It takes a village: Leveraging regional ecosystems to build a competitive workforce

It takes a village: Leveraging regional ecosystems to build a competitive workforce

January 19, 2018

Hardly a day goes by that you don’t see a report or an op-ed about how machines and computers are going to replace humans in the workforce, often referring to workers like they’re obsolete. Meanwhile, leaders around the world are placing even greater importance on skills of human workers and they’re struggling to find skilled and experienced workers in local labor markets and maintain the skills of their current workforce.

A recent global study conducted by the IBM Institute of Business Value in partnership with Oxford Economics of more than 8,000 c-suite executives from around the world found that 60 percent of executives identified people skills as one of the most important external forces that will impact their enterprise in the next two to three years.

Another study of more than 5,600 global executives revealed that half of the industry executives cite lack of appropriately skilled workers in local labor markets as the single greatest skills-related challenge and 60 percent struggle to keep workforce skills current and relevant in the face of rapid technological advancement. We are facing a crisis. But computers and machines taking jobs is not the close fight. The immediate challenge is finding and maintaining a workforce of skilled and experienced workers to do the jobs that exist today.

Rapid advancements in technology are morphing traditional industry value chains and business models in unexpected ways. These dramatic transformations have had a profound effect on the types of workforce skills demanded by various industries.

Employers across industries are increasingly crippled by a workforce whose skills have not kept pace with changing requirements. If left unresolved, the global skills shortage will have profound effects on industries, regional economies, individuals and their families.

There is no magic bullet to solve this problem and no one entity can address this challenge alone. Solving this challenge will require a village. Leaders from industry, education and government must work together to deepen the talent pool and equip the workforce with the skills today’s organizations need. However, there are varying perspectives as to who should be responsible for leading the skills challenge.

The previously mentioned study of global executives also asked leaders who or what entity they believe should take responsibility for developing workforce capabilities. Almost 80 percent indicated that they believe governments should bear the bulk of responsibility in developing and maintaining worker skills (see Figure 1). Interestingly, despite much posturing about limiting the role of government, an astounding 90 percent of industry leaders in the United States indicated they believe government should have serious responsibility for addressing the skills challenge. In reality, many government organizations have been overwhelmed by the extent and depth of the issue and are not in a position to address the issue on their own.

Figure 1: Who is responsible for workforce skills development?

Source: IBM Institute for Business Value Global Skills Survey

Leaders ranked higher education institutions second in order of responsibility. Confidence in higher education’s ability to solve the widening skills gap is underwhelming: Only half of the industry leaders surveyed believe secondary schools are adequately preparing students to be productive members of the workforce. And only 55 percent say that educational institutions adequately update curricula and programs to keep pace with industry changes.

Business leaders are no more impressed by their own ability to address the skills challenge. Only 51 percent of industry executives believe their organization’s business culture supports employee career development. And as many as 55 percent of all executives surveyed conclude that inadequate investment from private industry is the most important challenge to overcome in addressing skills development in the future.

Despite having arguably the most at stake, individuals were ranked last in order of responsibility. Only 39 percent of all executives surveyed believe individuals should have a significant responsibility in maintaining and developing their skills.

Tackling the global skills crisis requires a team effort in which all necessary ecosystem actors align to address the disconnect and build cohesive regional skills ecosystems. With partners working in tandem, industries will be better equipped to innovate at the level and intensity necessary to build and sustain job creation and competitiveness. In addition, economies will be better positioned to recruit and retain new industries, and individuals will be armed with the skills necessary for higher paying new jobs.

Building and engaging more effectively in business ecosystems – in addition to one-on-one relationships – can help all partners more readily overcome barriers and accelerate establishment of new initiatives and innovation. Ecosystems involve complex webs of interdependent enterprises and relationships aimed at creating and allocating some form of business value. In a regional context, ecosystems might refer to strong or loose affiliations of businesses; educational institutions; local, state or national government entities; and others.

To create cohesive regional ecosystems, partners from government, education and industry must work together to:

Identify the right partners and empower orchestration
Identify key partners from government, education and industry, and then define and empower a strong intermediary to recruit partners and build consensus. More economic development organizations (EDOs) are becoming increasingly active in this area by serving as both a facilitator and catalyst with the appropriate players. In fact, we are seeing many more EDOs adding full-time workforce development staff, sometimes giving that position more attention and budget than the traditional recruitment position.

Crystallize vision, define objectives and achieve commitment
Define and agree on a common vision with clearly defined roles and commitments across ecosystem partners. In addition, establish business intelligence requirements, strategy and governance for addressing data collection and sharing among partners. The guru of total quality management, Dr. W. Edwards Deming said, “you should not ask questions without knowledge.” You must survey industry leaders regularly to determine skill set needs before objectives and a process to achieve those goals and objectives can be reached.

Formalize processes and sustainable design
Formalize processes and accountability mechanisms to help ensure partners remain engaged and committed, and encourage partners to align internal business metrics to the ecosystem vision. Measure, measure and measure! It’s the only way you can determine whether you are succeeding.

Engage your community colleges and technical schools
They were the unsung heroes in the workforce development ecosystem. Now, they are front and center getting the respect they deserve. Look at states like Tennessee and the Tennessee Promise, which will provide two years of tuition-free attendance at a community or technical college in Tennessee, or Tennessee Reconnect, which provides a last-dollar scholarship for adults to attend a community college tuition-free. This effort gives every Tennessean the opportunity to enter or reenter public higher education with no tuition expenses. Both initiatives are lead practice examples of how states and regions are building the talent pipeline.

Global economies are at a crossroad. As industries are redefined, so are the types of skills they require. The available labor force can either help accelerate or constrain economic evolution and growth. How ecosystem partners from the public and private sectors respond will determine whether this evolution results in sustained economic malaise or economic prosperity. How engaged and coordinated are ecosystem partners in your region or industry and what role are you taking to strengthen the skills ecosystem in your region?