Biographical Sketch: A. Wade Martin

Executive Director and founder of South Carolina's technical education program, which has trained more than 160,000 students since 1961 to meet the State's growing demand for technicians, craftsmen, and production workers; consultant to 17 States in the design of technical training programs, to large corporations, and to industrial development groups; former administrator of North Carolina's industrial and technical education program.

STATEMENT OF A. WADE MARTIN, EXECUTIVE DIRECTOR AND FOUNDER OF SOUTH CAROLINA'S TECHNICAL EDUCATION PROGRAM

Mr. MARTIN. It is a great pleasure for me to be here and participate in a conference examining one of the great issues facing our Nation. Actually it is an issue in which I have not only a passing interest, but an emotional interest. I have been involved intimately with it in the economically backward State I represent. Reversing, or even arresting, the trend of urbanization may erase a special internal danger facing America that becomes more pressing with each passing year. Also, the American way of life would be more meaningful if development without congestion can occur.

It is easier to state a problem than recommend a solution. A fundamental is that all people resist change, and anything, any change you recommend can become controversial. My topic is education; or, stated another way, it is the development of human resources. Human resource development has been described as the process of increasing the knowledge, skills and the capacities of all people in a society. This may be described in economic, political, social, or cultural terms. Since my experiences have been in the development of human resources for economic purposes I will confine my statement to economic terms.

Even in this context it becomes political, social, and cultural. For the benefit of this discussion I want to restate the problem to establish the framework for a recommended course of action.

A popular song following World War I asked the question "How are you going to keep them down on the farm after they've seen Paree?" The same question is now raised in an age of improved patterns of communications and easy movement brought about by radio, television, newspapers, and rapid transportation. Development of undeveloped regions of America provided one answer to the riots of cities whose population explosion has created problems of unrest.

Development of these regions will slow the influx of masses who now know for the first time in history that urban areas offer more economic promise and as a consequence they migrate to these areas to claim their share of American affluence. Simply stated the rural to urban shift is for economic reasons. Let us then look at the economy.

Most people working for the development of an undeveloped area work toward improving the "export base." They interpret the export base as a product or service sold to a regional, national, or international market which brings wealth into their area.

These economic developers use a rule of thumb that one export base job creates two service jobs or that 100 high paying export base jobs support a community of 900 people adequately. In this analysis the medical doctor, local merchant, or teacher is a support service, dependent on the export base to bring wealth to the area. To develop a re

gion, the economic developers say, the following should be emphasized: 1. Industrial expansion preferably of high wage industries including attraction of new industry and the expansion of local industries. 2. The improvement of agriculture.

3. Development of tourism.

4. Development of national or regional distribution. 5. Increasing Federal grants.

Except for Federal grants, there is a common denominator * * * The primary source of wealth is creating or raising the value of a product or service and putting it into the channels of still wider areas of trade. Because of immediacy, the economic developer usually places his emphasis on manufacturing industrial development. And all to frequently, as has already been mentioned, they become branch plants with no concern for the ratio of direct and indirect labor and other intricacies that really build an export base.

Too, in semirural or small towns, agriculture and manufacturing appear to offer the only practical way to establish an "export base. Industrial development in our free enterprise society is dependent on the judgment of men who have a responsibility to invest capital in such a way that it will return the maximum to the stockholders.

For the past few years, I have been privileged to direct a unique program of education. It is unique in that to my knowledge it is the only program in our Nation with a legislative mandate "to provide educational programs coordinated with the State's economic development efforts." In other words, we can be involved in everything from preliteracy to postdoctoral, or have a concern with it.

I have been privileged to work with perhaps more than 2,000 industrialists who were considering investment of risk capital in the South which would generate new jobs and economic promise. This includes big corporations and small investors with all the shades of bigness or smallness between. I have watched these men many times turn from a declining area and locate in an urban area.

Why do they do this and what can be done to reverse the trend? There is no easy answer. I do not recall ever working with two industrial prospects with identical problems. Some may have similar needs, but they invariably have different levels of support they can provide for a new operation. Because of these differences we can safely conclude that most industrial plant locations are far from an exact science.

Admittedly, there are many factors which influence the decision of investment capital, but manpower characteristics and the community environment are the most important.

The education of manpower necessary to reduce the risk for investment capital is a vast and complicated subject. It is complicated because it represents preparation for many types of industries and it also requires development of many levels of skills. Properly planned, it recognizes the total labor force, from top management to the training of operators. Properly done, it represents on-the-job training, institutional education, out-of-area recruiting and the development of new attitudes in a community.

I came here yesterday morning prepared to tatlk about how programs can be tailored to reduce the risk for risk capital, creating jobs in rural areas; to talk about the need for outstanding occupational edu

cation and technical education. About how we work on a modified version of the critical path; in the planning we do in our new plant startups; because it has been the subject of several national magazine articles.

After Senator Harris' opening statement, I realized I was talking about program practices, and he was interested in national policy and solutions, and somehow I had not understood that. So I rewrote the comments that I have, to indicate the need for educational leadership and some of the problem areas I have seen in rural areas. Education of people is important, but getting jobs to rural areas is equally important, because education and poverty can grow hand in hand. It can be an instrument of outmigration unless it is properly coordinated.

Reversing the trend of declining rural areas is possible but it will require a national policy and certainly will require hard work on the part of State and focal leaders. If we make the assumption that it is possible to meet all the criteria for industrialization except for the human factors let us look at some of the human problems of rural industrialization.

It would be impossible to list all the considerations but let us look at the more common reasons investors give for not putting industries in rural areas. Quickly they could be put into two categories:

(1) The unknown characteristics of the labor force potential in nondustrial areas; and/or

(2) The absence of "livability" which attracts the highly technical inmigrants necessary. Included in "livability" is lack of housing for management, reluctance of the community to adjust to outsiders, limited recreation and inferior elementary and secondary schools.

If this Nation is to initiate an effective long-range plan to reverse the urban trend it must first face the task of education of leaders to be more responsive to change. Under a State-Federal partnership new programs must be initiated but equally important is the development of capabilities to stop programs whose effectiveness, because of changing practices, has become clearly submarginal.

What are some of the specific courses of action that must be taken? The increased involvement of higher education in action research. No one can deny the growing importance of higher education. However, it must be recognized that the college or university graduate represents that portion of the labor force whose job market is the entire Nation. College graduates are usually recruited and blended into an already seasoned work force and given further on-the-job specialized education.

Instituions of higher learning have research capablities which could answer many of the problems. The research needed is the interdisciplinary action research frequently talked about but seldom practiced. Let us look at one problem many industrialists experence in a rural area. Please understand this is only one of many. In starting a new plant companies show a higher attrition rate during the first few years in a rural area. Usually the job separation rate may be as high as 12 percent per month, or higher; that is, people that come in and go to work and find they do not like the job, or that they do not fit in, they do not want to fit into an industrial environment, and they leave. Initially on a declining basis, perhaps 2 percent a month after a few years is a good safe ratio, and this does not break the back of a com

pany. Also the rate of absenteeism is initially higher-something like 36 hours present per week per hundred employees, per 40-hour week, as compared with 39 hours per week per hundred employees. Absence from machines becomes a very critical factor when you are operating on a small margin of profit. This makes a startup cost prohibitive. But most companies actually find the rural worker productivity better in urban areas after the first few hectic years. This suggests several questions. Why is the attrition rate initially higher in rural than urban areas. Secondly, are there voids in the motivation of drives of those who take and leave jobs. But the important thing, the thing we need to answer is how do we go about correcting it.

Clearly, any national policy should begin with research directed toward corrective measures. My first recommendation is to increase or restructive the funds available for research so these funds may be directed to applied human factors research.

Another area of research is increased emphasis of the product sector, and products research.

Our economy grows about 312 percent annually, as measured by the gross national product. This may be compared with the small but vigorous economy of the Japanese, whose growth rate has been exceeding 7 percent.

I had a staff group working in Japan, and they came back with some marvelous tales of worker efficiency, and the fact that they can turn out products-forgetting wage differentials they can actually turn out products cheaper and with less labor content for a lot of the consumable items than we can here in America.

Japan invests 1 percent of its gross national product in research and development. However, it is mostly all related to the civilian sector. The United States, as I understand, invests about 3 percent of its gross national product in research and development, but only about 10 percent of that 3 percent, or three-tenths of 1 percent goes to the civilian sector. If we as a nation could increase civilian sector research, we could create new opportunities for employment and manufacturing of new products as well as improve our competitive position in the work markets.

I suppose this is what we might say is the opportunity approach and does not necessarily recognize any theories of static resources.

Another need is the development of a national policy on human resources development and management. In recent years the Federal Government has fostered and funded educational and skill training programs to a fantastic fiscal magnitude, if we consider the funding levels of the thirties, forties, and fifties. In my judgment, perhaps it is still not enough, and I think history might record that we needed more during these changing times.

In addition to the well recognized programs of higher and vocational education, numerous remedial manpower and antipoverty programs have been introduced; the Manpower Development and Training Act, the community work and training program, the Job Corps, the Neighborhood Youth Corps, and many others. There is some agreement that the broad array of these programs and the manner of administration frequently cause these programs to be in conflict, one with another. This is not intended as a criticism against the intent of the laws or the people who administer the program. The intent

is good and those who administer are usually competent. But when you administer a program that has more than perhaps a thousand employees, and when you are being funded from several different areas, and if you give your director of long-range planning a project of an experimental demonstration program, and then find out there will be Federal funds available, and he comes back and says this can be funded under nine different acts, and funding level, support level, will range from 40 to 90 percent, and there are five or six types of guidelines then it becomes pretty inconsistent with sound management practices.

But not one of the programs mentioned is directed toward reversing the trend of urbanization. The programs are directed toward helping people rather than helping regions. New industries frequently say "If Federal funds are involved it cannot be too practical."

Clearly any national policy designed for a more flawless matching of people and jobs should begin with an understandable management structure and with proper coordination at the Federal and State level. We should begin by the creation of a National Council for Human Resources Development and Utilization. The Council might be empowered to emphasize educational programs where manpower shortages exist and to dignify productive labor. This Council should develop a national policy which might give the States the freedom to implement or redirect Federal funds so they might be better managed as supplementing State efforts. Perhaps block funding in a State-Federal partnership should direct more Federal funds to underdeveloped regions. The regional commission approach is sound and I am glad the Appalachian Commission is on the program. They can build certain constraints in the funding process, but they can require undeveloped areas to do the proper planning that will insure excellence rather than the categorical aid approach that everybody thinks this is their money.

At the present time most remedial programs of human resources development are aimed at the unemployed or the youth. These programs, for the most part, are not designed to recognize the needs of industry; that any industry employing its labor force from only the unemployed or youth would promptly go broke in a competitive products market. The job separation rate of the unemployed and the youth is high-it has always been high. And very little emphasis is placed on programs of the underemployed in the 24 to 45 age group that represent the best risk.

Export base or manufacturing plants must recruit from the underemployed and offer them a better job. What I am saying is that new emphasis and latitude be given to programs designed to reach the underemployed. Job vacancies from underemployed create job opportunities for the unemployed. I was so glad this was mentioned earlier this morning.

The development of a national policy on the purchase of governmental goods and services designed to help undeveloped areas. The increased participation of the Federal Government in all the broad aspects of our economy makes the Federal Government increasingly important. Many major corporations in urban areas depend, to a large degree, on federally funded contracts. In one of the growth

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