S4E1: Future-Proof Education: Apprenticeships & the Experience Gap

Transcript:

Jason Dressel 00:11

Today on the History Factory Podcast, apprenticeships, not internships, apprenticeships. I’m Jason Dressel, and welcome to the History Factory Podcast, the podcast at the intersection of business and history. In this edition of the podcast, I’m going to talk to Ryan Craig about his book Apprentice Nation, how the Earn and Learn alternative to higher education will create a stronger and fairer America. The book begins with an introduction titled, “We Were Once a Nation of Apprentices,” in which Mr. Craig sets the historical context that apprenticeships used to be an integral element of our society’s workforce economy in education, colleges and universities and the conventional wisdom, especially after World War Two that they are the path to success in this country, have of course been a huge reason why apprenticeships have for many of us become an antiquated idea. But Ryan Craig’s book cuts through a lot of misinterpretations about apprenticeships and delves into why they’re being so underutilized here in the United States, the role they play in other global economies, and why they should become increasingly prevalent here in the US. And for those of you who are frustrated with the state of our colleges and universities, there’s a fair amount of red meat for you in  Apprentice nation, although Ryan Craig is by no means arguing that they are not also critical institutions. So let’s get into it. A really interesting conversation with Ryan Craig, a managing director at Achieved Partners. He is co-founder of Apprenticeships for America, a national nonprofit dedicated to scaling apprenticeships across the US economy. And in addition to Apprentice Nation, he is also the author of a new you faster and cheaper alternatives to college, as well as college disrupted the great unbundling of higher education. And given the topic I also feel like I should note that Ryan has worked in higher education, is a graduate from Yale University, and also has held positions at Warburg Pincus and McKenzie. Here’s my conversation with Ryan Craig.

Ryan Craig, welcome to the History Factory Podcast. Thanks so much for joining us, and congratulations on your new book.

 

Ryan Craig 

Thanks, Jason. Good to be here. 

 

Jason Dressel 

Well, I guess maybe just like you do in your book, we can just start with a little bit of a level set on what exactly is an apprenticeship and how is it commonly misunderstood? 

 

Ryan Craig 

Yeah, there’s a lot of misunderstanding. Many folks will use internship and apprenticeship interchangeably, but they’re really not just different. They’re kind of the polar opposites. An apprenticeship is a full-time job, where you’re hired without having the skills or experience that you’re going to need in order to be successful in that job. And there’s a formal classroom training component, there’s an informal on the job training component, your salary or wage will scale up as you learn more and become more productive. And there are various career pathways you can pursue. Once you’ve sort of are officially in that job are no longer no longer an apprentice. So, but again, it’s a full-time job. So unless someone has hired you, and you’re receiving a W2, you’re not an apprentice. So that’s an apprenticeship. An internship is a work experience paid, hopefully, but often or too often unpaid, that a student will pursue in the course of his or her program of study. Could be during the summer could be during the term. Sometimes there are universities like Northeastern and Drexel where you are going to do multiple internships before you graduate in infield. But internship is the polar opposite because you’re a student first, and you’re only sort of working incidentally, and often part-time.

 

Jason Dressel 04:31

Yes, Certainly our country seems to be far, far more familiar with the internship concept than the apprentice apprenticeship concept. And we’ll get into that. But, but first, you know, Ryan, what’s your background? What kind of led you to be interested in this topic of apprenticeship? 

 

Ryan Craig

Yeah, so I’ve been in higher education for almost 25 years, started my career at Columbia University in the 1990s and have helped build universities, online universities, built programs invested in companies that work with hundreds of colleges and universities on various things. And about a decade ago, I was fortunate enough to be able to raise capital to fund my own higher education-focused investment firm. And it was from that that we began to see the sort of persistent negative employment outcomes of the Great Recession, where lots of young people were graduating from college, but essentially graduating into underemployment. So they were getting jobs that their degrees did not didn’t require those degrees. And sometimes they were working in retail or no food service after graduating the classic liberal arts grad working at start as a Starbucks barista. So our firm began to invest in what we termed faster and cheaper alternatives to college boot camps and the like. But even those models did not meet our expectations. Lots of boot camps are a good way to address the skills gap. There are lots of technical digital skills, and platform skills that colleges aren’t training on that employers are insisting on. We call that last mile training. Boot Camps are good for that. But what they can’t do is close what we call the experience gap, where you’ve got millions of employers asking for 3, 6 12, months of relevant work experience for a job that used to be entry-level. So nowhere is that more evident in cybersecurity. Where a decade ago, someone with a modest technical background, could get a job as a tier-one analyst in a security operations center. So in your first row of defense you’re looking at the alerts that come in, you’re deciding which you can resolve, which you can ignore and which needs to be elevated. Today, that job has essentially been automated away. And the entry level jobs and security operation centers are what used to be tier two analysts which require a CISSP certification, which means three to five years experience. So as digital transformation progresses, as automation progresses, as generative AI emerges on the scene, we’re going to see all good jobs, all good entry level jobs go the way of those cybersecurity entry level jobs, where the menial work or grunt work that you used to do in an entry level job as you kind of learn the ropes and figured out what the heck you were supposed to be doing and how you could add value that is going to go away, you’re not going to be spending 30 hours developing PowerPoint presentations that no one’s going to look at, you’ll spend one or two hours doing that and leaving the rest of the work for AI. And the rest of the time, you’re gonna be expected to do higher value client work, product work, you name it, but you’re not gonna be able to do without experience. So we began looking at models that could address that, as well as the skills gap. And we started by investing in a staffing company that staffed software developers, to clients. And they could only staff maybe a quarter of the position descriptions they received just because there wasn’t enough talent. So we essentially built an apprenticeship program into that company. They began hiring and training new workers who didn’t have the necessary skills, we gave them the skills. And that was extraordinarily successful for us. And so, now my day job, what I actually do is I run Achieve Partners, and our workforce funds. What we’re doing is we are buying business services companies in sectors where there’s a talent gap, like cybersecurity, like software development. And we’re building large apprenticeship programs into those companies. So they become talent engines, for their talent starved sectors. And it’s a strategy that works extraordinarily well. 

 

Jason Dressel

Just to dig into that a little bit of curiosity before we move on, why the strategy of buying those companies because you believe your firm can ultimately make them better performers and create more value because of the fact that you’re solving for that talent discrepancy. 

 

Ryan Craig

Exactly. We think we’re doubling organic growth of these businesses by creating a new revenue stream as we’re selling talent into the market. And by attracting more attention to our companies as the first and only companies in their talents to our sectors to be producers of new talent. 

 

Jason Dressel 09:59

Got it. So one of the things I really liked about your book, writing was really the historical sort of context of how you approach this, this topic. And so that then checks the box on inviting you on to a podcast the position as being at the intersection of business and history. So here we are. But you know, what, one of the things that that you kind of touch on, and I sort of characterize this, as, you know, there’s, there’s this kind of, you know, the conventional wisdom of kind of the, the American dream is that, you know, the way to get up and, and kind of, you know, make a better life for yourself, and then kind of put your kids in a better position is that, you know, you go to college, you get married, you buy a house, this feels like it’s really been sort of the kind of post world war two kind of American sort of success, kind of ingredients for success. And, you know, when you look at a lot of our public policies, they really reinforce you know, that doing those things, you know, there’s a lot of public policy that says that getting people being married and owning houses is good for public policy. So you know, as so I’m just kind of curious, like, one of the things that you talked about with apprenticeships is that we used to be, I think the way you quoted in the book is we used to be a nation of apprentices. So what did they look like, historically? And why do we now not really think of apprenticeship as being sort of part of the fabric? And instead we think of, you know, going to college and then getting an internship and then getting a job? 

 

Ryan Craig

Yeah, I mean, it’s a great question. And look, up until about World War Two, college was still the sort of province of a very small minority of adults, who would essentially you’d make your way up with some formal or informal version of apprenticeship. You know, we decided that call and look, I think the reason is that, the idea of college, the idea that everyone should be able to fulfill their potential, that discovery is, an important value. That’s all very consistent with the idea of college, that’s what colleges is about. And that worked, worked really well, when college cost a couple $100 a semester or a couple $1,000 a semester. And you could, you know, you could live without going, you know, into significant debt, and attend and attend college, you know, to go from there to college for all, or only college. That’s the step that we took in this sort of 60s 70s and 80s. And we really began to disinvest in things like Career and Technical Education at the high school level, in youth employment, right, if the only pathway is one that runs through four year college, then in high school, you’re going to focus on making yourself as attractive a college applicant as possible, as opposed to doing you know, work as a gardener, or a waiter, or a server, that might teach you a few things about your own interests and capabilities. And your ability to support yourself. So that’s where we are, and then, you know, enter digital transformation, enter an era where the skills that employers are having a hard time finding are actually harder to learn in the classroom than they are by doing enter the experience gap we just mentioned, in suddenly, the idea of, you know, remaining in classrooms until you’re an only classrooms until you’re 20 to 23 years old makes little to no little to no sense this orthodoxy that we’ve established of high school to college to work, doesn’t make a lot of sense. anymore. I am what I’m not, I’m not saying that there’s no value to college or that we, you know, millions of people should not attend college. What I am saying is the sequencing that we’ve established doesn’t make sense in an era of digital transformation, and AI, and that we have dramatically over invested in this, you know, now very costly tuition based and debt based infrastructure for career launch. And we’ve dramatically under invested in an Earn and Learn infrastructure for career launch. But again, I do think that in a world in a decade from now, where we have millions of high school graduates starting as apprentices, those millions of people are still going to need additional post secondary education. But, by the time they ultimately enroll, they’re going to be much better informed as to what program what their interests are, than they are today where we have this massive problem of asymmetric information where you have 1000s of underperforming colleges, enrolling at risk students who are unlikely to be successful. And the colleges either do know or should know. And the students themselves have no earthly idea.

 

Jason Dressel 15:20

Yeah, and I think what you’re getting out there right is presumably, that’s also going to help the colleges and universities in the system kind of unto itself, be a little bit more sort of aligned with the needs of the economy, because I think one of the things you’re pretty, pretty critical of in the book, and rightly so is kind of the state of colleges and universities now they’re really preparing young people to be in the workforce. And, you know, you mentioned you, you work to Columbia, and you know, you’ve got degrees from Yale. So you know, you’re pretty smart guy who had the privilege to go to some pretty good schools and be part of those institutions. How would you kind of characterize the state of our colleges and universities? And what do they do well, and where are they falling short. 

 

Ryan Craig

So I think they do as good a job as they’ve ever done in preparing young people with the critical thinking skills, problem solving skills, communication skills that they needed to be successful in the good jobs of the last century. I think, you know, today’s good jobs want all of that. But they also want discrete combinations of digital skills, platform skills, business knowledge, role knowledge. And unless they find, and now increasingly, with this experience, gap of relevant work experience, and unless we can address those, we are basically sort of pulling the ladder up from for young people, it’s going to be very, very difficult for young people to get good entry level jobs. 5 10 years from now, colleges and universities don’t figure out a way to integrate real work experience into their degree programs. We need to do it, apprenticeship is the best way to do it. Because apprenticeships are jobs, where you’re hired, specifically without having the skills and experience you need. And you’re that is delivered in spades over the course of the apprenticeship. But you could also imagine a world where we have systematic comprehensive internships, right, you can imagine state and requiring every university in the state to ensure that students graduate from four year degree programs with multiple paid in-field internships, that would go a long way to addressing these concerns. You can imagine a world where students as part of their coursework, are completing of capstone projects that are actually real work projects for real employers along the way, but both of those things would require colleges and universities to have a very different approach and much more developed infrastructure around employer engagement. Today that runs through Career Services, which is sort of a sort of a backwards corner of the university. And no one else at the university feels like they have any responsibility for career or employment outcomes of graduates, which is why, you know, at your typical school, all they’ll be able to tell you about what happens to their graduates is that for the survey, we send to, you know, graduates, 85% of respondents report that nine months out, they’re either employed, or in professional graduate professional school, but you don’t know where they’re employed. You don’t know whether they’re working at Starbucks. 

 

Jason Dressel

So maybe they don’t want to maybe they don’t want to know the answers to all the 

 

Ryan Craig

Well, I think that’s why I said earlier that there’s like, there’s a little willful ignorance here. And as long as the money keeps flowing, and it’s what this is, it’s not as though this is a free market. There is a, you know, remarkable government subsidy going on here. If you look at, you know, total public support for the tuition-based debt-based career launch infrastructure, aka College. Relative to the Earn and Learn infrastructure, we spent over $500 billion of federal and state money each year, on that tuition based infrastructure, we spend less than 400 million on Earn and Learn infrastructure, so it’s 1000 to one. If you compare this to public support that a apprentice receives compared to a college student, for every dollar the apprentice receives the college student receives $50. So I don’t know whether the right ratio is one to one, two to one or 10 to one, but I’m pretty sure it’s not 50 to one and 1000 to one, and in fact no other developed country is so imbalanced with regard to that disparity. Every other developed country is an order of magnitude higher than we are on investment and Earn and Learn career launch infrastructure.

 

Jason Dressel 20:01

Yeah, it’s not just the public funding, right? It’s like even when you look at, you know, the available money through, you know, foundations for grants, it’s like I would assume even in those sorts of other streams for funding for colleges and universities, it’s disproportionately in that area versus things like. 

 

Ryan Craig 

That’s where we have the infrastructure. It’s like the guy coming out of the bar, looking for his last, you know, car keys under the streetlight because that’s where he can see. That’s the that’s the problem we have, all we have is that infrastructure we don’t have you know, as someone someone pointed out to me recently, it’s either college or Chipotle, right? You got, like for high school, graduate college or Chipotle. So this idea of college and career readiness, and they’re every state has a college and career readiness standard for its high school graduates. But look at the standards, nothing to do with career readiness. It’s all about college, because that’s that those are the pathways we have. And frankly, it’s because those are the easier pathways to build much harder to build pathways that require engagement with employers. But that’s the you know, one of the key points of the book is that nowhere where you have a robust urban large infrastructure nowhere where you have a robust apprenticeship infrastructure, do you have one because employers in those countries are somehow more benevolent or farsighted. You have it because there is an ecosystem of intermediaries that are either required to do the work of setting up and running by running these programs or are highly incentivized to do so. And we don’t have that in this country, because we have not made the primarily investment in that infrastructure. 

 

Jason Dressel

Yeah. So you’ve alluded to that to how it’s different in other and other countries. And I’m just curious to understand more about that. So what do kind of apprenticeships look like? And what roles do they play in the societies and in education systems and workforces of our other leading global economies? 

 

Ryan Craig

Sure. So in the US, we have 500,000 apprentices. Today, civilian apprentices. That may sound like a lot, but it’s only point 3% of the workforce, and represent about 70% of those apprentices are in the building or construction trades. Compare that to the giants of Central Europe, Germany, Austria, Switzerland, probably most of your listeners won’t be surprised to hear that they’re 10 to 15 times better than we are on a per capita basis. So instead of point three, percentage, three to four and a half percent of the workforce are apprentices. But I bet your listeners will be surprised to hear that in the UK, Australia,Canada and France, they’re doing eight times better than we are. In a generation ago, they weren’t a generation ago, those countries looked a lot like the US in terms of having a small apprenticeship sector, mostly in the construction trades. Whereas today, it’s very common in those countries to watch career in health care, or financial services, or tech, or logistics as an apprentice. And so what happened and what happened was those countries recognize the central role that intermediaries play, they recognize that employers don’t create apprenticeships, of their own will, primarily because the very notion is anathema to most employers, the notion of hiring and paying a worker who’s not going to be productive for an extended period of time is not something your average employer is excited about doing, let alone all the other stuff in terms of recruiting and training and coaching and mentoring and registering the program that they wish they would need to do. So hard to do. But employers don’t do it. In Germany, they’re successful because these massive chambers of commerce and trade unions are actually required to set up and run these programs. It’s written into statute. So what the UK and Australia did is they recognized this and they essentially overfunded the cost of training to incentivize staffing companies and HR services, companies and nonprofits to get into the business of becoming Apprenticeship Service Providers. So now you have in the UK, you have this robust ecosystem of 1200 Apprenticeship Service providers who are in the business of going around knocking on the doors of employers across the country across every sector of the economy, offering to set up and run apprenticeship programs for them in many cases, making it completely turnkey for the employer. All the employer needs to do is put the apprentice on their payroll and pay the reduced apprentice wage. Everything else is handled by the apprenticeship service provider and that’s how they got to 8x. The US doesn’t have that infrastructure because we have not invested in apprenticeship intermediaries the way other countries have.

 

Jason Dressel 24:53

And before we kind of shift off of that what I’m curious what’s apprenticeship look like in some of the Eastern entries like I would have guessed that it’s pretty common in India or not. 

 

Ryan Craig

So I think it’s informally, again, ever any country where you don’t have as robust a formal post secondary or tertiary education sector, informal apprenticeships thrive. But it’s largely because employers have no alternative to sourcing.

 

Jason Dressel 25:23

Got it. So in the book, you outline a pretty, pretty practical blueprint, a roadmap for how the United States can make apprenticeships a more integral part of our society or our education system and economy. So we tease enough of it to make people want to read the book, what’s, what’s the elevator pitch on that? And sure, maybe similar or different to what those other countries like Canada and the UK have done? 

 

Ryan Craig

Yeah. So the big thing is that right now, we have huge barriers and effectively zero incentives to creating apprenticeships, we need to invert that we need to reduce significantly reduce the barriers, and we need to dramatically increase the incentives. So today, you know, an apprenticeship Apprenticeship Service Provider, looking to sell an apprenticeship program to Verizon, they would not only have to ask Verizon to pay the apprentice wage, but they probably also have to ask Verizon to pay an additional 10 to $20,000 per year fee for everything that they would be doing. So in other in other developed countries, that’s not that’s not what happens. That’s funding is essentially provided by the state. And so it makes it it makes it much easier for employers to say yes to apprenticeship. In addition, you know, they would have to register jumped through hundreds of pages of federal paperwork, or state paperwork to register the program for effectively no benefit because there’s no funding that flows with with becoming a registered apprenticeship program today. So those are the two major things there are other things like skills frameworks, every apprenticeship program in this country, you have to sort of develop that from scratch, whereas other developed countries have established skill frameworks for every possible occupation. We don’t do a good job around. Ensuring that professional licensure is limited to those professions that really, in degree requirements that are associated with professional licensure are limited. We allow professional associations to own their own licensure decisions, and they add as many reps as many walls and dig as many mouths as they can, around the profession. And adding degree requirements to professional licensure effectively makes an occupation non-apprentice level. States also need to be doing a lot more in the UK 25 years ago, as they were reaching their apprenticeship inflection point, some enterprising reporter asked the Ministry of Labor, well, how many apprentices do you actually employ? And the answer was none. And so today, there’s a rule in the UK that 2.3% of ministry employees need to be apprentices running their programs. And so we are we are going to see movement here. Colorado just became the first state to direct its agencies to set up and run apprenticeship programs. And just as we’ve seen this rush of states, remove bachelor’s degree requirements from their state job descriptions, I think 16 At last count, I expect to see a similar number of states doing that. So I mean, the good news here is that there is widespread agreement on both sides of the aisle, that this is worth doing. I think it’s perfectly good politics for a Democratic Party that is widely viewed as a party of college elites. So but, you know, put politics aside, it’s going to become an economic necessity because technological change is going to make career launch much more challenging in the decade ahead. 

 

Jason Dressel

Yeah. And what challenges do you potentially see what just kind of the stigma, you know, as we mentioned before, you know, sort of the conventional wisdom for so long has been that the way you get ahea, is by going to college? Do you see that as one of the significant barriers just changing sort of public opinion and perception on the importance of college? 

 

Ryan Craig

No, not really. I think that will change once we begin to build this infrastructure. I know from our programs that we’ve developed in all these areas, software development, cybersecurity, and the like that if you offer a paid pathway into a career without requiring skills, or experience, you get hundreds and hundreds, sometimes 1000s of applicants for every seat. And unfortunately, the selectivity in these programs is worse than your Ivy League school. There’s a ton of demand for this. The problem is that when people think about apprenticeship today, they think about plumbers and welders and roofers because they’re just simply aren’t enough apprenticeships in the sort of high-value white collar or new collar, technology, primarily fields that really need them. Because it’s going to be hard to get these jobs any other way. 

 

Jason Dressel

What was one of the biggest kind of surprises you had just in the process of the research and writing this book? 

 

Ryan Craig

I’d say the biggest surprise was how poorly we’re spending the money that we actually are spending on apprenticeship today. The Office of Apprenticeship at the Department of Labor, they’re now up to almost 300 million a year in funding. But rather than providing formula-based, or what we call paper apprentice funding, like other developed countries have where you’re literally only paying once an apprentice has hired. They’re providing grants to organizations that tend to be good at applying for Department of Labor grants, which are community colleges and workforce boards. And what they’re doing rather than actually creating apprenticeships are resulting in the hiring of apprentices. They are developing curriculum for the classroom component of apprenticeships, they are registering the program, and then they’re sitting on their hands waiting for an employer to come along saying, ‘Hey, I’d like to use my curriculum for my apprenticeship program.’ But I can guarantee you there’s not a single employer out there that would launch a program, but for, you know, on being unable to find curriculum for the classroom component. And so when I created the directory of the book, which is a directory of all current apprenticeship programs registered and not in the United States, outside the construction trades, so tech, financial services, healthcare and like. I started with the Federal Rapids Database, which is the database of registered apprenticeship programs. And I asked, well, how many of these programs are outside construction? And the answer was 6000. And then I asked, well, how many of these 6000 are actually real apprenticeship programs? Meaning that you could apply for a job as an apprentice tomorrow? And someone would actually look at your application? And the answer is of those 6000, only 200 were real. The remaining 5800 were what I call paper apprenticeship programs, meaning they exist only on paper, meaning a Community College has developed a curriculum registered the program. And if you go to the website, it’s the community college essentially marketing to employers saying, ‘Hey, you want to adopt our curriculum?’ So I think that’s a big surprise. And I’ve had done a number of talks before with folks from the Department of Labor. They’re not. They’re not fans of mine. Right now, I would say, but there’s no, there’s no vigorous disagreement. The one point I had is like, well, we know we do performance-based funding because we provided a grant, we did a grant program last year where states received awards based on their promises of performance. And I said, Well, what actually happened to the money? Do we know whether it actually resulted in apprentices being hired? And so we’ll know that’s out of our hands. 

 

Jason Dressel

So that’s not money, somebody was invested for the colleges to have a sales program to sell to a company if they ever call. 

 

Ryan Craig

Exactly, exactly. So we can do a lot better with the money we’re spending. I think once we do that, we’ll begin to get this flywheel spinning, get folks realizing just what the power of apprenticeships can be. 

 

Jason Dressel

Yeah. So Ryan, what’s kind of the most misunderstood notion of apprenticeships and what’s what’s maybe the one or two things you just would want everyone to know?

 

Ryan Craig

Yeah, I’d say well, for folks in the policymakers, the folks who are making decisions on this stuff, the biggest misunderstanding is that apprenticeships have been lumped in with other workforce development and training programs. And they’re not, they’re different, they’re jobs. And so whereas much of the, you know, $3 billion that we spend out of the Workforce Investment Opportunity Act every year, the Department of Labor is administering is we see not great employment outcomes, Job Corps being a premier example of that over a billion dollars with very little job creation, except for the people who run Job Corps. They have good jobs out of it. But apprenticeship is different because these are jobs. This is not about training. Primarily, it’s about convincing an employer to hire a worker who’s going to be unproductive for a period of time. It’s about employer behavioral change. And so it needs to be treated and thought about and funded differently from the way we currently fund workforce development. And that’s what every other developed country that’s way ahead of us has already recognized. 

 

Jason Dressel

Yeah. Well, and maybe ultimately, what’s needed is a little bit of a rebrand where they’re not even called apprenticeships they’re called jobs with some parameters. 

 

Ryan Craig

Yeah I’ve had that it’s a bunch of folks have asked that I think that again, that will solve itself the moment that you become familiar with apprenticeships in cybersecurity and software development in all the fields that college students are having an increasingly hard time getting those jobs, you know. 

 

Jason Dressel

Great. Well, Ryan, awesome conversation thank you so much for joining us and sharing your experience and perspective. We really appreciate it.

 

Ryan Craig

Thanks, Jason. Enjoyed it.

 

Jason Dressel 35:36

Alright, folks, that concludes this episode of the History Factory Podcast. If you enjoyed the discussion and are interested in learning more, check out Ryan’s book Apprentice Nation how the Earn and Learn alternative to higher education will create a stronger and fairer America. Thanks again to Ryan Craig. As always, thanks for listening to the History Factory Podcast. I’m Jason Dressel. Be well

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