EDUCATION AND ECONOMIC DEVELOPMENT: POSITIONING VIRGINIA FOR - PowerPoint PPT Presentation

EDUCATION AND ECONOMIC DEVELOPMENT: POSITIONING VIRGINIA FOR STATEWIDE GROWTH ChamberRVA Inaugural Education Summit – July 18, 2019

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TOPICS FOR TODAY  Linkages between education and economic development  Education in Virginia: strengths to sustain and build on  Education in Virginia: areas for improvement  Case study on connecting education and business: HQ2  Virginia’s national leadership opportunity  Q&A 2

EDUCATION PLAYS A CENTRAL ROLE IN STATE ECONOMIC DEVELOPMENT EFFORTS . . .  Preparing individuals to be productive members of society (including but not limited to compensated work)  Developing talented citizens to meet current and future workforce demands in the private and public sectors  Providing scientific, technical, and professional education, as well as other career prep opportunities, for our citizens  Through higher ed, conducting research and catalyzing innovation of importance to our people and industries  Improving our state’s image as an attractive location for business investment and highly mobile professionals  Enhancing quality of life 3

. . . AND IT DIRECTLY IMPACTS THE MOST IMPORTANT SITE-SELECTION FACTOR FOR BUSINESS DEVELOPMENT PROSPECTS: TALENT NOT COMPREHENSIVE Primary selection factors* Secondary selection factors** • Quality, availability, and cost of target • Level of state-and-community support workforce (fast-track permitting, etc.) • Tax and regulatory climate • Availability and quality of customized recruitment and training solutions • Proximity to key customers and suppliers • Statutory financial incentives • Transportation infrastructure and logistics • Customized incentives • Operating costs (electricity, insurance, workers comp, etc.) • Quality-of-life factors (public education options, crime, etc.) • Availability of target real-estate solution (size, cost, control, water/sewer/rail connectivity, etc.) * Priority of selection factors varies from project to project; however, quality and availability of workforce almost always is one of the top three considerations ** Typically these factors come into play when multiple locations offer relatively comparable characteristics relative to primary site-selection criteria 4 Source: Author experience with hundreds of site-selection projects

IN JUST THE LAST DECADE, WORKFORCE AVAILABILITY HAS RISEN TO THE TOP OF SITE-SELECTION CONSIDERATIONS In 2008, top site consultants in the U.S. ranked “availability of skilled labor” as the third most important site-selection factor; in 2018, they ranked it no. 1 In 2008, corporate real estate execs in the U.S. ranked “availability of skilled labor” as the sixth most important site-selection factor; in 2018, they ranked it no. 1 5 Source: Area Development surveys (2008 and 2018); VEDP analysis

VA EDUCATION STRENGTHS TO SUSTAIN AND BUILD ON  PreK-12 and higher education in Virginia represent perennial state selling points for VEDP (e.g., higher ed ranked no. 1 by SmartAsset, PreK-12 ranked no. 8 by U.S. News)  USN&WR: Ranks many public/private Virginia institutions strongly overall, with UVA, William & Mary, and Virginia Tech all ranking in the top 30 for public universities in the U.S.  Bachelor’s degree attainment among the highest in America  Decentralized higher education governance model, like that of the U.S. overall, is a defining aspect of the VA higher ed  FastForward through VCCS is helping address demand for sub-baccalaureate postsecondary credentials 6

EDUCATION IN VIRGINIA: AREAS FOR IMPROVEMENT  Still trailing many states in early childhood education, which is the foundation of our entire talent pipeline – ideally need a clear, comprehensive, and cohesive vision with a durable structure  Insufficient pipeline of skilled trades workers in multiple regions  Rarely ranked among top states for state workforce development programs – due to lack of statewide custom recruitment and training incentive program (like in Georgia, Louisiana)  Tech-talent pipeline not sufficient to address large number of openings, including but not limited to Northern Virginia  Persistently high levels of underemployment among full-time employed individuals with a bachelor’s degree or higher (roughly 25% – better than many other states but still too high)  Educational attainment and performance disparities between rural and urban areas, and between Northern Virginia and other regions 7

WITH STATE FUNDING, VEDP AND VCCS ARE LAUNCHING A WORLD-CLASS CUSTOM WORKFORCE INITIATIVE IN 2019  Assembly of strong leadership team  Design and buildout of a modern, productive office suite  Development of name/brand and marketing materials  Successful kickoff of a few pilot projects  Strong VEDP partnerships with VCCS and its institutions  Partnership cultivation with selected 4-year institutions BIG MEDIUM-TERM GOALS: TOP 3-5 NATIONAL RANK IN THREE YEARS…BEST IN AMERICA IN FIVE 8

CASE STUDY: AMAZON HQ2 AS AN EXAMPLE OF THE POWER OF CONNECTING EDUCATION AND BUSINESS Brian Huseman, Amazon VP for Public Policy: “At the end of the day, tech talent was the driving factor [for selecting Virginia]. Both tech talent on day one, but also tech talent in the future.” 9

COMPUTER SCIENCE IS THE DOMINANT DEGREE FIELD TIED TECH-INTENSIVE JOBS, SUCH AS SOFTWARE ENGINEERING Distribution of degrees by field for tech employees at Amazon Seattle HQ Additional perspectives on tech- talent pipelines: VEDP analysis of U.S. Census ACS microdata indicates that computer science is, by far, the most common Other fields (<2% major for college grads working in each), 35% software development or computer programming positions in the U.S. Computer Science, overall as well as in the DC/MD/VA 49% region Interviews and focus groups with many tech employers confirmed Information computer science as the principal Technology, 2% college degree field of concern re: strengthening the tech-talent pipeline Software in Virginia (in addition to alternative Engineering, 3% pathways, e.g., coding boot camps) Electrical Engineering, 4% Computer Engineering, 7% Source: social media data; U.S. Census American Community Survey; VEDP analysis 10 2 10

THE D.C. METRO AREA IS THE TOP PRODUCER OF TECH TALENT (I.E., GRADS IN C.S. AND RELATED FIELDS) IN NORTH AMERICA New computer science graduates, annually (Bachelor's degree and above) Number of new computer science graduates, 2015 Seattle 1,340 New York 6,032 Chicago Boston 2,891 3,680 Philadelphia 1,850 Greater D.C. Los Angeles 6,258 3,653 Atlanta Phoenix 1,947 3,026 Dallas 2,049 Rest of Virginia 2,077 11 SOURCE: U.S. Department of Education, National Center for Education Statistics, integrated Postsecondary education data system (IPEDS), 2015

WE PURSUED A DISTINCTIVE STRATEGY FOR HQ2 THAT WOULD POSITION OUR ENTIRE TECH SECTOR FOR SUCCESS From the outset, we committed to match the scale and structure of the financial commitment for HQ2 with the ambition of the project through a combination of company commitments and investments in our state and regional competitiveness for all technology firms and corporate headquarters INVESTMENTS IN VIRGINIA’S TRADITIONAL INCENTIVES COMPETITIVENESS: We will launch a series of initiatives to grow Virginia’s 40% tech talent and infrastructure, 60% while supporting Amazon’s success in Virginia Note that the final package split was about 30% direct incentives and 70% investments in Virginia’s competitiveness 12

VIRGINIA IS INVESTING ~$1.1 BILLION IN A PERFORMANCE-BASED TECH-TALENT INITIATIVE TO DOUBLE ANNUAL CS GRADS (BS+MS) Tech Internship Master's-Level program for Tech-Talent Higher Statewide Education in Education Bachelor's- Northern Students Statewide Level Tech- Virginia community Talent Strengthening college Tech- Education the K-12 Tech- Talent Talent Education Statewide To add 25-35k BS/MS grads in CS and related fields over 20 years, Virginia is investing: • Up to $675MM in undergrad education, including 250-300 new faculty lines, startup packages, capital projects (new buildings and labs), and operational support • Up to $375MM in graduate education, including 50-75 new faculty lines, startup packages, capital projects (a new tech campus plus new buildings), and operational support • $25MM in tech internships/apprenticeships in higher education • $25MM in K12 computer science education (e.g., professional development, online curricula) 13

VIRGINIA’S PUBLIC INSTITUTIONS PRODUCE OVER 1,300 BACHELOR’S AND 400 MASTER’S DEGREES IN COMPUTER SCIENCE -RELATED FIELDS Three-year annual average through AY 2017-2018 Virginia Tech 346 96 442 George Mason University 185 131 316 University of Virginia 176 50 226 Virginia Commonwealth University 107 22 129 Old Dominion University 99 56 155 Bachelor’s degrees James Madison University 97 101 Master’s degrees College of William and Mary 71 23 94 Radford University 58 Christopher Newport University 59 53 6 University of Mary Washington 45 11 Virginia State University 41 32 9 Virginia Military Institute 24 33 Norfolk State University 21 12 The University of Virginia's College at Wise 14 Longwood University 14 Note: This data is based on numbers directly provided by Virginia’s higher education institutions for computer science, computer engineering, and software engineering bachelor’s and master’s degrees. 14 Source: Virginia’s public higher education institutions; SCHEV; VEDP analysis