New skills for region’s economic future
As originally appearing in The Providence Journal

By James T. Brett & Edward M. Mazze

At the recent New England Economic Partnership forecast conference in Boston, economists from around the region gathered to discuss the outlook for this part of the country. As it has been for the last several years, the economic forecast was tempered: The region is expected to have slow growth and slow recovery over the next four years.

During the recession, New England lost a total of 5 percent of its jobs and the region as a whole is unlikely to return to pre-recession employment levels until well into 2015. Among the six states, the smallest state, Rhode Island, has had the greatest economic pain. Throughout much of the recession and continuing into 2012, Rhode Island has had the second highest unemployment rate in the country. A double-digit unemployment rate is forecast into 2013, with over 33,000 jobs lost since 2006. In terms of recovery, progress is slow – expansion of employment is projected to crawl forward in the next two years. In Rhode Island, it is a sobering outlook.

Since the beginning of the recession, New England has generally fared better than other parts of the country by some measures. Taken in the aggregate, the region’s overall unemployment rate has remained below the national average and is expected to remain so for the next three years. The weakness in our housing markets, while significant, does not touch the crippling declines seen in other parts of the country. However, job growth in New England remains weak and there is significant uncertainty in the regional economic outlook.

Much of this uncertainty derives from external factors. New England’s prosperity is obviously intertwined with the rest of the nation. To the degree the national picture dims, our region is likely to mirror those developments. And, perhaps to a greater degree than other parts of the country, Europe’s influence is significant – the European Union has traditionally been an important trade partner and investor for New England. As a result, we are very concerned about the weakness in the European economic outlook and the sovereign debt crisis currently playing out across the Atlantic.

Given the factors we cannot influence or control, it is important that we look at those elements in the economic mix that we can address. In any recession, there is dislocation and then realignment of the labor market with the emerging employment opportunities. In this recession, we see a significant disconnect between the types of new jobs that are developing and the skills that the unemployed or underemployed may bring to these opportunities. Around New England, for a diverse range of industries, employers have job openings – but simply cannot find qualified employees to fill them.

Among the top sectors for growth are computer and mathematical occupations, along with health-care support occupations. In each of these sectors, jobs are emerging that require highly skilled labor – and often different skills than in past decades. Our economy is shifting more and more toward those occupations which require science, math, engineering and technology, the so-called STEM fields, and our workforce is not able to keep pace. We need to redouble our efforts in educational reform to help expose students to STEM skills early and often, and ensure that they arrive in the workforce equipped with the advanced skills needed in jobs of the future.

There is also a “skills gap” for employers needing workers with specific job skills, such as advanced manufacturing techniques used in complex production environments. Precision manufacturing technology becomes more sophisticated every day, and so do the skills needed to work with this technology and oversee these kinds of manufacturing processes. We need to do far more to equip the existing labor force, and the next generation of workers with sophisticated mid-level skills needed in the emerging manufacturing sector.

Since 1990, the number of workers with any postsecondary education has been growing more slowly than in other parts of the country.

In particular, the region faces a shortage of workers with education beyond a high school diploma but short of a bachelor’s degree. Many of the jobs in growing sectors, such as health care, will require just this mix – some 40 percent of future job openings. It is vital that our extraordinary educational institutions in New England recognize this reality, and align their offerings to meet these workforce needs.

James T. Brett is president and chief executive of the the New England Council, a regional business-advocacy association. Edward M. Mazze is a professor of business administration at the University of Rhode Island.

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