Category Archives: Labor & workforce

Many Virginians Prefer Training over Incentives

Graphic credit: VCU

The Douglas Wilder School of Government and Public Affairs has published a public opinion poll delving into Virginians’ attitudes toward a wide range of issues relating to K-12, higher ed, and workforce training. The poll appears to be methodologically sound. I will use the poll results as stepping stones to address several topics.

Workforce training: When asked how to prioritize the spending of state economic development dollars, according to the poll results shown above, Virginians were evenly split between expanding workforce training and education programs over providing financial incentives to recruit new business or retain existing business.

I construe these results as evidence of potentially strong public support for my proposal, elaborated upon here, to scrap the Commonwealth’s Opportunity Development Fund, which is used to dish out financial incentives to corporations expanding in Virginia, and beefing up the state’s targeted workforce training program. The idea: Instead of attracting corporations with cash, we entice them with a skilled workforce.

As I noted in that column, addressing the jobs-skills mismatch is arguably the greatest economic challenge facing Virginia today. If a corporation can’t find the workers it needs, it won’t consider a community no matter how big the incentives. Furthermore, it makes more sense to invest in Virginia workers than subsidizing out-of-state companies that may or may not be willing to make a long-term commitment to the state.

Invest in Virginia Workers, Not Corporate Subsidies

Replace economic-development incentives with workforce training.

Replace economic-development incentives with workforce training. Photo credit: Richmond Times-Dispatch

(The Richmond Times-Dispatch published my op-ed this morning.)

The Virginia Economic Development Partnership (VEDP), once one of the most respected economic development teams in the country, has been taking it on the chin. A year ago, a Chinese company bilked the partnership for a $1.4 million incentive payment in a deal that never transpired. The scandal prompted the departure of VEDP’s CEO and sparked a legislative inquiry that unearthed “systemic deficiencies” in its management.

In December, Gov. Terry McAuliffe proposed reforms to improve oversight of incentives, which amounted to $384 million over the past decade. Among his recommendations: Create new divisions within VEDP, one to administer the incentive programs and another to audit VEDP activities and report the findings directly to its board of directors.

I have a simpler idea. Instead of adding new layers of bureaucracy, eliminate the incentives altogether and use the money for workforce training.

Virginians have long had a love-hate relationship with economic development incentives, viewing them as an ugly necessity for competing with other states, most of which offer subsidies and tax breaks to lure corporate investment. The Old Dominion was one of the first states to make incentives contingent upon the recipient meeting benchmarks for dollars invested and jobs created. If a company fails to keep its promises, the state will claw back its payments.

But there’s a bigger problem that tighter administration of state incentive programs cannot solve: There is no way to tell if subsidies and tax breaks actually work.

Site location in the United States has evolved into a racket. When a corporation decides to expand, it typically hires a site consultant to scout the ideal location. It is common practice to narrow down the choice to two or three localities in different states and then to set them bidding against one another to offer the sweetest incentive package.

So many states dangle subsidies, grants, tax breaks and other kinds of bribes that companies would be negligent to not try to extract the biggest, fattest concession possible.

The trouble is that economic developers are bidding in the dark. The VEDP can make educated guesses, but it has no way of knowing exactly how much money it will take to sway a particular corporation to invest in Virginia, no way of knowing whether it gave away too much, indeed no way of knowing if a company would have invested in Virginia without an incentive package at all.

As it happens, the timing is perfect to re-think incentives. The VEDP board has hired Steven Moret, Louisiana’s former economic development chief and a superstar in the field, to run the organization. Key to his success was FastStart, a program he built into one of the nation’s premier workforce development initiatives. Moret should be given the resources to replicate the program in Virginia.

Once upon a time, VEDP had a respectable job-training program, which it offered as a perk to companies investing in the state. But the Virginia Jobs Investment Program (VJAP) has undergone considerable restructuring and reorganization over the past 20 years, and not to its benefit.

Between 2010 and 2014 it shrank from 16 operational and support personnel to six. While Louisiana was building a best-in-class workforce development initiative, Virginia was dismantling its own.

In an era of abundant capital and near-zero interest rates, reputable corporations can easily and cheaply borrow the money they need to expand. A much tougher task is finding a skilled workforce.

Many communities are out of the running for a wide range of economic development projects because their workers lack industry-specific skills. In Martinsville, for instance, the 6.8 percent unemployment rate is higher than almost anywhere in the state, yet in November local companies were complaining that they were having difficulty filling some 1,325 job openings.

If local companies can’t find the workers they need, what chance does Martinsville have in attracting out-of-state industry?

Addressing the jobs-skills mismatch is arguably the greatest economic challenge facing Virginia today. If a corporation can’t find the workers it needs, it won’t consider a community no matter how big the incentives.

Virginia’s colleges, community colleges and universities can do most of the heavy lifting on education and training, but they are not equipped to provide a fast-response, turnkey workforce solution like Louisiana’s FastStart program.

While the General Assembly ponders how to reform VEDP, it also needs to re-think the state’s economic-development incentives: Virginia needs to emphasize workforce development over subsidies and tax breaks.

Given the state’s current budget constraints, the most logical pot of money to fund a program like FastStart is the Commonwealth’s Opportunity Development Fund. We can continue doling out payola to out-of-state corporations or we can invest in Virginia’s workers, likely with a better result. It’s not a difficult choice.

Forget Globalization. Worry about Automation.

Automation is taking more American jobs than Mexicans are.

Automation is destroying more American jobs than Mexicans are.

Watcha gonna do… watcha gonna do… whatcha gonna do when robots come for you?

Robots aren’t science fiction. You need to start thinking about them — and so does Virginia’s political establishment.

The 2015 Oxford automation study, “The Future of Employment: How Susceptible Are Jobs to Computerisation,” concluded that 47% of all U.S. jobs in 702 occupations are at “high risk” of decimation by automation. If it’s any consolation, an Organization for Economic Cooperation and Development (OECD) study found that a mere 9% of jobs are at risk. But don’t get complacent. A 2016 McKinsey study predicts that 60% of all U.S. occupations could see 30% or more of their work activities automated.

Using the same methodology as the Oxford study, Dr. James V. Koch, an Old Dominion University economist, calculates that nearly 1.9 million jobs are at risk in Virginia — about 51% of all jobs, four percentage points higher than the national average.

Seeking refuge in a college education will not necessarily save your job from robots or artificial intelligence. A hair stylist in Harrisonburg stands better chance of surviving the job carnage wrought by our robot overlords than, say, a tax preparer in Danville.

The deciding factor, says Koch in an essay in the “2016 State of the Commonwealth Report,” sponsored by the Virginia Chamber Foundation, “is the extent to which jobs require creative and and social intelligence and the ability to manipulate as opposed to being dominated by repetitive, routine tasks capable of being learned by machines fueled by artificial intelligence.”

So, in the immortal words of 19th-century Russian revolutionary Nikolai Chernyshevsky, “What is to be done?”

Writes Koch:

Wise public policies in this arena should focus on “riding the wave” of technological change rather than encouraging resistance movements that are destined to prove futile. Astutely constructed public-private partnerships between governments and firms have the potential to develop programs designed to compensate and redirect job losers, who in many cases are relatively innocent victims of dynamic economic forces beyond their control.

Koch, a former Old Dominion University president, argues the state should work to increase the skills, flexibility and mobility of the workforce. By skills, he means proficiencies that count in the marketplace. “This is not the same thing as generating massive numbers of additional bachelor’s degree holders, or STEM-degree holders,” he says. “There is relatively little rigorous economic evidence available that a significant shortage of job candidates exists in STEM-related occupations.”

By flexibility, Koch means “suppleness in thinking and approach” — critical thinking. And by mobility, “wise public policy will reduce barriers that discourage people from moving geographically and/or telecommuting to jobs that may be located thousands of miles away.”

What the empirical evidence tells us, says Koch, “is that the current range of public policies is insufficient to deal with the occupational ferment that Frey and Osborne (the authors of the Oxford study) have identified. We are forewarned.”

New VEDP Chief Brings Workforce Training Credibility

Steven Moret, Louisiana's economic development and workforce training guru

Steven Moret married economic development and workforce training in Louisiana. Photo credit: The Advocate

Steven Moret, an economic development executive from Louisiana, has been selected to run the Virginia Economic Development Partnership (VEDP) on the strength of his track record of attracting private investment to Louisiana by building one of the most respected workforce training programs in the country.

The VEDP board approved the hire in a special meeting yesterday against the backdrop of a devastating report by the Joint Legislative Audit and Review Commission (JLARC), which charged that VEDP suffered from “systemic deficiencies” in administration and management.

Moret, selected from among six finalists after a nationwide search, will receive a base salary of 340,000 with benefits and, he would be eligible for an annual incentive bonus up to 15% tied to performance. He has strong family connections to Virginia. His mother lives in Richmond, and his in-laws are planning to move to the city.

Among all of Virginia’s economic development programs, VEDP is the most important. VEDP itself administers a $27 million budget, and it is influential in dispensing tens of millions of dollars more in incentives through the Commonwealth’s Opportunity Fund.

In an interview with Virginia Business, VEDP Chairman Dan Clemente explained the board’s rationale behind the pick:

Clemente said that hiring a new, highly qualified leader will help shepherd through changes resulting from JLARC’s review. Saying that he had consulted with legislative leaders before calling Monday’s meeting, Clemente noted that Moret was hired to head up Louisiana’s economic development efforts in 2009 under conditions similar to those facing VEDP today. “He came in and straightened that out and brought in billions in new capital investment, “ Clemente said.

What really impressed him, Clemente added, is that Moret traveled to Georgia to study its workforce development initiative, developing a similar model in Louisiana called FastStart. “He hired the No. 2 guy in Georgia and brought him to Louisiana to make the program work,” Clemente said. “He’s good at executing ideas.”

Clemente said Moret —who was not present at Monday’s meeting — has read JLARC’s 132-page report. “He looked at it and said, ‘Dan, this is all administrative. I can take care of it. ’” Clemente said Moret wanted to come to Virginia because “ ‘your location draws Fortune 500 companies, and that creates a lot of opportunities for me.’ ”

Bacon’s bottom line: Moret seems like a promising choice for the job, and it will be interesting to see where he takes VEDP. An experienced executive should be able to address the managerial issues raised by JLARC. Of greater import will be his ability to connect corporate recruitment with workforce development.

The number one driver behind corporate investment today is gaining access to a skilled workforce. As we have blogged on Bacon’s Rebellion repeatedly, tens of thousands of jobs across the state are going unfilled because of the inability of existing employers to find employees with the necessary qualifications. Needless to say, staffing is an issue to out-of-state company considering an investment in Virginia as well. The skills gap tells us that a massive disconnect has developed between the workforce, employers and the educational/ training institutions that impart needed skills.

Since 1965, the Virginia Jobs Investment Program (VJIP) has provided training to companies creating new jobs. That program has undergone considerable bureaucratic turmoil over the past 20 years, shuffling in whole or in part between the old Department of Economic Development, the Department of Business Assistance, the Department of Small Business and Supplier Diversity, and then back to VEDP, according to a 2014 VEDP presentation.

Between 2010 and 2014, the program shrank from 16 operational and support personnel to six. In other words, while Louisiana was building a best-in-class workforce development initiative, it appears that Virginia was decimating its own program.

From a philosophical perspective, investment incentives such as special subsidies and tax breaks smack of corporate welfare. The beneficiaries are corporations, often highly profitable ones. There is no moral justification for such transfer payments, only the practical justification of bribing an out-of-state company to locate in Virginia. By contrast, workforce training benefits both the corporation and the employees benefiting from the training. While some such skills imparted in highly tailored training programs may be company-specific, employees often acquire skills they can apply elsewhere. Viewed another way, workforce training is an investment in Virginians, not out-of-state corporations with no demonstrated long-term commitment to the state.

Given a choice between bribing companies with subsidies and tax breaks or subsidizing their workforce training, I would choose training in a heartbeat. Indeed, if one of Mr. Moret’s priorities is to recreate his Louisiana workforce-training success here in Virginia, I would suggest that the General Assembly could provide him with all the money he needs from the Commonwealth’s Opportunity Fund.

Workforce Training that Focuses on Unfilled Jobs

Workforce training in Martinsville, Va.

Violet Mabe, of Martinsville, participates in a Certified Production Technician class at the local community college. Photo credit: Roanoke Times

The Martinsville area, a manufacturing powerhouse as recently as the 1980s, has become the poster child for Virginia’s rust belt. Unemployment hit 20% during the bottom of the last recession, and still lingers at 6.8%. Ironically, the Martinsville-Henry County area simultaneously suffers from a labor shortage — a shortage of labor with the right skills, that is.

I addressed this issue back in August in “Is It Time to Blame the Victim,” which described the difficulty local authorities had in finding people willing to undergo the training required to fill hundreds of vacant jobs. Now the Martinsville Bulletin has published an in-depth look at the workforce dilemma.

There is a serious mismatch between workforce skills and the jobs available. As of last week, there were 1,325 jobs open in Martinsville and Henry County. Factors influencing the difficulty in filling the positions include the need for daycare, lack of transportation, and the inability of applicants to pass drug tests. “But a skills mismatch and need for training is the problem area officials most often cited,” states the article.

Patrick Henry Community College (PHCC) and the New College Institute (NCI) battle a perception that education is unaffordable. Adults with families to support must make significant sacrifices even to earn a two-year degree.

One possible solution is to award certifications geared to the needs of particular employers, such as the Center for Advanced Film Manufacturing that grooms students for jobs at Eastman Chemical Co. That program offers a paid internship with Eastman and a guaranteed interview with the company. The company has hired more than 90% of the graduates of the program.

PHCC has launched a similar program with Radial, a logistics and distribution company. Kim Smith-Glisson, director of operations in Martinsville, explains the motivation:

As we grew the business in Martinsville/Henry County we did not want to have to continue to relocate our supervisors, our managers, our senior managers externally from outside of the area. We wanted to be able to develop the talent locally and continue to promote from within.

Drake Extrusion, a polypropene fiber manufacturer, announced a $6 million expansion in Henry County earlier this year, creating 30 jobs. CEO John Parkinson said additional job training is a necessity:

We’ve got a lot of people who are willing to apply for jobs, but they don’t really have the technical skills, the problem-solving skills, the ability to use computers on the shop floor and things like that, which is what we’re really looking for these days. Gone are the days when you’re just looking for people who can press buttons and watch machines.

Bacon’s bottom line: Two-year programs have their place, but they often take too long and impose too high a cost on adults who support families while acquiring new workplace skills. Community colleges and career colleges need to develop programs that deliver employers the specific skill sets their employees need. Likewise, employers need to get over the idea that job training is mainly a public responsibility. They need to partner with community colleges and help underwrite the cost of training programs that benefit them.

Meanwhile, Virginia needs to look at the panoply of job training programs — Nine state agencies distribute more than $340 million in federal and state funds for employee assistance and training — to see how effectively their programmatic models align with labor market realities. Are there obsolete and/or ineffective programs that can be shut down and their resources reallocated to programs proven to work?

The McAuliffe administration has sponsored creation of the Go Virginia program to develop a collaborative approach to workforce development involving business, local government and higher education. Whether Go Virginia delivers a focused approach to workforce training and education, or just adds another layer of bureaucracy, remains to be seen. But one thing seems evident: Training Virginians to fill unfilled jobs that already exist should be a lot easier than solving unemployment by recruiting new businesses to invest in the state.

Update: Patrick Henry Community College already has numerous certification programs that require less than a two-year course of study. See comments of PHCC’s Jim Bove here.

In Praise of Occupational/Technology Degrees

Earnings for occupational/technology degrees compared to four-year degrees

Source: State Council for Higher Education for Virginia. (Click for larger image)

Here’s what stands out from this data table from the State Council for Higher Education in Virginia (SCHEV): The average income (five-year-rolling average) for students earning two-year occupational/technology degrees was $36,600 a year within 18 months of graduation — measurably more than $34,500 for those earning four-year degrees.

Occupational/technology degrees are generally obtainable through community colleges. Tuition is lower, which means students need smaller loans. And the degrees take only two years to earn, which means that grads get to generate two more years of income.

Arguably, grads with four-year degrees fare better in later years as they enjoy opportunities to climb the career ladder. It would be interesting to see that data. It would be even more interesting to compare career earnings prospects (occupational/technology degree grads get a two-year head start) adjusted for differences in the cost of college attendance.

Virginia, like other states, hews to the philosophy that “the more college grads, the better.” SCHEV has the explicit goal of making Virginia “the best educated state in the country,” to be achieved not by creating the economic conditions that lure the best and brightest from elsewhere but by digging deeper into the pool of academic talent in order to feed more students through the higher educational system.

But that philosophy runs smack into two hard realities: (1) Thousands of students are admitted to college aren’t academically prepared to do the work, and (2) two-year occupational/technology degrees pay somewhat more, at least in the early years. Vocational education needs to driven by market demand, not arbitrary political goals.

(Hat tip: John Butcher)

A Novel Idea: Train Your Own Workforce

What the world needs is more HVAC techniciansAlexandria-based Michael & Son is establishing a vocational school in Richmond to train its workforce in plumbing, electrical and HVAC trades. The first class of enrollees is expected to start in the next few weeks, according to Richmond BizSense.

Said President Basim Mansour:

We’re probably not going to be fully running for another four to six months, but when the school is finished, it’s going to be the most state-of-the-art trade school in the nation. We’re going to be able to create and build incredible, talented people that we can farm just for our use.

The reality is that nobody’s going into the trade anymore. What we need as a company is, first, great people, and then second, tradespeople. It’s easier to find good people who don’t know the trade, so we’re going to take those good people and teach them the trade.

Michael & Son spent $1.9 million to buy the old Wyeth Pharmaceuticals building and another $1 million to convert it into a dormitory to house up to 74 students. Classrooms at the school will replicate a home where students can get real-world work on plumbing, electrical wiring and HVAC systems. The company will pay students $300 a week to attend class — in contrast to some trade schools that charge up to $20,000 to attend. The 12-week program is followed by six weeks of field work. The company currently employs about 900 people.

Bacon’s bottom line: Why don’t we see more of this? Building tradesmen make good middle-class wages, and there aren’t enough of them. Why aren’t more businesses — at least the big ones which can afford to spend $3 million on facilities — training their own workers?

How has it happened that U.S. industry has come to rely upon the higher education establishment to provide the training? When you own your own shop, you teach exactly the skills your workforce needs, and you teach up to your standards. Other than Newport News Shipbuilding, which has one of the top apprenticeship programs in the country, I can’t think of any other enterprise in Virginia that does this.

Chart of the Day: Shrinking Workforce

workforce_growth

Map credit: StatChat blog

This chart, published by Hamilton Lombard on the StatChat blog, shows how the working-age population of the United States has begun shrinking in much of the United States. While metropolitan areas still experience a growing workforce as they suck up labor from rural counties, even urban growth is slower than it was ten to fifteen years ago.

Workforce growth 2000-2005.

Workforce growth 2000-2005.

The downside of this trend, is that working Americans will have to support a fast-growing population of elderly Americans, along with the Medicare, Medicaid and Social Security programs that benefit them. As has been widely publicized, government will become increasingly hard-pressed to finance these entitlements in the absence of meaningful reform.

The bright side of the story is that intensifying competition for workers should translate into lower unemployment and higher wages, assuming the economy can continue to produce even modest job growth. (The next U.S. president, whoever he or she is, will no doubt claim credit for the benefits of demographic shifts forces over which they have no influence whatsoever.)

Here in Virginia, the public policy apparatus has not begun to think seriously about the implications of a stagnant workforce. “With shrinking workforces and lower unemployment rates, most rural areas will need to change their focus toward attracting workers rather than just keeping them,” says Lombard.

The same can be said of urban areas as well. If metropolitan areas want to grow, they, too, will need to change their focus to attracting workers. Fifteen years ago, urban geographer Richard Florida noted that corporate investment chased the workforce, especially what he termed the “creative class.” As the nation enters a no-growth phase for the workforce, that phenomenon should intensify. Virginia communities will need to re-think what constitutes economic development. Instead of using subsidies and tax breaks to lure corporate investment, communities should expend resources to create the amenities that lure young workers, especially skilled and educated members of the creative class. Attract the workforce, and the corporate investment will follow.

 — JAB

Four of Five Virginia Job Openings Do Not Require a Bachelor’s Degree

workforce_surveyThis post is excerpted from the Executive Summary of the “Virginia Job Vacancy Survey” prepared for the Virginia Employment Commission by the Center for Urban and Regional Analysis at Virginia Commonwealth University.

Key Findings — Statewide

Employers project a 4.2% overall job vacancy rate in 2016, 61% due to separations and 39% due to new positions. Extrapolated to the entire QCEW establishment population from which the survey sample was drawn, the number of projected job vacancies in 2016 is estimated to be 130,827.

Over 60% of the positions, an estimated 78,785 jobs, will be full-time, while 32% (41,803 jobs) will be part-time (8% are unknown). Eighty-three percent (108,405) of the positions will be permanent and 16% (21,209) will be seasonal.

Employers expect it to be extremely difficult to fill over 21% of the vacancies and moderately difficult to fill an additional 39% of the vacancies. This perception permeates all industry sectors, employer sizes and regions, for the most part. However, employers were not asked to state why they have these expectations. Thinking that perhaps perceived difficulty in filling vacancies would be correlated with formal education or training requirements, we cross-tabulated these variables. However, we found no strong correlation between perceived difficult in filling positions and formal education, training or skills required.

Asked to rate the attributes they seek in new hires, employers ranked them in the following order: Professionalism, Communication Skills, Basic Academic Skills, Interpersonal Skills, Critical Thinking Skills, and Technology Use.

Extensive formal education does not appear to be required for the majority of job openings. Almost two-thirds of all openings (63%) require a high school diploma or GED, whereas about 12% require an associate degree or some college with no degree, and 18% require a bachelor’s degree or higher. About one-third of the projected vacancies requires licensing or other industry-recognized credential.

About half (46%) of all projected openings require on-the-job training of one month or less and about 31% require training of 12 months or less. Over 42% of the projected openings require no prior experience and almost 53% require less than five years’ experience.

For full-time positions, employers project, on average, an annual starting salary of $39,385. For part-time positions, employers expect to pay an average hourly starting wage of $11.98.

Virginia Tech Makes Big Bet on Big Data

pamplin_school

Virginia Tech’s Pamplin College of Business

by James A. Bacon

Virginia Tech wants another $70 million of your tax dollars. That’s a lot of money, but give Tech credit for thinking big. Its audacious plans for a $225 million Global Business and Analytics Complex could be the next big thing that elevates the university to ever greater heights of prominence. Of course, it also could represent a massive bet on a passing intellectual fad. But one way or the other, it’s BIG.

Here’s the idea: Tech wants to expand its Blacksburg campus to accommodate four new buildings — two academic and two living-learning residential communities for about 700 students. The academic buildings would become the new home of the Pamplin College of Business and house research space in Tech’s data analytics and decision sciences destination area.

“We believe that Virginia Tech can become an international leader in the complex nexus of data and decision making; where people, communities and policy meet big data analytics to produce solutions that improve the human condition,” said Executive Vice President and Provost Thanassis Rikakis, as reported by the Roanoke Star.

The dorms are expected to cost $73.5 million, which university officials say could be financed by state bonds. The academic buildings would cost about $140 million, half of which Virginia Tech would raise and the other half officials hope will come from the state.

Virginia Tech is infusing data and decision sciences into every corner of its teaching, research, and outreach, says Naren Ramakrishnan, director of Tech’s Discovery Analytics Center. “We are preparing students to be data-literate and empowering them to use the methods of data science to complement their disciplinary work. Our data analytics and decision sciences planning group draws members from engineering, sciences, business, liberal arts, humanities, and the natural resources.”

Tech’s long-term goal includes developing a health analytics complex at its Roanoke campus and a technology-focused complex in Northern Virginia.

Bacon’s bottom line: No question, Tech is tapping into a powerful economic trend. Big Data is one of the most all-pervasive forces at work in society today, and the harnessing of Big Data is one of the great challenges of government and industry. Someone has to teach this stuff — why not Virginia Tech? If Tech is an early entrant in this educational field, it could be very successful. Moreover, the economic benefits of hiring more professors and teaching more students — a lot of economic activity — could be leveraged many times over if Virginia businesses hire Pamplin graduates to reinvent their enterprises and become more globally competitive.

But that’s a lot of “ifs.” Tech wants roughly $70 million from the state to make this happen, and it will compete with Virginia’s other public universities, all of which have grand schemes of their own, for scarce funds. It doesn’t help that the General Assembly will be cutting spending, not adding to it, in the current budget cycle.

Here are some of the issues legislators need to consider:

  • How else could the state invest that $70 million? That sum is larger than the $60.8 million allocated in 2017 to economic incentive funds for industrial recruitment, small business, brownfields, enterprise zones and movies put together. Those funds, incidentally, largely benefit working class Virginians and/or economically depressed communities.
  • How much direct economic activity will the Global Business and Analytics Complex create in added payroll and other spending?
  • What will be the indirect impact, in terms of improved competitiveness of Virginia business enterprises? Is that question even possible to answer?
  • Where will the students go? If Virginia taxpayers are going to invest a massive sum in human capital, can we be assured that most graduates of this program will subsequently work for Virginia companies, enhancing their competitiveness? Or will out-of-state companies recruit them, meaning Virginia taxpayers are effectively subsidizing the human capital of our competitors?
  • How many other higher ed institutions are pursuing similar strategies? Is this the next higher-ed empire-building fad in which everyone is hypes Big Data in order to bamboozle money from alumni and taxpayers? Are Stanford, MIT, Michigan State, Georgia Tech and a dozen other prestigious institutions all pursuing the same angle? Or does Virginia Tech really, truly have a unique idea?

This is just a start. I’m sure the list of questions can be refined. The payoff is potentially very big. But Tech is asking for serious money. Legislators need to give the idea serious deliberation.