Skills Gaps: Getting the People You Need to Serve Your ...assets1c.milkeninstitute.org/.../2007/Slide/gc07_basic_skills_gap.pdf · Source: Deloitte / National Associations of Manufacturers,

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



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: 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



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



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


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


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


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


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


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


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


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


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


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


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


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


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.

Documents

Skills Gaps: Getting the People You Need to Serve Your ...assets1c.milkeninstitute.org/.../2007/Slide/gc07_basic_skills_gap.pdf · Source: Deloitte / National Associations of Manufacturers,