Acknowledgements

ConvergeUS would like to thank the Bill & Melinda Gates Foundation for its generous support in making this report possible. The authors would also like to thank Emily Hays for her research assistance. The survey that is the basis for the second part of this report was conducted by Princeton Survey Research Associates, International (PSRAI). At PSRAI, we would like to thank Evans Witt and Margie Engle-Bauer.

tAble of contents
eXecUtIVe sUmmARY PARt I Economic Change and Challenges to the Workforce PARt II A Survey of Business Executives PARt III Conclusions endnotes

X ecU t IV

eXecUtIVe sUmmARY

bUsIness eXecUtIVes VIews on AmeRIcAs new woRkfoRce

The global economy has experienced enormous changes in recent years. In the midst of a severe global recession, companies in the United States see more and more revenue opportunities overseas. At the same time, the pace of innovation is accelerating, driven by the growth in connectivity and dissemination of communication technologies. Business must fight harder for market share and workers must develop skills to keep pace with a global marketplace. Adapting to these changes is among the biggest challenges presently facing the U.S. economy. No single initiative from the public sector, the private sector, or both will address this challenge. However, education will be crucial to facilitating these adjustments. Improving the standards to which we hold students will, in turn, be part of how the educational system helps train a 21st century workforce. The Common Core State Standards (CCSS) initiative represents an effort in the United States to establish a framework that will better

prepare students for college and the workforce. This report surveys business executives to assess their awareness of CCSS and examine how they view workforce issues facing America. The survey took special care to examine how executives of technology companies responded, since the technology sector drives so much productivity and economic growth. Two tensions emerge from examining the responses of business leaders: 1. Few think the American educational system is doing its job very well in preparing workers for todays economy, even as these leaders are most likely to choose education as a key policy intervention that could help economic competitiveness. 2. Business executives and technology executives especially most often cite the need for workers who can solve problems and think critically, but a majority are unaware of an initiative CCSS that could help give students those capacities. These tensions nonetheless present an opportunity. Business leaders understand the need to improve the educational system, yet are not as engaged as they should be with CCSS and how those standards can contribute to meeting current and future workforce needs. The reports findings suggest that stakeholders in the CCSS and business community need to collaborate more effectively in implementing CCSS and other educational reforms. The surveys main findings are: When asked how well the educational system is preparing todays workers for the economy: 56 percent of executives say the educational system does the job somewhat well; 33 percent say it does the job not well; and

only 11 percent says the educational system prepares workers well.

52 percent of business executives are not familiar with Common Core State Standards, with just 14 percent saying they are very familiar with them and 33 percent somewhat familiar. With respect to policy steps the United States could take to help companies be more competitive, education is cited most often, followed by investments in research and development and corporate tax reform. 66 percent of executives say steps to improve education are very important; 56 percent say R&D is very important; and 54 percent cited corporate tax reform is very important.

In thinking about the important objectives for a high school education: 88 percent of executives said teaching students to think and solve problems is very important; 80 percent said focusing on basics such as reading, writing, and mathematics is very important; and 72 percent said providing skills so students can be productive workers is very important.

Focusing on high schools, the executives surveyed thought the following steps would help improve high schools effectiveness in better preparing high school students for college: 72 percent cited focusing on skills such as analytical thinking and problem-solving. 61 percent cited focusing on basic skills such as reading, writing, and math. 51 percent cited monitoring teacher performance.

Regarding areas in which recent college graduates could improve to be successful in the global workforce: 61 percent said improving writing and communication skills would help a lot. 59 percent said improving critical thinking and problem-solving skills would help a lot. 44 percent said improving graduates creative thinking would help a lot. 43 percent said improving math skills would help a lot.

school education, tech executives were less likely than non-tech executives to cite acquiring basic skills (by a 77 percent to 82 percent margin) and becoming a good citizen (by a 60 percent to 68 percent margin). Similarly, when asked what changes would be most effective in preparing high school students for college, about three quarters of all executives cited analytical skills and problem-solving. But fewer tech execs cited focusing on basic skills like math and writing (by a 55 percent to 64 percent margin) and fewer said reforming public schools (41 percent of tech executives said this versus 51 percent of non-tech executives).

Although there was generally a good deal of alignment between respondents in the technology sector compared to those who are not, there were several ways in which tech executives differed from their counterparts in other sectors. With respect to CCSS, tech executives are slightly more aware of the standards, with 18 percent very familiar and 46 percent saying they were not familiar with them. Non-tech executives were less aware of CCSS (12 percent were very familiar with them) and 55 percent were not familiar with them.

Technology executives placed greater emphasis than their non-tech counterparts on the need for better math and science education at all levels. By a 42 percent to 30 percent margin, tech executives say focusing on teaching the sciences would better prepare high school students for college. By a 48 percent to 39 percent margin, tech executives say recent college graduates should improve their math skills to thrive in todays global workforce. By a 41 percent to 25 percent margin, tech executives say having greater scientific and engineering knowledge would help recent college graduates be successful in todays global workforce. By a 34 percent to 25 percent margin, tech executives say that keeping up to date with computers and programming skills would help recent college graduates do well in the workforce.

When asked about policy steps that would help companies competitiveness, technology executives were more likely to cite R&D as very important; 66 percent did, while 51 percent of non-tech executives said this. Technology executives placed greater relative importance on the need for students to develop the capacity for critical thinking and problem-solving. All executives shared this view, but tech executives tended to place less emphasis on the importance of other educational objectives such as basic skills or good citizenship. While 88 percent of both tech and non-tech executives cited teaching students to think and solve problems as a very important objective for a high

co n o mI

PARt I economIc chAnge And chAllenges to the woRkfoRce

The globalization of the economy has accelerated the pace of economic change. In one of the economys most dynamic sectors information and communications technology companies that are household names such as Apple, Microsoft, Intel, and IBM now see large shares of their revenues coming from overseas. In 1999, 57 percent of Intels sales were in foreign countries, a share that grew to 82 percent in 2009. Ciscos overseas sales rose from 39 percent to 50 percent in that timeframe, and Microsofts jumped from 30 percent to 43 percent. The pattern for Apple was the same, if less pronounced, with an increase in foreign sales from 46 percent to 51 percent from 1999 to 2009, with IBM showing a similar pattern with an increase from 57 percent to 64 percent.1

These developments place the American worker in the thick of international competition more so than ever before. American workers remain the most productive in the world, but the productivity advantage the United States has traditionally enjoyed over its trading partners is narrowing. Globalization does not just challenge traditional trading patterns and competitive positions. It also means U.S. workers have to adapt and change with the economy. Plenty of anecdotal evidence indicates that the increasingly global economy requires workers to have a range of problem-solving skills, the ability to effectively communicate with others, and the capacity to collaborate with people within their companies and those external to them. This report serves as a review of recent trends in the American workforce and how structural changes to the economy places new demands on the skills of U.S. workers. In conducting this review, the context is thinking about Common Core State Standards (CCSS) and how they might help in preparing American workers for jobs of today and tomorrow. CCSS seek to provide a clear and consistent framework to prepare our children for college and the workforce. 2 The standards do not try to impose specific curriculum requirements on schools, but rather set benchmarks for the kinds of skills and capacities students should have to be ready for post high school education. By themselves, CCSS will not address all challenges to addressing gaps in workforce preparedness. But they are part of the solution to aligning the education students receive to the needs of a fast-pace global economy. The report will also, through a survey of business executives, shed light on employers attitudes toward the workforce needs for our economy. In particular, the survey explores how employers view the skills of the workers they hire, with

special attention paid to whether executives in the tech industry differ from other sectors of the economy on these issues. The interest in the technology sector is driven by this sectors importance to the broader economy. To take one data point, the Internet accounted for 21 percent of economic growth in mature economies from the 2004-2009 timeframe, with most (75 percent) of the growth benefits falling outside the tech sector and benefiting companies in manufacturing and services.3
stRUctURAl economIc chAnge

Over the last several decades, the way we live and work in the United States has changed significantly. Certain industries have become obsolete, technological advancements have fundamentally altered the skills required of workers in other industries and the growth of the knowledge economy has increased the relevance of other skills. Though the causes of this shift are manifold, the United States has a new status quo: 1. The nature of work is different than previous decades; 2. The skills workers need to maintain stable employment are also distinct, and; 3. How firms, and the economy, grow and innovate has been fundamentally altered by the computing and knowledge exchange revolutions.4 Chart 1 shows the changes in employmentand thereby the change in the makeup of the U.S. economyfrom 1939 through 2011. Industries such as professional and business services, as well as education and health services, are on the rise while manufacturing is on a steady decline. Those growth industries require generally higher-skilled and higher-educated workers than the industries in decline. Economic literature documents this polarization of the labor market in the last several decades.

Job opportunities in the United States have steadily trended towards either low-skill, lowwage occupations or high-skill, high-wage occupations, with middle-skill and wage white collar and blue-collar jobs decreasing.5 Chart 2 shows this phenomenon through the percent changes in employment in occupations from 1983 through 2011. High-wage, higherskill occupations like management and certain services have experienced positive growth, even during the most recent recessionary period.

Similarly, low-skill, low-wage occupations like protective services, food prep and personal care services have experienced positive growth. The occupations in the middle of the chart that are disappearing are the middle-skill, middle-wage positions. Chart 3 illustrates the difference in the make-up of the U.S. economy by skill the percentage of occupations requiring middle-skill levels has dwindled from 75 percent in 1980 to 68 percent in 2009.

selected IndUstRIes As A shARe of All PRIVAte, nonfARm emPloYment: 1939-2011

50%
Manufacturing Professional and business services

40%

Trade, transportation and utilities Education and health services Leisure and hospitality

30%

20%

10%

9 193
chARt 1

195

197

199

201

Source: U.S. Bureau of Labor Statistics, Establishment Data, Table B-1

PeRcentAge PoInt chAnge In emPloYment bY occUPAtIon, 1979-2009

60% 50% 40% 30% 20% 10% 0% -10% -20%
Operators, fabricators and laborers Food prep, building and grounds cleaning Personal care and personal services

Managers

Professionals

Technicians

Sales

Office and admin

Production, craft and repair

Protective services

1979 1989 1989 1999 1999 2007 2007 2009

22% 27% 15% -1%

28% 30% 11% 0%

37% 17% 14% 2%

54% 14% 4% -7%

11% 3% 1% -8%

10% 4% 8% -17%

-5% 1% -11% -15%

36% 20% 20% 2%

31% 11% 18% 0%

7% 12% 31% 5%

Source: Current Population Survey; Reprinted from Autor, The Polarization of Job Opportunities in the U.S. Labor Market, (2010) chARt 2

shARes of emPloYment bY occUPAtIon

High skill Middle skill Low skill

12% 75% 13%

15% 68% 17%

2009

Source: U.S. Census Bureau chARt 3

1980

chAngIng oRgAnIzAtIon of fIRms

In the past several decades, changes to the global economy have been characterized as the emergence of a knowledge economy. The data, processing, and computing revolutions that have increased the speed at which information is accumulated, analyzed, and acted upon to generate value define the knowledge economy. The term is used to describe an economy whose growth is realized from the export of low-cost and high-end knowledge-based services rather than manufacturing products. The rise of the knowledge economy has increased the importance of certain cognitive and collaborative skills and competencies in the workforce, and made other skills obsolete.6 Firms increasingly need employees who have the ability to articulate and integrate information into activities rather than skilled manufacturing laborers, for example.7 For many workers, information technology calls on them to engage in problem-solving and complex communications tasks, increasing the relative productive capacity of each worker.8 Until recently, it has been relatively difficult to observe and measure the core competencies knowledge, skills, and abilitiesrequired by different occupations. The U.S. Department of Labor and others have compiled the Occupational Information Network (O*NET), which catalogs the competencies required for certain occupations through surveys of people who have those jobs. These

competencies are defined as knowledge classifications, skills, and abilities. Specifically: 1. Knowledge is information, like Mathematics, Chemistry, English Language ,and Accounting. 2. Skills are competencies developed in particular domains that allow ongoing learning in that domain and are broken down into content, processing, and problem-solving skills. 3. Abilities are the personal attributes that influence performance in a work setting similar to the concept of aptitudes. The O*NET database categorizes abilities with such labels as creativity, innovation, mathematical reasoning, and oral and written expression.9 The capacities to thrive in todays workforce are also associated with having sufficient training in science, technology, engineering, and mathematics (STEM). Researchers at the Georgetown University Center on Education and the Workforce have produced a thorough analysis of the knowledge, skills, and abilities associated with STEM occupations as well as their transferability to other, competitive occupations. They found that STEM skills and abilities in particular are highly valued across the economy, particularly in several occupations that are shown to be growing such as managerial, professional, and healthcare professional occupations. Those skills and abilities are enumerated in Figures 1 and 2.

Core Skills Associated with STEM and Competitive Occupations

Mathematics Science Critical Thinking Active Learning Complex Problem-solving Operations Analysis Technology Design Equipment Selection Programming Quality Control Analysis Operations Monitoring Operation and Control Equipment Maintenance Troubleshooting Repairing Systems Analysis Using mathematics to solve problems. Using scientific rules and methods to solve problems. Using logic and reasoning to identify the strengths and weaknesses of alternative solutions, conclusions, or approaches to problems. Understanding the implications of new information for both current and future problem-solving and decision making. Identifying complex problems and reviewing related information to develop and evaluate options and implement solutions. Analyzing needs and product requirements to create a design. Generating or adapting equipment and technology to serve user needs. Determining the kind of tools and equipment needed to do a job. Writing computer programs for various purposes. Conducting tests and inspections of products, services, or processes to evaluate quality or performance. Watching gauges, dials, or other indicators to make sure a machine is working properly. Controlling operations of equipment or systems. Performing routine maintenance on equipment and determining when and what kind of maintenance is needed. Determining causes of operating errors and deciding what to do about it. Repairing machines or systems using the needed tools. Determining how a system should work and how changes in conditions, operations, and the environment will affect outcomes. Identifying measures or indicators of system performance and the actions needed to improve or correct performance, relative to the goals of the system.

Systems Evaluation

Source: Carnevale, Smith, Melton, STEM Report, Georgetown University Center on Education and the Workforce (2011) fIgURe 1

10

Abilities Associated with STEM and Competitive Occupations

Problem Sensitivity Deductive Reasoning Inductive Reasoning Mathematical Reasoning Number Facility Perceptual Speed The ability to tell when something is wrong or is likely to go wrong. It does not involve solving the problem, only recognizing that there is a problem. The ability to apply general rules to specific problems. The ability to combine pieces of information to form general rules or conclusions (includes finding a relationship among seemingly unrelated events). The ability to choose the right mathematical methods or formulas to solve a problem. The ability to add, subtract, multiply, or divide quickly and correctly. The ability to quickly and accurately compare similarities and differences among sets of letters, numbers, objects, pictures, or patterns. The things to be compared may be presented at the same time or one after the other. This ability also includes comparing a presented object with a remembered object. The ability to quickly and repeatedly adjust the controls of a machine or a vehicle to exact positions.

Control Precision

Source: Carnevale, Smith, Melton, STEM Report, Georgetown Univercity Center on Education and the Workforce (2011) fIgURe 2

11

how the U.s. woRkfoRce stAcks UP

The changing nature of the economy and firms now requires core skills and abilities that can be applied and adapted to a variety of work settings. Yet, research indicates that a country that attempts to move towards a knowledge-based economy but does not keep pace in developing a highly-skilled labor force will face constraints to its growth.10 These constraints are evident in the U.S. labor force: there is a strong demand and an inadequate supply of employees with the appropriate skill levelsand that gap seems to be growing. According to results from consulting firm Manpowers international survey of employers, 52 percent of employers reported difficulty filling jobs due to lack of

available talent. This number is up 38 percentage points from 2010, perhaps indicating that, as the economy rebounds and rebuilds, the workforce is having great difficulty keeping up.11 Chart 4 shows the gap between job openings and unemployment in the U.S. from December 2000 through January 2012. In an economic expansion, the gap between job openings and unemployment should contract, while during a contraction, the rates should move inversely. Since the most recent recession, the gap between job openings and unemployment has narrowed somewhat, but the gap is still near historic highs. This movement indicates that the U.S. economy is experiencing the pangs of a mismatch between its labor force and its productive activities.

Job oPenIngs RAte And UnemPloYment RAte, seAsonAllY AdJUsted, decembeR 2000-JAnUARY 2012
12
Unemployment Job Openings

10 8 6 4 2 0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Source: BLS / JOLTS for job openings, CPS for unemployment rate chARt 4

12

At the same time, policymakers and business leaders have seized upon a lack (or perceived lack) of a robust Science, Technology, Engineering and Mathematics (STEM) workforce as a critical barrier to continuing economic growth, innovation, and global leadership. As noted above, Carnevale, Smith, and Melton indicate this concern is likely warranted, but not for the reasons traditionally assumed.12 They note that, increasingly, STEM-competencies are valued and rewarded outside traditional STEM fields, leading to workers moving to those jobs. That is, as innovation changes, those skills traditionally associated with STEM are progressively more necessary in non-STEM occupations.13 The growth in STEM occupations indicates that the demand for those competencies will continue to increase. Chart 5 shows the projected growth of STEM occupations as a percentage of total occupations from 2010 to 2020. Chart 6, shows a breakdown of projected growth in STEM occupations categories from 2010 to 2020 compared with projected growth in all occupations for the same time period. By 2020, STEM occupations as a whole will have gained ground compared with the rest of the economy by the time the United States fully emerges from the recession. While the total number of jobs in the United States is projected to grow 14.3 percent between 2010 and 2020, from 143 million to 163.5 million, the number of STEM jobs is projected to rise by 17 percent, making it one of the most dynamic occupation clusters in the economy.

Yet, despite growing demand for workers with facility in STEM fields, there is ample evidence that the United States is lagging in this area. In both 2006 and 2009, the U.S. scored below many other developed countries in the Programme for International Student Assessment in mathematics literacy, science literacy and reading. The average mathematics literacy score of U.S. 15-year-olds declined about 9 points from 2003 to 2006, and then rose about 13 points in 2009, placing the United States below 17 of 33 other members of the Organisation for Economic Co-operation and Development (OECD). The average science literacy score of U.S. 15-year-olds was not measurably different from the 2009 OECD average, though it improved by 3 points from 2006 to 2009. The U.S. score was lower than the score of 12 out of 33 other OECD nations participating in the assessment. Finally, in reading, the United States placed below 9 of 33 other members of the OECD in 2009. It is also the case that jobs requiring STEM capacities are becoming more widely distributed in the economy. The demand for high-skills has grown beyond the careers that require Bachelors or graduate degrees; some 27 percent of STEM postsecondary jobs require competencies below those levels.

13

stem occUPAtIons As A PeRcentAge of totAl emPloYed, 1999-2020

6% 5% 4% 3% 2% 1% 0% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2020 Projected

Source: Bureau of Labor Statistics, Occupational and Employment Wage Estimates, Employment Projections 2010-2020 chARt 5

PRoJected PeRcent chAnge In emPloYment bY selected occUPAtIonAl gRoUP, 2020

25

Projected Percent Change

20 15 10 5 0

All Occupations

Computer and Mathematical

Architecture and Engineering

Life, Physical, and Social Science

Occupational Category
Source: Bureau of Labor Statistics, Occupational and Employment Wage Estimates, Employment Projections 2010-2020 chARt 6

14

Role of edUcAtIon

The preceding discussion shows how education namely STEM education can ensure there is a pipeline of people coming out of schools with skills that prepare them for jobs in demand. There are two additional ways in which education policies can improve labor force participation by upgrading workers skills: 1. By providing students the opportunity to acquire skills; and, 2. Demonstrating to potential employers that they are certified in specific skills. An education system that allows students to acquire critical skills and competencies and certify them transparently will generate workers that hold visibly marketable skills. The Common Core State Standards (CCSS) are an example of a standardized qualification system that would improve the transparency of earned qualificationsa K-12 education in the United States. As noted at the outset, CCSS is not a comprehensive solution to addressing the challenges and gaps laid out in this report. But they have an important role to play in developing a workforce that fits the 21st century economy.

As Tom Friedman and Michael Mandelbaum have pointed out, employers today, no matter the sector, are looking for people who can think critically, who can tackle non-routine complex tasks, and who can work collaboratively with teams located in their office or globally. This means that, while the U.S. needs more graduates in the sciences and engineering, it also needs more than just that if it is to have a workforce that can compete in the 21st centurys global economy. It needs a workforce with the right mix of skills to participate in an innovation system that is driven by creativity, collaboration, and technology. These demands on workers are arguably more urgent for the technology sector, where the pace of innovation, coupled with its disproportionate contribution to economic growth, call for a steady supply of workers with the right mix and range of skills. How do business leaders in the technology and other industries view the ability of Americas educational system to produce students who can thrive in todays workforce? This report now turns to the results of a survey that examined these issues.

15

U sI n e ss

PARt II A sURVeY of bUsIness eXecUtIVes

The first part of this report shows that the U.S. must take action to improve workers readiness to participate in a rapidly changing economy. This portion of the report hones in on the steps employers think are necessary to better prepare students for todays workforce. To do this, ConvergeUS conducted a survey of 294 business executives whose firms have 25 or more employees, asking them a series of questions about their attitudes about todays workforce.

The sample of business executives, for the survey fielded from March 5 to March 30, 2012, represented a cross section of U.S. businesses and organizations. Nearly one-third said their firms had between 25 and 99 employees, with a similar number having more than 500 employees, and the remaining one-quarter having between 100 and 499 workers (a later section of the report provides greater detail). At a high level, the survey asked business executives about three things: 1. The steps the U.S. might take to make U.S. companies more competitive in the world economy; 2. How well they believe the U.S. educational system is preparing workers for todays jobs; and, 3. The specific skills or knowledge bases executives see as important to the workforce of the future.

These questions were asked in the context of executives awareness of the CCSS initiative. Nearly half of respondents (47 percent) said they were at least somewhat familiar with CCSS, with 14 percent very familiar and 33 percent somewhat familiar. Some 52 percent said they were not familiar with CCSS, with just 1 percent not offering a response.
oVeRAll ResUlts

This portion of the report presents the basic findings, that is, the responses of business executives to the main substantive portion of the survey. At the outset of the survey, business executives were asked how important they would rate various policy steps that the United States could take to help countries be more competitive.

Thinking about policy steps the United States could take to help companies be more competitive in the world economy, please tell me how important initiatives or investments in each of the following areas would be?
Very Education Research and development Corporate tax reform Infrastructure Trade agreements Immigration reform 66% 56 54 45 42 40 Some-what 26% 30 29 39 32 27 Not too 3% 8 11 10 15 21 Not at all 3% 4 5 3 8 9

Source: ConvergeUS survey of companies and organizations with 25 or more employees, March 5-30, 2012. N=294. tAble 1

18

As the responses show, education is the policy area most often cited as a very important area on which to focus to make U.S. companies more competitive. The second tier issues are research and development and corporate tax reform, with a majority of executives citing them as very important to helping competitiveness. Areas such as improving infrastructure, negotiating trade agreements, and immigration reform are also seen as very important by a sizable share of respondents. But, when asked how well the U.S. educational system is preparing workers for jobs in todays economy, business executives views are tepid at best. Just 11 percent say the educational system is doing that job very well, with most (57 percent) saying somewhat well, and a full one-third (33 percent) saying not well.

With education seen as an important priority for the country, yet not delivering adequately, the questions become: What are the gaps? What are the skills or capacities students need to prepare better for the workforce? The survey addressed these questions by examining respondents views on: 1. The importance of various objectives of a high school education; 2. The steps that would be effective in better preparing high school students for college; and, 3. The areas recent college graduates need to improve to be successful employees in todays economy.
cRItIcAl obJectIVes of edUcAtIon

Here is what respondents said when asked to rate the importance of various objectives of a high school education.

In your opinion, how important are each of the following objectives for a high school education?
Very Teaching students to think and solve problems. Focusing on basics such as reading, writing, and mathematics Providing skills so students can be productive workers Becoming good citizens in society Providing a basic education and additionally music, art, and physical education Preparing students to attend college 88% 80 72 65 52 52 Somewhat 9% 15 22 30 36 40

Source: ConvergeUS survey of companies and organizations with 25 or more employees, March 5-30, 2012. N=294. tAble 2

19

A clear message from this question is that executives want students to be prepared to be productive workers, but they are somewhat more focused on those students basic skills and problem-solving abilities. This sentiment shows up more clearly in a follow-up question, when respondents were asked to identify the most important objective of a high school education. Among all business executives: 38 percent said teaching students to think and solve problems was the most important objective of a high school education; 22 percent said focusing on teaching basic skills such as reading, writing, and math; 18 percent said providing skills so that students can be productive workers; 8 percent said preparing students to attend college; 6 percent said providing basic education and, additionally, art, music, and physical education; and 6 percent said training them to become good citizens in society.

percent chose gaining broad knowledge and a wide range of skills that can be applied to changing assignments and responsibilities compared to the 18 percent who chose gaining in-depth knowledge in a specific field. (The remaining 26 percent were split between choosing both or saying neither was important.)
IdentIfYIng skIll And comPetencY gAPs Amongst Recent college gRAdUAtes

Next, the survey turned to the issue of how much recent college graduates need to improve various areas to be successful in todays workforce. Although the theme of problem-solving and critical thinking appeared again, writing and communication skills were equally prominent.

effectIVeness of edUcAtIon sYstem In PRePARIng stUdents foR college And the woRkfoRce

Respondents reiterated the importance of cultivating problem-solving capacity when the questions turn to steps that might be taken to better prepare high school students for college. Among the respondents who said it was very or somewhat important for a high school education to prepare students for college (271 out of 294 respondents), executives ranked problem solving most often as a very important input into college readiness. The full answers are in Table 3. When asked to choose between two priorities in preparing students who attend college for career success, the problem-solving theme reappears. More than half of respondents 56

20

How effective would each be in better preparing high school students for college?
Very Focusing on skills such as analytical thinking and problemsolving Focusing on basic skills such as reading, writing, and math Monitoring teacher performance Reforming how public high schools are organized and run Teaching time management and study skills Creating more rigorous national standards that students must achieve to graduate Increasing funding for high schools Focusing more on teaching the sciences, such as biology and chemistry 72% 61 51 48 47 37 35 35 Somewhat 23% 34 37 39 44 43 40 49 Not too 3% 4 10 11 7 16 17 14 Not at all 1% 1 2 1 1 3 7 2

Source: ConvergeUS survey of companies and organizations with 25 or more employees, March 5-30, 2012. N=271 for respondents who said it is somewhat or very important for a high school education to prepare students for college. tAble 3

How much do you think recent college graduates need to improve in the following areas in order to be successful employees in todays global workforce?
A lot Writing and communication skills Critical thinking and problem-solving skills Thinking creatively Having math skills, such as understanding statistics Working together with a diverse group of people Having scientific or engineering knowledge Locating, organizing, and evaluating information from multiple sources Keeping up to date on the latest in computers, such as programming and other technology skills Proficiency in a foreign language 61% 59 44 43 34 31 30 28 25 Some 28% 31 40 39 36 42 43 40 41 Not too much 7% 6 11 12 21 20 21 24 23 None 2% 2 3 4 5 3 3 7 7

Source: ConvergeUS survey of companies and organizations with 25 or more employees, March 5-30, 2012. N=294. tAble 4

21

Yet, when asked to cite two areas where recent college graduates need the most improvement, critical thinking and problemsolving skills again rose to the top. Specifically, here is what business executives said when permitted to pick the two most important things recent grads could improve:

how tech comPAnIes see thIngs

37% 15 9 6 4 3 3 2 2 * 17
tAble 5

Critical thinking and problem-solving skills Writing and communication skills Having math skills, such as understanding statistics Working together with a diverse group of people Locating, organizing, and evaluating information from multiple sources Proficiency in a foreign language Thinking creatively Keeping up to date on the latest in computers, such as programming and other technology skills Having scientific or engineering knowledge Other (Specify) No answer

Of particular interest in this research is how executives of technology-oriented companies view the educational and workforce development challenges facing the country. The survey asked respondents about the line of business in which their company operates, and also asked, irrespective of whether the company might meet a formal definition of a technology company, whether respondents considered themselves to be working for a technology-oriented company. Overall, about one-third (35 percent) of those responding said that their company operated in the technology industry. This section compares responses from executives in technology companies to those in the sample not in the technology sector. It is important to note that with the sample size of 294 for the entire survey, 103 executives interviewed are in the tech sector, with the remaining 191 not in businesses that are considered in the technology sector. These relatively small sample sizes often make distinguishing responses difficult from a statistical perspective. For the most part, differences are suggestive, with those being statistically different noted in the text. In Table 6, respondents views on research and development (R&D) are the only statistically significant difference between tech executives and their non-tech counterparts. Since technology companies typically rely on R&D to a greater extent than most other kinds of companies, it is not a surprise that executives in these companies view it as a national priority to a greater extent than other executives. Tech executives see education and R&D as the most important priorities for the United States, while

22

non-tech executives view education as the main issue, followed by corporate tax reform. Turning to familiarity with CCSS, though the differences in the table below indicate tech and non-tech executives are different only at a low level of statistical confidence, the results suggest a higher awareness of this issue for tech executives relative to non-tech executives in the sample. Similarly, tech executives are (at a low level of statistical confidence) more likely to believe the

educational system does very well at preparing workers for todays jobs. This may be because tech companies can often be more selective in hiring workers, thereby allowing them to screen out candidates with lower levels of preparedness. However, notwithstanding the modest differences, the overall results from this question are clear. One-third of executives do not think students are well prepared for the challenges of todays jobs and more than half think the educational system does its job (with respect to workforce preparedness) only somewhat well.

Comparing Executives in the Tech Industry With All Others (those who say issue is very important)
Tech Execs (n=103) Education Research and development Corporate tax reform Infrastructure Trade agreements Immigration reform 68% 66* 51 42 40 41 Non-tech Execs (n=191) 64% 51 56 46 43 40

Comparing Executives in the Tech Industry With All Others (Familiarity with CCSS)
Tech Execs (n=103) Very familiar Somewhat familiar Not familiar 18% 33 46 Non-tech Execs (n=191) 12% 35 55

Source: ConvergeUS survey of companies and organizations with 25 or more employees, March 5-30, 2012. tAble 7

Source: ConvergeUS survey of companies and organizations with 25 or more employees, March 5-30, 2012. * Indicates significant difference. tAble 6

23

Turning to respondents perspectives on objectives for a high school education, tech executives focus most often on the need to teach students how to think and solve problems. Non-tech executives share this view, but are somewhat more likely to say that the basics are very important relative to tech executives. Although the table shows other differences between tech and non-tech executives, caution about the small sample size is in order. For instance, it makes sense that tech executives (whose companies generally call for a high level of educational attainment than others) are more likely to emphasize the need to prepare high school students for college, the small sample size means the results are only suggestive.

When asked to prioritize the most important objectives, tech and non-tech executives do not differ on what is most important namely teaching students to think and solve problems. However, tech executives are more likely than their counterparts elsewhere to say it is most important that high schools impart the skills for students to be productive workers. It is notable that (albeit at a low level of statistical confidence) that non-tech executives are more likely than non-tech executives to emphasize the importance of the basics reading, writing, and math.

In your opinion, how important are each of the following objectives for a high school education? (% very important)
Tech Execs (n=103) Teaching students to think and solve problems. Focusing on basics such as reading, writing, and mathematics Providing skills so students can be productive workers Becoming good citizens in society Providing a basic education and additionally music, art, and physical education 88% Non-tech Execs (n=191) 88%

Comparing Executives in the Tech Industry With All Others (How well educational system prepares workers for todays jobs)
Tech Execs (n=103) Very well Somewhat well Not well 15% 57 29 Non-tech Execs (n=191) 8% 55 35

77

82

Source: ConvergeUS survey of companies and organizations with 25 or more employees, March 5-30, 2012. tAble 8

69 60

73 68

47

55

Source: ConvergeUS survey of companies and organizations with 25 or more employees, March 5-30, 2012. tAble 9

24

When asked to reflect on steps high schools might take to better prepare students for college, again non-tech executives are more likely than those in the technology sector to cite the basics. Non-tech executives are also notably more likely to point to reforming public high

schools. However, it is not a surprise that tech executives are more focused on the sciences than their non-tech colleagues; by a 42 percent to 30 percent margin tech executives say high schools would do a better job preparing students for college by focusing on the sciences.

In your opinion, how important are each of the following objectives for a high school education? (% most important)
Tech Execs (n=103) Teaching students to think and solve problems. Focusing on basics such as reading, writing, and mathematics Providing skills so students can be productive workers Becoming good citizens in society Providing a basic education and additionally music, art, and physical education Preparing students to attend college 37% Non-tech Execs (n=191) 38%

In your opinion, how important are each of the following objectives for a high school education? (% most important)
Tech Execs (n=103) Focusing on skills such as analytical thinking and problem-solving Focusing on basic skills such as reading, writing, and math Monitoring teacher performance Reforming how public high schools are organized and run Teaching time management and study skills Creating more rigorous national standards that students must achieve to graduate Increasing funding for high schools Focusing more on teaching the sciences, such as biology and chemistry 72% Non-tech Execs (n=191) 71%

17

25

55 48 41

64 52 51

24 5

15 6

46

47

36

38

11

Source: ConvergeUS survey of companies and organizations with 25 or more employees, March 5-30, 2012. tAble 10

33

36

42

30

Source: ConvergeUS survey of companies and organizations with 25 or more employees, March 5-30, 2012. tAble 11

25

When given a choice between the importance of having broad knowledge and skills to handle different assignments and in-depth knowledge of a specific field, there are no differences for tech versus non-tech executives; 56 percent in each group says it is more important for students to have a broad knowledge and wide range of skills that can be applied to changing assignments. However, by a 22 percent to 16 percent margin, tech execs are more likely to say it is important to gain in-depth knowledge of a specific field. With the focus on college graduates and the areas they need to improve to meet the challenges of todays workforce, both critical thinking and communications skills come to the forefront in equal measure for executives in the tech and non-tech sectors. As the following table shows, some three in five of all executives say critical thinking and problem-solving skills are areas where college graduates can improve. The same number says writing and communications skills are in need of improvement. Tech executives part ways from their nontech counterparts in three areas where they are more likely to place emphasis on the need for improvement: 1. Understanding math and statistics and knowledge of science and engineering; 2. Writing and communications skills; and, 3. Keeping up with the latest in technology and computers. It is worth noting that non-tech executives are more likely than tech executives to say that creative thinking and working with a diverse group of people represent areas in which college graduates could improve. When asked to identify the two areas most in need of improvement for todays college

graduates, critical thinking and problemsolving skills are mentioned most often, with 39 percent of tech executives saying this and a similar number (34 percent) of non-tech executives saying this. Thereafter, writing and communications skills and understanding math and statistics are mentioned in equal measure, with 15 percent and 9 percent of all executives citing those, respectively.

How much do you think recent college graduates need to improve in the following areas in order to be successful employees in todays global workforce?
Tech Execs (n=103) Critical thinking and problem-solving skills Writing and communication skills Having math skills, such as understanding statistics Having scientific or engineering knowledge Thinking creatively Keeping up to date on the latest in computers, such as programming and other technology skills Locating, organizing, and evaluating information from multiple sources Working together with a diverse group of people Proficiency in a foreign language 60% 58 48 41 37 Non-tech Execs (n=191) 58% 62 39 25 48

34

25

31

29

29 26

37 24

Source: ConvergeUS survey of companies and organizations with 25 or more employees, March 5-30, 2012. tAble 12

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A PRofIle of the comPAnIes ResPondents woRk foR

The survey asked respondents questions about the company for which they work. Just over one-third (36 percent) of companies whose executives participated in the survey operate in a single location, with 62 percent saying they have more than one location. For firms in the technology sector, 27 percent operate out of one location, with 41 percent of non-tech companies saying that have multiple locations. In terms of size, the following table shows the share of firms whose number of employees fall into specific intervals.

As to revenues, here is how they breakout among for-profit entities in the sample (which is 87 percent of the 291 respondents). In this sample, technology firms tend to be larger than non-tech firms both in terms of number of people employed and revenues.

Revenue for your company

All respondents (n=294) Less than $500,000 2% 3 8 7 Tech Firms (n=103) 1% 2 10 5 Non-Tech Firms (n=191) 2% 3 6 9

All respondents (n=294) 25 to 99 employees 100-499 employees 500-999 employees 1,000 or more employees No response 32% 26 8 26 8

Tech Firms (n=103) 29% 28 7 32 4

Non-Tech Firms (n=191) 34% 25 8 23 9

$500K to $1,000,000 $1 million to $2 million $2 million to $3 million $3 million to $5 million $5 million to $10 million $10 million or more

10

12

16 55

15 61

17 51

Source: ConvergeUS survey of companies and organizations with 25 or more employees, March 5-30, 2012. tAble 13

Source: ConvergeUS survey of companies and organizations with 25 or more employees, March 5-30, 2012. tAble 14

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Tech firms in the sample also rely more heavily on an educated workforce than non-tech firms in the sample. The survey asked to specify the level of education required for most jobs in their company or organization. As the table below shows, executives at tech firms are much more likely to say most of the jobs in their company require a college degree, with non-tech firms similarly more likely to say that most of the jobs in their organization require a high school degree or less.

What is the level of education required for most jobs in your company or organization?
All respondents (n=294) A high school degree or less Two years of college or some vocational training after high school A four year college Post graduate education 20% Tech Firms (n=103) 7% NonTech Firms (n=191) 27%

Tech companies in the survey were also far more globally oriented than non-tech firms sampled, with two measures capturing the degree to which firms whose executives took the survey have an international flavor. First, the survey asked respondents whether their company has any staff located outside the United States. One third (32 percent) of all respondents said they had staff outside the United States, but there were large differences when contrasting tech firms with non-tech firms. Half (52 percent) of executives with tech firms they had staff outside the United States, compared with 22 percent of non-tech firms who said this. As to revenues, nearly three quarters (73 percent) of tech companies derive at least some of their revenues from foreign sales, a stark contrast to the 41 percent figure for nontech companies in the survey. The breakdown by share of revenues that come from sales outside the United States is as follows.

16

15

16

What percentage of your companys revenue is derived from sales outside the U.S?
All respondents (n=294) None 1-24% 25-49% 50-100% 68% 17 9 6 Tech Firms (n=103) 27% 39 18 14 Non-Tech Firms (n=191) 59% 27 9 3

46 18

59 18

38 18

Source: ConvergeUS survey of companies and organizations with 25 or more employees, March 5-30, 2012. tAble 15

Source: ConvergeUS survey of companies and organizations with 25 or more employees, March 5-30, 2012. tAble 16

28

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o n c lUsI

PARt III conclUsIons

One clear message from this report is that our economy is undergoing rapid change and that this change places new demands on the workforce. Workers need to acquire skills to keep pace with a global economy and continually update those skills. And it is not just about having skills it is also about workers having the ability to think critically, solve problems, and collaborate with others.

Common Core State Standards have an important role to play giving todays students the wherewithal to participate in a 21st century workforce. Yet, when asked about whether they know about CCSS, half of business executives surveyed are not aware of them. In fact, the report and the survey show tensions in how business leaders see workforce challenges. Specifically: 1. Few business executives think the American educational system is doing its job very well in preparing workers for todays economy, even as these leaders are most likely to choose education as a key policy intervention that could help economic competitiveness. 2. Business executives and technology executives especially most often cite the need for workers who can solve problems and think critically, but a majority are unaware of an initiative CCSS that could help give students those capacities. These tensions nonetheless present an opportunity. Business leaders understand the need to improve the educational system, yet are not as engaged as they should be with CCSS

and how those standards can contribute to meeting current and future workforce needs. The reports findings suggest that stakeholders in the CCSS and business community need to collaborate more effectively in implementing CCSS and other educational reforms. Collaboration is a watchword these days with good reason. Global supply chains call on business to work across organizational and national boundaries to create goods and services. Agencies within government and across levels of government are more effective in serving the public when they coordinate. Much the same is true in the non-profit sector. This report indicates that additional collaboration is called for in another area education and workforce preparation. As the survey shows, business understands how education can help their companies by closing gaps in workforce preparedness. The survey also shows business executives have an awareness gap when it comes to CCSS. Addressing both gaps jointly among all participants in the workforce and education environment could contribute to a stronger American society and economy.

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endnotes

Steve Lohr, Global Strategy Stabilize IBM During Downturn, New York Times. April 19, 2010. Available online at: http://www.nytimes. com/2010/04/20/technology/20blue.html?_r=1 See Common Core State Standards Initiative, available online at: http://www. corestandards.org/about-the-standards McKinsey Global Institute, Internet Matters: The Nets sweeping impact on growth, jobs, and prosperity. May 2011. Available online at: http://www.mckinsey.com/ Insights/MGI/Research/Technology_ and_Innovation/Internet_matters Moira Nelson, The Adjustment of National Education Systems to a Knowledge-Based Economy: a New Approach. Comparative Education. 46.4 (2010): 463-486. For quantitative explorations of the polarization of the U.S. labor market, see David H. Autor, The Polarization of Job Opportunities in the U.S. Labor Market: Implications for Employment and Earnings. Washington, D.C: Hamilton Project, Brookings Institution, 2011; Claudia D. Goldin and Lawrence F. Katz. The Race between Education and Technology. Cambridge, Mass: Belknap Press of Harvard University Press, 2008. See Timothy Bresnahan, Erik Brynjolfsson, and Lorin M. Hitt. Information Technology, Workplace Organization, and the Demand for

n dn ote

Skilled Labor: Firm-level Evidence. Cambridge, MA: National Bureau of Economic Research, 1999; F. Green, D. Ashton, B. Burchell, B. Davies, and A. Felstead. Are British workers becoming more skilled? In The overeducated worker? The economics of skill utilization, ed. L. Borghans and A. de Grip, 77105. Cheltenham, UK: E. Elgar, 2000.
7

11,167 in Asia Pacific and 18,137 in Europe, the Middle East and Africa (EMEA).
12 Anthony P. Carnevale, Anthony P, Nicole

Smith, and Michelle Melton. Stem, Science, Technology, Engineering, Mathematics. Washington, DC: Georgetown University, Center on Education and the Workforce, 2011.

Christopher Winch, Education and the Knowledge Economy: a Response to David & Foray. Policy Futures in Education. 1.1 (2003). David H. Autor, Frank Levy, and Richard J. Murnane. The Skill Content of Recent Technological Change: an Empirical Exploration. The Quarterly Journal of Economics. 118.4 (2003): 1279-1333. For more information and to access the O*NET database, please visit: http:// www.onetcenter.org/overview.html Skills Formation for Knowledge-based Economic Development. Working Paper, 2011. Available at: http://ssrn.com/abstract=1809205 Manpower Group, available at: http:// us.manpower.com/us/en/multimedia/2011Talent-Shortage-Survey.pdf. In January of 2011, 39,641 interviews were conducted via telephone in 39 countries: 10,337 with businesses in Americas countries,

13 Carnevale, et al 2011 14 Bureau of Labor Statistics, Employment

Projections 2010-2020, available at: http://www.bls.gov/news.release/pdf/ecopro.pdf Student Assessment, available at: http://www.pisa.oecd.org/pages/0,2987, en_32252351_32235731_1_1_1_1_1,00.html

15 OECD Programme for International

16 Carnevale et al 2011 17 See, generally, Nelson 2010 18 Organisation for Economic Co-operation and

10 Wes Schwalje, A Conceptual Model of National

11 2011 Talent Shortage Survey Results,

Development, Education and Training Policy Qualifications Systems: Bridges to Lifelong Learning. Paris: Organisation for Economic Co-operation and Development, 2007. Mandelbaum, That Used to Be Us: How America Fell Behind in the World It Invented and How We Can Come Back. New York: Farrar, Straus and Giroux, 2011.

19 Thomas L. Friedman and Michael