1: Deciding on a Sector Approach

Why a Sector Initiative?

What is a Sector Initiative?

Sector initiatives respond to a need for more innovative approaches to skills-based economic development. They rely on local partnerships that are led by employers and include workforce development, economic development, education, and other stakeholders to identify and address the highest priority workforce challenges of the industry. These partnerships are each unique depending on the region and the industry of focus, but they share certain characteristics that define them as sector initiatives. Characteristics of sector initiatives include: 

  • They focus intensively on a specific industry over a sustained time period, customizing solutions for multiple employers in a region.
  • They strengthen economic growth and industry competitiveness, and benefit individual workers by creating new pathways into the industry, by sustaining/increasing good jobs and careers;
  • They are led by a strategic partner, or intermediary, with deep industry knowledge; and
  • They promote systemic change that achieves benefits for the industry, workers, and the community. 
Benefits to Employers:
A third party evaluation of sector initiatives in the State of Massachusetts showed a 41% reduction in turnover; 19% reduction in rework; 23% reduction in customer complaints; and 100% of companies reported that partnerships with other companies were valuable.

Why choose a sector approach?

Sector strategies make it possible for a region to focus on the needs of key regional industries. They bring together economic development, workforce development and education, advancing the way you think and act on: 

  • Economic development issues such as global competition, outsourcing, critical skills shortages, and linking economic and education strategies. Sector strategies foster innovation and competitive advantage in global markets through focused attention on key industries and development of extensive knowledge about their needs.
  • Advancement of workers and sustaining middle-class jobs in the current context where knowledge and skill levels across industries and in multiple occupations often do not meet industry needs. Sector strategies can help create new jobs and new opportunities for individual workers by helping to promote education and training programs, develop career ladders, and ensure the workforce is appropriately skilled to help employers grow and prosper.
  • Leveraging and aligning both resources and strategies to strengthen agility, flexibility and responsiveness for the benefit of industries and their workers. Sector strategies can bring coherence to the public response by making it possible to work across individually funded programs and focus priorities in the same strategic direction. 

For more information on the strengths of a sector approach, you can watch this video on how sector strategies promote regional economic competitiveness.

For a clearer picture of what a sector initiative looks like, see check out the many case studies later in this chapter, or this video of a panel discussion of sector practitioners.

Common Challenges a Sector Initiative Can Address

Sector initiatives offer a mechanism to meet the skill needs of regional industries, and provide job opportunities to workers in those regions. They address at least five common challenges, presented below.

Challenge #1: Single-employer focus.

Traditionally, workforce and economic development systems focus on single employers, rather than industries. This is challenging for three reasons: first, public and private resources are spread thin, and simply cannot meet the individual needs of every employer in a region adequately; second, thin resources are often spent unwisely when services are duplicated to meet similar needs of individual, separate firms; and finally, by operating within a single-employer framework, public systems struggle to reach economies of scale.

Sector approaches address this challenge by serving a group of employers within the same industry. Greater efficiency is achieved, and public systems develop an in-depth understanding of industry-wide needs, thereby increasing the capacity to target their response.

Challenge #2: Informal Mechanisms to Support Growth of Regional Industries

Public education, workforce and economic development systems often struggle to identify the high-growth industries in their region. Once identified, they may find it difficult to justify a focus on those industries. The result is a thinly spread focus on all industries, and a lack of formalized attention to the industries that provide the most potential for economic growth and jobs for local residents.

Sector approaches offer a formalized way to identify and target the industries that drive local economies. Using labor market analysis, public systems can identify high-growth industries in their region, and then address industry needs with a coordinated response across education, workforce and economic development. The partnership approach does not replace on-going activities by workforce and economic development with other industries and employers, but organizes resources and time to benefit critical industries.

Challenge #3: Arbitrary regional boundaries.

The geographic lines drawn by public education, workforce, and economic development systems often reside within geopolitical boundaries such as cities, counties or school districts, rather than aligning with natural labor market areas. This limits the true capacity of public systems to support industries and workers, both of which operate based on the multitude of factors that define a labor market region. Factors might include commuting patterns, proximity to airports and other major transportation routes, or concentration of firms within the same industry, among others. Employers may in fact be deterred from engagement with public systems if faced with a need to work with a seemingly arbitrary workforce development entity or economic development agency.

The sector approach operates within regional labor markets, as defined by industry analysis and labor market information. Depending on the true labor market region, sector partnerships often transcend geopolitical boundaries by coordinating response to industry across two or more workforce areas, economic development areas, or education districts.

Challenge #4: Lack of coordination across systems and stakeholders.

For state and local public systems, separate missions, funding streams, and structures make it difficult to focus on the complex, larger challenges that confront a regional economy. Without a mechanism for coordination across various stakeholders and systems, the opportunity is lost to collaborate, coordinate information and leverage resources in ways that address regional challenges.

Sector initiatives operate on the premise of a partnership of education, workforce development, economic development, employers within a single industry, and other stakeholders relevant to the challenge experienced by the target industry in a specific region. This partnership, convened and facilitated by a knowledgeable intermediary entity, jointly develops a deep understanding of industry needs, and develops customized solutions that address those needs.

Challenge #5: Lack of Meaningful Employer Engagement.

The “dual customer” approach utilized by workforce development agencies has significantly changed and improved how local industry is supplied with needed workers. In most areas, however, a key challenge is a set of missing tools that meaningfully engage industry in ways that close the short- and long-term gaps between needed and available skills. As a result, employers often look elsewhere to meet their needs by either leaving an area or recruiting workers from other areas or states. The risks in this scenario are two-fold: industries discouraged with their current location and public systems, and local workers left out of job opportunities.

Sector initiatives offer a highly targeted “dual customer” approach by maintaining an ongoing dialogue with employers in a single industry in a region. Engagement starts with a clear identification of the “pain points” of that industry (i.e. what is their common and most significant complaint about available skills?), continues with a deep analysis of why that “pain” or challenge exists, and follows through with customized solutions to that challenge. Over the course of a partnership, employers learn how to use public systems more effectively, and public systems learn how to support regional industry.

Browse the links and resources on the next page for more information on the structure and benefits of sector approaches.

Sector Strategy Examples and Resources

National Websites

sectorstrategies.org – A Knowledge Exchange for Policy and Sector Leaders
This website provides learning tools to design policies that strengthen regional economies through sector strategies. Interactive and comprehensive resources provide policy makers and sector leaders with an opportunity to interact with sector experts, examples of promising practices and access to the latest research and reports.

Corporation for a Skilled Workforce
Corporation for a Skilled Workforce (CSW) is a national, non-profit policy organization whose mission is to help communities thrive in a knowledge and skill-based economy.

National Network of Sector Partners - A project of the National Economic Development and Law Center
The mission of the National Network of Sector Partners (NNSP) is to encourage the use and effectiveness of sector initiatives as valuable tools for enhancing employment and economic development opportunities for low-income individuals, families, and communities.

Sector Skills Academy – The Aspen Institute
To stimulate and strengthen growth in sectoral employment development, three organizations with deep roots in this field – The Aspen Institute Workforce Strategies Initiative, the National Network of Sector Partners, and Public/Private Ventures – have created the Sector Skills Academy, a unique leadership institute that emphasizes a collegial environment, peer exchange, skills acquisition and professional growth.

Workforce Strategies Initiative – The Aspen Institute
A project of the Aspen Institute, the Workforce Strategies Initiative (WSI) develops projects designed to evaluate and advance industry-specific approaches to workforce development. The WSI website contains extensive information on the Sectoral Employment Development Learning Project (SEDLP), a 4½-year, intensive learning evaluation of the outcomes, strategies and industry relationships of six leading sectoral programs. The evaluation offers insights to both practitioners and policy makers regarding the strengths and weaknesses of the sectoral strategy. WSI’s newest evaluation efforts focus on measuring the impact of sector strategies on employers and industry through their Business Value Assessment toolkit.

Public/Private Ventures
Public/Private Ventures is a national nonprofit organization whose mission is to improve the effectiveness of social policies, programs and community initiatives, especially as they affect youth and young adults. In carrying out this mission, P/PV works with philanthropies, the public and business sectors, and nonprofit organizations.

Win-Win Partners
Win-Win Partners are companies and organizations achieving competitive advantage through community investment and national organizations that assist companies with successful execution of these strategies by providing them with valuable services such as research and market data, brokering, and networking opportunities with other executives. The Win-Win Partners project is an outgrowth of the Ford Foundation Corporate Involvement Initiative.

 

Case Studies, Evaluations, and Issue Briefs

State Sector Strategies: Regional Solutions to Worker and Employer Needs National Governors Association, November 2006.

Targeting Industries,Training Workers and Improving Opportunities: The Final Report from the Sectoral Employment Initiative  Anne Roder, Carol Clymer, Laura Wyckoff. Public/Private Ventures. 2009.

Career Pathways: Aligning Public Resources to Support Individual and Regional Economic Advancement in the Knowledge Economy Davis Jenkins. Workforce Strategy Center. August 2006.

Jobs and the Urban Poor: Privately Initiated Sectoral Strategies Clark, Peggy and Steven L. Dawson. The Aspen Institute. November 1995.

Sectoral Strategies for Low Income Workers: Lessons from the Field Conway, M., Blair, A., Dawson, S, Dworak-Munoz, L., The Aspen Institute. October 2007.

Asian Neighborhood Design: A Case Study of a Sectoral Employment Development Approach Conway, Maureen and Marshall Bear. The Aspen Institute. June 2000.

Garment Industry Development Corporation: A Case Study of a Sectoral Employment Development Approach Conway, Maureen and Suzanne Loker. The Aspen Institute. November 1999.

Wising Up: How Government Can Partner with Business to Increase Skills and Advance Low-Wage Workers. Duke, Amy-Ellen, Karin Martinson, and Julie Strawn. Center for Law and Social Policy. April 2006.

Labor Market Leverage: Sectoral Employment Field Report Elliott, Mark and Elisabeth King. Public/Private Ventures. Winter 1999.

Jane Addams Resource Corp: A Case Study of a Sectoral Employment Development Approach Glasmeier, Amy K., Candace Nelson, and Jeffery W. Thompson. The Aspen Institute. December 2000.

Cooperative Home Care Associates: A Case Study of a Sectoral Employment Development Approach Inserra, Anne, Maureen Conway, and John Rodat. The Aspen Institute. February 2002.

Working with Value: Industry-Specific Approaches to Workforce Development, A Synthesis of Findings Rademacher, Ida, ed. The Aspen Institute. February 2002.

Project QUEST: A Case Study of a Sectoral Employment Development Approach Rademacher, Ida, Marshall Bear, and Maureen Conway. The Aspen Institute. August 2001.

“Benefits of a Sector-Based Approach,” Research and Evaluation Brief, vol 2 no 3 Schwartz, Sunny and Johan Uvin. Commonwealth Corporation. August 2004.

Evaluation of the Wellspring Model for Improving Nursing Home Quality Stone, Robyn I. et al. Institute for the Future of Aging Services, American Association of Homes and Services for the Aging. August 2002.

Focus: HOPE - A Case Study of a Sectoral Employment Development Approach Thompson, Jeffrey W., Susan Turner-Meikeljohn, and Maureen Conway. The Aspen Institute. December 2000.

Sector Employment Strategies in Central Indiana: A Prospectus Weinschrott, David J. Hudson Institute. May 2003.

 

State Websites

These websites from states with active sector strategies contain a wealth of tools and resources, such as model RFPs, guidebooks, and partnership examples.

Colorado: SECTORS

Georgia: Work Ready Regions

Illinois: Critical Skill Shortage Initiative (Southern Economic Development Region)

Massachusetts: Commonwealth Corporation Sector Strategy overview

Michigan: Regional Skills Alliances

Minnesota:
Framework for Integrated Regional Strategies (FIRST) Grants

Sector Workshop Materials

North Carolina: Allied Health Regional Skills Partnerships

Oklahoma: Industry Sector Strategies Institute

Pennsylvania:
Industry Partnership Guidelines
Incumbent Worker Training Guidelines

Washington:
Industry Skill Panels
High Skill, High Wages Strategic Fund

Wisconsin: Wisconsin Sector Strategies Initiative

Things to Consider

If the challenges outlined above speak to you or describe similar situations in your region, a sector initiative may be an effective mechanism for change. You will want to consider a range of factors before deciding on a sector approach, including the following suggested items:

Industry Analysis: Seeking Out Economic Impact and Career Mobility Opportunities

Sector initiatives focus on one industry by engaging multiple employers within that industry to identify common challenges and implement a customized solution to those challenges. A key element of a sector approach is a focus on an industry that will yield the greatest economic benefit to a region, and the greatest job opportunities to a region’s workers. Another way of framing this concept is a focus on those industries that represent the “economic drivers” of a regional economy. Conveners of a sector partnership or early adaptors of such an approach will need to undertake a Regional Needs Assessment, asking questions such as:

  • Which industries are concentrated in our region?
  • What is their potential for growth?
  • What types of jobs are available in that industry?
  • Are there levels of occupations that signal worker advancement opportunities?
  • Are there observable skilled worker challenges experienced by that industry?

Convener: An Intermediary Entity that can do the Job

Sector initiatives across the country are coordinated by a single entity, known as a Partnership Intermediary. In each sector initiative, the convener varies depending on the target industry, the nature of the region, and the best fit to the needs of the sector partnership. For example, a convener may be a local workforce board, an industry association, a community-based organization, a labor management partnership, and others. Regardless of the type of entity, the convener is responsible for coordinating the efforts by the partnership. They usually possess knowledge of the target industry, they facilitate data analysis, goal-setting, strategic planning, employer engagement, and on-going stakeholder input. They do not chart the course of the partnership, but are critical to its implementation.

Employer Engagement Strategies: Maximizing their Time and Offering Solutions

A general rule for engaging employers is to respect their time, keeping in mind that as a primary customer of public workforce and economic development, they might choose to go elsewhere to get their needs met (e.g. another region, another state, another country). At the same time, sector conveners must engage employers from the very beginning if they expect industry needs to truly drive the dialogue and outcomes of a sector approach. This requires business-savy on the part of the convener, including the ability to “speak their language,” avoid jargon, and know their interest in being involved. See Rules of Thumb for Engaging Employers for more.

Regional Stakeholders: Understanding the Playing Field

Who in your region matters to the target industry, to the worker population in your region, and to the ability to connect workers to industry? Every early sector initiative undertakes a scan of the potential partners in a region. The stakeholders you engage will play different roles in the planning, design and implementation of the initiative. They also will contribute diverse resources, knowledge, and levels of commitment. Who are the potential stakeholders? They are many and diverse, including: CEOs or other industry leaders; trade or business associations; labor union representatives; industry experts; community based organizations that offer support services to workers; key public agencies such as workforce development boards or one-stops, economic development agencies, and others; community colleges or universities; community training providers; job placement services; and more. Initial conveners and early planners of an initiative will need to Identify Partners that best fit the needs of their region and industry.

Common Goals: Identifying the Challenge and Change that Inspires Everyone

An essential (and early) activity in every sector initiative is the development of a common mission that unifies the diverse stakeholder group toward a shared vision of change. The shared vision of change is not the same as a customized solution to the specific workforce challenge(s) faced by the target industry. That will surface later once an in-depth industry and labor market analysis is undertaken. The convener will play a key role in facilitating consensus around a shared vision for change, and can utilize any number of tools to achieve that end.

Resources: Time, Financial Backing, In-kind Support, and the Will of Partners

All sector partnerships, soon after their initial convening, face the following questions: How will we support the partnership? How will we support the implementation of to-be-determined solutions? How will both be sustained over the long term? A striking advantage of sector approaches is the ability to more effectively meet the needs of a regional industry by leveraging resources across public systems, and across private investments. The act of bringing diverse public systems together with employers and other stakeholders creates an opportunity to create new financial and in-kind support through blending, braiding, and leveraging existing sources. Sector conveners should facilitate early discussions about time commitments and expectations, and Sustainability Strategies should be outlined. This toolkit will provide more detail on the issues of financial support and longer-term sustainability in Part IV.

It is important to note that at this point in your decision-making, the factors listed above do not all need to be immediately addressed. This will come with time. However, they do all need to be considered. The remainder of this toolkit will delve into further detail of each of these factors, starting with industry identification and regional definition in Module 2: Regional Needs Assessment.

Chapter 1 Review Questions

  1. What about a sector approach do you understand will work for your region and your region's key industries?
  2. How do you see this approach complementing your existing workforce and economic development efforts?
  3. It's never too early to start discussing available resources to support a sector partnership. What are the regional resources (public, private sector, human, cash, in-kind) that you might be able to leverage to start and sustain your effort?