding, it is a new vision and new approach and new strategy; things that we earlier identified as critical to success in an innovation economy.

As it stands now, the workforce investment system is a collection of heavily regulated programs micro-managed by Washington and too-often disconnected from the economy that they serve. So we are now proposing a sweeping reform to bring this system into the 21st Century.

First, we must give states and local communities' maximum flexibility and authority to design a system that meets their needs. How the system is designed is really not important, as long as it is helping local workers obtain the skills needed to find and keep good-paying jobs with local employers.

Second, in exchange for that greater flexibility, we will demand greater accountability. The performance measures that were begun under WIA will be simplified and improved and the incentives and sanctions will be greatly strengthened.

Third, the overhead costs of the system must be reduced. The layers of bureaucracy, the complicated rules, and the regulatory loopholes have entrenched a system where we waste too much money and train too few workers. Dealing just with infrastructure, we believe that over $300 million in savings could be achieved almost over night, leading to the training of an additional 100,000 workers.

Fourth, individual choice must be enhanced in the system through the use of Innovation Training Accounts. These accounts will include funds from several sources and be flexible enough for individuals to tailor training programs at any provider of their choosing.

And finally, we must also look beyond WIA at other programs that duplicate these services or have job training and placement as their mission. It makes little sense to operate multiple bureaucracies when a single, streamlined, flexible system can better serve the needs of workers and employers.

So what do these major reforms mean to you? I believe that they position the community colleges to be the education and training provider of choice for local workers and businesses.

All the strategic advantages that you so often hear, "you're affordable, accessible, and adaptable," become that much more important.

Businesses need an education partner that can move at the speed of innovation;
Government needs an education partner that can provide affordable training and offer a return on taxpayer investment;
And workers need an education partner that will provide them with the skills they need to succeed in this challenging economy.

We have been modeling what success looks like through the President's High Growth Job Training Initiative. Through this initiative, powerful partnerships of employers, educators, and the public workforce system have been changing the way communities are responding to our workforce challenges all across the country.

Throughout history, institutions that have been unwilling or unable to change with events have seen events pass them by. As the agenda for the next two days shows, you are embracing the challenge of the new economy and positioning yourselves on the leading edge of change. I have no doubt that this will lead to your continued growth and success and the continued growth and success of our economy and nation as a whole.

Thank you so much for the opportunity to speak to you today and I am truly excited about what we can accomplish by working together. Thank you.