Despite a recent slump in job creation and weaknesses in several key sectors, the Texas economy continues to outperform the nation as a whole. Nevertheless, myriad steps must be taken to ensure future successes in the increasingly complex and sophisticated global marketplace. One such issue is workforce development and job training programs. We cannot hope to be a part of the high tech, high-growth world of the future—which will encompass not only electronics and communications, but also biotechnology, alternative energy, advanced metals, and other areas not yet invented—if we cannot offer employers the capabilities of a skilled workforce.
A look at the relative demographics of Texas and other areas demonstrates that we are younger, on average, than most regions of the United States. Simply stated, we have the bodies. However, Texas currently lags other states in the percentage of persons age 25 years and over who have completed high school or college. The relatively less educated workforce increases the importance of training resources.
Traditional workforce development typically involves addressing two broad challenges: (1) meeting widespread skill shortages to avoid any future economic decline while encouraging growth, and at the same time, (2) providing the skills many workers lack so they are able to get and hold jobs that are good enough to make them self sufficient. In recent times, training availability and related grants have surfaced as important economic development criteria. With demographics leading to a tightening labor pool and skill requirements increasing, the availability of skilled workers and effective training are often the most critical factors in choosing a location. In the race for new capital investments, job growth, and new and expanding facilities, Texas was a leader in the early to mid-90s; more recently the state’s position has dropped significantly.
The demise of the Smart Jobs program has left us without a critical tool that virtually all other states have and are using in competitions for corporate locations: employer-based training. Without a quality program, Texas stands at a significant, perhaps insurmountable, disadvantage in the arena of competition for quality corporate locations. Quality corporate locations can generate substantial spillover activity throughout the economy; this activity, in turn, leads to additional job opportunities for all Texans. While other goals are laudable and should be met by other means, this program must remain focused on its core objectives.
In a nutshell, it is my belief that (1) Texas needs a focused, employer-driven plan specifically tailored to encourage location, retention, and expansion in high-skill, high growth sectors; (2) the program needs to make efficient use of the State’s resources, but be evaluated by economic development criteria; and (3) the program should be implemented using market-based incentives. The economic benefits of training are clear. They accrue to the individuals receiving the training, the companies employing them, and the economy as a whole.
Recent demographic studies suggest that if current trends continue, our population will face a declining overall standard of living. This issue has to be addressed on many fronts, some of which are much more complicated and expensive than direct worker training. An exemplary, employer-driven workforce training initiative is but one piece in a very large puzzle. It is, however, an essential piece. Human capital is the cornerstone of the modern technological business landscape. If properly developed, our growing working-age population will fuel the Texas economy for years to come, much the same way that our fertile soil and mineral deposits did in earlier times.