Cities Are Taking a Regional Approach to Closing the Skills Gap

This post is the fifth installment in a series focused on NLC’s Cities and Unequal Recovery report, which highlights the findings of our 2015 Local Economic Conditions survey.

Middle skills occupationApprentice working with engineer to inspect manufacturing machinery. (Getty Images)

Economic development consistently ranks as a high priority for local officials across the country. Alongside this priority is a growing focus on the need for increased postsecondary education opportunities at two and four year colleges and career and technical education institutes. The leadership of local officials is critical to increasing these opportunities, which in turn can provide a substantial return on investment for their community.

In July 2015, NLC partnered with the Los Angeles Area Chamber of Commerce to hold a mayoral summit on postsecondary success in Los Angeles, supported by The Kresge Foundation and J.P. Morgan Chase.

Source: JP Morgan Chase

Source: JP Morgan Chase

The summit marked the release of the Los Angeles Skills Gap Report, which shows that Los Angeles County has a diverse economy with a wide array of middle-skills jobs – those that require a high school diploma and technical training, but not necessarily a four-year college degree. Unfortunately, it also shows that many Los Angeles residents lack the education and skills that employers are looking for. This means that many industries are struggling to fill key middle-skills positions, while many potential workers remain either unemployed or underemployed.

Studies show that this dilemma is playing out in communities across the country. NLC’s own Cities and Unequal Recovery indicates that despite the significant economic growth in cities over the past two years, there continues to be a skills gap.

At the summit, city leaders highlighted the postsecondary success initiatives they are using to combat this skills gap. Robert Garcia, mayor, Long Beach, Calif., showcased the Long Beach College Promise and the Long Beach Internship Challenge to expand on-the-job learning opportunities for young people. Rusty Bailey, mayor, Riverside, Calif., talked about Completion Counts, an initiative that helps students apply for, attend and complete community college.

The city of Los Angeles is in the process of establishing local goals for college success with a number of partners, including the Los Angeles Community College District and several universities in the region. These goals will help ensure that young people have the resources they need to achieve postsecondary success and create a stable and thriving workforce in the city and the greater Los Angeles region.

Like Los Angeles, many cities are adopting a regional approach to close this skills gap. In San Antonio, Mayor Ivy Taylor supports the SA Works initiative, which has a goal of creating 20,000 new applied learning opportunities, including a countywide STEM degree accelerator project through the Alamo colleges, as well as a place-based training program for 300 Eastside San Antonio residents.

This initiative is part of SA2020, a nonprofit whose mission is to help connect the community for a stronger San Antonio. SA2020 has helped create an alliance between City Hall and the San Antonio Chamber of Commerce that focuses on regional industry needs, and works to ensure that workforce needs and postsecondary offerings are aligned so that residents have the training they need to take on middle-skilled, well-paying jobs in San Antonio and Bexar County.

A C Wharton, mayor of Memphis, Tenn., established the nation’s first Office of Talent and Human Capital within the mayor’s office to provide dedicated staff focused on developing, retaining and attracting talented workers to Memphis and Shelby County. The mayor has also connected with the business community to provide pathways for residents to access jobs in Memphis’ growing service, healthcare and knowledge-based industries.

Local leaders can play an essential role in developing this approach by investing in activities that strengthen their region’s competitive advantage by:

  • Establishing and maintaining a leadership structure to guide and sustain college access and completion efforts.
  • Setting community goals and rally necessary partners.
  • Maintaining and analyzing real time data on postsecondary attainment.
  • Aligning local industry needs with community colleges and credentialing courses.

To learn more, check out NLC’s page on postsecondary success.

Miles Sandler
About the Author:
Miles Sandler is the Senior Associate for Education in the NLC Institute for Youth, Education, and Families. Miles can be reached at Sandler@nlc.org.

Four Ways City Leaders Can Boost Entrepreneurship and Propel Economic Growth

This is a guest post by Josh Russell and Jason Wiens. This post is the fourth installment in a series focused on NLC’s 2015 Cities and Unequal Recovery report, which highlights the findings of our 2015 Local Economic Conditions survey.

Startup density varies from city to city across the United States. (Kauffman Index of Startup Activity)

City leaders across America understand that entrepreneurship is key to the success of their economies. That is the message from the 2015 Local Economic Conditions Survey conducted by the National League of Cities.

In that survey, 47 percent of cities said the “number of new business starts” was a positive driver of local economic conditions. New business creation was viewed by more city leaders as source of local economic improvement than any other factor.

These perceptions of chief elected officials are in line with decades of data that show new and young businesses are the primary source of net new job creation. When it comes to job creation, age matters more than size.

But how do these perceptions reflect the reality of entrepreneurial growth in these cities? Is entrepreneurship flourishing in cities where leaders viewed it to be an important contributor to economic growth?

To answer these questions, we looked at a sample of cities linked to their metropolitan statistical areas from 2002 to 2012. Here is what we found:

  • Over the last decade, average startup rates are consistent among cities regardless of their views on new business creation.
  • Startup rates converged in 2012 to 6.9 percent for cities that believed startup rates were an impactful economic factor and to 6.8 percent for cities that did not.

While there is little difference between startup rates in cities that viewed new business creation as an impactful economic factor, the real story is found when we look at employment in startup firms.

The percent of employment in startups has diverged among cities that believe startups are and are not an important economic factor. In those cities that viewed startups’ impact positively, new businesses were adding more jobs than in cities where leaders did not view them to have a positive impact. In 2012, on average, firms in cities that viewed new businesses as having a positive impact started with 15 percent more employees.

2011 marked the first year of an increase in new business creation since the start of the Great Recession. To further boost entrepreneurship and propel economic growth, local leaders have a menu of tools available to them.

  1. Build connections. While capital constraints represent one of the primary challenges to entrepreneurs, research has shown that public venture funds and local incubation centers result in little to no benefit to entrepreneurs. Instead, cities should focus on fostering local connections among entrepreneurs and businesses. These local connections, as opposed to national or global contacts, are vital to an entrepreneur’s success. Focus should be put on events that cause entrepreneurs to think and act together, building a robust local ecosystem. Examples of early-stage entrepreneurship programs that can be implemented in cities include Startup Weekend and 1 Million Cups.
  2. Welcome Immigrants. Immigrants are twice as likely as native-born Americans to become entrepreneurs. These entrepreneurial gains are not limited to low-skill sectors, but include high-skill and high-tech sectors as well. Immigrants and children of immigrants represented 52 percent of key founders of high tech firms in Silicon Valley and over 40 percent of Fortune 500 founders. While legal barriers to immigrant entrepreneurship result in missed opportunities for U.S. economic growth, cities can capture the benefits by welcoming immigrants and supporting their entrepreneurial ambitions.
  3. Support Women. Women face many unique challenges to starting a business and are half as likely to start businesses as their male counterparts. Among the top challenges are financial capital, mentorship, and work-life balance. Women are one-third as likely to access equity financing through angel investments or venture capitalists as men and begin companies with nearly half as much capital. Mentorship plays an important role in developing successful entrepreneurs, yet nearly half of female entrepreneurs say a lack of available mentors is a major challenge facing their businesses. Parenting balanced with work also results in lower rates of entrepreneurship among women. Women with STEM Ph.Ds are significantly less likely to engage in entrepreneurship if they have a child under two, while there is no statistical difference in entrepreneurial rates of comparable men. Local policies that support women in entrepreneurship can create positive economic growth in cities.
  4. Develop Human Capital. Higher levels of education are associated with increased entrepreneurial activity. While a high ratio of college graduates means more entrepreneurial firms, a substantial high school completion rate can further increase a city’s startup activity. Developing a strong school pipeline can help promote human capital and develop a strong, local entrepreneurial ecosystem.

Stated simply, these policies are all about investing in people.

As entrepreneurship rates grow, entrepreneurs are reviving local economies across the nation. The role of city leaders in this arena is to create conditions that allow more entrepreneurs to start businesses and nurture that environment so that those businesses can grow. Cities that invest in people should see entrepreneurial benefits.

About the Authors:

Josh Russell is a research assistant at the Ewing Marion Kauffman Foundation.

 

 

Jason Wiens is Policy Director at the Ewing Marion Kauffman Foundation.

Three Ways Your City Can Prosper by Embracing Equity

This is a guest post by Sarah Treuhaft. This post is the third installment in a series focused on NLC’s 2015 Cities and Unequal Recovery report, which highlights the findings of our 2015 Local Economic Conditions survey.

Participants in the SySTEMic Solutions program in Fairfax County make a presentation on robotics. As part of an overall strategic plan for economic growth, cities can create programs like this one, in partnership with universities and area businesses, to funnel students into STEM-related professions. (photo: Northern Virginia Community College)

NLC’s 2015 survey of local economic conditions paints a clear picture of unequal growth in America’s cities, underscoring the need for bold, focused strategies to firmly link low-income communities and communities of color with regional (and global) economic opportunities.

Two years ago, New York City mayor Bill DeBlasio captivated voters with his “tale of two cities” narrative summarizing the dynamics of rising inequality in America’s largest metropolis. NLC’s 2015 survey of chief elected officials reveals how uneven growth is not isolated to high-tech boomtowns, but widespread among the nation’s cities.

The survey illustrates the challenge of poverty amidst plenty: While 92 percent of city mayors said economic conditions improved in the past year, 50 percent reported an increase in demand for survival services like food and shelter, 36 percent saw an increase in homelessness, and 24 percent reported a decrease in housing affordability.

Urban economies are coming back, but the rising economic tide is not translating into good jobs, rising wages, and ownership opportunities for low-income residents and communities of color. Our analyses of the Bay Area and Fairfax County, Va., revealed the persistence of racial inequities in these booming economies. A new report on New Orleans finds that although the region has “staged an unlikely economic comeback,” 41 percent of families are struggling to get by on less than a living wage — up from 35 percent in 2006 — and those families are disproportionately made up of women and people of color. And Alan Mallach’s research on older industrial cities shows how growth is isolated to a few high-density, walkable neighborhoods while income, wealth, and home values are stagnant or declining everywhere else, with African American communities losing the most ground.

Unequal growth is socially and economically unsustainable. Research shows that more equitable regions experience stronger and longer-lasting growth. Demographic changes are also magnifying the costs of racial economic exclusion and upping the value proposition of inclusion. As Baby Boomers retire, their jobs will need to be filled by a much more diverse generation.

Small business owners Al and Marie Pronko benefitted from a $10,000 cash award as part of Detroit's NEIdeas program, which helps local businesses as part of a larger strategy to spur economic growth in the city. (photo: NEIdeasDetroit.org)

Small business owners Al and Marie Pronko benefitted from a $10,000 cash award as part of Detroit’s NEIdeas program, which helps local businesses as part of a larger strategy to spur economic growth in the city. (photo: NEIdeasDetroit.org)

In the face of these trends, cities should embrace equity as their path to prosperity and take steps to foster inclusive growth: growing new jobs and new businesses while ensuring that low-income people and people of color fully participate in generating that growth and fully share in its benefits. Here are three ways forward:

Bake racial economic inclusion into growth strategies.

Getting to equitable growth requires an intentional and strategic focus on removing barriers and building pathways for struggling workers and entrepreneurs to connect to jobs and business opportunities. Many cities are tackling this challenge and implementing new approaches to fuse growth and opportunity. Portland’s economic development agency just launched an Inclusive Startup Fund to provide capital, mentoring, and business advising to startups founded by underrepresented groups. Recognizing the importance of neighborhood businesses to Detroit’s renaissance, the New Economy Initiative held NEIdeas contests in 2014 and 2015 to provide financial and technical support to help neighborhood businesses grow. And in Pittsburgh, Urban Innovation 21 is connecting the city’s low-income African American communities with its knowledge-economy revival by placing youth in internships at area tech companies, supporting local entrepreneurs, and running a new Citizen Science Lab that offers hands-on life sciences trainings.

Implement a homegrown talent development plan.

City leaders recognize that workforce preparedness is central to their economic success, but often focus on attracting young, mobile, college grads from other states. To shift to equitable growth, cities need to cultivate their homegrown talent. Universal pre-K is a winning strategy and San Antonio’s groundbreaking program is already showing results for low-income, predominantly-Latino four-year olds. “Cradle-to-career” partnerships like Promise Neighborhoods are working to ensure children in low-income neighborhoods have the educational, health, and community supports they need to succeed. NLC’s survey reveals there is a great deal of room for cities to adopt targeted and sectoral workforce development strategies. One promising effort is New Orleans’s Economic Opportunity Strategy, which aims to recruit, train, and connect many of the city’s 35,000 jobless black men with jobs coming online at its major anchor institutions. Cities can also unleash talent by knocking down hurdles to employment. Passing “ban the box” policies that remove questions about prior convictions from job applications and creating municipal ID cards that help immigrants access financial and other services are key strategies.

Leverage public spending, investment, and planning as a force for inclusive growth.

While cities do not control all of the policy levers needed to move toward equitable growth, they can leverage their land use planning and zoning powers, procurement, and infrastructure investments to connect unemployed and underemployed residents to good jobs and transform disinvested neighborhoods into resilient “communities of opportunity.” The upturn in market activity presents cities with opportunities to implement classic equitable development tools — local hiring, community benefits agreements, permanently affordable housing, living wages, etc. — to ensure long-term residents benefit from publicly-subsidized development and can stay in their neighborhoods as they improve. Cities must also innovate new tools — like San Francisco’s new Retail Workers Bill of Rights — to turn low-wage jobs into jobs that support strong families and strong communities.

Now is the time for cities to lead on inclusive growth. Please join us at the 2015 Equity Summit October 27-29 in Los Angeles to explore these and other strategies for building “All-In Cities,” and sign up for our newsletter for regular stories about what works for equitable growth.

About the Author: Sarah Treuhaft is Director of Equitable Growth Initiatives at PolicyLink. She leads the organization’s work to advance racial and economic inclusion as an economic imperative and coordinates the development of the National Equity Atlas. You can connect with Sarah on Twitter @streuhaft.

How LinkedIn Can Help Your City Match Jobs with Trained Workers

This is a guest post by Nicole Isaac. This post is the second installment in a series focused on NLC’s 2015 Cities and Unequal Recovery report, which highlights the findings of our 2015 Local Economic Conditions survey.

Skilled workers, like this engineer maintaining the gas turbine of a power plant generator, are in high demand - but cities need more effective ways of connecting with them. (Getty Images)

Skilled workers, like this engineer maintaining the gas turbine of a power plant generator, are in high demand – but cities need more effective ways of connecting with them. (Getty Images)

While some contend that the United States economy may be impacted by a skills gap, at minimum, researchers have found that there is a skills mismatch between the available jobs and the majority of the trained workforce to fill these jobs.

According to a recent McKinsey Global Institute report, in countries around the world, 30 to 45 percent of the working-age population is unemployed, inactive in the workforce, or working only part-time. In the United States, the United Kingdom, Germany, Japan, India, Brazil and China, this equates to 850 million people. In the United States alone, there are approximately 20 million people who are unemployed, underemployed, or marginally attached to the workforce, yet there are 5.4 million available jobs just waiting to be filled by people with the right skills.

We’re seeing these skills mismatch trends across American cities today. For example, the National League of Cities’ Cities and Unequal Recovery report suggests that the “skills gap” is the most common concern facing local economies, with 21 percent of cities reporting an increase in the gap over the past year, and exacerbated by the lack of coordination across leading partners for the respective components of workforce development.

This is a real challenge – and, given the number of available jobs and a recovering economy, a significant opportunity for cities across the country. As the report notes, “cities are rising to the challenge and embracing the opportunity by creating collaborative, systemic workforce development approaches to not only improve the local talent pipeline, but also to open communications with employers about assessing needs and improving hiring practices.”

Working with local, state, and international levels to address the challenges around skills, both in supply and demand, is strongly aligned with LinkedIn’s vision to create economic opportunity for every member of the global workforce. We work towards this objective each and every day through partnerships with cities to address workforce issues with LinkedIn’s technology and insights from our Economic Graph. We know firsthand that online connectivity allows for faster, better job matching; smarter labor and educational policy making; more efficient hiring and skills assessments at companies; and overall economic improvement in developed and emerging countries.

That is why, in February, we worked on New York City’s Tech Talent Pipeline program, a $10 million initiative meant to train New Yorkers for high-tech jobs. Together, we analyzed aggregate LinkedIn data from more than three million LinkedIn members in the New York City region and 150,000 NYC-based businesses to provide Tech Talent Pipeline with insights on the current state of the city’s tech industry. Using the data, the city can determine how to strategically invest their resources to create the greatest economic impact.

In June, we announced a partnership with the Markle Foundation called Rework America Connected. This partnership will provide an online destination that connects every sector of the labor force within Colorado and Phoenix, leveraging the job seeking and skills matching capabilities of LinkedIn. Through greater transparency among employers, educators, and job seekers, we’re aiming to create greater economic opportunity for the middle-skilled workers of Colorado and Phoenix.

We’ve been working with the National League of Cities and local governments and other stakeholders to identify and support workforce strategies for the jobs of today and tomorrow. Specifically, three of the cities recognized by the NLC – Philadelphia, Salt Lake City, and Nashville – were recently highlighted as part of the TechHire initiative for their focus on training workers for today’s in-demand tech jobs. LinkedIn is partnering with Philadelphia employers, city officials and non- profits to assist with skills alignment in the city. In Nashville, we are working with the Nashville Technology Council to better prepare their curriculum with business needs. Finally, in Salt Lake City, we have been working with the local economic development teams on providing individuals with access in-demand jobs.

Our overall goal in working with cities is to provide individuals with greater economic opportunity, and we’re planning to take the lessons learned from these current initiatives and apply them more broadly in other cities and regions. These public private partnership models are one mechanism by which cities can utilize innovative approaches to age-old problems– through creating more efficient data-sharing models and leveraging the resources of private sector partners to impact communities now.

About the Author: Nicole Isaac is the Head of Economic Graph Policy Partnerships at LinkedIn.

How to Build a New Type of Urban Practice: Analyzing NLC’s Economic Indicators Report

This is a guest post by Ben Hecht. This post is the first installment in a series focused on NLC’s 2015 Cities and Unequal Recovery report, which highlights the findings of our 2015 Local Economic Conditions survey.

If we want to see dramatically better results, we need new ways of solving the complex problems facing American cities. The findings from NLC’s 2015 Local Economic Conditions survey highlight three opportunity areas where we can focus our attention to catalyze lasting change.

(photo: Bill Dickinson)

Many findings in the 2015 Local Economic Conditions report, recently published by the National League of Cities (NLC), mirrored what we at Living Cities are seeing in the field. We believe that the following three areas, highlighted in the report and below, are particularly important to understand and harness if we are going to build a new type of urban practice that gets dramatically better results for low-income people in cities:

Entrepreneurs, Small Business, and the Rise of ‘Urban Serving Businesses’

The NLC’s finding that “new business startups and business expansions are driving improved economic health in cities” couldn’t be more true. And it’s different than in other recoveries. For example, in our Integration Initiative sites in Albuquerque, N.M. and New Orleans, civic leaders are intentionally tapping into the potential of local entrepreneurs of color and unique contracting opportunities to build growth businesses and to get low-income people and people of color into jobs, especially at a sustainable, living wage. Encouragingly, the Kauffman Foundation recently selected Albuquerque as part of a new project to learn about and identify the best ways to build a local ecosystem to support these emerging entrepreneurs.

Relatedly, we’re seeing the rise of what we’ve termed ‘Urban Serving Businesses,’ structured as social enterprises and otherwise, that are building their businesses in cities, creating jobs and often delivering products and services that are improving the lives of low income people and the communities in which they live. Accelerators like Tumml and participants in efforts like Code for America and Venture for America are great examples of this trend. This is an area of opportunity for cities, and one that Living Cities and our partners are exploring on the job creation front. We’re about to undertake a landscape scan, in partnership with Deutsche Bank, to understand the state of that emerging sector, the ecosystems that currently exists to support them, and the gaps that inhibit their growth and long term success. We’re also interested in learning if a collaborative like Living Cities can play a role in that ecosystem, and what that role could look like.

Addressing the “Skills Gap” Problem from Cradle to Career

Yet, even as businesses grow, we’re still seeing that educational attainment and workforce preparation remain a challenge. As the NLC study found, the misalignment between skills available in the community and the needs of businesses is worsening. This reality is part of why we are a big supporter of the StriveTogether Network, where we’re learning about and testing promising solutions to fixing the skills gap permanently by re-engineering the systems that are failing our kids, from cradle to career. We’re particularly encouraged by the recent announcement of the six sites selected for funding from Strive’s Cradle-to-Career Accelerator Fund. In each site, leaders from the public, private, philanthropic and nonprofit sectors have come together to achieve needle-moving change across the cradle to career continuum, from readiness for Kindergarten to college completion and securing of a good job. They are using data for continuous improvement, disaggregating by race and income, and working to re-direct dollars from approaches that aren’t getting results to those that do. More than two dozen other sites are primed to learn from them and follow in their footsteps.

Innovative Affordable Housing Solutions: Looking the Problem with Fresh Eyes

Finally, the NLC’s study confirms what we are reading about in the papers and on social media every day. Despite “rising residential property values,” the “lack of affordable housing is a major concern facing cities.” We’re seeing communities across the country realize that the tried-and-tested tools that they’ve long relied on to attack the problem are grossly insufficient to address current conditions. That has catalyzed places like San Francisco and Boston to develop new approaches to building market-rate, mixed income, and affordable housing for their residents. In Boston, for example, the Mayor’s Innovation Team (i-team) is tackling the city’s affordable housing challenge in new and creative ways by helping agency leaders and staff through a data-driven process to assess problems, generate responsive new interventions, develop partnerships and deliver measurable results.

NLC’s new report highlights exactly the areas where we need to focus our attention. It provides further fuel for the argument that we need new ways of solving many of these old problems if we want to get dramatically better results. There are many promising solutions out there — in Albuquerque, Boston, Cincinnati and beyond. We all need to help them to succeed and to move them from the periphery of practice to the mainstream.

About the Author: Ben Hecht  was appointed President & CEO of Living Cities in July 2007. Since that time, the organization has adopted a broad, integrative agenda that harnesses the collective knowledge of its 22 member foundations and financial institutions to benefit low income people and the cities where they live. You can reach Ben on Twitter @BenHecht.