| Assistant Secretary David A. Sampson Texas Workforce Commission Austin, Texas Wednesday, June 23, 2004 | | Good afternoon. It's great to be back in Texas amongst so many familiar faces! I want to thank Diane Rath for that introduction and for inviting me to be with you today. I also want to recognize and thank Ron Lehman, Ronald Congleton and Larry Temple for all their hard work on behalf of Texas citizens. I appreciate this opportunity to spend a few minutes talking with you about the state of our economy, and the role that innovation and technology, research and development, and education and workforce training must play to grow our economy and create prosperity throughout the 21st century.Overview of Economy and the President's Economic PoliciesI am glad to be able to come here this afternoon with good news for our national economy. A number of recent reports indicate the economy is strong and growing stronger. In May, 248,000 new jobs were created. The economy has posted steady job gains for each of the last nine months, with over one million new jobs added in the last 100 days alone. According to the Wall St. Journal, out of the 1.1 million jobs that have been created since last August, over 650,000 jobs have been created in the higher paying service industries, such as financial and information services, fields that boast average salaries of $17.34 an hour, compared to $15.20 for jobs in the manufacturing sector. Employment over the last year was up in 44 of the 50 states, and the unemployment rate was down in 47 of the 50 states. A year ago, the unemployment rate was 6.3%. Today it stands at 5.6%. That’s lower than the average of the 1970s, the 1980s, and the 1990s. In Texas, 12,900 new jobs were created in May, 17,000 were created in April, and a total of 102,000 new jobs have been created since September of 2003. Two weeks ago, Manpower Inc. released a poll indicating that 30 percent of US CEO's plan to add jobs in the third quarter and 60 percent of CEO's of medium and small businesses plan to add jobs in that same period.National manufacturing employment increased by 32,000 workers in May, and manufacturing sector employment as a whole has risen each of the past four months. Additionally, manufacturers have been reporting more increased activity and new orders than any time in the last 20 years. If examined on its own, the U.S. manufacturing sector would be the fifth largest economy in the world - larger than the entire economy of China.Small business confidence is at a 20-year high, and real after-tax incomes are up 11% since December 2000. Overall, economic productivity grew from 2000 to 2003 at the fastest 3-year rate in more than 50 years. This is important because small businesses are the drivers of new job creation, creating 7 out of 10 new jobs in our economy. Consumer confidence increased 5 points according to a new survey released this morning, an eighteen-year high.The fact is, President Bush's economic policies have helped bring about these positive economic trends. The President's Jobs and Economic Growth tax relief package has helped drive the strong improvement in our economy, raising the level of economic activity and productivity, resulting in higher incomes and living standards for Texas workers. Promoting Innovation and Technological DevelopmentsPresident Bush has said, "The role of government is to create conditions in which jobs are created, in which people can find work." A public-financed workforce development system is an important player. The economic development focus of the Bush Administration is supporting innovation and competitiveness on a regional level across America. Increased innovation and competitiveness empowers regions to attract private-sector investment, thereby improving the opportunities for American workers.Two weeks ago, the Economic Development Administration and the U.S. Council on Competitiveness hosted a national conference on the "Innovation Imperative: Turning Ideas into Prosperity." Four main themes relating to innovation and regional economic growth emerged from the conference.1.) Innovation is the only sustainable source of regional prosperity. 2.) Talent is the key asset in fostering innovation.3.) Building a cultural environment that supports entrepreneurial activity is critical. 4.) To build an innovative region requires more collaboration than ever. No longer can we structure economic development strategies based on political and geographic boundaries. In an economy where virtually every product has a worldwide market, the path to success lies in regional collaboration among cities, counties and states. By working together and combining their resources, communities within a region can maximize their market advantages through enhanced capacity for research, innovation, and high quality workforce. These critical components of economic growth help everyone in the region better attract the private sector investment necessary to spur job creation.Research and DevelopmentDriving the capacity for innovation is a vigorous research and development agenda in regions across the country. The U.S. private sector spends $193 billion annually on research and development (R&D). President Bush's FY 2005 budget calls for $132 billion in federal R&D funding, a 44 percent increase from the $91 billion spent in FY 2001. This request allocates 13.5 percent of the budget's total discretionary outlays to R&D – the highest level in 37 years. Not since 1968 and the Apollo program have we seen an investment in science of this magnitude. Workforce DevelopmentAs the economy innovates and grows, jobs emerge that demand higher-skills and pay higher-wages than ever before. How can we get ready to meet the workforce demands of the future? Transition points are always painful and at EDA we stay focused on helping people who have lost jobs. The fact is, those needs will be very different than those we have encountered in the past. Industries such as manufacturing and retail now need workers who understand computers and robotics and supply chain management. Fields such as health care and construction need more skilled labor than ever before. Newer industries - for example, biotechnology and geospatial technology - have emerged, and others that are today just the gleam in the eye of some innovator soon will. The jobs of the future, at virtually every level, will need to be filled by "knowledge workers," who have specialized skills and training.Workers in traditionally blue-collar industries now need specialized training to work with advanced robotics and computerized production lines. Even employees who have advanced degrees need to keep learning and upgrading their skills to keep pace with the competition and open up new opportunities.In a knowledge-based economy like ours, a top priority for all of us must be to ensure that we have the skilled workforce we need to spur economic growth and productivity. The private sector makes an enormous investment both in training new workers as well as keeping current the skills of those already on the job. We need the publicly funded workforce development and employment system to become a much more adept, flexible, and valued player in the eyes of the private sector. Let me put this in plain terms. Two-thirds of America's economic growth in the 1990s resulted from the introduction of new technologies, and 60% of the new jobs of the 21st century require post-secondary education held by only one-third of America's workforce. Therefore, it is imperative that businesses and universities invest in training and retraining of their students and employees to prepare them for the job demands of the future. This reality calls for a more robust, engaged incumbent worker training effort.For communities to grow and prosper businesses and higher-education institutions must invest in strategic partnerships to prepare workers for the jobs of the future. We need to ensure that the education and training community have a place or can develop a curriculum necessary to develop the skills identified by employers. President Bush recognizes how important this partnership must be and has put forth the "Jobs for the 21st Century Initiative." This initiative will prepare our economy and workforce for new challenges by expanding access to post-secondary education and fostering job-training partnerships between community colleges and employers in industries with the most demand for skilled workers. Specifically, the President's FY 2005 budget commits significant resources to help displaced workers find jobs. The budget proposes $23 billion for job training and employment assistance, $250 million for community colleges to train workers for industries that are creating the most new jobs, and $1 billion for training and cash benefits to assist workers dislocated by increased imports or shifts in production outside the United States.ConclusionPresident Bush has said we're at the beginning of an "innovation economy." This presents a great number of challenges, but it brings an even greater number of opportunities. America has always adapted and led the world in economic growth, innovation, and job creation because at every critical junction, we have refused to give into calls for isolationism and protectionism. As a result, America is still the land of endless opportunity.And now, America has another choice. We are at another one of those junctures in history. We can continue to grow the economy and create new jobs as the President's policies are doing, or we can raise taxes on American families and small businesses, hurting economic recovery and future job creation. A pro-growth agenda, a strong education system, and help for American workers to gain the skills to secure good jobs are the right ways to respond to the challenges of our growing and changing economy.Let me end by saying our business and investment decisions must strive to effectively promote innovation, technology, and research and development. It seems clear that workforce development will play an instrumental part in making the American dream a reality for every worker and business.Thank you for your time and thank you again for inviting me to be with you here today.
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