On Thursday, March 29, Northrop Grumman Chairman, Chief Executive Officer and President Wes Bush addressed the Commission on the Future of Undergraduate Education. Below are his remarks.
In addition to my participation with this commission, I also chair the Education and Workforce Committee of the Business Roundtable, and serve on the Board of the Business-Higher Education Forum. I’m delighted to be on this panel with Dane and Brian. I admire the work IBM is doing, and I’m also looking forward to Stan’s remarks.
Together, the member companies of the BRT represent about $6 trillion in annual revenues and represent about a quarter of the market capitalization of the US stock market.
Its companies reflect the industrial and market diversity of our economy as a whole. Without doubt, the BRT understands the business community.
One of the BRT’s greatest concerns is with a growing gap in workforce skills to match the dynamic technological growth that underpins our economy. Raising those skills and closing the skills gap are tremendous issues for the business community.
Being able to find workers with the skills we need, today and in the future, is key to the prosperity of our companies and of our nation’s economy.
There is a direct relationship between this skills gap and the growth of our nation’s GDP.
The role of the BRT’s Education and Workforce Committee is to find solutions to workforce issues that affect businesses across our nation.
So we brought together the chief HR officers from a subset of the Business Roundtable companies to build a survey that we put out to the membership.
The objective of the survey was to take the pulse of these companies on the issues of talent – both in terms of demand and supply. We got a great response.
We learned that only 5% of the companies in this survey said they have no problem when it comes to skills. Or put in more drastic terms, 95% of the companies DO have a problem when it comes to skills.
For those respondents, the survey data highlighted skills gaps in four categories:
The fundamental skills of math, reading and writing;
More general applied skills (critical thinking, goal perspective, cognitive flexibility);
STEM skills, and;
Workplace skills, such as communications, business acumen, and leadership.
In the area of fundamental skills, more than 58% of responding companies reported having some degree of difficulty finding qualified applicants with adequate math skills. The feedback was framed a lot more broadly, as the emerging issue is really around quantitative literacy, which I think Brian will touch on in his remarks.
Finding talent with general applied skills also is problematic for most companies. The most difficult challenge is in the category of critical thinking and problem solving:
84% of companies reported some degree of difficulty;
79% reported challenges with innovation and creativity;
And 74% reported challenges with cognitive flexibility.
The next key finding was no surprise: STEM skills in particular are in short supply:
More than 80% of respondents reported challenges in the areas of data science, cybersecurity, and engineering;
And more than 75% reported issues in advanced mathematics and computer science.
In the category of workplace skills, more than 75% of companies reported challenges in the areas of leadership and business acumen.
Collectively, we are all making extensive investments in talent to remedy these gaps.
Responding companies, on average, invest about $80 million per year on employee learning;
And 54% of these companies forecast that this investment requirement will continue to increase.
This survey brought together companies across sectors – manufacturing, retail, financial, pharma, energy – you name it. The results attest to just how universal these skills gaps are.
Implied in this data is an enormous opportunity for undergraduate education to dramatically improve the employability of new graduates.
And clearly, there’s a great opportunity for enhanced corporate engagement with higher education.
And that opportunity is what drives the partnership between the Business Roundtable and the Business-Higher Education Forum, to look at how we can be more effective in communicating these workforce needs to academia.
In collaboration, these two organizations took these survey results to the heads of the various higher education associations.
We asked for feedback and perspectives on opportunities for business and higher education to work together.
The enthusiasm in that discussion was exceptionally high. It is clear to all parties that the business community cannot solve the problem alone. Nor can higher education.
Both sides of this coin have an obligation to engage because unless action is taken, this problem will only get worse.
This is why partnerships are so important.
In all, this survey and these opportunities validate the partnership strategy BHEF has been pursuing for a number of years: align higher education partnerships to current and future hiring needs. That strategy:
aligns higher education partnerships to future hiring needs;
and utilizes a broad network of partners, which cut across states and regions and focus on a company’s strategic needs.
Our hope is that reports like this one will help set the stage for how business engages with the higher education community moving forward.
An effective partnership between business and academia will be symbiotic in the best sense of the word. And most importantly, it will benefit students and the nation as a whole.
Let me be clear: The business community is not looking to academia for better training programs. America’s higher education system is the best in the world, and we want graduates with a real education.
As we say in the Commission’s draft report – too often people try to put liberal education and career education in two different boxes.
What the business community is looking for are graduates who are ready to respond to the needs of their new employers upon graduation; new graduates more aligned with the needs of the workforce in which they seek employment – more ready on the day of graduation with; Better critical thinking skills; Problem-solving abilities;
And skills more targeted to the needs of the industries they target for employment;
And also with the broad education needed to continue to adapt and engage in our rapidly changing world.
The business community also wants to ensure that community colleges are included in these partnerships. They are critically important to any skills gap solution;
They provide the education necessary for the excellent jobs available that require two years of college;
And they provide a pathway to 4-year institutions.
Brian Fitzgerald, in his remarks, will give some more insight into how these partnerships can work.
I will simply note that the partnerships in which Northrop Grumman has participated have been very successful for us.
The business community and our national academic leadership need to step up and aggressively engage on this issue. We need to make it clear that if we’re going to grow our economy, we need to address these workforce issues together.
Even if we successfully address many of the other issues holding back GDP growth, we would still be held back by our workforce challenges.
Neither the business community nor academia can do it alone. Partnerships between both our communities offer the only path to a solution.
The business community looks forward to expanding this partnership. And we’re energized by the growing relationship with our nation’s academic leadership.