Pamela Passman: National Association of Workforce Boards Forum 2006

Text of Prepared Remarks by Pamela Passman, Vice President, Global Corporate Affairs, Microsoft Corporation
National Association of Workforce Boards Forum 2006
“Preparing American Workers for the Knowledge Economy: A Call to Action”
Washington, D.C.
February 27, 2006

Introduction

PAMELA PASSMAN: Thank you for inviting me here today.

I don’t know if any of you have ever listened to a speech by someone from Microsoft, but my colleagues love to use PowerPoint slides to illustrate their talks. I am a bit of old-fashioned, much to the disappointment of my 11-year-old daughter, who—being far more versed in the multimedia capabilities of the PC than I—offered to prepare a whiz-bang PowerPoint deck for my speech today. She insists that I’m just afraid of a computer glitch while giving speeches—and hey, what can I say. Bill Gates may be able to finesse his way through a technology breakdown on stage…but I’m sticking with paper for now!

In a way, this underscores what I want to talk with you about this afternoon: the readiness of the American workforce to embrace technology as an essential tool of the knowledge economy.

As the world’s largest software company, Microsoft has a very strong interest in the technology and computing skills of America’s workforce. This is not just a business issue. We already sell quite a bit of software. We really care about this for two other reasons. First, because of the challenges we face ourselves trying to hire qualified people. And second, because of the demographic, cultural and economic trends we see as a multinational company doing business in more than 100 countries.

Based on our perspective of the global economy and what other countries are doing to enable their citizens with workplace IT skills, I don’t think it’s an overstatement to say we all should be concerned—quite concerned—about the readiness of the American workforce.

This is probably not a surprise to anyone in this room. As you know, the United States is falling behind on various measures of workforce readiness:

  • Only 13 percent of American adults are proficient in the knowledge and skills needed to search, comprehend and use information—a 13 percent drop since 1992.

  • Only 13 percent of American adults are proficient in the knowledge and skills needed to identify and perform computational tasks—a number that hasn’t gone up in 15 years despite our nation’s focus on improving math and science skills.

  • And only 5 percent of American college undergrads today are pursing degrees in science or engineering, compared with 42 percent of university students in China.

Meanwhile, with the first of the baby boomers starting to retire this year older workers will be leaving the work force much faster than new workers are entering. While population growth is expected to make up for much of this shortfall, this growth will come almost entirely from immigrants who are far less likely to have the minimum education required for most jobs.

At the same time, the nature of work in America is rapidly shifting. As we move from a manufacturing-based economy to an information-based economy, employers are demanding more skills that revolve around knowledge creation, collaboration and communication, and analysis.

Information workers now account for 72 percent of the U.S. labor force, and over the next decade, 6 out of every 10 new jobs will be in professional and service-related occupations. Even jobs as diverse as a delivery driver, a retail clerk or a manufacturing foreman require at least a basic level of proficiency in computers.

Already, we’re seeing the challenges that these demographic and workplace trends are posing. In a recent survey of U.S. manufacturers, 90 percent of employers reported moderate to severe shortages of skilled workers. Topping their wish list of skills required to meet future needs are technical skills. Not far behind are strong computer skills.

And we’re not even talking here about the estimated 300,000 skilled IT jobs that have gone unfilled over the last decade because there was no one qualified to fill them.

This is certainly a challenge for Microsoft, where at any given time we have between 3,500 and 4,500 open positions in the U.S. Some of these positions require highly specialized technical skills, but many require only a basic level of computing proficiency to perform managerial, marketing, administrative or other business tasks.

While the American Competitiveness Initiative laid out in the President’s recent State of the Union message offered some solutions to these challenges, the reality is that as a nation we are not doing nearly enough to equip American workers with the kinds of basic computing skills necessary for them, or for American businesses, to stay competitive in the global economy.

And the scary thing is that other countries are. Countries like India and China and Russia have seen the economic success the U.S. has enjoyed over the last three decades, due in large part to our embrace of information and communications technologies, and they want a piece of the action.

I was recently in Switzerland at the World Economic Forum, where there was a fascinating conversation between Bill Gates and Thomas Friedman…someone I’m sure many of you are familiar with as a New York Times columnist and as the author of a book on globalism called “The World Is Flat.”

Bill was commenting that in just a few years, there will be more people in China using broadband than there are households in the United States, and that India is graduating four times as many college students with engineering skills as we are here in the U.S.

Friedman was marveling that the last time he was in India, people were buying airplane tickets at Internet kiosks in local gas stations. In a world that has become so interconnected, or “flat,” largely as a result of technology, Friedman observed that many of the old geographic advantages are gone: you don’t want to be a “B” student in Poughkeepsie when every genius in Beijing and Bangalore can now compete, connect and collaborate anywhere in the world.

The point I’m trying to underscore here is that innovation and change is happening at incredible speed all around us. And those of us living here in America cannot simply presume that we will always be the economic center of the universe.

The good news is that there’s plenty of action to go around. We don’t have to worry about the fact that other nations are embracing technology, and innovating in new ways, and investing in IT education and skills training… as long as we’re doing the same thing.

But if there’s not going to be a huge pot of federal or state dollars available anytime soon to invest in new workforce training programs, the question is this: what else can we do now to ready the American workforce?

Microsoft’s Commitment to Workforce Readiness

I’d like to take a few minutes to share with you what Microsoft is doing, and then outline some steps we believe the private and public sectors can and must take together to better equip American workers for success in an information-based economy.

About 10 years ago, it started to become clear to us at Microsoft that digital literacy was emerging as an important national issue. Initially, we thought the problem could be solved just by providing access to technology. One of Microsoft’s first initiatives was called Libraries Online, and over a period of several years in the mid-to-late ‘90s, Microsoft provided cash, software and technical support to equip thousands of American libraries across the country—especially in underserved rural and inner-city communities—with computers and access to the Internet.

What we learned was that as important as this access to technology was, it is also vital to provide people with the education and training in how to use computers and the Internet.

As a natural outgrowth of our commercial software business, we have developed a number of successful IT education and skills training programs to address these needs.

Microsoft Learning is a group at Microsoft that focuses on developing and delivering IT skills training and certification solutions. Working with hundreds of commercial training partners in the United States, more than 7 million American workers have received IT skills training on Microsoft technologies in classrooms, at corporate offices and over the Web.

This includes more than 1 million American workers who have become trained as certified Microsoft Office Specialists. The Office Specialist certification measures proficiency in Microsoft Office productivity applications used in jobs across a range of disciplines and industries. It is valued by workers who want to demonstrate proficiency in desktop computing skills, and among employers who want to validate that a prospective employee has those skills. In fact, these skills are considered so relevant that more than 1,500 colleges and universities consider Office Specialist certifications as eligible for college credit.

On average, certified Office Specialists earn 12 percent more than their non-certified colleagues, and 82 percent said they received salary increases after receiving their certification. This correlates with more than 80 percent of employers reporting that employees with the Office Specialist-certification are more productive and more competent at their jobs.

Another Microsoft certification program offers credentials in more advanced computing skills for IT professionals and developers. Over the last 13 years, more than 650,000 IT professionals and developers in the United States have received certifications in specialized areas such as database administration, networking and software application development. Like the Office Specialist program, this professional certification program provides both employees and employers with training and validation of an individual’s technical and professional computing skills, which are much needed and highly valued not only in the IT industry, but across many sectors of the economy.

Microsoft IT Academy is another IT learning program we make available to hundreds of accredited educational institutions in the U.S. For a modest fee, participating schools can take advantage of free online training courses, Microsoft software for use in learning labs, and mentorship and career resources for students and mid-career workers interested in the full range of IT skills training.

Our early investments in Libraries Online, and especially in our commercial training and certification programs, has helped us learn a great deal about how to teach people how to use computers, and what kind of skills they need to perform different kinds of jobs.

It also has given us the confidence to take on a big bold goal: bringing the benefits of technology—and technology skills—to one quarter of a billion underserved people worldwide by 2010.

This is something we’re doing through two global initiatives launched in 2003 with thousands of partners in the public sector and the non-profit community.

Partners in Learning is a $250 million program that provides students, educators and local governments on a worldwide basis with the resources they need to make technology an integral part of classroom learning and instruction. In the U.S., nearly 250,000 teachers, school leaders and students in 31 states have benefited from IT skills training and other Partners in Learning programs which provide the software, curriculum and professional development resources needed to catalyze new ways of teaching and learning.

Our other major digital literacy program is called Unlimited Potential, and is designed to provide underserved populations with IT education and skills training through community-based technology learning centers around the world.

In the three years since the Unlimited Potential program began, we’ve made 170 grants totaling more than $24 million in cash and software grants, and provided technical support and training to more than 4,000 technology learning centers in the U.S., about half of which are specifically targeted at workforce development.

  • For example, in Microsoft’s backyard in Washington state, the Workforce Development Council of Seattle-King County led a statewide pilot project, utilizing Microsoft’s Unlimited Potential curriculum, that allows any WorkSource client to learn or upgrade their technology skills—at no cost—in order to strengthen their qualifications for better job opportunities.

  • A grant to Catholic Charities of Santa Clara County in San Jose is being used to expand the availability of classes in computer and Internet skills for newly-arrived immigrants and refugees, and to help clients with Internet job searches and writing resumes.

  • In St. Louis, the St. Patrick Center is using a Microsoft grant to support an 8-week course in computer skills for the homeless and those at risk of becoming homeless. Graduates participate in a four-week paid internship where they have an opportunity to try out their new skills.

  • A grant to Arizona Women’s Education and Employment in Phoenix is being used to hire instructors—in partnership with a local community college—to teach technology skills to unemployed and underemployed individuals, who also will receive help with job placement after they’ve finished.

  • And in Tampa, Florida, the MacDonald Training Center is using a Microsoft grant to provide training, vocation and career skills to people with disabilities, including the use of adaptive computer hardware for people with physical or developmental disabilities.

In addition to the cash grants, one of the great things about Unlimited Potential is the IT skills curriculum and free or low-cost software we provide that help create sustainable capacity for local technology learning centers.

Where We Go From Here: A Call to Action

While these efforts are important, and something Microsoft is certainly proud of, they represent only what one company is doing to provide workers with essential technology and computing skills. There are other things which Microsoft believes the public and private sector can and should do to help U.S. workers prepare for the increasingly competitive global marketplace.

The first is to set an ambitious but achievable national goal. Here’s the one I’d like to propose today: By 2010, every young person, every job seeker, every displaced worker and every individual in the U.S. workforce who wants a basic level of technology and computing skills will have access to the education and training they need to succeed in the knowledge economy.

To accomplish this, we need to better utilize and align existing resources in both the public and private sectors, and develop new resources where they’re needed and don’t exist. To kick start this effort, Microsoft is inviting other industry leaders to join with us in an alliance that will focus on two objectives:

  • First, to work with other leaders in the private and public sectors to create a national workforce development policy framework, goals and agenda for the United States. Many other nations have comprehensive strategies that define the challenges, the needs and the necessary policy, legislative and funding tools. We cannot afford to be without a roadmap that ensures American workers are equipped for the 21st century knowledge economy.

  • The second goal of this alliance would be to work with the public sector to more effectively align successful private sector models of ICT skills training and certification with public sector workforce development programs, which I think we all agree are not serving the needs of workers and employers as effectively as they could be.

In addition, I’m pleased to announce that this spring, Microsoft will make available a new Digital Literacy curriculum—at no cost—to eligible educational, non-profit and government organizations throughout the United States.

There are some great things about this:

  • First, this curriculum is targeted to serve your clientele—people who may have little or no experience using a computer.

  • Second, the curriculum is comprehensive, yet manageable. Using a proven learning format, the five-part curriculum will cover computer basics, how to use the Internet and productivity software, computer security and privacy, and a fifth category we call Digital Lifestyle—which is about the different ways people can use computers at home and in their daily lives.

  • Third, it includes an online self-assessment that allows users to identify areas in which they need additional training.

  • Fourth, an online certificate test will validate an individual’s ICT skills. For employers, this certificate will help assess a potential employee’s ICT skills proficiency.

  • And fifth, the Digital Literacy curriculum will be made available free to governments, accredited educational institutions and nongovernmental organizations which are eligible for, or participating in, one or more of Microsoft’s IT skills education or training programs.

When the new curriculum and assessment modules become available, they’ll be a great complement to the somewhat more advanced Unlimited Potential curriculum currently in use.

While we all know there is no magic bullet in workforce development, we are excited about the possibilities this new Digital Literacy curriculum offers to educate, assess and validate IT skills proficiency for thousands, if not millions of American workers.

And finally, Microsoft is deepening its focus on making Unlimited Potential grants to nonprofit partners that integrate IT skills training with job search assistance and career development guidance. To ensure that these programs meet the needs of local communities, Microsoft and its district offices plan to work closely with public and private sector organizations to understand local workforce priorities and skills needs and to expand Microsoft’s relationships with grantee partners to help them be more successful.

Transforming Workforce Training Through Technology

These are ambitious goals which, to succeed, will require a good faith effort by both the public and the private sectors. In the absence of significant new financial resources at the government level, we believe this offers a roadmap for enhancing the current workforce training system to meet the needs of both workers and employers.

To address demographic and global economic trends, it’s imperative that we act now to ensure that new and existing workers acquire the basic technology skills necessary not only for work, but for every part of their lives.

The steps I’ve outlined today are certainly not the only actions necessary to take workforce development to the next level. But they can—in the relatively near term—have a measurable impact on the preparedness of millions of Americans, and the ability of U.S. businesses, to contribute and benefit from the knowledge economy.

Thank you very much.

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Pamela S. Passman

Corporate Vice President and Deputy General Counsel, Global Corporate Affairs