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Podcast

Podcast

Harvard Business School Professors Bill Kerr and Joe Fuller talk to leaders grappling with the forces reshaping the nature of work.
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  • 11 Jan 2023
  • Managing the Future of Work

How federal stimulus can break new ground on economic development and good jobs

American Rescue Plan program director Todd Fisher on the complex business of steering billions in investments to build up talent pipelines along with local and regional economies.
Joe Fuller: What does it take to translate federal stimulus spending to significant economic benefits? The path from bill signing to ribbon cutting can be convoluted, and history suggests the lack of coordination between the public and private sectors can undermine results. The 2021 American Rescue Plan Act—or ARPA—steered billions toward economic and workforce development. The challenge is to foster innovation and sustain impact. That’s a tall order.

Welcome to the Managing the Future of Work podcast from Harvard Business School. I’m your host, Harvard Business School Professor and Visiting Fellow at the American Enterprise Institute, Joe Fuller. My guest today brings a cross-sector perspective to the task of translating policy into results. Todd Fisher is Program Director at the U.S. Department of Commerce, charged with helping distribute funds related to the workforce under ARPA. After a distinguished career in finance, Todd pivoted to focus on workforce and economic development, with an emphasis on programs that demonstrably lead to improvements in social mobility. We’ll talk about what it takes to foster place-based economic development, linking business needs and the skills base in specific regions. We’ll also talk about the Commerce Department’s efforts to ensure ARPA funding supports innovative programs that demonstrate impact by creating good, household-sustaining jobs. Welcome to the podcast, Todd.

Todd Fisher: Joe, it’s great to be here. Thanks for having me.

Fuller: Todd, you’re currently advising the Commerce Department on a number of programs related to the deployment of federal stimulus funds and development of innovative programs for skills. How do you find yourself here in the first place? You’re not a career civil servant.

Fisher: I am not a career civil servant. I’m really a private-sector person. I grew up as a sort of middle-class person, knowing how education and jobs sort of drove social and economic mobility, and I’m a product of that. I went into the private sector after college and stayed in the investment world for nearly 30 years, including 25 at KKR, a large alternative asset private equity firm. But I always had wanted to A) have a second career, because I love learning, I love doing different things, and B) always having a passion for the world of economic and social mobility that dates back to my early days, even while I was at KKR doing lots of things in the education and jobs and sort of young adults—NEETs, as they call it, “not in education, employment, or training” in the U.K. When I turned 50, I decided the time was right to sort of take a 180-[degree] turn in my career. So I took a year at Harvard. I took three years at a not-for-profit called “Year Up,” which is a large workforce not-for-profit. And when I got the opportunity to come into the federal government, it was something I’ve always wanted to do in my life, and I thought seeing the potential impact of the federal government, as well as seeing the private sector and the not-for-profit sector, would be really valuable to me.

Fuller: Well, we’re certainly huge fans of Year Up. Gerald Chertavian has been a guest on our podcast and, of course, a proud son of the Harvard Business School. Todd, you’ve been working in the Biden administration, specifically on what most of our listeners will think of as the “stimulus plan.” But that’s a very complicated series of pieces of legislation. Could you tell us just what the main components are, specifically, in terms of areas like skills development, creating innovative pathways for people to get better situated economically?

Fisher: Yeah, well, the specific areas that I’m working on are a series of competitive grants. It was $3 billion out of the original American Rescue Plan Act that was allocated to the Department of Commerce and, specifically, to the Economic Development Administration to go toward both place-based economic development and workforce development to help distressed regions, distressed communities, and distressed populations. What we’re trying to do here is a series of competitive programs, some of which focus exclusively on workforce development, like the Good Jobs Challenge; some of which focus on large-scale, transformational, place-based investments that include workforce development but also include other components, like the Build Back Better Regional Challenge; and then a whole series of smaller grants that address, for example, indigenous communities or coal-impacted communities or specific populations or specific industries, like travel and tourism.

Fuller: Todd, I’m sure a lot of our listeners think that there are lots of programs at the federal level that try to achieve these purposes. What’s different about what’s happened under the American Rescue Plan, and why does someone like you find themselves doing this? Why would the administration have pulled in someone, really, with a private-sector background to be part of this?

Fisher: It’s a great question. We’re quite excited about the new and innovation nature of it and the flexible nature of some of these funds. The nature of having the private sector be at the center as a core partner to the public sector, the not-for-profit sector, and the educational sector is something that was quite unique here. The other aspect that I would just highlight very briefly is the transformational aspect of the dollars. So particularly, in our Build Back Better Regional Challenge, where we had $1 billion and ultimately 21 grantees, the nature of that kind of dollars that can catalyze a given region or a given industry in a region is fairly unique in the government.

Fuller: Well, maybe you could illustrate a couple of the Regional Challenge grants, because it wasn’t what I’ll describe as a list of the usual suspects—really large cities with getting supplementary funding to take a traditional approach. It really did appear that you were really doing more experimentation and trying some innovative things.

Fisher: Yes, I appreciate that. We stated very clearly that equity and equity in all its aspects—obviously equity in terms of populations, but also in communities—was really important and at the core of all of these programs under the American Rescue Plan. And that also drove you to making sure that where this money was going was well represented across the country, across regions—from rural to urban and different communities. The other aspect of it was, the whole goal was to try to create transformational dollars that brought together a variety of different aspects of a given region. And by nature, it was meant to take some bigger bets, if you will, and really try to help regions take that next step. So if you took an example—for example, New Orleans. New Orleans, we funded something in the Build Back Better Regional Challenge, which was a $50 million investment into something called “H2theFuture,” which was the Greater New Orleans Development Foundation. And the whole idea was to help that region transition their regional hydrogen energy sector, which is already one of the larger ones, to decrease that cost gap between green hydrogen and other natures of hydrogen. That region has lost 20,000, 22,000 jobs in the oil and gas sector over the last number of years. They have people and other real tangible assets in the region. So this program, this $50 million, went to a series of individual components—from technology to workforce to end-user commercialization projects.

Fuller: Another element of this is a program called “Good Jobs Challenge,” which did seem to have some predecessor programs, some shared DNA with some older programs. Can you talk to us a little bit about that allocation of the American Rescue Plan funding? And particularly, it’s baked into the title, Good Jobs Challenge. How are you defining a good job?

Fisher: We were focused on jobs that provided more than the prevailing wage in a given region, more than that living wage, if you will, that also had effective benefits and advancement opportunities. It could be union jobs, it could be other nature of jobs like that. But we were trying to focus on, how do you get populations into jobs that have strong wages and benefits with opportunities for advancement. That’s how I would define “good jobs.” It obviously varies by a given region and a given region’s economic situation.

Fuller: So how do these piece parts fit together? And what are the hypotheses that you have that you’re trying to test in these innovative programs?

Fisher: Well, with regards to the Good Jobs Challenge—and it actually refers also to the Regional Challenge as well—the whole idea is to start with demand, to start with the regional strategy, and to start with what industries and what businesses in that region are really looking for, and how do you align all employers in an industry sector against that training pipeline, that talent pipeline, into their businesses. I think for too long, economic development and workforce development were seen in sort of two separate silos. We can build the environment, where jobs will come to a particular region, and people will flow in. They’ll come from anywhere. And I think we’ve found over many years that that is not the way the world works. People don’t want to have to move to take those jobs. So combining how you train the local population to serve the needs of businesses and the assets of that community consistent with the strategy of that region in that community is critical. The Good Jobs Challenge is surrounded around industry sectors and the strategy of those industries with a dramatic focus on how employers are showing up and coming to the table. The kinds of commitments that employers are making specifically around hiring and as specifically as possible, but as well as around other types of commitments—be that around providing funding, equipment, mentorship, working on curriculum development, et cetera. Point number two would be, how do you then align the system to that demand and those commitments. And that system needs to bring together not only the training providers, but also a barrier reduction. One of the, I think, unique aspects of the Good Jobs Challenge is the ability to put grant money toward wraparound supports and barrier reductions—from transportation to childcare to language services, et cetera, particularly with an emphasis on equity. It’s not enough just to say, “We’ll train people, and they will end up in these jobs.” We all know we all have barriers to different ways of employment. And wrapping that together and integrating, in a holistic way, wraparound services and barrier-reduction training, work-and-learn programs, employer commitments, and all other aspects of the public sector and the not-for-profit sector against this goal, it was very important to this program.

Fuller: Well, certainly listeners to this podcast and people who have reviewed the research we’ve done at our project will hear a lot of themes there that we endorse strongly: having deep employer involvement from day one, aligning resources for a systemic approach, understanding that it’s not as simple as finding someone with some skills and an open job, but there have to be a certain set of circumstances that make that job something that someone can pursue now and can get settled in and get the benefits of employment, whether it’s literally employee benefits, but also just a regular income flow and whatnot so they can get their life circumstances in a position so that they can continue to pursue employment advancement. Taking the jobs to where the workers are and connecting the workers to the jobs that are near them and accessible to them are really elements of formulas for the future. Let’s go back for a second to the Good Job Challenge. Were there a couple of programs there that you were really excited about or that you think really incorporate that kind of multi-dimensional approach you were describing?

Fisher: What I really like about the Good Jobs Challenge is the diversity of the types of winners that we have. And they really do span from some more well-developed systems—Chicago, Cook County, for example, obviously is probably one of the foremost workforce development systems in the country, with the Chicago Cook Workforce Partnership. But taking an established system like that and working with them on a series of new or nascent sector partnerships around places like healthcare or logistics or technology. We also have a whole series that are either much more niche or focused on different regions. I’ll give you an example. If you take our Foundation for the California Community Colleges, which is a program in the northern interior of California, it’s $21.5 million, and it’s focused on training fire and forestry crew, conservation scientists, U.S. Forest Service crews, and partnering across that with industry, also with a lot of Hispanic-serving and indigenous-led partners to try to accomplish this ecosystem. And there’s everything in between. We have a focus in North Carolina on purely clean energy, which ranges from solar installers to master’s students in clean energy, bringing together the whole ecosystem across a variety of lesser-represented rural regions in North Carolina to align against the state’s clear focus on clean energy and building that industry for the future. And then we have some that cut across full states. We have Ohio, where taking some real success they’ve had in manufacturing in pockets of Ohio and taking one sector view across manufacturing, but building it across the whole state of Ohio, similarly in Connecticut.

Fuller: As you were designing the programs and going out to choose award winners, what kind of feedback were you getting from employers, from unions, from workforce development systems? What type of questions or concerns were they expressing? And how did you account for them in the design and the ultimate awards?

Fisher: The biggest thing I would say is about the differences in capacity and where different regions are in their development toward the system. Will you really put dollars toward regions that have been historically left behind or underinvested in and, therefore, don’t have the grant writers that some of the other larger cities have, that don’t have the capacity or are at the starting blocks versus at the end blocks of implementing a robust, coherent workforce development system around different segments? We tried very hard to factor that into our approach, both in terms of our core criteria that we were trying to measure against, with things like equity, how you’re accessing underrepresented populations and communities as specific merit review factors in our analysis, but also by saying you could apply to the program in a couple of different phases. You could apply as you’re implementing your program and you’re going to take it to the next level—a scaling type of aspect. But you could also apply in a systems-development phase, where you’re earlier stage—you’re still trying to work everything out, but you have brought together the right players around a table. I think when you look at the diversity of what we have here, cross-cutting against regions, cross-cutting against different populations, different industries, I think that we have effectively served that potential criticism. And by also funding communities of practice—we have JFF as our partner, for example, for technical assistance and ride-along research—that what we’re able to do is actually get the best of both of these worlds. We get to share best practices, partner groups that have similar industries or similar affinities, and really help the broader set of the environment and the country really develop. When you look at what we’re funding here, that goes from technology, that is a broadly sort of funded area of workforce development, but also goes to logistics and construction type of jobs and healthcare jobs, which are the biggest single job that we’re focused on in the Good Jobs Challenge in terms of number of potential placements, it’s a real representative of the demand across the country for jobs.

Fuller: JFF, of course, being Jobs for the Future, a Boston-based organization that works with governments, really at all levels, and increasing with corporations on creating pathways, programs, and relationships between educators and employers to try to get more aspiring workers into good situations. So much of the activity involving companies is focused on very, very large corporations who have the wherewithal, the hiring power, the ability to spend in trying to advance ESG initiatives. So much of America works in semi-rural areas, second-, third-tier cities, where maybe there’s what we call a “small of the large,” a small facility of the big company, but it’s not a big corporate headquarters, it doesn’t have a big dynamic tech or healthcare or other cluster around it that both has a sustained large demand for certain types of skills, but also all sorts of the associated institutions that we associate with successful economic clusters. When you think about the programs, these are time limited, they’re related to specific legislation, and given your knowledge, based on your studies, your work at Year Up, now being at Commerce, what do you hope can get imprinted on the more permanent, lasting structures where the federal government is involved in skills development—whether it’s in the higher education acts, student loan support, federally registered apprentices, other ideas? What do you hope that this can show Washington and the permanent civil service and legislators that we could build on?

Fisher: I think about a couple of areas there that come to mind. The first one is the role of the private sector. When I first started to enter the workforce industry and started to go to conferences and sit at round tables, my biggest takeaway was, actually, there are no real employers sitting around these tables. Every once in a while, there’s an ESG person, et cetera. And that didn’t feel like a real partnership. That felt like, “If you train them, we’ll think about hiring them.” I think part of the demonstration in these programs is meant to say, “Government, we all have to treat employers as true partners, and employers have to take the responsibility and what that means to be a true partner and the kinds of commitments, the kind of practice changes and process changes internal to their companies that they also need to consider if they really want to be true partners and really want to see the training pathways and talent pathways developed in a more effective way.” So I hope by the kinds of information and templates and other sort of thought leadership we’re putting out there—what commitments really look like, what real commitments look like, as opposed to, “We endorse this program.” That’s very different from saying, “We endorse this program, and we will hire up to 561 of the graduates of your program.” Or even, “We will agree to interview every graduate of your program. We will agree to be participants in the curriculum development of your program. We will agree to provide equipment to help in the training in the program. We will provide mentors at our organization to help develop the talent as they come into the organization.” So that aspect of challenging employers, but also challenging ourselves to say, “We’re going to be partners with the private sector,” I think is a critical aspect that I hope the government learns from.

Fuller: What kind of metrics do you want these programs to be evaluated on, and how should taxpayers, but also people who are looking for innovations, be judging the outcomes associated with these programs?

Fisher: Ultimately, this is all about jobs, placement of talent into good jobs, wages, and wage growth over time. That is what really matters at the end of the day, when you are thinking about workforce programs and measuring success. And I know that the secretary likes to always talk about, we’re not in this to do train-and-pray programs. We’re not in this to just train talent, and hopefully, they get a job. One of the things I take really great pride of, particularly in the Good Jobs Challenge, is our approach to data metrics and measurement. We have created a memorandum of understanding with the Census [Bureau] to create some more consistent ways to capture data. We have put some new questionnaires and surveys out that have been approved so that we can start to capture this data in a consistent way. And we’ve funded some ride-along research so that we can analyze what works in the context of having good, consistent wage and demographic data. So, I think ultimately, we have a lot of programs out there across this country. Many of them work tremendously well. A few of them are at scale. But my hope is that, by adding to a more consistent way of evaluating success and really blocking that into job placements, wages, and wage growth, that we can help to see what really does work and try to perpetuate that and scale that across the country.

Fuller: Well, that’s exciting, Todd, because I think anyone who studies this space knows that one of the hardest things to do is to get a coherent data-driven picture of what has happened historically and what’s happening in the marketplace today. We have so little data about the long-term income outcomes for various education programs, whether they’re degree granting programs or certificate programs. We have great authoritative data on job postings, but not job placements. We have very, very limited data on things like the employment status of the formerly incarcerated. They’re all these big gaps. And big gaps in information make for very inefficient markets. And that has plagued this market forever. Just something as simple as an educator or a skills provider understanding the taxonomy in job descriptions, which in European countries, is agreed to by industry groups and curated and carefully nurtured.

Fisher: My background is data. It’s the way my mind works. What gets measured gets done. And as a student at Harvard five years ago, when I took the advanced leadership initiative, and started to study the world of workforce, and not-for-profits, et cetera, I found really interesting the fragmentation. I want to play my part in trying to provide some of the data to allow investors, funders, to see what works and try to measure effectiveness of different programs more consistently so that we can scale. Because there are lots and lots of good things out there. We know a lot of what works. It’s just very, very hard to scale that and put capital behind those programs.

Fuller: The inefficiency in the system based on a lack of data is just appalling. And there’s so much value that could be created for employers, communities, and workers if we just had a more precise, accurate understanding and much, much more broad availability of data. People are smart if you give them the right information. If you make it hard for them to find, they’ll make well-meaning but often misguided choices.

Fisher: I think that’s right. I think data is important, but I don’t want to make it the nirvana. The other thing of a pure sort of observation from my world as an investor is that workforce development is a highly operationally complex business, if you want to call it as such. I used to look at different businesses in the private sector, and some were super, what I’d call penny, nickel, dime kind of businesses. You had to really focus on every single lever to try to get that margin up a little bit. And workforce development is complicated—from outreach, recruiting, building that funnel at the front end, getting talent into the gate, the barriers at all points where talent unfortunately falls off, or doesn’t complete, or doesn’t get placed, or isn’t successful in their first few days. There’s so many different pieces that need to come together to make an effective workforce development system truly, truly work.

Fuller: Todd, let’s go back to your past life, being in business, being in the investment business in a very distinguished company that really had a remarkable breadth in all sorts of different investments, all sorts of different business relationships. How would you characterize the business community’s thinking right now about issues like equity, like economic mobility? We certainly see an unprecedented level of interest and I would say a genuine commitment to try to improve outcomes. But I’m less certain companies actually know how to put those good intentions into actions that lead to good, measurable results.

Fisher: I think that’s exactly right. I’m very excited about the momentum that we see right now and over the last couple of years in the private sector. I think it is a sincere commitment to working toward a more equitable workforce, to the value of having diversity and equity in your workforce, to the need to engage with different pools of talent to bring different talent into your company and some of the roles that employers need to take to make that happen. However, I think getting that implemented throughout your organization—from the CEO to the hiring manager—is challenging, and that is where I think a lot of the work needs to happen. How do you change processes within companies to enable that hiring, that go a little bit against that just-in-time hiring approach and temporary workers and treating certain workers as more commodities, because we can have high turnover and hire them again and again?

Fuller: Todd, some of the programs, certainly the regional challenges, do sound like they’re, by design, intrinsically local. They’re specifically designed to try to boost those communities, building on their asset base, building on their business base. Is this a series of specific geographic interventions? Or do you see the opportunity to create things that are relevant across multiple markets?

Fisher: I would answer that in a couple of ways, Joe. One, I would say that, while economic development and workforce development is, by nature, regional and subject to the regional dynamics, there are still many, many aspects that can and should be replicated across regions. Number two, I think we have in both of our large programs a couple or a few interesting grants that show the potential for scale. So maybe I’ll highlight two very quickly. One is in our Good Jobs Challenge, where we gave a grant to WTIA, which is also known as Apprenti. They have a very successful apprenticeship-type of model where they work hand in glove with companies to help them manage apprenticeship programs. And they put in a proposal, a combined proposal with numerous training providers, as well as employers, to take their model to 11 regions and to develop a local technology workforce focused on underrepresented communities, focused on an apprenticeship model, particularly for cloud computing. But doing that in partnership with two major companies, Boeing and Amazon Web Services, in 11 different markets to show how you can scale this across markets—which personally I’d like to see more of. I think there is real opportunity across job types, across industry, across different employers to do this more broadly and take more than just a single community approach. That would be one. One of the ones in the Build Back Better Regional Challenge that I’m also particularly excited about is an indigenous project. It’s a $45 million grant to something called “Four Bands.” And, really, it’s an effort to bring together the indigenous finance sector across four states—North and South Dakota, Montana, and Wyoming—across nine CDFIs—which are community development finance institutions—to increase economic opportunity in individual communities by working with native entrepreneurs, small businesses, providing revolving loan funds, providing a workforce training program, and providing the data infrastructure to set up something across a region, and bringing nine separate organizations, that have historically worked on their own, together in a more effective way where the sum of those nine is greater than the sum of those parts. So those are examples of ways to start to build broader regional scale plays.

Fuller: Well, I’m excited that Apprenti’s involved. Jennifer Carlson, the executive director, was a guest on our podcast almost three years ago, and they have had excellent results, and it’s a great example of how a program that is directly focused and engaged with employers can create curriculum and interventions that lead to a clear line of sight to employment, as opposed to general skills training or some academic settings that don’t have that tight linkage with the attributes that employers are seeking in candidates for in-demand jobs. Well, Todd, I will say that, if we’re going to get the type of integration, type of systems change that you’ve been describing in our conversation today, it’s going to take people that come to that work with deep understanding and credibility in the private sector and a commitment to make the type of pivot you made in your career—now working for the federal government at the Economic Development Administration, Department of Commerce, but [also] in institutions like Year Up. We need more of those players that have the type of relevant combination of experiences that we’re trying to instill in workers through these programs.

Fisher: I appreciate it, Joe. It’s been a pleasure to be on. Thanks for having me.

Fuller: We hope you enjoy the Managing the Future of Work podcast. If you haven’t already, please subscribe and rate the show wherever you get your podcasts. You can find out more about the Managing the Future of Work Project at our website hbs.edu/managingthefutureofwork. While you’re there, sign up for our newsletter.

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