Workforce Development, Job Creation, and Sustainable Economic Development


There has been a great deal of workforce development activity across the U.S. Since the late 1990s, when workforce development was linked to welfare reform, many states and communities created plans and implemented a range of workforce development activities. Some initiatives have been caught in the “activity trap,” while others have contributed to sustainable economic development for their regions.  This article will describe the relationships between different economic development frameworks, successful models, and the linkages that often result in ongoing job creation, increased employment levels, and sustainable economic development.

What Has Happened?

Since the late 1990s, states have created Workforce Development Bureaus, one-stop centers, job training and re-training initiatives, coaching programs, and placement services.  Those workforce development plans that are primarily training and placement based have faced ongoing challenges. However, those that provide linkages between key elements of the broader system have been able to create longer-term job creation, employment and real traction with economic development. Unfortunately, the great recession of 2008-2012 did create significant challenges for the economy, which adversely impacted everything from workforce development programs to job losses and setbacks for economic development initiatives. Now that the country has recovered from this fiscal crisis, we are finding a number of states that have built initiatives that have created significant job growth, expansion of gross state product measures, and increases in per capital personal incomes.

Core Interconnectivity

Sometimes, people use the words “education of the workforce,” “workforce development,” “employer recruitment,” “job training,” “job creation,” and “economic development” interchangeably. However they are separate but interconnected areas, which affect one another and need to interact synergistically in an integrated system.  Lyn Haralson of the Federal Reserve characterizes workforce development as an essential component of economic development, which needs to focus on both the individuals involved in programs that help them to become more job-ready, but linked to both current employer needs as well as job trends, within the broader context of economic development.

Sustainable economic development happens when all of the elements that support economic development interact effectively, are well coordinated, and driving toward a common vision, resulting in great alignment. Such interaction of the different parts of the economic development system working in concert also provides increasing leverage and greater collective impact. 

Key Components of Economic Development

Economic development happens when each of these parts works in coordination with the others, toward commonly held goals, resulting in an (1) expansion of the number of jobs, (2) increase in employment rates, and (3) improvement in capital and gross domestic product (GDP). When economic development is sustained over time, the successful accomplishments of each component are leveraged for collective impact.

What is Needed for Success?

The majority of successful initiatives are characterized by the following key elements:

  • Strong and effective leadership;
  • Clear vision and mission supported by effective policies;
  • Adequate and sustainable funding;
  • Business needs, emerging worker profiles, and current and future job trends;
  • Stakeholder engagement; and
  • Systemic approaches with strong linkages.

Strong and effective leadership is required for almost all successful initiatives. This includes staff and board leaders that are knowledgeable champions for the cause, results-driven, well connected in the region, working as an effective team.

Clear vision and mission are essential to any enterprise, and the mission, vision, program, priorities and goals should be frequently communicated and well understood by leaders and stakeholders. What is often missing is having the vision, mission and work supported by effective policies. Policies at state and county levels create the framework for success, mixed results, or failure. Sometimes workforce development and economic development policies are (1) not in good alignment, (2) run by separate bureaus with sometimes conflicting priorities, or (3) beset by ineffective collaboration. A recent study by the Urban Institute analyzes state policies, and makes recommendations for improving policy.

Adequate, diversified and sustainable funding that is carefully linked to initiative goals ensures that the systemic issues underlying success are addressed and managed. Oftentimes, there is a gap between  workforce development, job creation or economic development goals and the funding resources needed for success. When funding is multi-year, diversified and broad based, it supports the kind of integrated initiatives that can develop traction and create results.

Business needs, emerging worker profiles, current and future job trends together drive successful initiatives. When programs are driven by just one or two of these key components, they are often not fully informed, nor do they have the right mix of stakeholder engagement. Knowing the current and projected job trends is critically important to any workforce development initiative, and annual workforce reports and other research provide excellent insights into (1) the current market, as well as near and longer term areas of job contraction and growth analyzed against the profiles of the types of people in the job market (often there is a disconnect); (2) county, regional and state population and job losses and gains. Understanding the needs and skills of those looking for work is equally important, and research and reports on (3) workforce and emerging workforce demographic, education, skill and interest profiles can identify the target population, and what they need. In the past, there have been “war stories” about people who papered their homes with training programs that were not pegged to employer needs. Having the business community identify (4) business needs and priorities for workforce and workforce training, coaching, placement and skill development programs, and commit to being involved in hiring program participants is critically important. Each initiative needs to investigate the (5) education, training, skill development, coaching and placement current and projected capacity, successful programs and their benchmarks, and projected future needs.

Stakeholder engagement is critically important for successful initiatives. The strongest programs include representation from all of the stakeholder groups on boards and committees, in providing feedback, and in shaping plans. These stakeholder groups include key business sector leaders and business associations; workforce development program leaders; jobseekers; economic development planners and program leaders; government policymakers; educational leaders; funders and investors; business incentive leaders; business facility and relocation planners; and other community or regional leaders.

Systemic approaches with strong linkages is critically needed so that the entire system and its elements are understood, and the parts are seen related to the larger system. Even though our educational system, workforce development, job development, economic development, and governing are different fields, they function interactively, affecting one another. When leaders develop a map of the system, they discover how these different fields interact, and how they can positively or negatively impact workforce development, job creation, and economic development. Mapping the system provides insights into how different policies, goals, strategies, and funding need to be in greater alignment. When this systemic approach is developed and alignment is improved, there can be substantial positive impact leading to better results across all parts of the system.


Each element of economic development can be strengthened if leaders involved in one part of the economic development system connect with leaders in other parts of the system, to work jointly to map the system, and create well-aligned initiatives toward common goals.
Anne Hays Egan, New Ventures Consulting. January, 2018. All Rights Reserved.