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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.