President H. Martin Lancaster
North Carolina Community College System
1999 Southeast US – Japan Conference
Tokyo, Japan
October 4, 1999
Governor Hunt, Mr. Matsushita, Mr. Hashimoto, colleagues from the Southeastern United States, dear friends and hosts from Japan – what a sincere pleasure it is to be in Tokyo today to participate in the 1999 SEUS Conference. I am honored and truly humbled to speak with you today about education and training – an issue that has such great priority here in Japan and among our Southeastern states.
In 1920, Alfred Marshall wrote a seminal book where he addressed the topic of what is required for the creation of a " great industrial people." In the book, he argued that the creation of a great industrial people requires close coordination between formal education and workplace training, and he put forth a definition of a productive worker, one that rings as true today as it did in 1920, when he said:
"To be able to bear in mind many things at a time, to have everything ready when wanted, to act promptly and show resource when anything goes wrong, to accommodate oneself quickly to changes in detail of the work done, to be steady and trustworthy, to have always a reserve of force which will come out in an emergency, these are the qualities which make a great industrial people. "
In 1920, North Carolina and the vast majority of the Southeast were predominantly poor, agricultural, rural states -- severely trailing the rest of the United States in industrial production and economic wealth. Similarly, Japan was no where recognized as it is today as an industrial leader. In fact, silk was the leading Japanese export in 1920.
But look at us today. Japan is clearly recognized as an international industrial leader, and would surely be a model for Marshall’s vision of a "great industrial people." Similarly, if one were to examine the landscape of the United States today, they would see that the industrial vibrancy of our nation is located in the very states represented at this conference, a dramatic shift from 1920.
Why have we both been able to achieve this role as "great industrial peoples," -- the people of Japan and the people of the Southeastern United States? I believe that it is because of the remarkable similarity of our circumstances, our values, and our priorities, in spite of our great separation in miles and differences in culture and history.
First, we are both people who have been tempered by adversity, who have seen our economies ravaged by war – for Japan the effects of World War II and for the Southeastern United States, the effects of the American Civil War. As a result, we are a people who have been by necessity, determined in spirit, strategic in thought, and innovative and creative to make what today are model economies that emerged in places with few inherent resources or advantages existed.
Secondly, we are both a people whose values and priorities have been shaped by our agricultural roots. Many credit the Japanese rice farming villages which once dotted the landscape of this great country, with instilling the spirit of community and hard work in the Japanese people which is so recognized today. Similarly, our roots in the Southeastern U.S. are in agriculture, and we too know the values of hard work, cooperation, and community.
Governor Hunt and I both grew up on North Carolina tobacco farms, and the long summer days spent in the hot sun working in tobacco fields, side-by-side with our neighbors, taught us several important lessons, identical to those learned in Japanese farming villages: hard work, cooperation, community. They are values and a work ethic that are evident in North Carolina today, where neighbors are working 16 hour days, side-by-side, to help one another to recover from the disastrous floods of Hurricane Floyd which devastated our state last month. And it is this spirit and work ethic, which is displayed by workers in our manufacturing plants in North Carolina, and across the Southeast, that have made our area such a ripe location for investment.
These roots of hard, back breaking work in the agricultural fields caused our parents, and people of our generation – both in the U.S. and Japan – to have a burning desire to strive for something better, and to look for ways to not just use the sweat of our brows to improve our standing, but also to use the creativity of our minds. And because of our similar roots, we are both a people who have not been ashamed to learn from others and to seek out opportunities, as this conference represents today -- to discover ideas from our friends that can improve our own lives.
Just as Japanese industrial leaders learned from American innovators, such as W. Edwards Deming, we have been the benefactors of your incredible industrial innovations which we have seen in your manufacturing plants located in both Japan and the United States.
In 1990, the Massachusetts Institute of Technology – MIT – studied the productivity differences between Japanese automobile companies and American auto companies. The study clearly indicated that on average, Japanese auto plants ranked highest in terms of both quality and productivity, followed by Japanese transplants located in the U.S. (predominantly in the Southeast), followed by the American domestic car plants. As if we needed it, this study provided clear proof to American industrial leaders, not only in the automobile industry, that there are important lessons to be learned from Japan.
And the study also indicated that one of these lessons is the importance of job training. Japanese automobile workers, those that were the most productive and produced the highest quality, received on average 380 hours of training, workers at Japanese transplant companies received 370 hours of training, while workers at domestic US-owned plants averaged only 46 hours of training.
In the Southeastern U.S., while we did not have the head start of other regions in terms of education, we have in recent years led the way in terms of education investments and innovations. And our focus has not only been on education in the classroom, but also job training in the workplace. Thus, as Marshall suggested in 1920, we have strived to closely link formal education opportunities with workplace training.
Why are we doing this? In North Carolina, a main reason is that our Governor, Jim Hunt – the senior U.S. Governor in terms of tenure and a recognized national leader in education -- has instilled in all of us the belief that "education is economic development." He does so because his predecessors, pioneers such as the late Governor Terry Sanford, also preached the value of education and job training for growing North Carolina’s economy, and turning us into as Alfred Marshall would say, "a great industrial people."
This emphasis starts in the formative years, in preparing children to be ready to learn even before they start school, where Governor Hunt pioneered the nationally recognized program, SmartStart. And it continues throughout the education process. We are proud in North Carolina that the 1998 report by the National Education Goals Panel identified North Carolina as the state showing the most significant improvement during the 1990s. And no state has made greater strides than North Carolina under Governor Hunt’s leadership to increase teacher pay and enhance school accountability.
But like all our Southeastern neighbors, we believe strongly that not only is it important to educate our children, but it is equally important to provide continuous training opportunities to our workforce. In North Carolina, we pioneered customized industry training in the United States in 1958. Each year, one in six North Carolina adults participates in a program at one of the 59 institutions of the North Carolina Community College System, the third largest community college system in the nation. We are very proud that we have been ranked as the number one worker training program in the United States for the past two years, and that we received the 1999 National Innovation Award for Education presented by the Education Commission of the States, on nomination of Governor Paul Patton of Kentucky. Over the years, we have cherished and learned from our many training partnerships with Japanese companies, which in recent years have included such companies as Sumitomo, Konica, ASMO, Asahi, Dai Nippon, Yutaka, Toyo Seal, Eisai Pharmatechnology, and Carolina Systems Technology. And Mr. Matsushita, we have particularly enjoyed our relationship with your company, and the opportunity to support training for approximately 500 North Carolinians who received good job opportunities through at your facility in Mooresville.
In North Carolina, however, we are not alone in our focus on training. A recent article on global training in the magazine, Plants, Sites, and Parks, noted that the strongest training programs in the United States are located in the Southeastern states, and include such noted programs as Alabama’s Industrial Training, Georgia’s QuickStart, South Carolina’s Special Schools, the Tennessee Industrial Training Services and the Virginia Workforce Services.
And just as Southeastern states emphasize workforce training as a key to prosperity, Japanese companies have been internationally recognized for the value they place on worker training, even in the face of the recent Japanese recession.
"Japan is struggling to recover from a lengthy economic recession. However, most indications are that the extraordinary Japanese commitment to incumbent worker training is largely unshaken and remains superior to practices elsewhere. Japanese companies have reduced their training and development spending during the recession and shifted the way that money is spent, but those changes appear to be minor."
When examining the current international workforce training scene, both Japan and the Southeastern United States clearly stand at the forefront. And just as we have done for so many years, there are clear lessons we can learn from each other – by better understanding the differences in our systems, and sharing innovations with one another.
Recently, the American Society of Training and Development conducted an international study of firm training practices that included companies in the United States, Japan, and Europe. To the researchers initial surprise, they found that Japanese companies spent significantly less than American and European companies on workforce training, and they also reported smaller percentages of employees receiving company-sponsored training during the year. Knowing the reputation of Japanese investment in training, the researchers were shocked by their findings. However, when they looked at their survey questions more carefully, and the comparison of responses, they realized that their survey had systematically underrepresented Japanese training in a way that was very revealing about the differences in our training systems.
In the United States, much of the job training that employees receive is formal, structured class-room or laboratory-based training, much of it offered by public institutions such as community colleges in addition to that provided by employers. Workers in the United States often pursue structured training opportunities because there is a much higher frequency of job and career changes. Likewise, American companies may be more inclined to provide or support short bursts of formal training, but unlike Japanese companies, are not as inclined to support more "holistic" worker development opportunities over an extended period of time.
In Japan, where companies have been more inclined toward lifetime or at least more long-term employment relationships, the researchers found that employee learning occurs in three primary ways: off-the job formal learning, on-the-job formal learning – sometimes called structured OJT – and on-the-job informal learning. Thus, the researchers concluded that while the average Japanese companies do not provide as many opportunities as American companies for formal off-the-job learning, they do provide more on-the-job and informal training opportunities that is entrusted to individual departments or divisions, or occur at small scale group meetings.
These differences, noted in the study, provide some powerful lessons to the American workforce training system -- lessons that many of us have previously recognized through our work and partnerships with Japanese companies. Specifically, the report suggests to Americans that they should give greater importance to on-the-job and informal training opportunities.
Like many of our Southeastern state colleagues, we in North Carolina have attempted to pay particular attention to these important lessons, and proactively implement training designs to capitalize on them. For example, we recently developed a new training program for managers and other potential company instructors that provides best practices in developing structured on-the-job training programs. And through our customized training and development program for new and expanding industries, we are able to support company-provided on-the-job training for new hires.
In addition, we have been one of the state sponsors of a major national study of informal learning in the workplace. It should come as no surprise to our Japanese colleagues that much of what people learn about their jobs – as much as 70% -- occurs in informal contexts. To assist North Carolina companies benefit from this untapped resource, we are working with the German company, Siemens, which has a major presence in our state to develop training opportunities to assist companies benefit from the source of informal learning opportunities.
While we can clearly learn from the Japanese best practices, I also believe that there are areas where Japanese companies will need to learn from us, particularly due to recent changes in the Japanese economy and labor market. While Japanese employers may not see the type of labor mobility we see in the American economy -- where it is not unlikely for workers to change their employers at least 8 times during their careers -- you are certainly seeing changes in the Japanese economy where lifetime employment with a single company is no longer the norm.
Thus, here in Japan, you may need to examine the roles of public institutions offering training and continuous learning opportunities to the more highly mobile Japanese workforce. I believe that one of the reasons that American companies may depend more on public training institutions – specifically community and/or technical colleges --- and give less emphasis than Japanese companies to holistic employee development, is due to the difference in labor mobility between the two countries. Thus, there is more emphasis on workforce development from an overall community or state perspective in the United States, and potentially less on a company-specific perspective.
As Japan evolves into a more mobile labor market, more emphasis may be given in Japan to American-style community colleges, which play such a vital role in most of the Southeastern states represented at this conference. We are very proud to support almost 800,000 adult learners each year, to acquire new skills or enhance existing skills, through the 59 institutions of the North Carolina Community College System.. And indeed, much recent recognition has been given to the role of community colleges in supporting the economic vitality of our Southeastern region, as well as other regions of our nation.
In a recent best-selling American book, Prosperity, two Wall Street Journal reporters, Bob Davis and David Wessel, suggest that community colleges hold the key to middle class prosperity in what they predict will be a coming 20-year boom for the American economy.
"Community Colleges are doing what other educational institutions aren’t doing: preparing people, often those with mediocre basic schooling, to get well-paying, middle class jobs," they write: "The proof is in the paycheck. In 1996, the typical (American) man who had a community college degree and was working full-time earned $35,201--nearly 20% more than a worker who didn’t go beyond high school."
A second workforce development area where Japanese companies and policymakers may pay additional attention, is the role of technology in training and what we call "distance learning." Clearly, the emergence of computers has revolutionized our American economy over the past decade. And we will see even more economic revolution in ways much beyond the Internet -- in ways most people don’t even realize -- with the emergence of designer material compounds which will have a significant impact on almost all areas of manufacturing, and the emerging role of bioinformatics and the human genome project which will open up new worlds of drug treatments. How will we train workers for these revolutionary new jobs?
Certainly, in America, we are seeing these changes in training and workforce development as well, as startling new applications are continuously introduced that offer opportunities for extremely high-quality technology delivered training. In North Carolina, these technologies, including the Internet, have opened up exciting new opportunities to provide quality training, with expert instructors, in even the most remote areas of our state.
The American Society for Training and Development study that I referenced earlier, however, suggests that Japanese companies are slower than Americans in capitalizing on the opportunities of technology-based training. The study indicated that only 1 percent of employee training in Japan is delivered via learning technologies, compared to 10 percent in other regions of the world. This is a particular training area where Japanese managers and policy makers may want to give greater attention.
In summary, in spite of our differences in training systems and training practices, and in spite of our distinct differences in history and culture, it is clear through our interactions at this conference, and our daily friendships and partnerships, that Japanese people, and the people of the Southeastern United States, share a remarkable kinship. A kinship based on our remarkably similar values.
These values have caused both of us to uniquely understand the importance of education and training, not only for our children, but for all of us as we strive to promote lifelong learning to create better citizens, better workers, better companies, and as a result, a better standard of living for all of us.
Lester Thurow, the famous American economist, captures it well in his current book, Creating Wealth, when he states: "In the end it is this system of public education that lies behind the continuous improvement in standards of living and the ever-rising levels of wealth that we now take for granted."
May we as leaders of our two countries never take for granted the economic hardships we have overcome, and the role that education and training have played in that progress. And may we never take for granted our friendship and partnership, and the important lessons and innovations we can share with one another as we strive to make better lives for our people.
Thank you.
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