HIGH-TECH HIGH July 6, 1998 The NewsHour with Jim Lehrer Transcript

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Austin's conversion into a high-tech center has forced the city to look within for its future work force. NewsHour correspondent Hedrick Smith reports on Austin's efforts to develop its teen-agers into the city's future skilled workers.

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A RealAudio version of this segment is available. NEWSHOUR LINKS: April 3, 1998 Technology companies compete for students. January 23, 1998 Downsized American workers are training for new high-tech jobs in community colleges. March 27, 1996 American business leaders join the nation's governors in a search for education solutions. December 27, 1995 Is high technology in the classroom an asset, or a liability? Browse the NewsHour's coverage of cyberspace and education. OUTSIDE LINKS: Austin, Texas Chamber of Commerce Visit Hedrick Smith's PBS special on the new economy, Surviving the Bottom Line.

HEDRICK SMITH: Not so long ago Austin, Texas, was known for the University of Texas, the capital of state government, LBJ and his library, and a lively music scene, where it seemed everyone could play a guitar. Life in Austin was pleasant but career opportunities were limited. By the mid 1980's, however, the Chamber of Commerce set an aggressive course towards changing Austin's economy. Chamber President Glenn West helped mount the campaign to use Austin's celebrated university to attract high-tech industry.

GLENN WEST, President, Chamber of Commerce: Today, the companies that are growing in our nation are the companies who are looking for knowledge workers. We have a young, very well educated labor force. And over the last 30 years, and particularly the last 10 years, we've now attracted literally thousands of high-tech companies to the Austin area.

HEDRICK SMITH: The Chamber's major coup was landing two large industry research consortia: MCC in software design in 1983 and Sematech in semiconductor manufacturing in 1988. And right in line with the Chamber's plan, consortia members and a host of other high-tech companies took root in Austin. By 1995, Austin was home to 825 high-tech companies, employing 85,000 people. Even with the economy's ups and downs, Austin's high-tech sector kept growing. And by the mid 1990's, Austin had become one of America's premier centers for leading edge technologies. But lurking beneath the surface of the boom, a vital resource was running dry -- skilled labor.

An Austin story.

Austin's story is America's story. Like many other US cities, Austin, Texas, has spent the past decade or more aggressively recruiting high-tech industry and turning itself into a hub of the information age. Today Austin is a victim of its own success. It has a bevy of billion dollar chip fabs and not enough qualified local workers to operate them. Bob Glover, an academic specialist in human resources, saw Austin's work force problems developing as the city went out recruiting high-tech companies.

HEDRICK SMITH: Was anybody thinking long term about the work force at the industrial take-off?

BOB GLOVER, University of Texas: People were thinking about it and talking about it, and there were numerous meetings to plan for it, but the problem was that nobody was acting to do anything about it and to put curriculum in place and to get students enrolled and recruit them and develop the teaching capabilities to put these competent workers out. So that was what the problem was. Action was the problem.

HEDRICK SMITH: Kirk Ladendorf, business reporter for the Austin American Statesman.

KIRK LADENDORF, Business News Reporter: These companies told us again and again that we're going to far more complex devices; we're building devices with far greater sophistication and complexity, and we're using far more complex equipment; we need people with more skills.

HEDRICK SMITH: Nevertheless, the Chamber kept recruiting more plants. Throughout 1995, it openly pursued Samsung's huge semiconductor fabrication facility and later celebrated Samsung's arrival with a colorful, groundbreaking ceremony.

HEDRICK SMITH: What was the impact here when Samsung announced it was coming and building this enormous new chip fab?

KIRK LADENDORF: One could say it was both a victory for the community, as well as an alarm signal. Motorola specifically expressed a fair amount of unhappiness with the Chamber of Commerce. They complained, they said, you're hurting us; you're bringing in another company to compete for labor; you're going to be driving up our labor costs.

HEDRICK SMITH: David Doolittle, a Motorola Vice President for Human Resources.

DAVID DOOLITTLE, Vice President, Motorola: It was one more semiconductor company in town competing for the exact same people that everybody else is competing for.

HEDRICK SMITH: Maybe one too many for Motorola.

KIRK LADENDORF: In mid 1995, Motorola said we are not going to build another factory in Austin in the foreseeable future; Virginia is where our next factories in the United States will be built.

HEDRICK SMITH: So Samsung was the straw that broke the camel's back?

DAVID DOOLITTLE: I'm not sure they were the straw, but they were a straw.

BOB GLOVER: A local principal told me that this was a wake-up call to all of us to produce workers who are qualified for this industry, or we're going to lose this industry.

HEDRICK SMITH: And so Austin's priorities are changing. The stakes are high. Failure means industry moving out, and not just out of Austin but out of America.

The need to develop a skilled work force.

GLENN WEST: The dominant issue for chambers of commerce all across this country today and the dominant issue in economic development in this country is the ability to deliver to employers a trained work force. If we can do that, there is an economic future for our nation for the next several decades that is unlike anything we've ever seen. If we fail to do that, then these companies have no choice but to go elsewhere to find that labor outside of the boundaries of this country and certainly outside of the boundaries of our individual communities.

HEDRICK SMITH: This crunch has caused recruiters to reach out to a long-neglected resource-teenagers.

CORPORATE RECRUITER: And then we also have the manufacturing plant that's going to be opening in October here in Austin.

CORPORATE RECRUITER: Yes. We started in '89 with eight employees. Now we got close to 3,000 employees. It's got our phone numbers, fax numbers, things of that nature on there.

MAN: Your company has a lot to offer.

HEDRICK SMITH: John Fitzpatrick is point man for a program created by the city and Chamber of Commerce to enlist industry in helping to train local youth for five career paths, including high tech. Fitzpatrick helped to organize this recent job fare for high school students.

JOHN FITZPATRICK, Director, Workforce Development Program: Different industries are starting to realize that they need to get on the ball and start working with a long-term workforce development system. The analogy that I use with employers, Hedrick, is that there's a reason the Los Angeles Dodgers have been successful for 50 years; it's because they invest time and money in their farm system. And if you as an employer want to be successful in the future, you'd better start working with high school students and community college students now.

MARGIE McKENZIE, Senior Recruiter, AMD: Our summer intern program is that you have to take Principles of Technology at the high school.

HEDRICK SMITH: We found Margie McKenzie, the head recruiter for manufacturing at AMD, working the job fare alongside many of her industry rivals.

MARGIE McKENZIE: The competition is tough. Everyone is looking for the same talent: Applied, Motorola, Tokyo Electronics. All these companies are looking for exactly the same thing.

HEDRICK SMITH: Now, I understand you do a lot of hiring out of state. Where do you go to get your workers when you can't get 'em locally?

MARGIE McKENZIE: We just recently came back from Albuquerque, New Mexico. We go to Norfolk, Virginia. We go to Indianapolis. We go to-we go all over.

HEDRICK SMITH: What's wrong with handling people from out of state? Why can't you just keep meeting the needs from out of state?

MARGIE McKENZIE: We've done that, but the talent doesn't stay. They leave. They eventually leave, because they're either homesick or they find jobs that they want to go closer to home.

HEDRICK SMITH: How long do they stay typically, a year, two years?

MARGIE McKENZIE: A year, we're lucky to get a year.

HEDRICK SMITH: That rapid turnover, plus the cost of bringing in workers from out of state is the reason why companies are now focusing on growing their own labor force here in Austin.

JOHN FITZPATRICK: There's still a lot of work to be done in Austin and everywhere else nationwide to get employers to understand the necessity to them, their self-interest in working with high school kids.

HEDRICK SMITH: Are high school kids generally getting the message that high-tech is a great way to go?

JOHN FITZPATRICK: There's still a lot of problems with students concerned about being successful in the high-tech field. When we're trying to recruit students for these hard classes, the first question they ask us: Is it required for graduation? You say, no. The second question they ask us: Is it hard? And we say, yes. The third question is: Why should I take it?

HEDRICK SMITH: Here in Johnston High School, these students are taking a pilot course called Principles of Technology. The project, one of several supported by local industry, the school system, and the Chamber of Commerce, is designed to introduce students to high-tech careers. A 19-year veteran of the Austin public schools, Physics teacher Frank Holder works at one of the delicate junctures of the workforce pipeline.

FRANK HOLDER, Physics Teacher: I guess the best way to describe it is that we're playing catch up; we're trying to get-we're trying to catch up with industry. We're trying to catch the kids up, and allow them to see-kind of peer over, kind of on tiptoe, and see the possibilities.

FEMALE STUDENT: Next year, I'm trying to get into an engineering internship in the school where I'm with an engineer to see what they actually do and to see if that's really what I want.

FRANK HOLDER: And that's what we're trying to nurture. That's what we're trying to cultivate. When you talk about going to work in the semiconductor industry, even though we've got one just three miles down the road here. We may as well be talking about going to the moon.

DARYL GRIFFIN, Student: No one in my family works in this field, so I have no way of knowing really what they do. You know, I don't know if they just riding the clock, or they're actually doing hard work, or brain busters or what. I mean, I really don't know what they do, so that's why it's intimidating.

FRANK HOLDER: It is a lunar landscape almost for these kids to think about working in that industry. It's foreign to them, but a lot of that is internal. A lot of the obstacles that they face are internal. They don't either believe that they have what it takes to be successful or just don't have the confidence. And that's what we're here to try to do.

ANALICIA ESTRADA, Student: Well, Mr. Holder came and talked to my Biology class last year. And I thought it would be interesting to find out about electronics and all that, but I'm not really too interested in it.

HEDRICK SMITH: You're not too interested in it?

ANALICIA ESTRADA: I think it has a lot to do with math and science, and I hate math.

HEDRICK SMITH: You hate math?

ANALICIA ESTRADA: Hate it.

HEDRICK SMITH: I mean, with a passion?

ANALICIA ESTRADA: Yes.

Trying to convince the teen-agers.

FRANK HOLDER: The job is convincing them that they're able to do that. The actual work, sure, it may be a little-it's a challenge, but they can do it, they can handle it--with a little coaching and a little help, a little nurturing. And that's why we're here. That's why they pay us the big bucks, to do that.

HEDRICK SMITH: Three years into the program there's still quite a ways to go. Industry would like to see 2000 students in the Austin area taking high school technology courses, but enrollment is only 200. Holder explains why most teenagers are hesitant.

FRANK HOLDER: I think we've got a lot of kids that are waiting for somebody to be successful, to get completely through the pipeline, and to land a good job, and that will kind of say to the rest of the group, the water is safe, come on in, you know, it's fine; you can do this. I can do this; you can do this.

GLENN WEST: Well, the good news for us is that we have identified and have in place a series of programs that can help us solve this problem over the long-term. What we have to do now is get those programs, ramp those programs up to scale. And that's a challenge for us, because it's not cheap to put these kind of programs in place, and yet, that investment ultimately will determine what the economic future of a community can be.

HEDRICK SMITH: Austin has learned what other parts of America are discovering painfully. A community must work as long and hard at developing a highly skilled workforce as it does at attracting new industry. The two go hand in hand and you can't count on the marketplace to solve the workforce problems for you. Getting enough high school students educated for information-age careers takes a monumental extra effort. Over the next five years John Fitzpatrick puts the cost to Austin at about $5 million-a steep price for falling behind the curve and having to play catch-up to the new economy.

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