Kentucky's economic success depends on the quality and variety of its human capital and the jobs that take advantage of those skills. There can be no 21st Century economy without a well-educated and skilled workforce.

Yet today poor educational status, low wages and high poverty rates are holding our economy back. Kentucky ranks at the bottom of all states in the percentage of adults with a four-year college degree or more. In per capital income, Kentuckians lag behind their counterparts in other states, earning about $6,000 less than the national average. Nearly 18 percent of Kentuckians live below the poverty level, and many of them are children. And Kentucky ranks 45th overall in the latest New Economy Index, which measures the extent to which states are prepared to compete regionally as well as globally in the 21st Century.

WE CAN DO BETTER. There are several steps we can take to improve our economic outlook, and those steps begin with investments in our people and putting Kentuckians first. All it takes is leadership and a little bit of business sense.

KENTUCKY'S WORKERS COME FIRST

Kentucky's Council on Postsecondary Education reports that within 10-15 years, nearly two-thirds of all jobs will require some post-secondary education. The Council estimates that 32 percent of the nation's workers will need at least a bachelor's degree. For Kentucky, this means that we will need to increase the number of four-year college degree holders by 200,000 or more simply to keep pace with changing knowledge and skill demands that will be required by employers.

Besides creating more and better jobs, improving the educational status and skill level of our workforce will result in higher wages that could lift Kentucky out of the bottom five states in median family income.

Kentucky needs a leader who puts the needs of Kentuckians first - a commitment that I will bring to the Governor's Office.

In my Kentucky First plan, I outlined a number of industries that build on our economic strengths and provide us the greatest potential for growth such as: energy, manufacturing, agriculture, adventure tourism, shipping and distribution, as well as data warehousing. I have recommended ways to invest in Kentucky business to create more jobs and improve our economy. Now I want to discuss another component of creating more jobs: investing in human capital.

My plan for putting Kentucky Workers First will:

• Focus workforce development on industries that represent our future

• Increase education and training opportunities

• Modernize our approach to developing a skilled workforce

Each of these areas is discussed further below.

FOCUS WORKFORCE DEVELOPMENT ON INDUSTRIES THAT REPRESENT OUR FUTURE

Kentucky not only must invest in Kentucky businesses and industries, we also must invest in human capital to support the industries that will be the source of Kentucky's future economic prosperity.

As Governor, I will:

• Match Training Programs to Industry Needs. Kentucky has increased the variety of programs that are available through the Kentucky Community and Technical College System (KCTCS); however, some programs still do not match the training needed to successfully transition unemployed Kentuckians to employment. For instance, manufacturing equipment and machinery used to train students and adult learners in academic settings are sometimes out-dated, which means they will need to be retrained by the industry upon employment. Moreover, KCTCS reported that in 2005 it served about 2,700 businesses in Kentucky. Although the number of businesses served by KCTCS has increased from 1,850 in 2004, it still is not reaching the majority of Kentucky's businesses. We can do better. As Governor, I will reach out to industry and education providers in all of Kentucky's diverse regions and request their combined assistance to design courses and curricula that reflect the skills and requirements of our businesses in today's economy. In addition, I will require that each program be evaluated regularly to quickly identify where adjustments need to be made to keep our programs up-to-date. With an ever-changing world we must invest in programs that ensure increased employability of our workforce.

• Work with the Kentucky Community and Technical College System (KCTCS) to Fill Job Training Needs. Community and technical colleges can encourage young and old workers alike to pursue education beyond high school and can custom-train and retrain workers in the specific skills that a business needs - at little or no cost to the business. Other states, like North Carolina, have instituted programs to better equip their community colleges to train their workforces - one North Carolina county quickly saw its non-agricultural employment double and per-capita income increase by five times as a result of such programs. For example, one community college in North Carolina worked with local hospitals and health care providers to anticipate their future manpower needs, and then worked with them to develop cutting-edge training programs to fill those needs, and thus greatly reduced the shortage. As Governor, I will implement similar successful strategies for KCTCS to fulfill our workforce training needs of the future.

• Expand the Number of Industry Partnerships, whereby businesses can collectively identify workforce education and training needs, collaborate on building career pathways for industry employees and developing credentials recognized across the industry, and share training and other costs associated with increasing workforce competitiveness. Partnerships also provide an opportunity to make better use of resources and can foster the creation of peer-learning networks across businesses to increase depth of knowledge and spur innovation. For example, to align training programs to businesses, needs and to encourage more industry partnerships to form, Governor Ed Rendell of Pennsylvania set up an Industry Partnership Worker Training Program Fund. The fund will be used to distribute training grants to newly formed industry partnerships to conduct training programs. As Governor, I will bring together businesses with similar workforce training needs across the state to form partnerships like these.

• Promote Greater Use of Regional Small Business Training Alliances. Many new businesses in high-tech and other emerging industries are small businesses. The economics of these small businesses do not permit them to conduct their own training programs. Yet a consortium of small businesses in similar industry sectors could jointly apply for training grants to fund industry specific training. That is why I will create Regional Skills Alliances (RSAs) as Governor, to make it easier for small businesses from similar industries to train workers on new equipment, and gather and share critical information about markets and technology. Michigan has established 13 RSAs throughout the state that are comprised of local business partners and workforce training providers that use federal Trade Adjustment Act funds and federal Workforce Investment Act funds to develop customized training programs. It's a model that we should consider replicating here.

State government, working in partnership with industries and businesses, can offer integrated workforce training programs to retool Kentucky workers and equip our children with the skills to compete in the future.

INCREASE EDUCATION AND TRAINING OPPORTUNITIES

Kentucky must connect young people and current workers to new and better-paying jobs and ensure that every Kentuckian has access to higher education and training programs they need to achieve their full potential and compete in the new global economy. In the coming weeks, I will unveil a higher education plan detailing my proposals to increase the number of college educated Kentuckians. Yet educating more Kentuckians is just one aspect to strengthening Kentucky's workforce, and there are other steps Kentucky could take to fix the "leaks" in every section of the education pipeline from early education through career training.

As Governor, I will:

• Strengthen the Career Readiness Certificate Program. Kentucky has created a nationally-recognized career readiness certificate, the Kentucky Employability Certificate (KEC), which confirms to employers that an individual possesses basic skills in reading, math and finding information - skills that all jobs require. We need to build on and go beyond the existing KEC program with a "KEC-Plus," providing assessments in more skill areas, on-site support where people work, eligibility for fast track training opportunities to develop specialized skills, benefits for businesses when they hire a KEC-Plus certified worker, and free job profiling for any company that pledges to interview KEC Plus job seekers for open positions to determine skills match. As Governor, I will work to strengthen and enhance our career readiness certificate program.

• Do a Better Job of Marketing Our Higher Education Opportunities, at Home and across America. It's often the case that after spending years in a city attending college or graduate school, a student will stay there. Kentucky has terrific higher educational opportunities - two flagship state universities and excellent regional universities, nationally-recognized private universities and a fine community and technical college system. The Kentucky Council on Post-Secondary Education and the KCTCS should spearhead an all-out effort to market the state's higher education system to the college-age public. For Kentuckians, it will help encourage bright, home-grown talent to stay here, while those from out of state may stay and contribute to the state's future. Given the great place Kentucky is, a student for 4 or 6 or 8 years just may become a Kentuckian for life.

MODERNIZE OUR APPROACH TO DEVELOPING A SKILLED WORKFORCE

Kentucky must have a modernized workforce delivery system that is able to provide the knowledge and skills that our workforce will need to respond to changing economic conditions. In order to meet these new demands, Kentucky needs a coherent and coordinated workforce delivery system that is results-oriented, effective and accessible.

As Governor, I will:

• Create a Coordinated Workforce Delivery System. Ever-changing economic conditions and changes in funding and personnel present ongoing opportunities to rethink the way the state delivers workforce training programs and services. We must be ever-vigilant to reduce fragmentation and eliminate duplication. Several state agencies, boards and councils currently have a role in economic and workforce development, such as the Cabinet for Workforce Development, Cabinet for Economic Development, the Bluegrass State Skills Corporation, Kentucky Workforce Investment Board, Adult Education Centers, the Kentucky Council on Postsecondary Education, and likely others, which leads to confusion and creates complication. As Governor, I will integrate our workforce delivery system into the statewide education and economic development strategies that I have laid out to grow our economy. Doing so will establish a flexible, efficient, performance-focused workforce delivery system that is more responsive to current and future labor market changes and will maximize Kentucky's effort to provide employers a robust pool of knowledgeable and highly-skilled workers from which to draw.

• Ensure Kentucky Receives All of the Federal Money to which It Is Entitled. The federal Workforce Investment Act (WIA) established a national workforce preparation and employment system to be carried out by states. As part of this act, states receive federal WIA funds intended to be used to provide customized workforce training programs. According to a Government Accountability Office report, Workforce Investment Act, States, Spending Is on Track, but Better Guidance Would Improve Financial Reporting, several states, including Kentucky, failed to spend all of their 2000 federal dollars. For 2000, Kentucky spent only 91 percent of its federal allocation and fell below expenditure rates based on labor benchmarks and projections established by the federal government to guide states in managing their spending. Kentucky also continued to fall below target expenditure rates in 2001 and 2002. Even more recently, Kentucky continues to carry a significant fund balance, and in 2006 its rate of spending fell below the national average. We cannot allow money to go unspent, especially given that Kentucky has lost more than 26,000 manufacturing jobs in the past five years. That's money that could have gone to provide life-changing training to thousands of Kentuckians. Yet state government couldn't get its act together sufficiently to find a reason to spend those funds. As Governor, I will make sure that we are making use of every possible WIA dollar due to us. We must develop better tracking data to actively monitor training commitments and WIA spending balances. Having more timely and more accurate tracking data will guarantee that all of our job-training funds are spent - and spent wisely.

• Improve Customer Satisfaction. Companies have been using customer satisfaction surveys as a matter of course for decades. Several states now are using customer satisfaction surveys to collect feedback from their customers - employers, workers and jobs seekers - to measure their satisfaction and improve their workforce delivery system. As Governor, I will integrate the use of customer satisfaction surveys into the process of modernizing the workforce delivery system, so that state government and service providers are not left guessing whether Kentucky's employers, workers and job seekers are satisfied with the workforce services provided by the state. With this information, state workforce and education agencies can improve.

CONCLUSION

Kentucky needs a leader with the experience and authority to build a strong workforce that meets the needs of industries and businesses, and to grow a 21st Century economy that creates more good-paying jobs. This will require putting aside partisan politics to do what is right for Kentucky in order to get the job done. The next administration will need to have the experience to bring our workforce and businesses together, because we cannot succeed unless we are all pulling in the same direction. All it takes is some Leadership and a little business sense.