In the Chips : State Can Look to Ireland for Ways to Improve Work Force
A couple of huge overseas investments announced recently by Santa Clara, Calif.-based Intel Corp.--and a smaller one by Palo Alto-based Hewlett-Packard Co.--underscore the importance of education in job creation and economic development and could help inspire new directions for California’s vital community college system.
The facts just about speak for themselves. In October, Intel announced $3.1 billion in new chip facilities in Ireland, Israel and Malaysia. Each plant was designated for a task: Israel will make flash memories, Malaysia will make circuit boards, and Ireland, which makes Pentium microprocessors in facilities opened four years ago, will manufacture future generations of Intel’s microprocessors--joining the big plant in Albuquerque as a site for the company’s most advanced products.
Many countries offered tax incentives for the new Intel plants, but the company chose to expand where it already had facilities, citing in Ireland’s case the availability of skilled technical labor.
Thereby hangs a tale, because the roots of that advantage date 25 years to the founding of Ireland’s 11 regional technical colleges, which teach two-year and three-year curricula to train technicians for high-tech industries.
“From day one, these colleges were focused on engineering, science and business and they were linked to the vocational needs of industry. The drive was to keep them relevant to changing technology,” says John Hayden, head of the Higher Education Authority, which handles government funding of Ireland’s colleges and universities.
Far-away Ireland has an echo in Southern California, where state Controller Kathleen Connell is working on new programs--scheduled to be announced in February--for the state’s 107 community colleges. The idea is to focus a number of the colleges on training skilled workers for specific industries.
“This state’s future is in advanced-technology industries, such as biomedical, electronics and software, sophisticated film work, the high-fashion part of textiles and apparel and in finance and foreign trade,” says Connell. “We need to remedy the shortage of skilled labor in these fields and work closely with industry to fill jobs that are already waiting.”
Connell was dismayed three years ago, working as part of the original Rebuild L.A., to hear from prospective employers that they couldn’t find skilled labor in the poor Los Angeles neighborhoods she was trying to help.
At the same time, she could look around the country and see states such as Utah, North and South Carolina and Massachusetts focusing their community colleges on new, more technology-intense industries.
California’s community college tradition is a proud one to be sure. The system offers two-year courses to 1.3 million students annually, roughly half of them in Southern California at schools such as Ventura, West Valley, Pierce, East Los Angeles, Trade-Technical, Harbor, Long Beach City, Mount San Antonio, Fullerton, Orange Coast, Riverside Community and San Bernardino Valley.
However, many of the colleges concentrate on preparing students for four-year universities, and business management courses more than technical subjects dominate student choices. A more industry-specific focus would better prepare students for jobs and thus help California business.
In that respect, tiny Ireland--where total expenditure on education is roughly equal to our community college system’s $2.8-billion annual budget--holds lessons for Southern California, with its many poor newcomers. Less than half a century ago, only 10% of Ireland’s children went on to secondary education. But in the 1960s, its low labor cost advantage vanished as local living standards rose and Asian countries emerged with even cheaper labor.
So Ireland pushed for technical education, concentrating on two-year colleges to prepare students for jobs in high-tech industries. At the same time, Ireland created technical universities to increase the output of computer science and electrical engineering graduates.
The strategy paid off. With an upgraded work force and entry into the European Common Market in the early ‘70s, Ireland became a convenient base for U.S. companies. Most U.S. computer, electronics and software companies have their European base in Ireland. Hewlett-Packard made a new investment this year to manufacture a sophisticated component of ink jet printers.
It’s not rural farm kids Intel and Hewlett-Packard are working with but--again a parallel with urban California--students from a tough area outside Dublin that was for 20 years a notorious slum.
Intel brings the youngsters into its technology-laden plants and shows them the kinds of jobs available in the new world. It also tells them such jobs pay $29,000 to $61,000 a year and that inspires them to study harder.
Such jobs do not come cheap to Ireland, which taxes foreign investors at only a 10% rate on locally generated profits, but imposes a 48% top income tax rate plus 21% value added taxes on its own people.
Such tax incentives and devotion to education are the lot of most countries in the world, from the developed countries of Europe--the Netherlands and Germany were close rivals for the Intel plant--to India, Singapore and the onrushing nations of Asia.
California, meanwhile, is home to many of the companies and industries those countries are trying to attract investment from. Thanks to past investments in education, this state possesses the most enviable technology base in the world and does not have to offer special tax incentives to attract it.
But we must keep our work force skilled and up to date in order to keep modern industry headquartered and thriving here, says controller Connell. And for that California’s assets are community colleges and ambitious youngsters--the tools, when you think about it, from which Ireland fashioned a world-class work force in a single generation.
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Money and Majors
Funding provided to California’s community colleges by the state, including general revenue monies and local property taxes, has risen about $700,000 since the 1989-90 fiscal year. A majority of the 1.3 million students attending 107 state community colleges prefer occupational, vocational and business careers, with computer science the fastest-growing area of specialty. A look at the state’s budget for community colleges and a breakdown of the most popular majors:
State funding, in billions of dollars:
1995-96*: $2.8
Breakdown of top majors
Business / management: 41%
Engineering / technology: 19%
Public affairs: 18%
Computer / information science: 14%
Consumer education / home economics: 8%
* Estimate
Source: Community College League of California
Researched by JENNIFER OLDHAM / Los Angeles Times
