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BBA Economic Digest: Future Jobs Depend on This

Future Jobs Depend on This

I said last week in a videoconference with economic developers from Pennsylvania, and I'll say it again until I am blue in the face -- that digital skills really, really matter.

The Council on Foreign Relations reports that two-thirds of the 13 million jobs created in the U.S. since 2010 require a medium- to advanced-level of digital skills. The truth is that millions of American workers, especially the nearly 70 percent without college degrees, could be shut out of America’s techno-centric, post-pandemic economy.

Here's what should be foremost on the minds of economic developers everywhere.

Expanding access to technology. Reliable, affordable broadband internet rests at the center of the future of work. Closing the digital divide with more access is key.

Stepping up efforts to upskill or reskill Americans. Training on digital fundamentals, like free Applied Digital Skills courses from Google, form a foundation upon which job seekers can build on to learn more advanced digital skills.

Developing public-private partnerships. Educators, economic developers, government officials, and employers need to develop avenues for employment after workers have completed skilling programs like Google’s IT Support Certificate.

Adaption Is Resilience

The labor market has recovered 12 million of the 22 million jobs lost from February to April. But many positions may not return any time soon. That has many people figuring out their next moves.

Pivoting from one career to another is never easy but many have pulled it off. Andrew Levine, chairman at DCI, an economic development marketing and travel marketing firm, has for several years now hosted a podcast called Second Act Stories dedicated to people who have made big career changes.

But while there are prominent success stories that illustrate resilience, preparing millions of displaced workers for the post-pandemic economy won't be possible without massive federal investment, experts say.

“We need a New Deal for skills,” Amit Sevak, president of Revature, a company that hires workers, trains them to use digital tools, and helps place them in jobs, told The New York Times

The bottom line: "We're in a Cambrian explosion period of experimentation with new ways of working," says Roy Bahat, a future of work expert and head of Bloomberg Beta, a venture fund backed by Bloomberg LP. "It's showing people will try to adapt if they must."

The Coming Reckoning

While higher education used to be a "lubricant" of upward social mobility, it's now more of a "caste system" that primarily serves the privileged.

"We're no longer public servants, but luxury goods who are drunk on exclusivity and brag about turning away 80 then 85 then 90 percent of applicants," NYU marketing professor, entrepreneur, author, and podcaster Scott Galloway told Business Insider. "I think it's morally corrupt and the reckoning is on its way."

College tuition rates have far outpaced the rate of inflation at the same time that acceptance rates have fallen, while the outcomes that students can expect after graduation have not improved accordingly.

Something has to give. Something has to change if higher education is to fulfill its purpose of providing upward mobility. So as to expand access and serve the public better, colleges and universities need to embrace hybrid learning models.

They also need to become more vocational in nature. Employers should demand as much.

Image Through Actions

Your community's image is your brand's public perception. You can help shape it by telling stories about your place.

But what can really sculpt your community image are the actions of the local economic development organization.

Does your EDO stay in contact with incumbent employers through a robust business retention and expansion program? If not, that says a lot.

Has your EDO established an emergency loan fund for small businesses during the pandemic? If not, that says a lot.

Developing a stellar community image opens up opportunities for customer testimonials and case studies, the proof needed to earn the trust of a potential investor on the outside looking in.

Companies look at communities not only as a resource for talent, but there is at least anecdotal evidence that some tend to invest in communities that align with their values. I can think of one large tech firm that will not invest in a certain Southeastern state for that very reason.

Weber Shandwick, one of the world's leading global public relations firms, found that global executives attribute 63 percent of their company's market value to their company's overall reputation.

If that is so, would not these same company execs feel the same way about community image when making a location decision?

Saving Capitalism

Please know that I am not suggesting a one-for-one wage increase correlation as I think that would stymie economic growth. But I do think that a big disparity in wage growth threatens capitalism as well as democracy.

A new report from the Economic Policy Institute details how the top 0.1 percent have increased their annual wages in recent decades by staggering levels, while the bottom 90 percent have seen their wages redistributed upwards.

In the four decades since inequality started growing, 1979 through 2019, working people who make up "the bottom 90 percent" saw annual wages grow by just 26 percent throughout that entire period―from $30,880 in 1979 to just $38,923 in 2019.

Meanwhile, the top 1 percent saw their wages grow by 160 percent. And wages for the tippy-top 0.1 percent ―the very highest earners among us―saw their annual wages increase by an astounding 345.2 percent―from $649,725 to nearly $2.9 million.

I am not for restricting anyone from reaching a pinnacle of success. If you can become a millionaire or a billionaire, have at it. In short, I am not for socialism.

A New Capitalism Emerges But I do believe that capitalism has to be fixed in order to save itself from the pitchforks. An answer is emerging, embraced by some of the top business leaders in the world, with the concept of stakeholder capitalism. The idea is that today's corporation has societal responsibilities not only to shareholders but also to employees and communities.

A seminal moment for the stakeholder capitalism movement came in December 2016 when Fortune Magazine took 100 CEOs from the world’s largest companies to Rome, to deliberate on things the private sector could do to address global social problems. The event culminated in a meeting with Pope Francis at the Vatican. Last week marked another milestone with the formation of The Council for Inclusive Capital with the Vatican, a partnership that includes business leaders committed to building “a fairer, more inclusive, and sustainable economic foundation for the world.” Leading the effort are CEOs Ajay Banga of Mastercard, Oliver Bäte of Allianz, Carmine Di Sibio of EY, Roger Ferguson of TIAA, Kenneth Frazier of Merck, Marcie Frost of CalPERS, Alex Gorsky of Johnson & Johnson, Al Kelly of Visa, Bernard Looney of BP, Ronald O’Hanley of State Street and Brian Moynihan of Bank of America. Moynihan said he joined the effort because it will create a moral framework and help ground business “in Judeo-Christian values and ethics.”

How SpaceX Could Bridge the Digital Divide

The US government plans to give SpaceX nearly a billion dollars to beam internet from space to people across rural America, where three out of five people say access to broadband is still a pressing issue.

The company will receive a total of $856 million, one of the largest subsidies handed out by the Federal Communications Commission under a new program designed to encourage companies to extend broadband access into the most underserved areas over the next 10 years.

SpaceX's win is notable because the company competed against more established internet service providers, such as Charter Communications and CenturyLink, which rely on traditional fiber optic cables to deliver high-speed internet to customers.

SpaceX's Starlink internet service, which is not yet fully operational, relies on an experimental swarm of nearly 1,000 satellites whizzing around Earth at more than 17,000 miles per hour as they beam the internet to high-tech antennas mounted on people's homes.

The FCC did award the bulk of the $9 billion worth of subsidies to more traditional providers. Charte received more than $1.2 billion to bring high-speed internet into more than 1 million neighborhoods. And the Rural Electric Cooperative Consortium was awarded $1.1 billion to more than 618,000 neighborhoods.

I Know My Rights!

The backlash against public-health safeguards has plenty of precedents: When the influenza pandemic swept through San Francisco in 1919, hundreds of "mask slackers" disobeyed the law and were arrested.

In the early 1980s, the public-safety battle was over seat belts. Most Americans didn't use them, and 65 percent opposed them being enforced by law. Some people cut the belts out of their cars. Others challenged seat-belt laws in court.

"In this country, saving freedom is more important than trying to regulate lives through legislation," wrote one staunch opponent in a 1987 Chicago Tribune editorial.

Americans have grown comfortable with seat belts. Today, more than 90 percent buckle up regularly. New Hampshire — whose license plates proclaim "Live free or die "— remains the only state without a mandatory seat-belt law.

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