Background:

Direction to Coordinate Workforce and Economic Development.

The Next Washington (2007) is a strategic plan for growing jobs and income in a global economy. It calls for improved partnerships among workforce and economic development efforts at the state and regional levels. To help implement The Next Washington strategies, Governor Gregoire directed the Workforce Training and Education Coordinating Board (WTB), the Department of Community, Trade, and Economic Development (DCTED), and the Washington Economic Development Commission (Commission) to develop a plan to improve coordination, with a special emphasis on assistance to key industry clusters.

State and Local Workforce and Economic Development Organizations.

The WTB provides planning, coordination, evaluation, monitoring, and policy analysis for the state workforce training system as a whole.

The DCTED assists communities to increase citizen’s quality of life and their economic vitality. It also assists businesses to maintain and increase their economic competitiveness, while maintaining a healthy environment.

The Employment Security Department (ESD), in addition to administering unemployment compensation and employment services, is responsible for the development, administration, and dissemination of state occupational information, including the state occupational forecast.

The State Board for Community and Technical Colleges (SBCTC) has general supervision and control over the state system of community and technical colleges. These institutions are responsible for offering academic transfer courses, occupational education and training, and adult basic skills and literacy education.

The Commission is responsible for planning, coordination, evaluation, policy analysis, and recommending improvements to the state's economic development system.

Workforce development councils (WDCs) are 12 regional organizations that provide workforce development planning and coordination between education, training, and employment efforts in their communities. They were formed under the Federal Workforce Investment Act of 1998, Public Law 105-220.

Associate development organizations (ADOs) are private, non-profit corporations that serve as the lead agency in each county for economic development. The ADOs are designated by the board of county commissioners or the county council. There are 34 of the ADOs statewide. They deliver direct assistance to companies, and act as on-the-ground partners with the state to recruit, expand, and retain businesses.

Sectors and Clusters.

In Skills for the Next Washington (2008), the WTB described and differentiated industry clusters and sectors.

"Industry cluster is the term for a geographic concentration of inter-dependent competitive firms that do business with each other, including firms that sell inside and outside of the geographic region as well as support firms that supply new materials, components and business services, and other institutions including government and education. It includes upstream suppliers of input –such as firms that supply materials and equipment, and downstream customers, including other firms. It also includes related entities that shape the environment within which the industry operates–such as government regulatory bodies. The key characteristic is inter-relatedness. A cluster is not the same thing as an industry sector. A sector is a group of firms with similar business processes, products, or services, for example construction or health services. At the core of a cluster is a particular industry sector, but a cluster is not restricted to firms within the sector….Also, firms exist in sectors even when there are few firms in the sector in a geographical area. A cluster, by definition, requires geographic concentration."

Examples of sectors in Washington include aerospace, agriculture, and marine services. Examples of clusters include aerospace in Snohomish and King counties, wine in Walla Walla county, and software east of Lake Washington.

Summary of Bill:

An “industry cluster” is defined as a geographic concentration of inter-connected companies in a single industry, related businesses in other industries, including suppliers and customers, and associated institutions, including government and education.

The WTB must work with the DCTED and the Commission to ensure coordination among workforce training priorities, the state’s long-term economic development strategy, assistance to industry clusters, and entrepreneurial development. In its comprehensive plan for workforce training and education, the WTB must identify the strategic industry clusters targeted by the workforce development system.

The sector-based strategies of the DCTED must include cluster-based strategies that focus on assisting regional industry sectors and related firms and institutions. The Commission is added to a committee advising the DCTED on its industry clusters grant program. Eligible grant activities are specified, including: formation of economic development partnerships; research and analysis of cluster economic development needs; and, planning and implementation of targeted activities. Priority must be given to applicants that complement, not duplicate, the purpose and efforts of industry skill panels.

In addition, the Commission is directed to include industry clusters and targeted strategic clusters in its biennial comprehensive plan. The Commission must consult with the WTB and include labor market and economic information by the ESD in developing the list of clusters and strategic clusters.

The ESD must analyze labor market and economic data in order to identify industry clusters and strategic industry clusters that meet certain criteria.

A “center of excellence” is a community or technical college designated by the SBCTC as a statewide leader in industry-specific workforce education and training. The SBCTC must, in consultation with business, industry, labor, certain state agencies, and educational institutions, designate and fund new and existing centers of excellence on a competitive basis. Priority is to be given to applicants with established programs serving a targeted industry cluster within its own region. Centers of excellence are to employ strategies that, among other outcomes, build a diverse workforce for strategic industries through sharing curriculum, delivering collaborative certificate and degree programs, and holding statewide summits on industry trends and educational best practices.

A WDC is a local workforce investment board as established in federal law. In partnership with local elected officials, a council must develop and maintain a unified local strategic plan that, among other elements, assesses local employment opportunities, identifies the services needed by the current and future workforce, and puts in place a system-wide financial strategy. The plan must articulate the connection between local workforce and economic development efforts.

The ADO's are required to participate in coordinated regional planning efforts with the WDC's, including assistance to regional industry clusters.