1 Priming the Talent Pipeline: Oregon’s Future Workforce Needs Analysis Preliminary Findings Board of Education Briefing January, 2008

2 Research Questions and Focus Key Questions to be Addressed ● What might be the drivers of Oregon’s future economy? ● What workers with what skills will be needed? ● What capacity does Oregon have now? ● Where are the major gaps in the workforce system? ● What should we do? Research Focus ● Oregon traded-sectors: Industry sectors that do business out of state and bring new wealth into the economy

3 Unique Approach To consider the likely future drivers of Oregon’s economic growth and workforce demand, this study breaks new ground in integrating two perspectives: Traded Sector Analysis using industry employment data that reflect an understanding of “where the Oregon’s economy has been and is currently”: –Focus on traded sectors that bring new wealth to the state’s economy –Consider i nterrelationships between among traded sectors Industry Technology Competency Analysis to learn where Oregon has “the know-how to grow”: –Technology core competencies represent a “ critical mass” of know-how. –They identify the state’s comparative advantage from a technology perspective –It is from existing industry technology competencies that gaining a position in emerging technologies can best be realized. Intersection of Industry Employment Strengths and Industry Technology Competencies Leads to Identifying Technology & Market Platforms

4 Overview of Project Methodology General Approach ● Inform understanding Oregon’s future traded sector workforce needs by building upon Oregon’s cluster-based initiatives driven by industry employment analysis and augment with an understanding of technology competencies found within and across Oregon’s industry base Assessment of Oregon Industry Core Competencies Guidance from Oregon Cluster Organizations Identify Workforce Needs Map to state occup forecast & industry & trade association reports Alignment with Educ & Trng Resources Analysis of Gaps Addressing Gaps

5 Assessing Drivers of Oregon’s Future Economy from Perspective of Traded Industry Sectors ● Economic Specialization – Does Oregon have a larger or smaller employment concentration in its traded industry sectors compared with the overall U.S. economy at a specific point in time? ● Results: High degree of employment specialization found in: - Wood & Other Forest Products - Electronics & Adv. Materials - Agricultural Products - Processed Food & Beverage Products ● Economic Competitiveness – What is the employment growth rate in Oregon for a traded industry cluster compared to the country as a whole? ● Results: Oregon Growing Faster than the U.S.  Business Services  Medical Products Oregon Growing, While U.S. Declining  Agricultural Products  Apparel & Sporting Goods  Logistics & Distribution  Processed Food & Beverage Products  Transportation Equip. & Parts Oregon Declining, But Less than U.S.  Communications Equip.  Electronics & Adv. Materials  Information Technology  Metals  Wood & Other Forest Products

6 Robust Performance of Oregon’s 12 Traded Industry Sectors ( ) Source: OECDD and Battelle analysis of BLS, QCEW employment data.

7 Assessing Drivers of Oregon’s Future Economy from Perspective of Core Technology Competencies ● Assess two complementary perspectives ● Technology Development –Analysis of Patent Clusters (intellectual property generated by companies) - suggests a robust set of innovation drivers –CorpTech Directory (specialized database of technology companies) - identifies Oregon strength in specialized product areas ● Technology Deployment –Analysis of productivity levels and growth –Interviews with leaders in key traded sector clusters –Integration of findings from OBC Cluster Network focus groups

8 Line of Sight to Identifying Technology and Market Platforms ● Original Listing -- Traded Industry Sectors + Emerging Industries/Signature Research Centers: – Agriculture Products – Processed Food & Beverage – Apparel & Sporting Goods – Business Services – Electronics & Advanced Materials – Communications Equipment – Information Technology – Logistics and Distribution – Medical Products – Metals – Transportation Equipment & Parts – Wood & Forest Products – Bioscience/Translational Research & Drug Discovery – Bio-Fuels – Wave Energy – Open Source Technology – Network and Homeland Security ● Agriculture and Food Processing Proposed Technology and Market Platforms : ● Electronic Components and Devices ● Software, Computing and Internet Services ● Biomedical Technology ● Metals and Transportation Equipment ● Wood & Forest Products ● Clean Tech Platforms reflect the technology and market interrelationships between and among traded sectors and emerging industries/signature research centers.

9 Building on the Technology and Market Platforms Framework ● Conducted on-line research and personal interviews to identify future market trends ● Developed in-depth profiles for each Platform integrating critical data, factors driving change, leading markets, specialized occupations and future workforce implications ● Identified cross-cutting workforce issues ● Identified common high-demand and specialized occupations ● Developed a simple framework for considering occupations: –Production - Engineering –Technician - Computer-related

10 Key Themes across Technology and Market Platforms ● Future Workforce Implications for Technology & Market Platforms – Rapid process and product innovations places strong need for continued skill enhancements (life-long learning) – Cross-cutting skills that emerged across all technology and market platforms provide clear target for public investments (agility) – Need for more versatile and multi- skilled technician and production workforce – Aging workforce being felt across all occupational areas – Offshore outsourcing raising skill requirements for innovation, new product design and project management – High growth and newly emerging industries of biomedical and clean technology require broad range of occupations. ● Oregon Workforce Issues – Interest and awareness by eligible workforce of needs for production workers lagging far behind demand – Problems with potential production and technician workers being employable – drug-free, dependability – Out-of-state recruitment very typical in Oregon for high skilled workforce – able to attract due to state’s lifestyle and quality of life – Skill mismatches – engineering, technician, and installers need to meet requirements of clean tech; computer- related graduates must meet software, computing and Internet services job requirements – Need for creating more “talent pipelines” to address workforce shortfalls – STEM issues in K-12; production to technician workforce; emerging industry needs

11 Changing Foundation Skill Requirements ● Indispensable foundation: high level of preparation in reading, writing, speaking, mathematics and science ● Applied skills trump basic knowledge and skills* ● Core Workplace Skills: Personal Management Skills: –Creativity/Innovation - Ability to learn quickly –Critical Thinking/Problem Solving - Agility –Communications (Oral and Written) - Comfortable with ideas –Information Technology Application - Self-direction/organization –Leadership - Life long learning –Teamwork/Collaboration - Entrepreneurship –High Performance/Lean - Ethics/Social Responsibility * Synthesis of national surveys by the Conference Board, Corporate Voices for Working Families, Partnership for 21 st Century Skills, and the Society for Human Resource Management

12 Job Demand Reflects Need for Replacement Workers … Much Larger than New Job Growth Across Occupational Groups ● Across major occupational groups, the Oregon Employment Department projects that future job openings will largely be due to needs for replacement workers ; highlights the demographic challenges facing production workers in particular ● Though not expected to grow the fastest, production occupations will require the most workers annually with the vast majority as replacements Projected Annual Job Openings for Oregon by Major Occupational Groups, Forecast Major Occupational Group Projected Annual Growth Openings Projected Annual Replacement Openings Total Annual Openings Production7803,2934,073 Computer-related ,066 Engineers Eng. Technicians Source: Oregon Employment Department, Occupational Projections

13 Preparedness of Oregon’s Talent Pipeline Remains a Challenge ● Oregon Progress Board’s 2007 Benchmark Report continues to show that Oregon faces considerable workforce challenges: – Educational attainment of adults still lagging : - HS Completion Rate stands at only 90.4% in 2006 below 1996’s level of 91.1% and well below 2005 target of 93% - Some College Completion stagnant since 1996 – 59.6% level in 2006 well below 2005 target of 70% - Post-Secondary Credentials unmoved since 1998 with just under 30% of the adult population completing even an associate’s degree or occupation-related credential – Few Oregon workers receiving job training : - Labor Force Skill Training : Only 33% of Oregon’s workers received 20 hours or more of training in 2006 – well below the 2005 target of 56%. – Some improvements seen in K-12 student performance, but not sufficient to meet benchmarks : - 8 th grade math -- 66% of eighth graders achieved established skill levels in 2006 up from 49% in 1997 – 2005 benchmark of 69% not reached - 8 th grade reading – 66% of eight graders achieved established skill levels in 2006 up from 56% in 1997 – 2005 benchmark of 71% not reached ● Oregon Progress Board’s 2006 Report on Progress of Oregon’s Racially and Ethnically Diverse Population presents data revealing that the state’s changing demographics – led by strong growth in the Hispanic population – is likely to result in lower education attainment for major segments of Oregon’s workforce of the future.

14 Preliminary Implications ● Production Workforce – With significant job openings and few focused programs, there is an urgent need to prime the talent pipeline of production workers to meet immediate growth and replacement needs. – Education and training efforts should focus on the “cross-cutting” skill needs in production that are common across technology and market platforms. – Growing clean tech jobs is a good fit for Oregon’s present occupational mix, but without a more focused effort to increase the supply of production workers emerging industries will likely compete for existing production workforce. ● Technician Level Workforce – To make the transition as a global leader in high performance manufacturing, Oregon will need to address the blurring of production and technician occupations in light of more complex technical environments. – This will result in a higher level technical skill mix, but also a strong emphasis science, math, technology applications, critical/analytical thinking, decision making and other critical applied academic and workplace skills.

15 Preliminary Implications Engineering Workforce ● Oregon has been largely successful in raising the level of engineering graduates in recent years, now it needs to be more focused on the skills and connections to employers in the state. ● On “net” now, Oregon appears to be an exporter of engineering talent – this is a key resource potentially being lost. Computer-Related Workforce ● The sharp fall-off in students pursuing computer related fields in light of expected continued strong occupational growth must be addressed. ● The alignment of educational programs and current/future employer requirements must be improved.

16 Examples of Preliminary Recommendations: Systems Building ● Adopt and promote the concept/terminology of a Talent Pipeline or Knowledge Supply Chain (systems approach). ● Support cluster- and consortia-based entities that can aggregate employer need and function as intermediaries between business and education/training providers (move past the single-business partnership mentality). ● Launch a multi-faceted messaging campaign to advertise the availability of good “middle-skill” jobs and to promote the value of career technical education and post-secondary alternatives, such as apprenticeships (it’s OK to go to work, then pursue further education and training). ● Significantly improve supply-side databases (current pipeline data is virtually impossible to access).

17 Examples of Preliminary Recommendations: K-12 ● Focus on creating agile, life-long learners with the applied academic, core workplace and personal management skills ALL employers need to build competitive companies. ● Incentivize special emphasis on the Essential Skills component of the new High School Diploma requirement immediately; ensure actual standards and content align with core business workplace requirements and are updated regularly. ● Expand Career Technical Education offerings linked to Technology/ Market Platforms and projected high demand/ specialty occupations through an infusion of state dollars. ● Exponentially advance the understanding of students, teachers and counselors about the changing nature of the workplace – through increased work-based learning experiences such as job shadowing, internships, etc.

18 Examples of Preliminary Recommendations: Community Colleges ● Establish a standardized manufacturing certificate program based on critical cross-cutting skills and aggressively recruit new talent to take advantage of excellent career opportunities. ● Set specific, quantifiable targets for high-demand occupations that cut across Technology and Market Platforms and require a certificate/AA degree; aggressively pursue additional funding to offer required training programs. ● Create an “Oregon Retired Skilled Workers Corps” in partnership with business to serve as “Emeritus” faculty at the community colleges in high-demand occupational areas. ● Adopt a career readiness certificate for use system-wide by the community colleges and public workforce system to credential applied academic and core workplace skills.