Regional Workforce Development Partnerships That Enhance Economic Development Efforts

by Dean Prigelmeier, President of Proactive Technologies, Inc.

Most area economic development goals are simple; expand the tax base so revenue is available to maintain and sustain the local socio-economic system. Strategies to accomplish this may differ but often include adding to the employment base of the community and/or region, since an effort to expand consumption – mandatory and discretionary – produces a “multiplier effect” as money circulates through the community. This goal can be reached by local and state governments offering tax abatement, cash and/or infrastructure improvements to companies seeking to relocate, or which are in an expansion mode. At lease, that was the simple vision of economists past.

It is fairly a proven fact, however, that in the past three decades the results of these tactics have become mixed as large corporations became larger and used their clout to seek incentives and cheap labor throughout the world. Commitments to local communities providing the incentives often evaporated faster than the ink on the documents dried, and corporations hopped from state to state, country to country, upsetting the stability of local tax bases, economies, communities and regions.

Economic development agencies and government leaders have always talked about helping locally grown enterprises which create an estimated 70-80% of the new jobs in the country. As they start, grow and expand they would hire more, provide more in taxes and be more likely to stay put. As large corporations gained more control of the policies and policy makers of the states and the federal government, the focus drifted away from local small and mid-size businesses and toward policies and strategies that helped large corporations at great expense.

It may be time for an economic development strategy that, out of necessity, focuses on smaller enterprises with solid ties to the communities as more and more large corporations with multi-national ties contribute less and less to local and regional economies and tax bases. It may be time to focus on local start-ups, small and medium size enterprises, and on companies that are bucking the “offshoring of jobs” trend and on to companies that are reshoring, relocating or expanding here from other countries. The cost of investing in economic development may shrink, economies may stabilize and grow, and communities and societies may be driven from despair toward hope and vitality with each new opportunity.

These small and mid-size companies and organizations will need a few programs, such as access to capital and financing, and tax incentives to help them make it to the growth stage. But small and medium size businesses have even a greater need for workers with relevant core skills and assistance with structured on-the-job training since they are running so lean, do not have a “training department” and cannot waste time, talent and resources if they are to survive and thrive.

This may take a shift in thinking from what has evolved over the last few decades. Yes there is a shortage of skilled workers that was exacerbated by the Crash of 2008 and Covid-19 upheaval. But the focus should move away from large multi-national corporations that want the highest skilled entry-level workers at the lowest pay rate. The focus should be on developing local enterprises which will, in large part, remain in the area with the right support programs. More stable and easier to define “industry clusters” (a term that has been around but not easily applied as large corporations that expand and relocate, throwing the cluster into disarray and turning the educational institution’s efforts into waste) can be identified and used to focus learning activities in the community and/or region.

Educational institutions and private training providers can zero in on a non-moving target and develop workers with the core skills that any employer can build on. That is the learning institution’s natural area of expertise for which they have the established institutions, instructors and materials to deliver this, only lacking continually current local job data upon which to design and improve their course content.

Combined with a structured on-the-job training program for each critical job classification for each employer, a “hybrid model” of workforce development can supply each small and medium-size enterprise with the labor they need through their start-up, operating and growth stages. Proactive Technologies, with its “accelerated transfer of expertiseTM” approach, has partnered with many community colleges, career centers, universities, colleges and training providers in such models with small and medium-size employers for many years, in many communities, in many regions, in many states. Many cases have continued year after year, with technical support for Proactive Technologies – some for as long as 16 years.

As well, Proactive Technologies has worked with economic development organizations to offer customized training solutions – focusing on the structured on-the-job training delivery system for the jobs a company may want to relocate or replicate from another state or country, or to facilitate the unbounded growth of locally cultivated enterprises. This approach can and does work.

For more information, visit the Proactive Technologies, Inc. website. If you are curious, watch a 13 minute video to learn more. Perhaps you will want even more information and choose to attend one of the upcoming live online presentations, followed by an onsite presentation.

I am not sure what will be the catalyst to shift the economic development emphasis away from large corporations to small and medium enterprises, but most assuredly it will one day as the returns from investing in the old model dwindles or do not appear, and citizens ask “why.”