Emily Stover DeRocco Speech

Workplace Learning Conference "Skills Development for the 21st Century"
Monday December 8, 2003
Chicago, IL

Thank you David. It is a great pleasure for me to be here today to participate in this conference.

I'm especially delighted to be here with Deputy Minister Wouters. Like many of you, I have been intrigued by the work that Canada is doing to identify and anticipate the skills and learning challenges that exist in various areas of the Canadian labor market. By establishing industry sector councils, Canada is bringing together representatives from business, labor, education, professional groups, and government to understand issues and design long-term strategies that are tailored to each sector. I look forward to learning much more about the work that Canada has been doing in this important area.

All of us here today are dedicated in some way to the development of human capital - that is, the talents, skills and capabilities of the men and women who make up the workforce. Human capital has always played an important role in building economic strength, but never more so than today. The investments that the private and public sectors make in enhancing and expanding their human capital will pay dividends far into the future.

What makes an organization's efforts to develop human capital stand out from all the rest? I believe there are five keys to excellence.

1. First is an organization-wide recognition of the value of the human capital and potential that exists within the workforce, and a willingness to unlock that potential and put it to work for the benefit of the entire organization.

2. Second is an ability to manage resources - which are often limited - in a way that supports core business needs and opens up opportunities for strategic innovation.

3. Third is the insight and vision to not just develop skills, but to deploy them effectively so they contribute to an improvement in the bottom line.

4. Fourth is a culture that supports learning and flexibility across the board, from top to bottom. Employees are encouraged to go beyond doing their own individual jobs well to focus on improving the capabilities of the organization as a whole.

5. Fifth is a group of learning and training professionals who see themselves not as service providers, but as strategic partners in advancing innovation, productivity, profitability, and growth. They see their role as not just to train workers for the jobs that need to be done today; but also to develop the skills that will lead the organization into the future.

These five keys to excellence reflect a commitment to lifelong learning.

Demand for Knowledge Workers

That commitment is especially valuable because the demand for knowledge workers is growing at an astonishing pace. The Employment Policy Institute reported that almost all of the net new jobs created in the economy between 1992 and 2002 required at least some post-secondary training. Workers in traditionally blue-collar industries now need specialized training to work with advanced robotics and computerized production lines. Even employees who have advanced degrees need to keep learning and upgrading their skills to keep pace with the competition and open up new opportunities.

As the demand for workers with specialized skills and training grows, the question is whether we can keep up. Already we have seen reports that companies are having difficulty filling jobs with workers who have the skills they require. Within ten years, some analysts predict a 33 percent shortfall in graduates with four-year or higher degrees.

Labor Pool Shrinking

The growing need for knowledge workers comes at a time when the labor pool as a whole is shrinking. The impending retirement of the baby boomers means that nearly 7 million people who currently hold key managerial, professional and technical jobs may retire over the next ten years.

In a knowledge-based economy like ours, a top priority for all of us must be to ensure that we have the skilled workforce we need to spur economic growth and productivity. Every investment we make in improving the skills and advancing the learning of our workforce will translate into a competitive advantage in our increasingly global economy.

As you well know, it's not enough to simply find and attract employees who have the skills you need - although that certainly is important. In an environment where the bar is always being raised, you have to continually retrain current workers in foundational skills that are rapidly changing and evolving.

Over the past two decades, the amount of money invested by employers in training has increased significantly; today, 70 percent of employers provide training, often in the form of financial assistance for continuing education. Employers spend about $60 billion annually on training, eight times more than federal and state funding combined. These crucial investments not only increase the value of our human capital; they may even spur greater investments in physical capital, as better educated workers need better tools to work with. Together, these investments lead to higher productivity, job creation, and economic growth.

An Agenda for Addressing Workforce Needs of the 21st Century

To continue to fuel economic growth, we will have to do a better job of aligning the skills of the workforce with the demands of employers for the skills they need to compete successfully in the global marketplace of the 21st century.

It's clear that there are jobs out there. The challenge is matching up the employers who need workers with the people and places that need jobs. That's where the workforce investment system comes in. We must become matchmakers to the markets of the future. Our goal is to ensure that every available worker has the education, training, and skills to fill the jobs that the economy creates, and that no worker is left behind.

Our vision is to bring the power of the resources devoted to employment, education and economic development together, and use them strategically to create opportunities for workers and build the skilled workforce that American industry needs to remain globally competitive.

We call this linkage of education, employment and economic development the "power of e-three." By leveraging this power, we are building a demand-driven workforce investment system that will better serve the employers and employees of the future, effectively respond to the global and national trends that are shaping the workforce and the economy, and make a greater contribution than ever before to our nation's economic growth and prosperity.

Our agenda has three key components.

First, we have created a High-Growth Job Training initiative to identify the fastest growing and the new and emerging businesses and industries, evaluate their skill needs, and use the nation's workforce investment system to ensure that people are being trained with the skills these businesses require.

Among the new and emerging industries I often site are the geospatial technology applications industry and the biotechnology and nanotech industry. These are a part of the lifeblood of advanced manufacturing. Geospatial technology has a current worldwide market of about $5 billion, and is growing by 10 to 13% per year, a growth rate that is expected to continue throughout this decade. The market is projected to have annual revenues of $30 billion by 2005. A survey of geospatial product and service providers revealed that 87% of respondents said they had difficulty filling positions requiring geospatial technology skills.

Another emerging industry experiencing rapid growth is biotechnology. Between 1992 and 2001, the number of jobs in biotechnology doubled; biotech jobs will grow by 3 million between 2000 and 2010, with double-digit increases in jobs such as pharmaceutical manufacturing, and biological technicians. Biotech companies have raised $70 billion over the past five years to support investments in their research, development, and production activities.

These are cutting edge industries, but even more mature industries are experiencing tremendous job growth. The most dramatic growth is occurring in the health care field. Today it accounts for about 13 percent, or $1 trillion, of our annual GDP, and provides more than 11 million jobs. With the baby boomers approaching retirement, the need for skilled workers to provide medical care will increase substantially. Nine of the top 20 fastest growing occupations this decade are concentrated in health care and millions of workers will be required over the next generation to meet our nation's health care needs.

The information technology field continues to have huge economic impact. The "hardware" side of the IT industry overlaps many sectors, and accounts for nearly 7 percent of GDP. The "software" side makes up nearly 6 percent of GDP. Interestingly, 92 percent of all workers in the IT field do not work for the IT industry; rather, they fulfill IT functions in non-IT industries. The IT field attracts a young workforce, with nearly 40 percent of workers being between the ages of 25 and 34; earnings in the field are expected to grow by 86 percent between 2000 and 2010.

In these fields and others, we're working with employers, community colleges and other post-secondary schools, worker advocates, and the public workforce system to prepare workers for the jobs of the future. Let us not lose sight of the fact that America's workforce is highly educated and that is a key competitive advantage for us in the world economy.

Most of the new jobs created today require at least some post-secondary training, and people who have that training typically experience less unemployment and higher wages than those who don't.

Second, we're reaching out to the unemployed to help them get the training and supportive services they need to help them get back in the workforce. The President has asked Congress to create another tool for the unemployed called Personal Reemployment Accounts, which provide job seekers with up to $3000 to pay for training, child care, transportation, relocation - whatever they need to make the transition back into the working world. If they find a job before they spend the $3000, they keep it as a reemployment bonus. We believe these innovative accounts would help unemployed Americans prepare for and connect with the new jobs of the 21st century.

Third, we're proposing legislative changes to the Workforce Investment Act to make the workforce system more effective and flexible. A key part of our success will come from community partners who use the resources of the workforce investment system as an economic development tool.

All of the elements of our agenda are aimed at creating a demand-driven workforce investment system that is effective and responsive to the needs of local labor markets in the 21st century. I look forward to working with you to achieve this goal, to sharing ideas, and to learning from your experiences. If we invest wisely in America's workforce, we'll be prepared for every opportunity to build the next rung on the ladder of economic growth, job creation, and national strength.

Thank you very much.