Back in the 1950s, 1960s and early 1970s, when companies were faced with high costs of operation in the Northern cities, their choice was relatively simple. Move to the rural South and take advantage of the low wages, mechanically skilled workforce, cheap land and incentives.

Today, manufacturing and service operations are dealing with a global economy that is increasingly knowledge-based. Ability to compete on a global scale forces the firm to focus more on how to reduce its costs through the application of technology to increase productivity than on finding lower wages. Every business and industry, whether traditional or high tech, that intends to survive in this highly competitive environment must embrace the application of advanced technology and the use of highly skilled workers.

Because the New Economy is knowledge based, domestic U.S. firms and foreign firms investing in the United States tend to look for communities and regions that possess a sizeable labor force with an existing skill base suitable for their operations. The past need for mechanical skills on an assembly operation have been replaced by computer skills, math and science skills, and the soft skills needed to function in a team environment.

So how does a company determine where these pools of skilled workers are located? Because traditional measures of wage levels, unemployment rates and labor force growth are less valuable in a New Economy environment, what measures are available to find the desired workforce?

Unfortunately, the answer generally lies in translating a number of available statistics and other sources of information to arrive at a satisfactory answer. Education levels provide one important measure of the skill base. For example, what percentage of the adult population has graduated from high school, or from a two-year college, or received a baccalaureate degree or higher?  This information is available from the 2000 Census, which, of course, is now half a decade out of date. ACT scores can be another source of information on the quality of the emerging workforce and the education they have received.

Another potential source of information for the site selector is labor market information available from a state's employment office (each state has a different name for this agency). This is current information on the size of the labor force and employment base, but provides little information on the skill base of the workforce. Inferences can be made about the availability of certain skills by analyzing the level of activity in information-oriented economic sectors, however. Some regions or communities have gone to the expense of hiring an outside consultant to analyze the local labor market, and this more detailed information can provide insights on skilled labor availability.

At the minimum, relocating and expanding companies will be concerned about the basic skills of the local workforce. The terms “workplace literacy” or “basic skills” refer to more than simply reading, writing and mathematics. They include communications skills, problem-solving abilities, the capacity to work effectively in teams and the willingness to accept change and embrace personal improvement to meet the evolving demands. The ability to locate qualified applicants at even this basic level is becoming an increasing problem, even in manufacturing, despite all of the layoffs. A May 2003 survey by the National Association of Manufacturers showed that 80 percent of responding employers “reported a moderate to serious shortage of qualified job applicants.”

A business looking at a new location should also investigate the scope and nature of the training programs available from the state, how well they are funded and what skills they are training. For example, Kentucky began addressing its workforce basic skills shortage nearly five years ago. Since then, the number of employees participating in Kentucky's workforce adult education programs has increased from 8,000 people in 2000 to more than 51,000 employees in 2004. Information on statewide workforce development initiatives from Web searches can also be an indication of trends in education and training in the state and region.

An increased emphasis will be made on education and training resources to meet the needs of the New Economy. Workplaces are becoming high performance, requiring that each worker have the ability to do a greater variety of tasks. Therefore, workers are finding that they must be multi-skilled and must commit to a lifetime of learning and retraining in order to remain competitive in rapidly changing labor markets. Programs such as those of the National Skill Standards Board Institute are aiding in fostering improved skills training and occupational certification across the country. As companies seek training programs as part of their location search, it would be beneficial to explore which communities and states have embraced programs such as this.

“Twenty-first century jobs require 21st century skills,” says Karen Bruett, director of education and community initiatives for Dell. “Successful businesses are looking for employees who can adapt to changing needs, juggle multiple responsibilities and routinely make decisions on their own. We must infuse 21st century skills into K-12 education in order to better prepare students for the realities of work and life in the 21st century.” 

“Twenty-first century skills combining technology literacy, critical thinking, creativity and mastery of core subject matter are the lifeblood of a productive workforce in today's global, knowledge-based economy,” says Susan D. Patrick, director of educational technology, U.S. Department of Education.

From a community's perspective, the ability to compete in the New Economy has two dimensions, according to a recent article in the Arizona Republic. The first is to be a magnet for talent, to create a high-amenity place that draws educated people to live and work there. The second is to be a pipeline for talent, to create a high-quality school system capable of producing an educated and talented workforce that will stay at home and form the foundation for future prosperity.

Richard Florida has attracted a lot of attention with his focus on the creative class in his research and book about the topic. Increasingly, companies will be drawn to those communities with a high quality of life that offer the lifestyle sought by young knowledge-based workers. These will tend to be in metropolitan settings, but some rural areas are successfully attracting lone eagles (individuals with knowledge-based enterprises) and entrepreneurs who prefer a more manageable pace of life with good access to outdoor recreation. For example, this author recently completed a strategic plan in the small ski town of Red Lodge, Mont., and found that this community recently acquired two new manufacturing operations from local entrepreneurs and was home to more than 30 lone eagles.

Communities that have an insufficient supply of workers with 21st century skills will see the high-skilled, high-paying jobs locating to or expanding in other communities that can supply the needed talent. This will have a significant negative impact on local income, because the wage gaps between workers in knowledge-based/information-based industries and the rest of the pack continues to widen.

The presence of a college or university is often important in the location of a knowledge-based business. With this increasing demand for knowledge-based and technically skilled workers in the New Economy, the post-secondary education system will face growing pressure to deliver graduates who can reduce this workforce gap. At the same time, universities and colleges are facing budget cutbacks, inability to recruit top technical personnel and professors and obsolete technology. It will take dramatically increased collaboration between higher education, local government and the business community to address this problem. Failure to do so will reduce the competitiveness of the community for a growing economy.

The inability at times for public institutions to respond to the need for continuing education has led to the development of other alternatives. The education of the adult workforce is moving forward with private educational organizations such as the University of Phoenix and Strayer Education Inc. Strayer, for example, offers bachelor's and master's degree programs in business administration, information technology and accounting, primarily to working adults. The company has grown to 35 campuses this year from 12 in 2001 and has increased its online offerings. It expects to serve 23,000 students this year, more than double the roughly 10,000 taught in 2001, chairman and CEO Robert Silberman said in a recent article in the Washington Post. The University of Phoenix has more than 40,000 students, 163 campuses and offers a considerable number of career-oriented online courses and programs.

The New Economy is real and growing. Competitive companies should increasingly look to locate and/or grow in those communities that can meet their needs for highly skilled workers now and into the future.

David Kolzow is the president of Team Kolzow, Inc., Hattiesburg, Miss. He can be reached by calling (601) 466-0338 or by e-mailing drkolzow@c-gate.net.

Vibrant Labor Markets

Dubuque, Iowa's economic development and business leaders created www.accessdubuquejobs.com to promote available jobs and communicate with people who have left the area and may be considering a return to their roots.

This attract-back strategy, called “Dubuque: Your Home Town, Your Future,” has the goal of letting people know that Dubuque is a vibrant and diversified economy, as opposed to the recession the city faced in the 1980s and early 1990s. Many people left the city to find different opportunities.

The local paper, the Telegraph Herald, prints ads that tell the success stories of someone who has made the return to Dubuque and details why they made the choice to come back, says Rick Dickinson, director, Greater Dubuque Development Corp.

Today's Dubuque features three cornerstones in maintaining its vibrant economy. It is growing job opportunities through recruitment and expansion; it is creating an infrastructure and amenities to provide an excellent quality of life with projects such as $188 million in developments along the Mississippi River; and it is growing its population and workforce base.

Dubuque's workforce supports the thriving business climate, which features a labor shed of 70 miles and includes parts of Wisconsin and Illinois. “Many of the counties surrounding us have double digit unemployment figures so we have folks who commute in order to find opportunities in Dubuque,” Dickinson says. What's more, Dubuque is home to 12,000 people who consider themselves underemployed.

Dickinson credits the economy's turnaround to the strength of the community and its leadership.

Leadership working together also plays a vital link in workforce development efforts in Fayetteville-Cumberland County, N.C. “What makes us different from other communities is that there are seven agencies located at our one-stop center, called the JobLink Career Center, who sit down and work together,” says Pat Hurley, director, Cumberland County Workforce Development Center.

“We have excellent relationships with businesses and the private sector community in meeting their needs and providing them with a skilled workforce,” Hurley says. The center assists not only the business community in a variety of ways, but also assists those looking for employment and training.

One way the center assists corporations is through the incumbent worker training program, which is supported by the state of North Carolina. The state provides grants of up to $37,500 to employers to provide additional skills training for their existing workforces. Hurley says corporations apply to the local workforce development board and the North Carolina Workforce Commission, which gives final approval for the training funds, reviews the applications. “It is a unique opportunity that state monies are being used to help existing employers in the community,” Hurley notes.

To learn more about the unique workforce opportunities in Dubuque visit www.accessdubuquejobs.com and www.greaterdubuque.org. The Cumberland County Workforce Development Center's Web site is under construction.