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Skills Gaps: Getting the People You Need toServe Your Global Customers
Wednesday, April 25, 200710:45 AM - 12:00 pm
Focusing performance improvement efforts on employeesthat add most direct value to the bottom line
Changing leadership and management behaviors to alignwith new business priorities
Attracting and retaining skilled staff
3.00 3.25 3.50 3.75 4.00 4.25
Importance Rating (0-5)
Five out of six strategic priorities are workforce related
Industry consolidation/managing mergers and acquisitions
Changes in the type/level of competition
Managing intensified pressure to reduce costs and improve quality
Improving workforce performance
Changing organizational culture and employee attitudes
Increasing customer care and service
Workforce performance has emergedas a top executive priority
Source: Accenture High Performance Workforce Study (2003)
Source: “American Higher Education: How Does It Measure Up for the 21st Century?” The National Center for Public Policy and HigherEducation, 2006.
For every 100 ninth graders
68 graduate on time
Of those, 40 enroll in college
Of those, 27 still enrolled the following year
Of those, 18 earn an A.A. within 3 years or a B.A. within 6 years
A leaky pipeline 82% of current students will not earn a 2-year or 4-year degree
49%
21%
48%46%
28%
0%
10%
20%
30%
40%
50%
60%
African-
American
Asian Latino Native-
American
White
Our most educationally disadvantaged are the fastest-growing– not good for social cohesion or macroeconomic growth
Achievement Gap = Opportunity Gap
High School Dropouts
Source: Jay P. Greene and Greg Forster, “Public High School Graduation and College Readiness Rates in the United States,” ManhattanInstitute for Policy Research, 2003.
Preserving America’s innovationleadership
Bill Gates
Testimony Before U.S. Senate, 2007
“We cannot possibly sustain aneconomy founded on technologypre-eminence without a citizenryeducated in core technologydisciplines such as mathematics,computer science, engineering, andthe physical sciences.”
400
500
Fin
land
Korea
Neth
erla
nds
Japan
Can
ad
a
Belg
ium
Sw
itzerl
and
New
Z
eala
nd
Au
str
ali
a
Cze
ch
Icela
nd
Denm
ark
Fran
ce
Sw
eden
Au
stria
Germ
any
Irela
nd
OE
CD
Slo
vack
Norw
ay
Luxem
bourg
Pola
nd
Hungary
Spain
Unit
ed
Sta
tes
Portu
gal
Italy
Greece
Tu
rkey
Me
xic
o
USA ranks 24th out of the 29 OECD countries in mathematics
Avera
ge S
cale
Score
Source: Organization for Economic Cooperation and Development (OECD), PISA 2003 Results
We are far behind in math and science
Source: Deloitte / National Associations of Manufacturers, 2005 Skills Gap Report.
4%
5%
8%
16%
18%
25%
35%
80%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
None
Others
Customer Service
Management and Administration
Sales and Marketing
Unskilled Production
Scientists and Engineers
Skilled Production
What types of employees do you expect to need in the next threeyears?
80% of manufacturers report moderateto severe labor shortages
Roles are becoming ever more complex
Today, 85% of manufacturing jobsrequire advanced skills:
– technical knowledge andexpertise
– an analytical approach to work
– an interest in technical processes
– good communication skills, bothoral and written
– the ability to get on and workaffectively with a wide range ofpeople
– the ability to manage timeeffectively and goodorganizational skills
– leadership skills
In 1950, 60% of manufacturing jobswere unskilled. A worker needed:
– a strong work ethic
– physical strength
– a modicum of the 3 R’s
Source: Deloitte / National Associations of Manufacturers, 2005 Skills Gap Report.
Source: Deloitte / National Associations of Manufacturers, 2005 Skills Gap Report.
Preparation level of workforce entrants
… but entrants are not keeping pace
10.8%
42.4%
64.5%
70.1%
45.6%
23.9%
10.3%
11.7%
8.7%
0.2%
8.8%
2.8%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
4-Yr College Grad
2-Yr College Grad
H.S. Grad / GED
Deficient Adequate Excellent N.A.
10%45,00038,08840,826Master’s or higher
-1%35,00036,56535,390Bachelor’s degree
-9%25,00026,75628,018Some college
-32%21,00022,85430,819HS diploma/GED
-30%16,00015,99822,686<12 yrs, no diploma
Education
-25%$20,700$22,852$27,618ALL
% Change2004198919732004 $
The return on human capital investmentshas dramatically increased over the past 30 years
Average earnings of men age 20-29
People with the highest skills to begin with will continue to benefit themost. Everyone else will lose, on both relative and absolute terms.
Workforce skills will be a decisive factorin our society and economy
• Growing traffic, housing problems
• Persistent structural unemployment
• Political barriers may beinsurmountable
Import large numbers offoreign skilled workers
Dramatically upskill theUSA workforce
• Reduced living standards – peopleearn less than parents
• Erosion of national industrial base
• Rising income inequality
• Won’t work: can’t compete on cost
• China $0.25-$0.60/hr
• Mexico $1.50-$4.50 /hr
“Dumb down” the USAeconomy
The role of business
Michael Porter
World Economic Forum, 2004
“Companies will strive fordistinction in innovation instead ofsize or diversification. This meansthey will pay greater attention toretaining, training and motivatingemployees.”
Skills Gaps: Getting the People You Need toServe Your Global Customers
Resource Slides
Focusing performance improvement efforts on employeesthat add most direct value to the bottom line
Changing leadership and management behaviors to alignwith new business priorities
Attracting and retaining skilled staff
3.00 3.25 3.50 3.75 4.00 4.25
Importance Rating (0-5)
Five out of six strategic priorities are workforce related
Industry consolidation/managing mergers and acquisitions
Changes in the type/level of competition
Managing intensified pressure to reduce costs and improve quality
Improving workforce performance
Changing organizational culture and employee attitudes
Increasing customer care and service
Workforce performance has emergedas a top executive priority
Source: Accenture High Performance Workforce Study (2003)
Source: Conferece Board; Bureau of Labor
-20% -10% 0% 10% 20% 30% 40% 50% 60%
16-24
25-34
35-44
45-54
55-64
65+
U.S. Population by Age Group, % change 2000-2010
The Graying of the Workforce A Massive Loss of Knowledge Capital in the Next 10 Years
Source: “American Higher Education: How Does It Measure Up for the 21st Century?” The National Center for Public Policy and HigherEducation, 2006.
For every 100 ninth graders
68 graduate on time
Of those, 40 enroll in college
Of those, 27 still enrolled the following year
Of those, 18 earn an A.A. within 3 years or a B.A. within 6 years
A Leaky Pipeline 82% of Current Students will not Earn Their B.A. or A.A.
49%
21%
48%46%
28%
0%
10%
20%
30%
40%
50%
60%
African-
American
Asian Latino Native-
American
White
Most educationally disadvantaged among us are the fastest-growing – not good for social cohesion or macroeconomicgrowth
Achievement Gap = Opportunity Gap
High School Dropouts
Source: Jay P. Greene and Greg Forster, “Public High School Graduation and College Readiness Rates in the United States,” ManhattanInstitute for Policy Research, 2003.
Preserving America’s InnovationLeadership
Bill Gates
Testimony Before U.S. Senate, 2007
“We cannot possibly sustain aneconomy founded on technologypre-eminence without a citizenryeducated in core technologydisciplines such as mathematics,computer science, engineering, andthe physical sciences.”
400
500
Fin
land
Korea
Neth
erla
nds
Japan
Can
ad
a
Belg
ium
Sw
itzerl
and
New
Z
eala
nd
Au
str
ali
a
Cze
ch
Icela
nd
Denm
ark
Fran
ce
Sw
eden
Au
stria
Germ
any
Irela
nd
OE
CD
Slo
vack
Norw
ay
Luxem
bourg
Pola
nd
Hungary
Spain
Unit
ed
Sta
tes
Portu
gal
Italy
Greece
Tu
rkey
Me
xic
o
USA ranks 24th out of the 29 OECD countries in mathematics
We are far behind in math and science
Avera
ge S
cale
Score
Source: Organization for Economic Cooperation and Development (OECD), PISA 2003 Results
We are Far Behind in Math and Science
Source: BCG 2006 Senior Executive Innovation Survey
0% 10% 20% 30% 40% 50% 60% 70%
Automotive
Consumer Products/Retail
Technology/IT
Media/Entertainment
Industrial Goods
Health Care
Telecommunications
Financial Services
Energy
China India
No longer just our sweatshops: Foreign companies planning to increasethe amount of R&D they conduct in…
Labor Arbitrage Driving Rapid Changein the Mix of Jobs in Economies Everywhere
Roles are Becoming Ever More Complex
Today, 85% of manufacturing jobsrequire advanced skills:
– technical knowledge andexpertise
– an analytical approach to work
– an interest in technical processes
– good communication skills, bothoral and written
– the ability to get on and workaffectively with a wide range ofpeople
– the ability to manage timeeffectively and goodorganizational skills
– leadership skills
In 1950, 60% of manufacturing jobswere unskilled. A worker needed:
– a strong work ethic
– physical strength
– a modicum of the 3 R’s
Source: Deloitte / National Associations of Manufacturers, 2005 Skills Gap Report.
Source: Deloitte / National Associations of Manufacturers, 2005 Skills Gap Report.
Preparation level of workforce entrants
… but entrants are not keeping pace… But Entrants are not Keeping Pace
10.8%
42.4%
64.5%
70.1%
45.6%
23.9%
10.3%
11.7%
8.7%
0.2%
8.8%
2.8%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
4-Yr College Grad
2-Yr College Grad
H.S. Grad / GED
Deficient Adequate Excellent N.A.
10%45,00038,08840,826Master’s or higher
-1%35,00036,56535,390Bachelor’s degree
-9%25,00026,75628,018Some college
-32%21,00022,85430,819HS diploma/GED
-30%16,00015,99822,686<12 yrs, no diploma
Education
-25%$20,700$22,852$27,618ALL
% Change2004198919732004 $
The return on human capital investmentshas dramatically increased over the past 30 years
Average earnings of men age 20-29
People with the highest skills to begin with will continue to benefit themost. Everyone else will lose, on both relative and absolute terms.
Workforce Skills will be a Decisive Factor inThe U.S.’s Society and Economy
• Growing traffic, housing problems
• Persistent structural unemployment
• Political barriers may beinsurmountable
Import large numbers offoreign skilled workers
Dramatically upskill theUSA workforce
• Reduced living standards – peopleearn less than parents
• Erosion of national industrial base
• Rising income inequality
• Won’t work: can’t compete on cost
• China $0.25-$0.60/hr
• Mexico $1.50-$4.50 /hr
“Dumb down” the USAeconomy
The Role of Business
Michael Porter
World Economic Forum, 2004
“Companies will strive fordistinction in innovation instead ofsize or diversification. This meansthey will pay greater attention toretaining, training and motivatingemployees.”
Source: BCG 2006 Senior Executive Innovation Survey
0% 10% 20% 30% 40% 50% 60% 70%
Automotive
Consumer Products/Retail
Technology/IT
Media/Entertainment
Industrial Goods
Health Care
Telecommunications
Financial Services
Energy China India
No longer just our sweatshops: Foreign companies planning to increasethe amount of R&D they conduct in…
Labor Arbitrage Driving Rapid Changein the Mix of Jobs in Economies Everywhere
19.438.7Total
6.09.3Immigrants
13.32.7Natives, 55+, All races
0.026.7Natives, 25-54, All races
Growth2000-2020
Growth1980-2000
Note: Numbers represent millions of adults.
America’s Labor Force Will Grow MoreSlowly Over The Next 20 Years, With AlmostNone Of The Growth Expected To Come FromNative-born Workers
20th15th24thU.S. Rank Among29 Countries
500494500OECD Average
491495483U.S. AverageScore
ScienceReadingMath
The U.S. is Not Among the World’sLeaders in Any Area of Educational Achievement.
Source: U.S. Department of Education, National Center for Education Statistics, 1993 – 1994, 1998 – 1999 and 2003 – 2004 IntegratedPostsecondary Education System, “Completions Survey” (IPEDS-C:94-99), and Fall 2004.
0 50,000 100,000 150,000 200,000 250,000 300,000 350,000
Biological and Biomedical Sc iences
Business
Communications and Communications Technologies
Computer and Information Sc iences
Education
Engineering and Enginnering Technologies
Health Professions and Related Clinical Sc iences
Psychology
Soc ial Sc iences and History
Visual and Performing Arts
Fie
ld o
f S
tud
y
Number of Degrees
2003 - 2004
1998 - 1999
1993 - 1994
1993 – 1994, 1998 – 1999 and 2003 - 2004
Trends in Bachelor’s Degrees Conferred byDegree-Granting Institutions in Selected Fields of Study
Source: Conferece Board; Bureau of Labor
-20% -10% 0% 10% 20% 30% 40% 50% 60%
16-24
25-34
35-44
45-54
55-64
65+
U.S. Population by Age Group, % change 2000-2010
The Graying of the Workforce A Massive Loss of Knowledge Capital in the Next 10 Years
Workforce Performance Challenge Alignment
Considerable Majority1 ofEmployees Understand
Strategic Priorities(% of Companies)
1 Defined as >75% of employees
Considerable Majority1 ofEmployees Understand Their
Contribution to StrategicExecution (% of Companies)
Agree
12%
Disagree
88%
Agree
17%
Disagree
83%
Source: Accenture High Performance Workforce Study(2003)
Copyright © Accenture All Rights Reserved.
Agree
27%
Disagree
73%
Workforce Performance Challenge: Capabilities
0%
10%
20%
30%
40%
HR CEO COO CFO
Average: 27%
Considerable majority1 of employees have the necessary skills toexecute their jobs at industry leading performance levels:
By TitleAggregate Results
1 Defined as >75% of employees
Source: Accenture High Performance Workforce Study (2003)
Copyright © Accenture All Rights Reserved.
Few Executives are Satisfied with thePerformance of their Training and Development Department
Satisfaction with Training/Development Organization(% “Very Satisfied”)
0%
5%
10%
15%
20%
25%
U.S. UK Germany France Spain Australia
Average: 13%
Source: Accenture High Performance Workforce Study (2003) Copyright © Accenture All Rights Reserved.
In Addition to Delivering Impressive Learning AndHuman Performance Results, A HPLO Helps to DriveRevenue And Profit Growth Through Improvements InProductivity
Growth vs. Peers
Source: Fortune Magazine, Company Annual Report, OneSource, Hoovers
HPLOs Competitors and Peers
• HPLO companies returnedbetter revenue and profit growthcompared to their competitorsand industry peers:
– Productivity (as measuredby sales/employee) was27% greater
– Revenue growth was 40%greater
– Net income growth was 50%greater
$0.48 millionper employee
$0.38 millionper employee
Copyright © Accenture All Rights Reserved.
Accenture Learning Determined Seven KeyElements Must be in Place to Create a HighPerformance Learning Organization
High Performance
Learning Organization
TheThe
FoundationFoundation
The Framework forThe Framework for
Maximizing ImpactMaximizing Impact
Measurement Alignment
Competency
Development
Reach the
Value ChainIntegrate Learning
into other processes
Blended Delivery
Approach
Leadership
Development
Copyright © Accenture All Rights Reserved.
36
Vision
• Changes in the nature of business, including changes in the nature
and structure of the workforce, are creating a critical need for
improvements in the ways that workers acquire the knowledge and
skills necessary to do their jobs.
• Advances in communications, media, knowledge management, and
simulation technologies are beginning to enable powerful tools for
training and performance support.
• Learning technologies will provide businesses with important new
levels of flexibility regarding the location, timing, and form of
learning activities.
• Traditional lecture-based training will increasingly be replaced with
technology-enabled approaches that support learning at the point of
need, either while learners are performing their jobs, or in the
context of computer-based simulations.
37
New Workforce Issues Make LearningTechnology An Especially Important Priority Now
3838
These Drivers Are Addressed Through FourMain Kinds of Learning Technology Applications Defined by When and How Instruction is Delivered
Definitions:
1. Courseware: Self-contained training software that delivers instruction andassessment, usually via the Web.
2. Virtual Classroom: Combination of hardware and software that allowsparticipation in an instructor-led training course without being co-located withthe teacher
3. Self-Service Performance Support: Help and advice systems used at the time ofneed, in the midst of performing a work task. Can be a stand-alone system or acomponent of a business application.
4. Remote Mentoring: Combination of hardware and software that allows a learnerto get instruction from a human mentor at the time of need.
39
Trend #1 Courseware has been Evolving from Text, to Online Lectures, toInteractive Simulations
Courseware WaveEnablingTechnologies Typical Applications
Online text, graphics, and quizzes • Basic connectivity, HTML
• Learning ManagementSystems
• This lowest commondenominator is still used forlow-end applications only
Online lectures and quizzes • Ubiquitous Broadband
• Digital video production anddelivery tools.
• Presentation authoring tools
• Offered as part of formaldistance learning programs,including at some colleges andcorporate universities
• Some compliance trainingoffered this way
Simulations
• Simple linear simulations:– for IT applications
– for business skills
• Rich, multi-path simulations
• High-fidelity simulation withrealistic I/O
• General tools for creatingand delivering Interactivemulti-media over the Web
• Learning ContentManagement Systems
• Simulation-building tools
• Accenture Learning’sPerformance Simulations
• Interactive, animatedwalkthroughs for applicationtraining
• Flight simulators and tank-battlesimulations
4040
Trend #2 The Virtual classroom is Evolving from Conference Calls toCollaborative Learning Environments
41
Trend #3 Self-Service Performance Support is Evolving from StaticDocumentation to Intelligent Assistants
Self-Service PerformanceSupport Waves Enabling Technologies Typical Applications
Static documentation forapplications, devices, methodsavailable online
• Cheap storage for onlinematerials
• Hyperlinked help systems inOffice applications – rely entirelyon user to navigate to relevantpotions
Context-sensitive help aboutapplication features
• Tools for efficiently connectingchunks of documentation touser interface features and
• “Tool tips” in Office applications
• Dynamic help menus
• Bubble help
Context-sensitive help andadvice, about both applicationfeatures and relevant businessprocess issues
• Tools for producing andmaintaining business-processknowledge
• A business application thatreminds the user of offline as wellas online process steps to take
• A Word processor that helps theuser write clearer sentences
Intelligent assistants, proactivelysuggest, and dynamicallyassemble context-sensitive helpand advice, bring in externalknowledge from the networkwhen needed
• Ubiquitous connectivity
• Integration of searchtechnology into productivitytools
• Intelligent analysis of what youmight need to know based onwhat you’re working on.
• A development environment thatlinks the programmer to relevantonline code libraries
• A word processor plug-in thatproactively retrieves informationon the Web that is relevant to thetopics that the user is writingabout.
42
Trend #4 Remote Mentoring is Evolving from Email and Phone Calls toAnytime / Anywhere Mentor Tele-Presence
43
Conclusions and Implications
• All four of the major forms of learning technology will continue tobe important in the future, since each has important role to play inthe enhancement of workforce productivity.
• Each form of learning technology is seeing key technical advancesbegin to unlock a dramatic next wave of potential.
• While up-front training will continue to be used, much content willmigrate out of just-in-case training, into just-in-time performancesupport.
• Any enterprise with a geographically distributed, rapidlychanging workforce will have no choice but to embrace newlearning technologies.
• For Accenture, and for many of our clients, adoption of learningtechnologies that make more effective learning available, when andwhere it is needed, will be a major enabler of a global workforcestrategy.
National Assessment of Educational Progress
(NAEP) Data – Grade 8
2005 NAEP Grade 8 ReadingAll Students, Nation
29
42
29
0%
20%
40%
60%
80%
100%
All Students
Percen
t o
f S
tud
en
ts
Proficient/Advanced
Basic
Below Basic
Source: National Center for Education Statistics, NAEP Data Explorer, http://nces.ed.gov/nationsreportcard/nde/
2005 NAEP Grade 8 Readingby Race/Ethnicity, Nation
49
21
4539
19
40
40
4143
43
11
39
14 18
37
0%
20%
40%
60%
80%
100%
African
American
Asian Latino Native
American
White
Pe
rce
nt
of
Stu
de
nts
Proficient/Advanced
Basic
Below Basic
Source: National Center for Education Statistics, NAEP Data Explorer, http://nces.ed.gov/nationsreportcard/nde/
2005 NAEP Grade 8 Readingby Family Income, Nation
43
19
42
43
15
38
0%
20%
40%
60%
80%
100%
Poor Non-Poor
Percen
t o
f S
tud
en
ts
Proficient/Advanced
Basic
Below Basic
Source: National Center for Education Statistics, NAEP Data Explorer, http://nces.ed.gov/nationsreportcard/nde/
2005 NAEP Grade 8 MathAll Students, Nation
32
39
29
0%
20%
40%
60%
80%
100%
All Students
Percen
t o
f S
tud
en
ts
Proficient/Advanced
Basic
Below Basic
Source: National Center for Education Statistics, NAEP Data Explorer, http://nces.ed.gov/nationsreportcard/nde/
2005 NAEP Grade 8 Mathby Race/Ethnicity, Nation
59
19
50 45
21
33
34
3841
42
9
47
13 15
37
0%
20%
40%
60%
80%
100%
African
American
Asian Latino Native
American
White
Pe
rce
nt
of
Stu
de
nts
Proficient/Advanced
Basic
Below Basic
Source: National Center for Education Statistics, NAEP Data Explorer, http://nces.ed.gov/nationsreportcard/nde/
2005 NAEP Grade 8 Mathby Family Income, Nation
49
21
38
41
13
38
0%
20%
40%
60%
80%
100%
Poor Non-Poor
Percen
t o
f S
tud
en
ts
Proficient/Advanced
Basic
Below Basic
Source: National Center for Education Statistics, NAEP Data Explorer, http://nces.ed.gov/nationsreportcard/nde/
High School AchievementMath and Science: NAEP Long-Term Trends
280
285
290
295
300
305
310
315
1986 1990 1992 1994 1996 1999 2004
Math
Science
Source: NAEP 1999 Trends in Academic Progress.
High School Achievement Reading and Writing: Long-Term Trends
250
255
260
265
270
275
280
285
290
295
300
19
84
19
88
19
90
19
92
19
94
19
96
19
99
20
04
READING
WRITING
NAEP Reading, 17 Year-Olds
220
240
260
280
300
320
1971 1975 1980 1984 1988 1990 1992 1994 1996 1999 2004
Av
era
ge
Sc
ale
Sc
ore
African American Latino White
NAEP Math, 17 Year-Olds
220
240
260
280
300
320
1973 1978 1982 1986 1990 1992 1994 1996 1999 2004
Av
era
ge
Sc
ale
Sc
ore
African American Latino White
Students in Other Countries Gain farMore in Secondary School
Nations' Average Science Performance
Compared with the U.S.
0%
50%
100%
Grade 4 Grade 8 Grade 12
Nations scoring higher than the U.S.
Nations scoring the same as the U.S.
Nations scoring below the U.S.
Source: NCES 1999-081R, Highlights From TIMSS
Source: NCES 1999-081R, Highlights From TIMSS
Nations' Average Mathematics
Performance Compared with the U.S.
0%
50%
100%
Grade 4 Grade 8 Grade 12
Nations' scoring higher than the U.S.
Nations scoring the same as the U.S.
Nations scoring below the U.S.
Source: CCSSO, State Indicators of Science and Mathematics Education, 2001
Fewer Latino students are enrolledin Algebra 2
45
62
0
80
1998
Percen
t E
nrolled
Latino
White
Math and Science Classes of Mostly MinorityStudents Are More Often Taught by Misassigned Teachers
54%
86%
42%
69%
0%
100%
90-100% Non-White 90-100% White
Certified in FieldBA or BS in Fieeld
Source: Jeannie Oakes. Multiplying Inequalities: The Effects of Race, Social Class, and Tracking on Opportunities to Learn
Mathematics and Science (Rand: 1990)
Poor and Minority Students Get MoreInexperienced* Teachers
20%
11%
21%
10%
0%
25%
High-poverty schoolsLow-poverty schoools
High-minority schoolsLow-minority schoools
*Teachers with 3 or fewer years of experience. “High” and “low” refer to top and bottom quartiles.
Source: National Center for Education Statistics, “Monitoring Quality: An Indicators Report,” December 2000.
African American and Latino17 Year-Olds Read at Same Levels As White 13 Year-Olds
0%
100%
150 200 250 300 350
Average Scale Score
Percen
t o
f S
tud
en
ts
White 13 Year-Olds African American 17 Year-Olds Latino 17 Year-Olds
African American and Latino17 Year-Olds Do Math at Same Levels As White 13 Year-Olds
0%
100%
200 250 300 350
Average Scale Score
Percen
t o
f S
tud
en
ts
White 13 Year-Olds African American 17 Year-Olds Latino 17-Year Olds
Source: US bureau of Labor Statistics and Bureau of the Census, Current Population Survey, March 2002
That’s Good, Because Education Pays:Annual Earnings of 25-34 yr-olds by Attainment, 2001
27831 2966334259
36135
49011
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
HS, no
diploma
HS diploma Some coll,
no deg
Assoc deg BA/BA
75% OF NEW JOB GROWTHREQUIRES SOME LEVEL OF POST-
SECONDARY TRAINING
Growing Wage Gap
Income:
– 1980, College Grad earned 50% more than HSDegree
– 2004, College Grad earns 100% more.
– Wage Gap Continues to Widen
Employment Change by Education 1992 to 2002
Source: Employment Policy Foundation tabulations of Bureau of LaborStatistics / Census Current Population Survey data; MTC Institute.
6.3
2.1
2.5
2.4
0.1
-0.4
-1.0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0
4-Year Degree
2-Year Academic
2-Year Technical
Some College
High School Only
Less than HS
Millions of Jobs
Conclusion
• Achievement of students overall has not kept pace
with the achievement of students in foreign countries.
• The Achievement Gap exacerbates this first problem
by ensuring an uneven level of achievement among
American students with disadvantaged children often
coming up on the short end.
The Commission on No Child Left Behind:
Bipartisan, independent effort to improve NCLB
• Formed February 14, 2006
• Commissioners:
• 15 leaders in education
• Represent K-12 and higher education, school andschool-system governance, civil rights andbusiness
• Co-Chairs: one Republican, one Democrat
Unacceptable achievement gaps pervade our schools
• African American 17-year-olds read at the same level as white 13-year-olds(NCES 2005)
Too many students drop out of school
• 7,000 students drop out of school every school day (Alliance for ExcellentEducation 2007)
Those who do graduate are often left unprepared for college and the workplace
• 40 percent of students at four-year institutions need remediation (Callan et al.2006)
• 42 percent of human resource professionals said high school graduates weredeficient in overall preparation for entry-level jobs (Conference Board et al.2006)
Students in other nations outperform American students
• In international comparisons of 15-year-olds’ math performance, Americanstudents scored lower than their peers in 20 other industrialized nations(Lemke et al. 2004)
Effective teachers and principals make a difference
• Good teachers can improve student achievement by as much asa grade level more than less effective teachers over the course ofa year—for low-performing students, the differences are moredramatic (Sanders and Rivers 1996)
• An increase in principal leadership ability is associated withhigher student achievement (Waters, Marzano and McNulty 2003)
But students who need it most are often taught by less experienced,less qualified teachers
• Children in high-poverty schools in three states were much morelikely than their more advantaged peers to be assigned to noviceteachers, teachers who lack subject matter knowledge andteachers with lower academic skills (Peske and Haycock 2006)
The current AYP system is a fairly blunt instrument• Schools either make AYP or they do not
• This method does not distinguish between schools that are movingin the right direction but have not yet reached the bar and thosethat are seriously struggling and show little or no progress
Many states still leave large numbers of studentsbehind
• As a result of certain flexibilities allowed under the law, largenumbers of students are not counted in some states’accountability systems
• The Associated Press found that 1.9 million students throughoutthe country are not counted in AYP calculations because of stateN-sizes (Bass et al. 2006)
There is insufficient investment in education research
• The Institute of Education Sciences spends $260 million oneducation research and development—two-thirds of 1 percent ofthe $400 billion spent each year on K–12 education
Low numbers of students participate in public schoolchoice and supplemental educational services (SES)
• In the 2003–04 school year, 3.9 million children were eligible totransfer to another public school, but only 38,000—less than 1percent of those eligible—actually transferred (Stullich et al. 2006)
• Only 233,000 of the 1.4 million students eligible for SES, or 17percent, participated in that option (Stullich et al. 2006)
The quality and rigor of academic standards varysignificantly from state to state
• A 2006 review of state standards found that two-thirds of U.S. students
attend schools in states with standards in the C, D or F range (Finn et al.
2006)
• A separate review found that only one-third of states—18—had strongstandards at every assessed grade level in every subject; remaining states
still lacked strong standards in every grade (AFT 2006)
Student performance on state assessments variessignificantly from student performance on NAEP
• Researchers have found that state results consistently exaggerate thepercentage of students deemed proficient or above in reading and math
compared with NAEP results (Fuller et al. 2006)
American children are left unprepared for life in a globaleconomy
• Approximately 40 percent of high school graduates lack the literacy skills
employers seek (Achieve 2005)
Effective Teachers and Principals:
• Develop new standards of effectiveness:
• Highly Qualified and Effective Teacher (HQET)
• Highly Effective Principal (HEP)
• Support teachers by giving high-quality professionaldevelopment to teachers at risk of not meeting HQETstatus
• Ensure all schools have similar expenditures for teachersalaries and comparable numbers of HQETs
• Require districts with high turnover rates developrecruitment and retention plans
Improved Accountability:
• Allow states to include achievement growth in AYPcalculations
• Limit state N-size to 20 and the use of confidenceintervals to 95 percent
• Improve the rules for including students withdisabilities in AYP calculations:
• Maintain the U.S. Department of Education’s 1 percent policy
• Amend the Department’s proposed 2 percent policy byreducing cap to 1 percent
• Give citizens the right to hold districts, state and theDepartment accountable for implementing the law
Effective School Improvement:• Ensure states and districts have the capacity to
help struggling schools and are focusing onschools with the most significant achievementproblems
• Require schools in corrective action toimplement a set of comprehensive interventionsdesigned to have a system wide impact, ratherthan the one option presently required
• Give schools in corrective action a full schoolyear to implement such interventions
• Double the research budget devoted to NCLB
High-Quality Student Options:• Improve access to and the quality of student options by
requiring:
• Schools that make AYP to make available more seats for
public school choice
• Districts to annually audit space available for choice transfers
• Districts to identify and publicize a person or office that would
operate as a point of contact on student options
• Multiple enrollment periods for students eligible for SES
• Access to school facilities for SES providers
• States and the Department to hold SES providers
accountable for improved student achievement
Fair and Accurate Assessments:
• Retarget existing assessment funds to:
• Improve the quality of assessments
• Provide alternate assessments for students withdisabilities and English language learners
• Develop required science assessments and theCommission’s 12th grade assessment
• Improve test delivery and scoring technology
• Allow districts to use Title I funds to develop andimplement high-quality formative assessments
• Schools in improvement would be required to do this
High Standards for Every Student:
• States assess their standards against what is neededfor success in college and the workplace
• Develop voluntary model national standards andassessments:• Developed by a national panel and based on the NAEP
frameworks
• States could:
(1) Adopt the national model standards and assessments
(2) Build their own assessments based on the national model
(3) Continue to use their existing or revamped standards andtests
• States choosing options 2 or 3 would have their standardscompared to the national model standards
Strengthening Accountability in HighSchools:
• Districts with large concentrations of strugglinghigh schools must develop and implementcomprehensive district wide high schoolimprovement plans
• High schools must add a 12th grade assessment
• Would measure mastery of content needed to becollege and workplace ready
• Not the sole determinant for graduation
Accurate, Reliable Data:
• Require all states to design and implement ahigh-quality longitudinal data system
• Core element of the Commission’s vision for ahigh-achieving education system
• Must have common elements
• Federal government to provide formula grants toassist states in development and implementation
• Provide professional development for all who usethese data systems
The Challenge
• In 2005 the loss of portable low skills jobs wasalmost complete but there was a newchallenge
• In 1990 nobody had seriously considered theidea that low wage countries could producehigh skill workers at scale
• But China, India, and others are doing justthat, for example, engineers
The Challenge
• Thomas Freidman has told us the world is flat--- not really but it is getting flatter all the time
• The result is that U.S. high, medium, and lowskill workers are being underbid
• Entire U.S. standard of living is at risk if we donot take action
Average Weekly Earnings 1969 to 2005 (in 1982 Dollars)
Sources: U.S. Department of Labor, Bureau of Labor Statistics, Employment, Hours, and Earningsfrom the current Employment Statistics Survey (2006).
The Challenge
• The answer to maintaining a competitiveadvantage is a U.S. educational system thatproduces highly skilled, creative, andinnovative workers.
• The current K-12 system is not meeting theseexpectations
International Attainment
Source: Organization for Economic Cooperation and Development, Education at a Glance, Table A1.2a. (Paris: Author, 2006).
U.S. Education System:Small Gains at Ever-Higher Cost
Sources: NCES NAEP Trends in Academic Progress Through 1999; NCES Digest of Education Statistics 2003.
The Challenge
• The problems with the K-12 system requiremore than marginal change
• Our K-12 system was basically designed foran agrarian society around 1900 --- builtaround elapsed time rather than skills andknowledge attained
• THE PROBLEM IS THE SYSTEM!
Summary
• The world is getting flatter
• Other countries are producing high skill, lowwage workers at scale
• The U.S. educational system is not capable ofaddressing this challenge
• The result of inaction will be a long run declinein the U.S. standard of living
• Creation of the New Skills Commission
Step 1---Move On When Ready
• Let students move on when ready
• Take college level exam at age 16
• Most students should be college ready by age16 --- essentially eliminate the last two years ofhigh school
• If students don’t pass continue to offeropportunities
The New Progression Through the System
Step 2---Resources
• Elimination of two years of high school willsave about $50 billion per year
• Additional funds of $8 billion
• Total funds available $58 billion
Step 3---Early Childhood
• Invest $19+ billion in high quality earlychildhood for
• All available data supports an expansion ofearly childhood education
• All 4 year olds
• Low income 3 year olds
Step 4---Teacher Quality
• Add $19+ billion to teacher pay
• Surveys show additional pay will attract higherquality
• Recruit teachers from upper one-third ofcollege classes
• Abolish pay based on seniority --- insteadbased on student performance
Step 5---High Performance School Districts
• School districts write performance contractswith variety of organizations to run schools
• Schools look like the best of charter schools
• Schools funded by the states --- teachersemployed by the states but hired by individualschools
Step 6---School funding
• $19+ billion provided by states for hardest toeducate students
Step 7---Curriculum
• Improve quality and reduce the number oftests
• Curriculum based on mastery of ideas andconcepts --- for example, understandingmathematics not memorizing it
Step 8---Education to the New Standard
• All members of the workforce 16 years old andolder have access to free education up to thenew college ready standard
Step 9---Lifelong Learning GI Bill
• Government creates an account for everychild of $500 when born and deposits $100 peryear up to age 16
• Workers can withdraw from the account onlyfor educational purposes
Step 10---Regional EconomicDevelopment Authorities
• Federal government to authorize states tocreate regional authorities to combineeconomic development, adult education, andjob training
Executive Summary
• The education needed to be a successful worker ten years fromnow is very different compared to that needed in today’sworkforce
• Community Colleges will be the primary engine to provide thiseducation and empower this new workforce
We are witnessing significant growthin the number of jobs requiringpost-secondary educational degrees
Adapted from U.S.
Department of
Education, Office of
Adult and Vocational
Education, "The
Economic Imperative for
Improving Education," in
The High School
Leadership Summit,
Issue Papers
(Washington D.C.,
2003), Figure 2.
Adapted from “Tough
Choices Or Tough
Times: The Report of
the New Commission
on the Skills of the
American Workforce,”
National Center on
Education and the
Economy,
(Washington, D.C.,
2006)
“Countries like the United States will see thecontinued erosion of low-skill, routine work and anenormous surge in demand for people with a very
high level of foundation skills and great creativity.”
The Education Distribution for the2010 “Creative” Workforce Based on Job Growth Estimates for the 2010 Workforce
Based on 2005 U.S Census data + U.S. Department of Education, Office of Adult and Vocational Education, "The Economic Imperative
for Improving Education," in The High School Leadership Summit, Issue Papers (Washington D.C., 2003), Figure 2.
The Education Profile for Today’s Workforce Based on Current US Census Data for 25+ Year Olds
Based on current US Census Data for 25+ year olds
Source: 2005 U.S Census data
Overlapping these profiles shows asignificant gap will need to be closed!
Why Manufacturing?
Manufacturing accounts for about 12 percent of the nation’sGDP and 11 percent of U.S. jobs
Manufacturing is the largest contributor to economic growth
Manufacturing wages are 23 percent higher than theaverage of other sectors’ wages.
Why Manufacturing?
Manufacturing provides its workers with more health,retirement, and other benefits than any other sector exceptgovernment.
Manufacturing contributes two-thirds of U.S. exports
Manufacturing performs 71 percent of all business researchand development / innovation
In the last 20 years, manufacturing productivity has growntwice as fast as overall business productivity
5
4
29
9
9
21
24
0 10 20 30 40
USA
Japan
China
Germany
France
Korea
Rest of the
World
Share of Worldwide
Manufacturing
U.S. is Leader in Manufacturing
If U.S. Manufacturing wasits own economy—It would be the 8th largestin the world
U.S. Remains Global Manufacturing Leader
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
1980 1985 1990 1995 2000 2003
Share of Global
Mfg GDP
All manufacturing industries High technology industries
Other manufacturing industries
19%
45%
Source: National Science Foundation
Global Leadership RequiresHigher Skills
The Workforce of the Future
Shortage of 13 million to 15 million skilled workers by 2020
Baby-Boom Generation is Retiring
Little or no growth in 18- to 26-year-old agegroup
Outdated or inadequate skills for high-demand jobs
60 percent of all new jobs in the 21st century will require skills possessed byonly 20 percent of the current workforce
The Growing Workforce Gap
20
25
30
35
40
45
50
55
60
1999 2002 2005 2008 2011 2014 2017 2020
Po
pu
lati
on
(in
mil
lio
ns
)
age 65 and over
18-24 year olds
Source: Social Security Administration
Skilled Employee Retirements Climbing
The Future Manufacturing Workforce
90% -- moderate to severe shortage of qualified skilled
production workers;
65% -- moderate to severe shortage of scientists and
engineers;
39% -- moderate to severe shortage of qualified unskilled
production workers.
What Manufacturers Say About TheirCurrent Workforce
Source: 2005 Skills Gap Report
Given Changes in the Economy and BusinessEnvironment, Which of the Following Will Be Most Importantto Your Company’s Future Business Success Over The NextThree Years? (Select Up to Three)
0% 10% 20% 30% 40% 50% 60% 70% 80%
High-Performance Workforce
New Product Innovation
Low Cost Producer Status
Increased Customer Service
Orientation
Increased Sales Outside the U.S.
Sourcing Products in Global Markets
Supply Chain Integration withSuppliers
Source: 2005 Skills Gap Report
Are K-12 Schools Doing a Good JobPreparing Students for the Workplace?(Those Responding ‘No’)
75% 76% 77% 78% 79% 80% 81% 82% 83% 84% 85%
2005
2001
1997
Source: 2005 Skills Gap Report
How Prepared for a Typical Entry LevelJob in Your Company Are Applicants with a High SchoolDegree/GED?
0% 10% 20% 30% 40% 50% 60% 70%
Poorly Prepared
Adequately Prepared
Source: 2005 Skills Gap Report
How Prepared for a Typical Entry LevelJob in Your Company Are Applicants with a Certificate froma 2-Year College?
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Poorly Prepared
Adequately Prepared
Source: 2005 Skills Gap Report
Educational Attainment—Household SurveyPercent Distribution in 2002, Employed Civilians Aged 25 and Over
9.9
30.4
18.0
9.6
32.1
Less than a high school degree
High school graduate
Some college, no degree
Associate degree
Bachelor's or higher degree
Source: U.S. Census Bureau
College or Bust
0% 10% 20% 30% 40% 50% 60% 70%
Will Enter a 4-
year college
Will enter an
associate degree
program or
advanced
training
Will lack the skills
needed for
employment or
drop out of high
school
Where the Jobs Are…
Where 9th graders are
headed
Source: Bureau of Labor Statistics
Average Annual Rate of Change
4.9
4.9
5.1
5.2
5.2
5.5
6.7
8.4
9.0
10.3
Religious, grantmaking, and other organizations
Metalworking machinery manufacturing
Employment services
Advertising and related services
Other general purpose machinery
Scientific research and development
Motion picture and sound recording
Software publishers
Computer systems design and related services
Internet, data processing, and other services
Industries With Faster Than AverageEmployment Growth
Detailed Industries With Faster ThanAverage Employment And Output Growth
• Detailed industries with:
– employment growth greater than 14.8%
– and average annual output growth rates greaterthan the overall average of 3.3%.
• These industries accounted for:
– 21.3% of employment in 2002
– and are projected to account for 45% ofemployment growth from 2002-2012
Detailed industries with faster than averageemployment growth and output growth greaterthan 2% per year
Manufacturing– Plastics product manufacturing (128,000)*
– Animal slaughtering and processing (80,000)
– Architectural and structural metals mfg (77,000)
– Pharmaceutical and medicine mfg (68,000)
– Other wood product mfg (67,000)
– Other general purpose machinery mfg (51,000)
– Cement and concrete product mfg (48,000)
– Metalworking machinery mfg (34,000)
– Veneer, plywood mfg (21,000)
– Forging and stamping (18,000)
* Numbers in parentheses are projected employment changes, 2002-12
Certifications for Skills
Certificates and DegreePrograms based on IndustryCompetencies and SkillsDemand such as MSSC
Integrated Education andTraining Systems That ProvideCareer Pathways
U.S. Manufacturing Worker in 2050
Necessary Skills• Robotic Implants (Ocular, Servo-Controls)• GPS Interface• Fluent in Spanish, Mandarin, English
Why Manufacturing?
Manufacturing accounts for 12 percent of U.S. GDP and 11 percent of U.S.jobs
Manufacturing is the largest contributor to economic growth, andcontributestwo-thirds of U.S. exports
Manufacturing wages are 23 percent higher than average of other sectors’wages.
Manufacturing provides workers with more health, retirement, and otherbenefits than any other sector except government.
Manufacturing performs 71 percent of all business R&D/innovation
In the last 20 years, manufacturing productivity has grown twice as fastas overall business productivity
90% -- moderate to severe shortage of qualified skilled
production workers;
65% -- moderate to severe shortage of scientists and
engineers;
39% -- moderate to severe shortage of qualified unskilled
production workers.
The Current Workforce Skills Now Lacking
Source: 2005 Skills Gap Report
The Growing Workforce Gap
20
25
30
35
40
45
50
55
60
1999 2002 2005 2008 2011 2014 2017 2020
Po
pu
lati
on
(in
mil
lio
ns
)
age 65 and over
18-24 year olds
Source: Social Security Administration
Skilled Employee RetirementsClimbing
690,000
28,300(4% of
Graduates )
16,800 (59% of
Eligible )0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
Minority High School GraduatesEngineering EligibleAdmitted
Approximately690,000 minoritystudents graduatedfrom high school in2002. Only 28,300(4%) were considered“engineering eligible”based on coursestaken and grades. Ofthese, 16,000 (59%)enrolled as freshmenin engineeringschools, out of107,000 totaladmissions.
Math and Science as the New Literacy
Source: National Action Council for Minorities in Engineering, Inc.
• Algebra Project (Moses & Cobb, 2002)
• Uri Treisman at UCal/Berkley (Treisman, 1992)
• Research and utilize new technologies for
developmental math (Achieving the Dream:
Community Colleges Count)
• Abdulalim Shabazz at Clark-Atlanta University
(Kostelecky, 1992)
• Opportunity to build bridges to promote scientific
literacy through the use of culturally relevant modes
of discourse (Varelas et. al, 2002)
Implications for Improving Math andScience Learning Environments for Students of Color
Source: National Action Council for Minorities in Engineering, Inc.
Education: Ticket from Poverty
$102,672
$65,531
$42,499
$28,669$22,242 $20,717
$37,421
$24,997
$17,305$11,906
$8,105
$53,143
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
$100,000
$110,000
Grad Degree B.A. Degree Some College H.S. Diploma Some H.S. No H.S.
MalesFemales
Adults Age 20+ Working Full-Time, California, 2000 Source: Census 2000 Public Use Microdata for California.