CHICAGO, ILLINOISCHICAGO, ILLINOISNOVEMBER 12-14, 2008NOVEMBER 12-14, 2008

National Governors AssociationNational Governors Association

SECTOR STRATEGIES LEARNING NETWORK MEETINGSECTOR STRATEGIES LEARNING NETWORK MEETING

SECTOR STRATEGIES IN A BAD ECONOMY: SECTOR STRATEGIES IN A BAD ECONOMY: TWO STATE STORIESTWO STATE STORIES

• Pennsylvania – enjoyed a relatively Pennsylvania – enjoyed a relatively steady growth in a diverse sets of sectorssteady growth in a diverse sets of sectors

• Sector Strategies in Workforce Sector Strategies in Workforce Development since 2004Development since 2004

• Administrated by the State Workforce Administrated by the State Workforce Investment BoardInvestment Board

We have a keen sense of the obvious

Source: Wall Street Journal November 7, 2008

Pennsylvania’s ExperiencePennsylvania’s ExperienceUnemployment Rate: Sept. 2006 - Sept. 2008

4.0

4.5

5.0

5.5

6.0

6.5

Sep-06 Dec-06 Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08

PA US Linear (US) Linear (PA)

Difference in Trends:Difference in Trends:Sector Strategy & Other Sector Strategy & Other Economic Development Economic Development Strategy Influence or Strategy Influence or

Wishful Thinking?Wishful Thinking?

Public Workforce Development SystemOrganizational Culture Continuum

Labor Exchange

Skills Development

FALSE DICHOTOMY??

THE BIG PICTURETHE BIG PICTUREECONOMIC ENVIRONMENT

CurrentLocation?

Changing Focus - Workforce Development System

1930's 1940's 1950's 1960's 1970's 1980's 1990's 2000's

Workforce Investment Act (WIA)

Job Training Partnership Act (JTPA)

Comprehensive Employment

and Training Act (CETA)

Manpower Development &

Training Act (MDTA)

Employment Act of 1946

New Deal Legislation“Wagner Peyser Act”

“UC Act”“Social Security Act”

95 % Incumbent Workers5 % Transitional

Traditional Emphasis of System – Assist Unemployed and Transitional

Workers

New Emphasis of System - Building the Skill Levels of the Existing Workforce – the Incumbent Workers – in order to support Community

Economic Development and to compete in the Global Economy

“FOLLOW THE MONEY”

95% Incumbent Workers5% Transitional

5%

Federal Sources

$$$$$$$$$$$$$$$$$$$$$$$

What to do in a Recession?

PA’s Sector StrategyIndustry Partnerships

• Currently 76 Industry Partnership funded – Currently 76 Industry Partnership funded – down from 90down from 90

• Over 65,000 incumbent workers trained since Over 65,000 incumbent workers trained since inceptioninception

• Industry-Led ModelIndustry-Led Model

INDUSTRY PARTNERSHIP

Pennsylvania’s Workforce Development System

• • 22 Workforce Investment Boards22 Workforce Investment Boards

• • 67 Pennsylvania CareerLinks (One-Stops)67 Pennsylvania CareerLinks (One-Stops)

• • 76 Industry Partnerships76 Industry Partnerships

What are Industry Partnerships?

• Organize clusters of businesses that share similar Organize clusters of businesses that share similar workforce challenges, markets and suppliersworkforce challenges, markets and suppliers

• Industry-led process is a key factorIndustry-led process is a key factor• Create economies of scale for job training and educationCreate economies of scale for job training and education• Identify key occupations Identify key occupations • Promote innovationPromote innovation• Working together, business can identify worker skill gaps, Working together, business can identify worker skill gaps,

address training needs and develop regional strategies to address training needs and develop regional strategies to build stronger economiesbuild stronger economies

Pennsylvania’s Targeted Industry Clusters

• Advanced Materials and Diversified ManufacturingAdvanced Materials and Diversified Manufacturing• Agriculture and Food ProductionAgriculture and Food Production• Building and ConstructionBuilding and Construction• Business and Financial ServicesBusiness and Financial Services• EducationEducation• Information and Communication ServicesInformation and Communication Services• Life SciencesLife Sciences• Lumber Wood and Paper, andLumber Wood and Paper, and• Logistics and TransportationLogistics and Transportation• EnergyEnergy

Impact of Recession on Business

Curtail expansion plansCurtail expansion plans

Retrench in cost-cutting Retrench in cost-cutting movesmoves

Consolidate operations Consolidate operations

Close plants and facilitiesClose plants and facilities

Become more risk averseBecome more risk averse

Impact of Recession on Workers

Move to a different areaMove to a different area

Step down the career ladderStep down the career ladder

Change careers entirelyChange careers entirely

Go back to schoolGo back to school

Become “permanently” unemployedBecome “permanently” unemployed

Recession Issues and QuestionsRecession Issues and Questions

IssuesIssues• In a recession jobs In a recession jobs

decline in some decline in some sectors & job growth sectors & job growth stops in moststops in most

• In a recession not as In a recession not as great a emphasis on great a emphasis on “getting the product “getting the product out the door.”out the door.”

QuestionsQuestions• Focus resources on Focus resources on

impacted sectors, impacted sectors, growth sectors or all growth sectors or all sectors?sectors?

• Opportunity for Opportunity for upskilling given upskilling given down time of down time of employees? employees?

Recession Issues and QuestionsRecession Issues and Questions

IssuesIssues• In a recession most In a recession most

Important –Important –Intelligence on Intelligence on Industry TrendsIndustry Trends

• In a recession not In a recession not hiring so retention of hiring so retention of current employees current employees increased importanceincreased importance

QuestionsQuestions• Intelligence gathered Intelligence gathered

at Sector Meetings or at Sector Meetings or a time to hold back a time to hold back information?information?

• Human Resources Human Resources strategies to retain strategies to retain workers discussed at workers discussed at Sector Meetings. Sector Meetings.

Discussion & Questions

For more information on theFor more information on the

PA Workforce Development SystemPA Workforce Development System

Call me at: (717) 705-8822 (direct line)Call me at: (717) 705-8822 (direct line)

Visit Us Online at:Visit Us Online at:

www.paworkforce.state.pa.uswww.paworkforce.state.pa.us