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How Austin is Coping with its
High Tech Skills Gap

Transcript

NOT SO LONG AGO, AUSTIN, TEXAS WAS KNOWN FOR THE UNIVERSITY OF TEXAS, THE CAPITAL OF STATE GOVERNMENT, LBJ AND HIS LIBRARY, AND A LIVELY MUSIC SCENE WHERE IT SEEMED EVERYONE COULD PLAY A GUITAR. LIFE IN AUSTIN WAS PLEASANT BUT CAREER OPPORTUNITIES WERE LIMITED.

BY THE MID 1980’S HOWEVER, THE CHAMBER OF COMMERCE SET AN AGGRESSIVE COURSE TOWARDS CHANGING AUSTIN'S ECONOMY. CHAMBER PRESIDENT GLENN WEST HELPED MOUNT THE CAMPAIGN TO USE AUSTIN’S CELEBRATED UNIVERSITY TO ATTRACT HIGH TECH INDUSTRY.

THE CHAMBER'S MAJOR COUP WAS LANDING TWO LARGE INDUSTRY RESEARCH CONSORTIA – MCC IN SOFTWARE DESIGN IN 1983, AND SEMATECH IN SEMICONDUCTOR MANUFACTURING IN 1988. AND RIGHT IN LINE WITH THE CHAMBER’S PLAN, CONSORTIA MEMBERS AND A HOST OF OTHER HIGH TECH COMPANIES TOOK ROOT IN AUSTIN. BY 1995, AUSTIN WAS HOME TO 825 HIGH TECH COMPANIES EMPLOYING 85,000 PEOPLE.

EVEN WITH THE ECONOMY’S UPS AND DOWNS, AUSTIN’S HIGH TECH SECTOR KEPT GROWING. AND BY THE MID 1990’S, AUSTIN HAD BECOME ONE OF AMERICA’S PREMIER CENTERS FOR LEADING EDGE TECHNOLOGIES

BUT LURKING BENEATH THE SURFACE OF THE BOOM, A VITAL RESOURCE WAS RUNNING DRY: SKILLED LABOR.

Opening stand-up

HEDRICK SMITH: Austin’s story is America’s story. Like many other U.S. cities, Austin, Texas has spent the past decade or more aggressively recruiting high tech industry and turning itself into a hub of the information age. Today, Austin is a victim of its own success. It has a bevy of billion dollar chip fabs and not enough qualified local workers to operate them.

BOB GLOVER, AN ACADEMIC SPECIALIST IN HUMAN RESOURCES, SAW AUSTIN’S WORKFORCE PROBLEMS DEVELOPING AS THE CITY WENT OUT RECRUITING HIGH TECH COMPANIES.

SMITH: Was anybody thinking long-term about the work force at the industrial take-off?

GLOVER: People were thinking about it and talking about it, and there were numerous meetings to plan for it. But the problem was that nobody was acting – to do anything about it, and to put curriculum in place, and to get students enrolled, and recruit them, and develop the teaching capabilities to put these competent workers out. So that was what the problem was – action was the problem.

SO WHILE AUSTIN COURTED AND WON THE HEARTS OF HIGH TECH INDUSTRY, THE CITY DANCED AROUND THE QUESTION OF WHERE THE COMPANIES WERE GOING TO FIND THEIR FUTURE WORKERS. AND THE COMPANIES CRIED THE BLUES TO THE CHAMBER OF COMMERCE AND TO KIRK LADENDORF, BUSINESS REPORTER FOR THE AUSTIN AMERICAN STATESMAN.

LADENDORF: These companies told us again and again that we’re going to far more complex devices. We’re building devices with far greater sophistication and complexity and we’re using far more complex equipment. We need people with more skills.

NEVERTHELESS,  THE CHAMBER KEPT RECRUITING MORE PLANTS. THROUGHOUT 1995, IT OPENLY PURSUED SAMSUNG’S HUGE SEMICONDUCTOR FABRICATION FACILITY AND LATER CELEBRATED SAMSUNG’S ARRIVAL WITH A COLORFUL GROUND BREAKING CEREMONY.

SMITH: What was the impact here when Samsung announced it was coming and building this enormous new chip fab?

LADENDORF: One could say it was both a victory for the community as well as an alarm signal. Motorola specifically expressed a fair amount of unhappiness when – with the Chamber of Commerce. They complained. They said you’re hurting us. You’re bringing in another company to compete for labor. You’re going to be driving up our labor costs.

DAVID DOOLITTLE, A MOTOROLA VICE PRESIDENT FOR HUMAN RESOURCES.

DOOLITTLE: It was one more semiconductor company in town competing for the exact same people that everybody else is competing for.

MAYBE ONE TOO MANY FOR MOTOROLA.

LADENDORF: In mid 1995 Motorola said we’re not gonna build another factory in Austin in the foreseeable future. Virginia is where our next factories in the United States will be built.

SMITH: So Samsung was the straw that broke the camel’s back?

DOOLITTLE: I’m not sure they were “the” straw, but they were “a” straw.

GLOVER: A local principal told me that this is a wake-up call to all of us to produce workers who are qualified for this industry. Or we’re going to lose this industry.

Stand-up.

SMITH: And so Austin’s priorities are changing. The stakes are high. Failure means industry moving out. Not just out of Austin, but out of America.

WEST: The dominant issue for Chambers of Commerce all across this country today, and the dominant issue in economic development in this country, is the ability to deliver to employers a trained work force. If we can do that, there is an economic future, for our nation for the next several decades that is unlike anything we’ve ever seen. If we fail to do that, then these companies have no choice but to go elsewhere to find that labor. Outside of the boundaries of this country, and certainly outside of the boundaries of our individual communities.

THIS CRUNCH HAS CAUSED RECRUITERS TO REACH OUT TO A LONG NEGLECTED RESOURCE – TEENAGERS.

1st RECRUITER: ...and then we also have the manufacturing plant that’s going to be opening in October here in Austin...

2nd RECRUITER: ...yeah, we started in ’89 with 8 employees and now we’ve got close to 3,000 employees... yeah, you can also take a jobline card. It’s got our phone numbers, fax numbers, things of that nature on there, okay...

FITZPATRICK: ...your company has a lot to offer. You guys have a lot of great opportunities...

JOHN FITZPATRICK IS POINT MAN FOR A PROGRAM CREATED BY THE CITY AND THE CHAMBER OF COMMERCE TO ENLIST INDUSTRY IN HELPING TO TRAIN LOCAL YOUTH FOR FIVE CAREER PATHS, INCLUDING HIGH TECH. FITZPATRICK HELPED TO ORGANIZE THIS RECENT JOB FAIR FOR HIGH SCHOOL STUDENTS.

McKENZIE: ...the summer intern program is that you have to take “Principles of Technology” at the high school...

WE FOUND MARGIE MCKENZIE, THE HEAD RECRUITER FOR MANUFACTURING AT AMD, WORKING THE JOB FAIR ALONGSIDE MANY OF HER INDUSTRY RIVALS.

SMITH: Now, I understand you do a lot of hiring out of state. Where do you go to get your workers when you can't get them locally?

McKENZIE: We just recently came back from Albuquerque, New Mexico. We go to Norfolk, Virginia, we go to Indianapolis, we go to – we go all over.

SMITH: So what's wrong with handling people from out of state? Why can't you just keep meeting the needs from out of state?

McKENZIE: We've done that but the talent doesn't stay. They leave. They eventually leave because they're either homesick or they find jobs that they want to go closer to home. So we've had a lot of turnover because they just don't stay in Texas.

SMITH: How long do they stay typically, a year, two?

McKENZIE: A year. We're lucky to get a year.

THAT RAPID TURNOVER, PLUS THE COST OF BRINGING WORKERS IN FROM OUT OF STATE IS THE REASON WHY COMPANIES ARE NOW FOCUSING ON GROWING THEIR OWN LABOR FORCE HERE IN AUSTIN.

FITZPATRICK: There is still a lot of work to be done in Austin and everywhere else nationwide to get employers to understand the necessity to them – their self interest in working with high school students.

SMITH: Are high school kids generally getting the message that high tech is a great way to go?

FITZPATRICK: There’s still a lot of problems with students concern about being successful in the high tech field. When we’re trying to recruit students for these hard classes the first question they ask us is - is it required for graduation? We say no. The second question they ask us is - is it hard? We say yes. The third question is - why should I take it?

HOLDER: ...what’s delta-t? (class responds.) Thank you...

HERE IN JOHNSTON HIGH SCHOOL, THESE STUDENTS ARE TAKING A PILOT COURSE CALLED “PRINCIPLES OF TECHNOLOGY.”

HOLDER: ...okay let’s go ahead and get in your groups. The lab sheets ...

THE PROJECT, ONE OF SEVERAL SUPPORTED BY LOCAL INDUSTRY, THE SCHOOL SYSTEM, AND THE CHAMBER OF COMMERCE, IS DESIGNED TO INTRODUCE STUDENTS TO HIGH TECH CAREERS.

HOLDER: ...does it boil at 100 degees in Austin, Texas?

STUDENT: No, around 90 something...

A NINETEEN YEAR VETERAN OF THE AUSTIN PUBLIC SCHOOLS, PHYSICS TEACHER FRANK HOLDER WORKS AT ONE OF THE DELICATE JUNCTURES OF THE WORKFORCE PIPELINE.

VILLASANA: Next year I’m trying to get into an engineering internship in the school, where I’m with an engineer to see what they actually do, and see if that’s really what I want.

HOLDER: That’s what we’re trying to nurture. That’s what we’re trying to cultivate. When you talk about going to work in a semiconductor industry, even though we’ve got one just three miles down the road here, you may as well be talking about going to the moon.

GRIFFIN: ...after I subtracted the weight of the cup it became one six seven point five...

No one in my family, in my family, works in this field, so I have no way of knowing really what they do. You know, I don’t know if they’re just riding the clock or they’re actually doing hard work or brain busters or what. I mean, I really don’t know what they do, so that’s why it’s intimidating.

HOLDER: It is a lunar landscape almost for these kids to think about working in that industry. It’s foreign to them, but a lot of that is internal. A lot of the obstacles that they face are internal. They don’t either believe that they have what it takes to be successful or just don’t have the confidence. And that’s what we’re here to try to do.

ESTRADA: Well, Mr. Holder came and talked to my biology class last year, and I thought it would be interesting to find out about electronics and all that. But I’m not really too interested in it.

SMITH: You’re not too interested in it?

ESTRADA: I think it has a lot to do with math and science, and I hate math.

SMITH: You hate math?

ESTRADA: I hate it.

SMITH: With a passion?

ESTRADA: Yes.

HOLDER: The job is convincing them that they’re able to do that. The actual work, sure, it may be – it’s a challenge, but they can do it, they can handle it. With a little coaching, a little help, a little nurturing, and that that’s why we’re here, that’s why they pay us the big bucks, you know, to do that.

THREE YEARS INTO THE PROGRAM, THERE’S STILL QUITE A WAYS TO GO. INDUSTRY WOULD LIKE TO SEE TWO THOUSAND STUDENTS IN THE AUSTIN AREA TAKING HIGH SCHOOL TECHNOLOGY COURSES, BUT ENROLLMENT IS ONLY 200. HOLDER EXPLAINS WHY MOST TEENAGERS ARE HESITANT.

HOLDER: I think we’ve got a lot of kids that are waiting for somebody to be successful. To get completely through the pipeline, and to land a good job and kind of say to the rest of the group “the water’s safe, come on in. You know. It’s fine. You can do this. I can do this, you can do this.”

WEST: Well, the good news for us is that we have identified, and have in place, a series of programs that can help us solve this problem over the long term. What we have to do now is get those programs–ramp those programs up to scale. And that’s a challenge for us because it’s not cheap to put these kind of programs in place. And yet, that investment ultimately will determine what the economic future of a community can be.

Closing stand-up

SMITH: Austin has learned what other parts of America are discovering painfully: a community must work as long and hard at developing a highly skilled workforce as it does at attracting new industry. The two go hand-in-hand and you can’t count on the marketplace to solve the workforce problems for you

GETTING ENOUGH HIGH SCHOOL STUDENTS EDUCATED FOR INFORMATION AGE CAREERS TAKES A MONUMENTAL EXTRA EFFORT. OVER THE NEXT FIVE YEARS, JOHN FITZPATRICK PUTS THE COST TO AUSTIN AT ABOUT FIVE MILLION DOLLARS - A STEEP PRICE FOR FALLING BEHIND THE CURVE AND HAVING TO PLAY CATCH UP TO THE NEW ECONOMY.

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