When Gina Raimondo took the helm of the U.S. Department of Commerce four years ago, she was adamant that economic development had to be married to workforce development. Those close to her say it was a conviction borne of her six years as Governor of Rhode Island—where her administration invested heavily in business-led workforce training as part of a plan to turn around the state’s economy.

Raimondo had a White House eager to place big economic bets, and a Congress that was ultimately willing to pour billions into helping the country recover from the pandemic. The administration also met with broad bipartisan support for shoring up national security and getting a leg up on China by bringing industries like semiconductor manufacturing back to the United States.

The Big Idea: Commerce found itself with billions to experiment with. And the department has gone on to not only reimagine industrial policy in the United States but to invest in working Americans on an unprecedented scale—making $2.9B in workforce investments over the past four years, compared to a roughly $3.3B annual budget for the core federal workforce system. From the beginning, the idea was not just to invest in critical industries but also in specific places that could develop world-class expertise—and workforces—if given the right incentives and support. 

The approach made economic growth synonymous with “good jobs” beyond the superstar cities. That theme has been so dominant in this Commerce Department, in fact, that it’s almost easy to forget what a departure it was from the norm. For decades, economic and workforce development have been not just separate efforts, but two completely different cultures.

“It’s been a sea change,” says Mark Muro, a senior fellow at Brookings Metro who has both advised and tracked the department’s efforts. “These aren’t just the biggest investments we’ve made in economic development in a long time, in many ways these are also the biggest workforce development efforts.”

The $70B for economic development has flowed through a host of different programs (as outlined in the latest fact sheets on regional competitiveness and CHIPS), including: 

The programs each have unique goals—from bolstering national security to renewing forgotten communities—but each pulls from the same master playbook of placing big bets on projects that were place-based, home-team designed, and focused on economic mobility along with growth. And, as one longtime Commerce official told us, any one of these programs would have been transformative. The department did multiple of them.

Together, they changed not only the way the federal government does economic and workforce development—but how the country thinks about it. It pushed a collective acknowledgement that you can’t have economic development without skilled workers, nor can you have economic mobility without meeting business needs.

“That isn’t just chasing individual firms but is trying to build vitality in places,” Muro says. “That genie won’t go back into the bottle.”

Big (Enough) Down Payment?

The bets are big. The idea, says Scott Andes, an early leader in the department, was to condense 20-30 years of development into a sprint: “What if we do a generation worth of economic development in five years by making a big down payment?”

For decades, the average size of grants coming out of the Economic Development Administration had been about $2M, Andes says. The minimum award in the BBB Regional Challenge, which he ran, was $25M. Grants in the Good Jobs Challenge and for Tech Hubs were similarly large. 

“We changed the size of what good looks like,” Andes says.

Muro, who was one of the original proponents of Tech Hubs, would have liked to have seen the investments be larger still and perhaps more concentrated. Politics, he says, played a role in spreading the money wider than might have been ideal.

“The big grants weren’t big enough in my view,” he says. “And there weren’t enough of the small programs for the widespread distress we see in smaller cities, let alone rural America.”

Muro also worries about a lack of follow-on funding from Congress. Many of the funds authorized by the CHIPS and Science Act, for example, haven’t been appropriated. But the program has gotten generally good reviews thus far, and maintains bipartisan support—though some Governors and members of Congress have complained that the incentive funds for companies haven’t been flowing fast enough.

Deal-making has picked up in recent months, though. And Congress just ponied up additional funding for Tech Hubs, a promising sign for continued support, Muro says. The Good Jobs Challenge also was able to make additional grants just this week. 

Good Jobs: The Good Jobs Challenge is the only standalone education and workforce development program out of Commerce. Its principles around preparing people for “good jobs” have been threaded through other work, leaders in the department say—and CHIPS took it to a new level.

Scott Jensen, director of workforce strategy for CHIPS, had led Raimondo’s signature workforce development program in Rhode Island. He was brought in after the CHIPS and Science Act passed because it was immediately clear that building a pool of skilled workers would be essential to bringing semiconductor manufacturing back to the U.S.

“It’s illogical to say, ‘Let’s reshore an industry and not think about workforce, because by definition there aren’t workers to do the work,” Jensen says.

Home-Team Advantage

Intel Corporation’s Ocotillo campus in Chandler, Ariz. (Photo courtesy of Intel)

Doing this work has required a level of flexibility that isn’t common for government grants. From the get-go, the Commerce committed to all the major programs being ground-up and business-led.

“It’s impossible to overstate the flexibility in these resources compared to other things,” Andes says. “Rarely do you have the unit of analysis and the policy to be a place—if this proves to be successful, that will make a big difference.”

The Tactics: In CHIPS, for example, that plays out in a very tactical way in how training dollars are released. Rather than large grants, companies are able to draw down smaller tranches of money through “funding orders” that are processed within about a week.

A company, for example, might say they need money to train 60 workers for specific roles it knows will be opening in the next few months. And if something shifts, the company has the ability to pause or tighten training cohorts. “There really needs to be a partnership that moves with the business cycle,” Jensen says.

Training outcomes, along with a host of broader metrics, are all tracked through a sophisticated data system that the CHIPS office set up on the front end. Reporting is expected to happen in close to real-time, so that all stakeholders have a window into how the projects are playing out and so that the reporting burden is reduced on the back-end.

On the Ground: Institutions like Arizona State University in Phoenix, where Taiwan Semiconductor Manufacturing Company just opened one fab and is planning two more, have stepped up in a big way. Training efforts haven’t been without hiccups, though. Maricopa Community Colleges there had to halt its promising Quick Start program for entry-level technicians this past summer after hiring slowed because of construction delays.

Hiring Commitments: Where possible, Commerce has tried to make sure that jobs are there before rolling out training dollars—and many of the grant programs, whether through CHIPS or recovery dollars, require hiring commitments from employers. 

“We’re not here to do train and pray,” says Rachel Lipson, a senior policy advisor at the Commerce Department’s CHIPS for America. “We want to and need to focus on job placement. That’s the most important metric.”

After the Honeymoon

Of course, the true test of any strategy is not whether it creates a new model, but whether it has the intended impact on the ground. Initiatives like Tech Hubs have just gotten underway, and the department was still inking semiconductor deals this week. Even some of the earliest programs, like BBB Regional Challenge and the Good Jobs Challenge, still need time to play out.

“In five years, you’ll know if you failed. But we won’t know at this point if we’ve hit a home run,” Andes says. 

Early Results: The signs are promising though, according to both insiders and experts outside the department. Andes points to Build Back Better initiatives in West Virginia, where partners are moving coal miners into pipefitting, and New Orleans, which is focused on clean hydrogen, as early leaders. Nebraska has drawn on unexpected strengths in K-12 robotics to develop advanced robots for the agriculture industry—and the workers to design, build, and run them. 

The numbers coming out of the Good Jobs Challenge also are a promising start. The 32 grantee coalitions in the first round of that initiative have already placed 12K people in “good jobs” in places as varied as Chico, Calif. and Peoria, Ill. With the announcement of another small round of grants this week, the goal is to eventually place 53K people in new jobs.

Staying Power: The various Commerce projects are still very much underway, and it will take years to assess their longer-term impact. There’s some risk that they’ll be cut short in the Trump administration—funding for clean energy, for example, is under fire—but a lot of the money is already out the door. And the investments have overwhelmingly gone to red regions.

The focus on equity that is threaded through the projects will be removed, Muro says, and the emphasis on unionized jobs is threatened as well. But he believes the general thrust of concentrated, place-based investments is here to stay, as is the recognition that economic growth and economic mobility have to go hand-in-hand. The approach solidified the direction economic and workforce development had been heading for a while, Muro says.

“It’s drawn intelligently on major thinking and experiments in U.S. metropolitan regions and also in Europe,” he says.

Without workforce development, there is no economic strategy, says Kevin Gallagher, who was a senior advisor to Raimondo, serving as her top aide on workforce until last February. Likewise, companies have to be at the table from the beginning to forge durable partnerships that can move the needle.

“We also need employers to commit to hiring these folks,” he says.

From a political perspective, Andes says, it would be hard to go back to the smaller, more diffuse investments of the past. “Put yourself in the shoes of a senator who just won $65M,” he says. “Are they going to be happy with $1M going forward?”

It’s encouraging that Congress recently backed core elements of both the Good Jobs Challenge and the department’s Economic Development Administration, Gallagher notes.

“Universally, we can agree that the goal of workforce development is to support workers getting good jobs,” he says.

Paul Fain and Colleen Connolly contributed reporting to this article.