Business Assistance Note #2
Integrating State Development Efforts: An Agenda for Service
Providers
Many states that want to grow their economies and advance the wellbeing of their citizens are beginning to integrate, or at least coordinate their economic, workforce, and technology development efforts. These states recognize that, while the three development strategies have value in and of themselves, they are also mutually reinforcing -- each can be more effective when linked with the others.
Economic development programs to attract and support businesses are well complemented by workforce development programs that prepare people to work in new businesses and upgrade current workers skills in existing businesses, and technology development programs that help the businesses build market share. Workforce development programs need jobs, specifically those in competitive enterprises, if they are to succeed in their mission of moving people into selfsustaining positions. Technology development efforts may be most valuable when theyre targeted at growth industries a state is actively trying to recruit and sustain; and all technology deployment efforts must be matched with training efforts preparing individuals to use the new technologies most effectively.
States that are successfully integrating the three development programs economic, workforce, and technology are focusing on results. They are creating a vision of the economy they want to develop, and then building a comprehensive strategy that will bring the vision to fruition. They are also giving their various program chiefs joint accountability for producing the broad results envisioned, rather than individual accountability for any narrow results that could be achieved through the separate programs.
Economic, workforce, and technology development service providers need to be aware of the directions being taken by progressive states, and become involved in promoting and facilitating the implementation of these changes in their own states. This Business Assistance Note will show that:
o A focus on results is the most effective structure for developing an integration strategy;
o Todays economic and political climate is ripe for integrating development programs; and
o Providers can play a key role in helping states succeed at integrating
their development efforts.
Focus on Results
States that make a focus on results the first step in their integration process should have an easier time developing, and then monitoring and improving their strategies. To structure their integration efforts around results, states will need to begin with a vision of a preferred future and then work backward to define outcomes, develop strategies, and adjust budgets in ways that will lead to the desired results.
In the past, government programs were organized around narrowly defined problems or populations, and program success was calculated by input or partial outcome measures. Economic development programs were charged with bringing new businesses into the state, and were evaluated on the number of businesses or jobs they attracted.
Workforce development efforts were designed to place people into jobs or upgrade current workers skills, and were evaluated on the number of individuals served and situated. Technology deployment efforts were developed to increase companies use of stateoftheart or stateofthemarket technologies, and were evaluated on the number of contacts made and companies upgraded.
A focus on results, however, would do away with narrowly defined program goals and replace them with a broad vision of a preferred future for the state. This vision might, for example, encompass a fully employed workforce of highly skilled individuals, employed in highpaying, cuttingedge jobs, in the most advanced and innovative companies and industries in the nation. Such a vision would provide states with a framework for constructing integrated program delivery strategies that cut across existing categorical programs. It would require that economic, workforce, and technology development efforts join together to target specific industries for development, attracting companies in those industries to the state, and enhancing the competitiveness of the new and of resident firms in those industries by improving their use of technology and providing education and training programs that improve their employees productivity (and the employees wages).
Such integration can occur at three different levels:
o Policy: Setting corresponding missions and goals for various development programs and ensuring that data on clients, services, and costs, as well as quality assurance systems are comparable across programs.
o Administrative: Developing and implementing agreements that define the roles and responsibilities of each program, and the procedures each will follow in implementing the agreements. Administrative integration involves common contracting procedures, joint intake and assessment systems, colocation of suppliers, client referral agreements, and information sharing.
o Case: Developing, implementing, and monitoring comprehensive plans, across development programs, for each client business or individual.
In a resultsoriented system, states would need to adopt one or more of these types of integration strategies to achieve the broad goals they set, because no individual program could achieve these broad goals on its own. Which strategy or strategies would work best in a state would depend on its existing systems and policy objectives.
Existing and planned initiatives in Colorado, North Carolina, Tennessee, and Virginia provide examples of resultsoriented policy coordination. These four states have developed or proposed increased policy linkages based on development goals shared across systems. Colorado, North Carolina, and Virginia have existing policy boards that bring together economic, workforce, and technology advisors. Tennessee has a new public/private partnership that works across systems and sectors.
Indiana, Massachusetts, and South Dakota are coordinating administrative functions through initiatives such as onestop career centers. These centers may share personnel and equipment, and use common administrative procedures to increase customer access to services, reduce costs, and achieve common goals. In addition, some of the centers may coordinate their case management assistance to individuals or businesses.
Finally, efforts in Kansas, Massachusetts, Rhode Island, and West Virginia exemplify case coordination. In Rhode Island, new account management executives will provide businesses with a single point of contact and coordinate assistance to them. Kansas and Massachusetts work with individual firms by pulling together packages of services according to their needs. West Virginia is considering a strategy to enable businesses to access both business and workforce development services at onestop service centers.
The benefits of a focus on results extend beyond initial program
design. A results orientation provides states with a clear and
relevant yardstick for measuring program success, as well as a
basis for adjusting their delivery strategies to improve program
effectiveness. It also enables them to provide feedback to citizens
on whether programs are making progress in achieving their desired
outcomes.
Environment For Integration
Bringing about integration is not easy. Years of administering categorical programs and competing for scarce resources can result in entrenched government bureaucracies and constituencies. Certain stakeholders may resist change, even if they are likely to benefit from it. Bureaucratic inertia, inflexible regulations, concerns about politics and shifts in policy priorities, a pace of change that is too fast or too slow, personality conflicts, and nay sayers can all undermine integration. In addition, politicians might not want a focus on results, since failing to meet any goals they set can spell political disaster.
A number of economic and political forces, however, are currently converging to support efforts at integration. On the economic front, the rise of the global marketplace and increased international competition have forced companies to restructure their organizations and reengineer their processes in order to improve their productivity and remain viable. These restructuring and reengineering ventures call for coordinated efforts at upgrading companies technologies and the skills of their workforces.
On the political front, citizens are demanding more of government. They are looking for improved outcomes -- a more effective government, responsive to community needs and priorities, and accountable for results. And they are looking for improved processes -- a more efficient government, requiring less money, and providing a customerservice approach to program delivery.
Integrated economic, workforce, and technology development programs can meet these political outcome and process demands. The programs can satisfy citizens calls for creating and retaining competitive businesses and quality jobs, enhancing workers skills, and increasing individuals selfsufficiency. And integrating the programs can reduce duplication of effort (and reduce costs), and ensure that the focus is placed on meeting client needs, rather than program requirements.
The interest at the federal level of combining programs into block grants or providing states with waivers to federal program regulations should also facilitate integration. Both block grants and waivers will provide states with more flexibility in how they design and deliver programs, in exchange for stipulations that states be more accountable for results. The flexibility should enable states to be more creative and integrate programs, while the accountability might well require the creativity and program integration.
Block grants, unlike waivers will have their downside: they are
likely to come with significantly less money than was available
in the past, without any concomitant reductions in expectations.
Therefore, with block grants, the need to improve program efficiency
will be stronger than ever.
Bringing About Integration
Bringing about integration will require stakeholders to relinquish control, enter partnerships, and take risks. Governors and state legislative leaders may have to take a leadership role, articulate clear objectives, and provide incentives for making changes. Stakeholders -- program chiefs and service providers, as well as service recipients -- must be involved as real partners in planning and implementation. The management structure must be reconfigured to ensure accountability for the newlydefined, broadbased results. And early, tangible successes must be achieved and celebrated to keep up any momentum.
Providers futures are closely linked to integration policies adopted at the state level. The change in the marketplace and in clients needs and expectations will require providers to take a more holistic approach to service delivery. Proposed changes in funding streams may put them out of business if they cannot be part of a more comprehensive delivery strategy. Service providers need to be proactive in integrating economic, workforce, and technology development efforts.
Service providers working at the delivery level are frequently more aware of the need for integration than are program chiefs working at the policy level. Economic, workforce, and technology development service providers can use this knowledge and play a role in promoting and facilitating the implementation of integration strategies in their own states:
o Service providers can work, at the delivery level, with other service providers to coordinate and integrate their own activities. They can identify their states existing economic development, workforce development, and technology deployment programs, determine whether there are any existing policies or structures for promoting integration among them, and take advantage of what is already available.
o Service providers can look for opportunities to encourage the development and adoption of integration strategies at the policy level. They should determine who the key players are and find occasions for using the knowledge theyve gained through locallevel integration efforts to influence decisions farther up the chain of command. They can search out forums for expressing their views to state policy leaders (administrative and legislative), including letters, informal meetings, testimony, and publications in relevant newsletters.
o Service providers can become active participants in the adoption of integration strategies. Service providers are among the key stakeholders in the system who have to be involved in planning and implementation. Once a process for developing an integrated strategy is established, service providers need to provide input into that process and participate in the committees that will be shaping the state strategy.
Integrating economic, workforce, and technology development efforts
will greatly improve providers ability to deliver quality services
to their clients, as well as improve program results. Those that
are familiar with integration will be best prepared to take advantage
of any policies states develop. Those that involve themselves
in statelevel discussions on integration will be best able
to ensure that the new system creates appropriate opportunities
for service providers.
Further information on the issues presented in this note can
be obtained from:
Baj, John, Robert G. Sheets, and Charles E. Trott. Building State Workforce Development
Systems Based on Policy Coordination and Quality Assurance. Washington, DC: National Governors Association, 1994.
Benchmarking Results for Children and Families. Issue Brief (May 31, 1995). National
Governors Association, Washington, DC.
Bonnett, Thomas. New Vocabulary for Governing in the 1990s. Washington, DC: Council of
Governors Policy Advisors, 1994.
Competitive Firms, Skilled Workers: A Strategic Planning Seminar, November 1995. Final
Seminar Report. Washington, DC: National Governors Association, 1996.
Council of Governors Policy Advisors. The States Forge Ahead Despite the Federal Impasse:
CGPAs 1996 Survey of States on the Devolution Revolution. Washington, DC: Council of Governors Policy Advisors, 1996.
Friedman, Mark. From Outcomes to Budgets. Draft paper. Washington, DC: Center for the
Study of Social Policy, July 1995. Integrating State Development Systems Based on Results. Issue Brief (March, 1996). National Governors Association, Washington, DC.
New Opportunities in Federalism. Issue Brief (July 24, 1995). National Governors Association,
Washington, DC.
Unruh, Thomas, and Jay Kayne, StateFederal Collaboration on Rural Development. Washington,
DC: National Governors Association, 1992.
Molly Shonka and Terri Bergman, 1996
BOX 1
This Business Assistance Note was developed from a National Governors
Association Issue Brief Integrating State Development Systems
Based on Results. The NGA brief stemmed from a November 1995 NGA
seminar Competitive Firms, Skilled Workers, funded by the Manufacturing
Extension Partnership of the U.S. Department of Commerce and the
U.S. Department of Labor, in partnership with the National Workforce
Assistance Collaborative. Copies of the NGA issue brief and a
summary of the seminar can be obtained from the National Governors
Association by contacting Jay Kayne: phone 202/6245392,
fax 202/6245313, or email jkayne@nga.org.
BOX 2
Key Elements of a ResultsOriented System
o Vision
o Policy results
o Benchmarks
o Baseline data
o Performance measures
o Performance standards
o Shared accountability systems
o Continuous quality improvement process
BOX 3
Kansas
The Kansas Technology Corporation (KTEC), a quasipublic
corporation, is part of the states economic development effort
to improve the ability of Kansas firms to access technology and
technical assistance. Since its inception in 1987, KTEC has integrated
technology development with economic and workforce investments
at every stage of the product life cycle. KTEC finances five universitybased
Centers of Excellence for basic and applied research, workforce
development, and technology transfer; provides seed capital for
emerging technologybased industry; awards matching grants
for federal programs; offers technical information and referral
services; furnishes online economic development information
and services (http://kicin.cecase.ukans.edu/); and funds three
innovation and commercialization corporations and six affiliates
to promote the movement of products to the marketplace.
BOX 4
Tennessee
Tennessee has been actively pursuing a new model of systemic integration
by fundamentally restructuring the public/private relationship.
Tennessee Tomorrow, Inc., (TTI) is the vehicle through which the
state and the private sector are systemically integrating public
and private sector initiatives, resources, and expertise for joint
efforts where integration can strengthen the economy and benefit
both sectors. Existing public/private initiatives include classroom
modernization and Internet access, the Tennessee Manufacturing
Extension Program, and a review of state government.
BOX 5
Strategic Integration Tactics
o Use block grants
o Use a resultsoriented framework
o Tailor integration to specific state conditions
o Know existing economic, workforce, and technology resources
o Focus on key transitions in the workforce or businesses
o Include technology deployment resources
Process Integration Tactics
o Establish a process for collaboration
o Involve key stakeholders early in the process
o Adapt the process to private sector expectations
o Make a longterm commitment
o Expect changes in leadership to slow momentum
BOX 6
State Contacts
Colorado: Greg Diamond, Governors Office of Business Development, 303/8923726
Indiana: Nina White, Indiana Department of Workforce Development, 317/2327381
Kansas: Richard Bendis, Kansas Technology Corporation, 913/2965272
Massachusetts: Barbara Baran, BSSC/ISP, 617/7278158 x313
North Carolina: Jane Smith Patterson, Governors Office, 919/7154382
Rhode Island: Dennis L. Bouchard, Rhode Island Human Resource Investment Council,
401/2776700
South Dakota: Bonnie Bjork, Governors Office, 605/773 5032
Tennessee: Brian Krumm, Tennessee Department of Employment Security, 615/7412131
Virginia: Mark Kilduff, Virginia Economic Development Partnership, 804/3718108
West Virginia: Will Carter, Governors Office, 304/5582000
BOX
The National Workforce Assistance Collaborative builds the capacity of the service providers working with small and midsized companies in order to help businesses adopt highperformance work practices, become more competitive, and ultimately advance the wellbeing of their employees. The Collaborative was created with a $650,000 cooperative agreement grant from the Department of Labor to the National Alliance of Business. Current partners on the project include the Council for Adult and Experiential Learning, the Institute for the Study of Adult Literacy at The Pennsylvania State University, the Maryland Center for Quality and Productivity, and the National LaborManagement Association. The Collaborative provides assistance in four areas: employee training, labormanagement relations, work restructuring, and workplace literacy. For more information, contact Karen Randall at the National Alliance of Business at 800/7872848.