Innovation Education and Workforce Training

The U.S. workforce propels U.S. leadership in innovation by stewarding the development and deployment of new products and technologies. Sustaining this leadership amidst accelerating technological change means recognizing the changing nature of work and responding to new demands for an evolving portfolio of skills. It also means ensuring that the building blocks of U.S. human capital are sound — that the U.S. education system is high performing and broadly accessible and that training resources serve workers through lifetimes of growth and change.

Failure to proactively prepare students and workers with innovation-ready skills puts the United States at a competitive disadvantage and restricts participation in the innovation economy. Inaction on this front shortchanges the full potential of U.S. human capital, undercuts efforts to capitalize on U.S. innovative capacity and increases the likelihood of painful labor market disruptions triggered by economic change. Robust investments in education and workforce training ensure that the benefits of innovation are broadly shared across the workforce and that workers thrive against a backdrop of rapid change. However, when it comes to building human capital, the U.S. approach is far from meeting this challenge.

The K–12 education system falls short of unleashing the full potential of its students.

Out of 70 countries that participate in the Organisation for Economic Co-operation and Development’s Programme for International Student Assessment (PISA), the U.S. ranks just 24th in reading, 25th in science and 40th in math. [i], [ii]
In 2013, only 19 percent of high school graduates were enrolled in a calculus course or higher, though students in the top fifth of socioeconomic status enrolled at almost twice that rate.

Workforce training programs, particularly those that do not require a four-year degree, are not up to the task — leaving the full potential of the U.S. workforce untapped.

The U.S. workforce development system is fragmented, duplicative and incomplete, as federal investments in workforce training programs have declined and stagnated.
U.S. public spending on training as a share of gross domestic product trails that of peer and competitor countries.
According to the Global Innovation Index, China ranks first in “Knowledge Workers,” while the United States lags behind at 13th.[iii]

U.S. education and training resources fail to meet the evolving needs of the innovation economy, creating a sizable “skills gap” that leaves business with an insufficient supply of qualified workers.

A 2016 Business Roundtable survey found that 44 percent of responding CEOs whose companies employ skilled trade workers reported difficulty finding qualified candidates for at least one skilled trade occupation.
A recent survey of senior business leaders found that 56 percent see talent shortages as the greatest barrier to quickly implementing artificial intelligence in business operations.
In STEM fields, the number of job postings in 2016 was almost 13 times higher than the number of qualified, available workers.
An estimated 2.4 million manufacturing jobs will be unfilled between 2018 and 2028 due to a skills shortage.

Strategic, cross-sector workforce training investments are needed to help close the skills gap and leverage additional funding sources.

Research consistently finds that students receive meaningful economic returns – due to higher wages, increased likelihood of employment and more hours worked – from vocational credentials earned at public community colleges.
Internship and apprenticeship programs are also highly effective training programs that align labor supply with the needs of U.S. businesses. However, just 5 percent of U.S. students participate in apprenticeship programs, compared to roughly 60 percent of German students.

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Notes:

[i] Seventy-three countries participate in PISA, but the sample size in Argentina, Kazakhstan and Malaysia is too small to ensure comparability.

[ii] The count of 70 countries includes three distinct observations for China because Chinese PISA participation is limited to specific regions and that is the level on which results are reported.

[iii] The Knowledge Workers Index is a composite index composed of employment in knowledge-intensive services, firms offering formal training, gross expenditure on R&D performed by business enterprise, gross expenditure on R&D financed by business enterprise and females employed with advanced degrees.

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