Building Innovation Systems that Support Local Competitive Advantage: Extending the Sector Narrative Scott Sheely Lancaster County Workforce Investment Board Lancaster, PA “A Demand-Driven Incubator Site”

The Sector Narrative Sector work started with programs with a jobseeker focus; Project QUEST; Paraprofessional Healthcare Institute; Focus: HOPE; Jane Addams Resource Corporation; Asian Neighborhood Design; Garment Industry Development Corporation.

The Cluster Narrative Industry Cluster work has been around for 25 years with Michael Porter being the person that pulled together various theories; Europe has been much more active than the US; Economic development focus…how do we help companies with a local competitive advantage survive in a global marketplace.

In Practice Many of us have moved this from the theoretical to practice; State and Local Planning Program at the HHH Institute of Public Policy as the University of Minnesota; Understanding our local economies.

Industry Cluster Analysis Foundational for understanding what industries are important within the local industrial mix; Which industries are growing and which are failing? Which industries are growing good jobs? In what career ladders should we invest?

Moving to Action Shared understanding and vision; Action by policymakers to institutionalize the vision; Give clear direction to the existing system that change is expected; Begin changing the things that you control; Start trying to influence what you don’t control.

The Intermediary Narrative Who is the right group to drive these initiatives? Whoever can get it done; Community-based organizations, labor unions, Chambers of Commerce, economic development entities; Workforce investment boards.

The Public Workforce System Workforce investment boards can also be intermediaries…but many are not; There is a paradigm shift where the system is moving from being a part of the social service system to being a part of the economic development system; Accelerated by public funding sources understanding this and providing resources to accommodate the shift;

Embracing the Role Spend more time developing better intelligence about businesses; Occupational information; Career ladder mapping; Skill mapping; Really address employer relations with the right people; Strategic; Operational;

Embracing the Role Focus on priority industries; Educate your staff; In contracting; In the way one-stops are structured; In bringing funding streams together; Educate your staff; Develop relationships; Economic development; Educators.

The Innovation Narrative Industry cluster analysis is historical; Problem facing most of America is how do companies stay competitive in the world marketplace…forward-looking; Cost and process control will get us so far; Innovation is the key; New products; New technologies; New companies.

The Innovation Narrative Reports by the Brookings Institution and Deloitte Consulting concluded in 2003 that PA manufacturing was too involved in the production of commodity products; Not enough innovation; Economic development dollars not strategically placed.

Deep and Wide Every cluster has a local competitive advantage; Challenge is to identify what that is; Need to build an innovation system that supports the competitive advantage; Wide…all of the partners Deep…concentrating on the right thing;

Regional Industry-Driven Centers of Excellence Centers of Excellence are normally attached to universities, hospitals, or government entities (NASA, NIH); Our Centers focus on enhancing local competitive advantage; Pulling together many actors to accomplish the task.

Functions of a Center Research and Development; Technology Transfer; Entrepreneurial Development; Incumbent Worker Training; Connection to K-12 and Higher Education for Career Ladder Development.

In Lancaster County Industry Clusters Health Care Biotechnology Ag and Food Communications Construction Metals and Metal Fabrication Automotive Centers Long-Term Care Practice Packaging Ops Production Agriculture Construction Tech Wood Finishing Automotive Tech

Structure of Centers Part of Lancaster Prospers, a coalition of economic development partners in Lancaster County; One of seven strategies; Run by the WIB which functions as the administrative entity providing fiscal, staffing, and promotional support;

Structure of Centers Each has a host organization which may or may not be an educational institution; Each has a Steering Committee which is entirely private sector and a Support Committee of everyone else; Website is the public face of the organization.

Wood Finishing Competitive advantage of a large concentration (4,000+ employees) of high-end custom kitchen cabinet manufacturers (75+ employers); Shortage of skilled finishers; No established skills curriculum in companies or at schools; R & D rests mostly with vendors.

Wood Finishing Steering Committee operational; Contracted with company to develop curriculum in conjunction with a standard-setting organization…American Wood Finishing Institute; Found R & D partners in ETAC, an EPA-oriented organization, and Penn State School of Forest Resources; Networking with Hardwood Development Council; Incumbent worker training consortium with ten companies.

Packaging Operations Packaging is at the heart of the biotechnology and ag and food clusters in the area; No packaging technology programs in the region; Higher-end process control skill training not available at any institution; R & D…big guys have it internally…little guys are at the mercy of vendors.

Packaging Operations Support Committee operational; Hired two engineers to do assessment of capacity of schools to upgrade and of the state-of-the-art in packaging technology among companies; Cooperating with NSF recipient in MN on curriculum development; Hershey Foods driving force in training area technical school teachers; Three WIBs, ten county area; 32-company Food Training Consortium already in place.

Health Care Health care is a growth engine for high-skill, high pay jobs; However, it has difficult working conditions (24/7, physical, unpleasant), high turnover, and low pay in some jobs; Long-term care is really the segment that is the driver for the industry…and will continue to be the driver for the foreseeable future; Well-defined career ladder but not a lot of continuing education.

Health Care Long history of regional cooperation including a region-wide recruiting campaign in 2001-2003; Center of Excellence in Long-Term Care Practice formed to focus innovation activities; Grant from the PA Department of Aging to study supervisory practices with PHI; Grant from PHI to design a Palliative Care curriculum for direct care workers; Grant in the amount of $400,000 from PA Department of Labor and Industry to do incumbent worker training around supervision; Soliciting research projects from local schools.

Industry Training Consortia Incumbent worker training that is done using multiple companies that have a common training plan and the do training together; Scale varies…some local, some regional; Consortia Food Manufacturers’ Consortium (32) Metal Manufacturers’ Consortium (15) Lumber and Wood Consortium (8) Maintenance Consortium (Hershey Food)

What We’ve Learned Think deep and wide…deep understanding of the industry…wide in terms of linkages with other entities; Think beyond workforce or economic development to innovation; Think beyond WIA in funding.

For More Information Scott Sheely Executive Director Lancaster County Workforce Investment Board 313 W. Liberty St. Suite 114 Lancaster, PA 17603 717-735-0333 ssheely@paonline.com