Changing How Virginia Thinks about Economic Development

Stephen Moret, CEO of the Virginia Economic Development Partnership (VEDP), is doing more than closing billion-dollar deals and resurrecting Virginia’s reputation as a top state to do business. He’s trying to change how Virginians think about economic development — or at least change what outsiders think about how Virginians think about economic development.

The VEDP has done something it has never done in the dozens of years that I have followed the partnership — launched a quarterly publication, the Virginia Economic Review, that will, in Moret’s words, “provide an inside look at Virginia’s economy, its diverse array of world-class companies, its amazing talent, and its stunning natural beauty, as well as insights from national thought leaders.”

With apologies to Oldsmobile, this is not your father’s sales material. With a focus on tech companies and tech talent, the inaugural edition interviews Amy Liu, a nationally known thinker about economic development with the Brookings Institution (cited previously on this blog); Peter Cappelli, director of the human resources center at the Wharton School; and Dan Restuccia, chief product and analytics officer of Burning Glass Technologies, a labor market analytics firm, among others.

Some of the insights contained within:

Amy Liu (Brookings):

We have to re-educate everyone about what success looks like in the modern era when there’s disruption in the retail sector, rise of automation, and a leaner manufacturing sector that is producing fewer jobs than it once did.

Today’s economy is service-oriented and knowledge-based. It is going to run on the ideas, entrepreneurialism, and skills of people. So future growth and wealth creation will come from investments in workers, including workers from different racial and ethnic backgrounds. Economic developers are realizing the critical nature of talent development in economic growth. …

I think the technology is occurring faster than the educational systems are adapting to it. We need to accelerate that. That’s why you’re starting to see coding schools and other nontraditional institutions emerging into the training marketplace.

We need to focus on a mid-tech workforce. In a review of 90 percent of all U.S. occupations, we have found that more than three-quarters of them have rapidly digitalized, including traditional pathway jobs. Many of these jobs do not require a worker to have a four-year college degree. I would love to see more K-12 and two-year institutions do more to prepare our young workforce for future jobs with basic computer literacy, software programming, and other data analytics. …

I definitely applaud Virginia for putting together a response to the [Amazon] HQ2 opportunity in a way that is not just about subsidies, and, in fact, the subsidies were not the kind of rip-off that most people were worried about. … The other thing I thought was very smart about the Virginia application was the focus on the talent pipeline. Unlike many other applications, Virginia did not offer an Amazon-specific solution and instead chose to invest in engineering and broader skills development through its higher education and K-12 institutions.

Peter Capelli (Wharton): Silicon Valley is known as a place where it is difficult to run a business, there are a lot of regulations, it’s really expensive, and commuting is a pain. Why, then, is everybody here?

Well, everybody’s here because the employees are here that we want to hire, and the employees are here because everybody else is here, right? The reason for those agglomerations, of course, is because employers want to hire on a just-in-time basis. The reason they’re there is they want experienced hires, and where do you find experienced hires who are in your niche industry and have had 10 years experience with these particular types of problems? The only place you find that is with density.

Dan Restuccia (Burning Glass) on the technology skills gap:

Employers can increase demand quite quickly. The ability of job seekers to respond in real time is not there in the same way. On one hand, you can’t have a supply-side system that responds immediately for high-growth skills because those skills take time to learn. On the other hand, we right now have very poor and very weak signaling to students and job seekers around what it is that employers are looking for and how can you as a job seeker make sure that you have the skills that employers are looking for today and will be looking for one-to-five years down the road. …

The question for Amazon was not a cost-driven one. Their optimization was not, “Where can I get the most workers most affordably?” Their question was, “Where can I get the tens of thousands of tech workers that I need?” I think they were driven to New York and the Washington region because those are the cities that have large tech workforces from which to draw. They have robust pipelines of new tech workers coming in, both through local universities and also as cities that are relatively easy to attract people to move to.

Speaking of the skills pipeline, the Virginia Economic Review displays this graphic based on National Center for Education Statistics data:

There are other articles in the inaugural edition worth highlighting, which I will do in due course. This content deserves to be circulated widely within Virginia as well as without.

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10 responses to “Changing How Virginia Thinks about Economic Development

  1. That’s a bit better Jim, but to what end and why and where?

    What’s powering the Wave for the Ages Coming over the Horizon NOW, the game changing giant Steve Moret has spotted and positioned Virginia so well to catch, hook into, harness and ride for the next 60 years into the Economic Development Hall of Fame?

    Plus:

    Where are the hot spots to fish those tides, for what, with what bait, and how? These are huge and complex questions right now.

  2. The thing that comes across over and over – is what kind of worker are most of these companies looking for in terms of education and skills.

    One presumes that these companies ARE finding them in places like NoVa but for Virginians – what schools are providing the “right” kind of job-ready education?

    We spend a lot of time talking about SOLs and the high cost of 4-year college – but if you are a kid who lives in RoVa or in the higher-crime parts of Richmond – are you getting educated so you can work for one of these 21st-century employers?

    Those who think a traditional 4-yr college education will equip them for the 21st century – are living in the past. Yes, in years and decades past – just “proving” you could accomplish 4 years in college was an important benchmark. I’d posit that – that’s “old school” and really a recipe for failure and debt now days.

    It’s not just technical skills – it’s competence in basic reading and writing such that those skills bring the knowledge that is needed to participate successfully – your entire life.

    This is what employers want; is Virginia focused on providing workers who have these skills?

  3. Workforce. STEM degree production. Nothing has changed since I worked for the VA Chamber of Commerce almost 20 years ago. I can’t speak for Jim, but this is the reason I’ve had my hair on fire about the skyrocketing cost of Virginia’s public universities and community colleges, and about poor performance in the K-12 realm preparing students for the high-effort degrees.

    I think Moret is doing a wonderful job, but the first major eight or nine figure deal Virginia did where higher education investment and workforce prep were central to the win involved the Rolls Royce plant in Prince George County, more than a decade ago now. Sadly it has not lived up to growth promises, but it is still there and it set the pattern. We reinforced that pattern at the shipyard a year of so later with a proposal to the state where the “incentive” we wanted for an expansion was a new building for our Apprentice School. I’m not too proud to steal a good idea.

  4. “and about poor performance in the K-12 realm preparing students for the high-effort degrees.”

    Problem is for most kids now (well over 50%) the K-12 public schools are worse than useless. Completely broken beyond repair, given entrenched interests, these failed schools grossly mismanaged by an incorrigible corrupt system, do far more harm than good, a problem that increases daily. We have no choice now for the sake of our kids, but replace this rotten system altogether. This new workforce education is a good place to start in tandem with charter schools.

  5. Virginia Economic Review and podcasts with a couple of the folks referenced above are available online at https://www.vedp.org/virginia-economic-review

  6. I understand the need for computer skills. I founded a tech-related business and have two sons working in the IT field. One is working for UVa, the other is in metro DC.

    As a nationwide business consultant for many years, the missing ingredient that I saw most often was not the lack of technical skills. It was the lack of critical thinking skills, the ability to see the big picture, to synthesize, and take non-traditional approaches to problem solving. Many innovative companies feel that same lack and hire liberal arts majors, music majors, and artists/designers, instead of focusing solely on STEM majors.

    I found that being trained in the systems thinking promoted by the sciences gave me unique insights that were not obvious to the engineers that I was surrounded by in the utility industry. Our enterprise benefited from both perspectives.

    We need to broaden our scope about what a business truly needs, instead of just following a formula and checking the boxes. If we continue on that path we will become more like China which trains its students to be excellent at recalling facts and improving what already exists rather than creating something new.

    Diversity builds strength – in ecosystems and businesses.

    • Hallejuah, Tom! Finally, someone who acknowleges what many surveys of companies reveal—the desire of most companies for employees with ctltitical thinking and communications skills, just what the classic liberal arts education is all about!

    • Here, I agree with TomH 100+%. I would add that a too narrow a specialization in any discipline (including one in the liberal arts) also renders some specialists too blinkered and blind to exercise critical thinking skills of sufficient scope, to see the big picture, to synthesize, and take non-traditional approaches to problem solving, and see other points of view and interests. And too often the more advanced and narrow the degree, the greater to loss.

      I saw this shortcoming again and again among otherwise highly intelligent lawyers, how they lost the ability to step back to see the big picture, to synthesize, and take non-traditional, yet highly practical, approaches to problem solving. In my time, there was a great unmet need for this sort of refocusing of lawyers at some points in their career, so they were better equipped to serve the real interests of their clients. Truly successful lawyers had managed to make this leap on their own someway, some how.

    • Great points, Tom. Amazon has voiced a similar perspective relative to its hiring practices for tech talent, emphasizing they are interested in both STEM and the liberal arts. “It’s not about STEM or liberal arts — it’s STEM and liberal arts.”

      Nevertheless, a much larger share of tech-intensive jobs, such as software developers / computer programmers, are held by computer science grads in comparison to any other degree field. That is true of Amazon as well as such positions in the economy generally in Virginia and the U.S. overall.

      The reason Virginia is placing a special focus on computer science education in particular is that so many companies are struggling to hire as many CS grads as they need (or would like) to recruit, even as we offer a healthy supply of liberal arts grads relative to labor market demand.

  7. re: ” It was the lack of critical thinking skills, the ability to see the big picture, to synthesize, and take non-traditional approaches to problem solving. ”

    Yes.. without question – except we have a whole lot of folks preaching to the choir here and not much “choir” ( schools that do this and do it well).

    I’m NOT opposed to non-public schools getting into this game – I DO THINK that public K-12 needs competition but just bringing in non-public competitors who are NOT as transparent (and accountable) is not a solution – and I seriously don’t understand the advocates thinking unless it basically is to undermine and abandon public schools – which – the truth is do a decent job for most kids in Virginia – We rank in the top 10 nationally in K-12!

    So we want to do BETTER – and we won’t get there by burning down what we have and starting over – we need to BUILD on what we have that does work already.

    And one again – Critical Thinking Skills are NOT GAINED by doing everything in your power to attend a GAWD-awful expensive 4 year college – you NEED those skills BEFORE your post K-12 education!

    Yet, we STILL have folks who want thinks like history and civics MANDATED in the SOLs – while the same folks don’t want Critical Thinking Skills mandated and I think this is because too many older folks STILL THINK that a 4 yr college degree cures all ills including a lack of critical thinking skills.

    Too many kids are scared of STEM and Critical Thinking Skills and looking for an easier path – and their parents – ironically are WITH THEM because they want a good high school QCA for college.

    We are messed up on this. Don’t blame Govt and Schools. Both of them will respond if enough voters demand changes.

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