Big Goals, Modest Funding

A high-profile U.K. apprenticeship company hits pause on registered U.S. programs while the feds modestly increase funding for the apprenticeship system. Also, the White House tries to boost both economic growth and mobility with new tech hubs. Will Congress kick in enough money for it to work?

Waiting for Apprenticeships’ Moment

As the Biden administration rolls out the largest-ever combined federal investment in registered apprenticeships, a high-profile apprenticeship company from the U.K. says it’s hitting pause on federally registered earn-and-learn programs.

Multiverse launched its U.S. operation in New York City in January 2021. The privately held company became Britain’s first ed-tech unicorn shortly thereafter and had big ambitions for apprenticeships on this side of the pond.

“We’re building an outstanding alternative to both the college system and to traditional corporate training,” Euan Blair, Multiverse’s co-founder and CEO, said as the apprenticeship intermediary arrived in the U.S.

The company focuses on apprentices from underserved backgrounds, who get free training, support, and salaries. It has trained more than 16K apprentices for technology roles with employer partners that include Microsoft, Citi, Google, and Morgan Stanley. Multiverse handles the significant red tape of registering the programs with the U.S. Department of Labor while charging corporate partners for the recruitment and training of apprentices.

Interest in apprenticeships has been rising in this country, with bipartisan support from state and federal lawmakers. The rapidly growing startup’s arrival was widely seen as a boon to the concept of apprenticeship here, and Blair’s big name didn’t hurt.

Yet Multiverse’s U.S. operation hasn’t grown fast enough to support its footprint. The company lost $50M last year and generated unflattering headlines. More layoffs have followed, and a spokesman says Multiverse has decided to withdraw temporarily from registered apprenticeships. 

The company will honor its commitments to U.S. apprentices and employer partners and will focus on the platform’s upskilling offerings in this country, with tech training programs for cohorts of workers at businesses.

“What we heard from employers was a need for training that can be deployed rapidly, can adapt to the ever-changing technology landscape, and can deliver immediate results,” says Tim Smith, Multiverse’s vice president of corporate affairs.

“Ultimately that requires a level of flexibility in duration and content that isn’t fundamental to U.S. registered apprenticeships,” he says.

While the decision appears to be driven mostly by investment pressure and Multiverse’s evolving business model, the relative lack of public funding for apprenticeships and substantial bureaucratic hurdles of the registered system haven’t helped. (Those rules may soon get more complex.) 

The balance between incentives and regulation in the U.S. needs to be right, says Smith.

The Kicker: “We carried almost the entire burden of registration for our employer partners, but more than half chose not to engage with the formal registration process, as the reasons for doing so weren’t obvious,” he says.

More Stick Than Carrot

It’s safe to say that U.S. policymakers have failed to fork over the money to match their rhetoric about apprenticeship.

The White House last week announced $244M in awards to to help modernize, diversify, and expand the registered apprenticeship system. The funding is the largest combined federal investment in the learn-and-earn model, according to the Labor Department. The grants prioritize education, care, clean energy, IT, supply chain, and other in-demand industries.

Yet that money is of course a drop in the bucket compared to the $500B or so in annual public funding for traditional higher education, as investor and apprenticeship backer Ryan Craignotes in his recent book. Likewise, congressional Republicans last week advanced a budget proposal that would go the other direction, with only $150M for registered apprenticeships.

“Without public funding, it becomes a pet project of a CEO,” says Craig, managing director at Achieve Partners. “When budgets tighten, the CFO cuts it.”

Indeed, while apprenticeships grew during the last fiscal year, hitting a new high of 646K active apprentices, a Work Shift analysis found an overall growth rate of 6%, which is well short of the scale policymakers say they want. And the number of tech apprenticeships shrank, with a 3% overall decline and a whopping 28% drop in new apprentices.

Inflection Point? The departure of a company that has provided “scalable plug-and-play options for high-demand occupations” highlights the fact that the U.S. apprenticeship system is at an inflection point, says Myriam Sullivan, interim vice president of the Center for Apprenticeship and Work-Based Learning at Jobs for the Future.

“For employers and training providers, costs associated with apprenticeship have grown,” she says. “This signals a need to systematically address financial barriers within the system.”

John Colborn is executive director of Apprenticeships for America, a nonprofit created in 2022. He remains hopeful that the U.S. is on the cusp of significant investments in apprenticeship. “Until then, the economics are dicey,” Colborn says. “Our market is still a developing market.”

Not much new public money would be needed for sustainability, he says, along with some fine-tuning of current funding streams. Colborn notes that Congress opened the door to a needed shift with its March spending bill by directing the Labor Department to assess the feasibility of performance-based funding for the registered system.

Craig argues that the key to developing earn-and-learn programs is by paying intermediaries based on the number of apprentices they support and place rather than “trying to pick winners” with spotty grant funding. California recently became the first state to move this way.  

Meanwhile, bipartisan interest in apprenticeship remains, experts say. And the newly announced federal grants include programs that feature a strong role for intermediaries. For example, OpenClassrooms is a partner of the University of Maryland Global Campus for $3.9M in apprenticeship funds it will receive in the latest batch of Labor Department awards.

“We’re in a good place and well positioned,” says Jeremy Durand, senior vice president of international sales and operations for OpenClassrooms, an apprenticeship intermediary headquartered in Paris. “I don’t think there’s a lack of funding, at least to reach scale.”

Multiverse says it remains all in on equitable access to opportunity that’s delivered through applied learning, for now via upskilling in the U.S. Advances in AI give the company the “ability to deliver more by creating personalized experiences for every individual,” says Smith, “which will better meet the needs for employers, but also the aspirations of learners.”

Other companies will pick up the slack on apprenticeships, says Craig. And he says if policy and funding get sorted out in this country, “Multiverse will be back.”

Marriage of Economic Growth and Mobility

The U.S. Department of Commerce this month awarded $504M to develop “tech hubs” in a dozen oft-overlooked regions, part of a broader federal push to build economic powerhouses and open up thousands of good jobs beyond the superstar cities.

Created through the CHIPS and Science Act, the hubs will help develop advanced industries in places like central Indiana and upstate New York, building coalitions of research institutions, colleges, companies, and community groups.

The Big Idea: The central premise is that you can’t have sustained economic growth without bringing up the skills and job prospects of local residents, and conversely that you can’t have economic mobility without innovation and vibrant industry.

“What’s really important and exciting is the marriage of economic growth and economic mobility,” says Jon Schnur, CEO of America Achieves, which was the lead champion of the initial funding for the tech hubs. “Too often people think about economic mobility without looking closely at where the puck is going.”

America Achieves provided substantial technical support for six of the successful tech hub applicants. Schnur says those pitches were successful because they were built around local need, expertise, and opportunity. “This is so different from what you think about a federal program,” he says. “The energy level in these communities is so high.”

Even so, the tech hubs, along with other workforce development initiatives in the CHIPS and Science Act, face two central challenges:

• The first is continued funding, with Congress not fully funding many of the programs authorized by the CHIPS and Science Act.

It actually cut the National Science Foundation’s budget by $800M this year and is considering cutting its education programs again, threatening efforts to help community colleges prepare workers for emerging technology sectors. Additional funding may yet be forthcoming, as CHIPS and Science initiatives have broad bipartisan support both in Congress and local communities—but little is certain in this election year or beyond.

• The second challenge is getting the timing right for education and training. You don’t want hundreds of graduates before there are jobs, or vice versa.

The tech hub in Tulsa, which hopes to generate 50K jobs, shows ways to potentially address both timing and funding challenges. The hub focuses on next-gen drone technology, building on the region’s history and relative strength in aviation tech. The education efforts will first address existing workforce shortages in the aviation field, while preparing longer-term pathways to upskill workers into advanced drone tech specifically.

It’s an approach that can deliver economic mobility today, while building a pipeline for more specialized jobs once they’re available. Community groups are central partners, working to ensure that the efforts benefit Tulsa’s large Indigenous and Black populations—which have both a history of thriving in the region and of oppression and neglect.

On the funding front, the Tulsa hub is tapping into philanthropic support to extend the impact of federal dollars. The George Kaiser Family Foundation, for example, has committed to providing $50M in sustained funding for the Tulsa Innovation Lab, which is leading the hub, and $10M for wraparound supports for working learners. 

Across all the hubs, the federal funds are designed to attract philanthropic and especially private investment. “This funding is best seen by local tech hubs as catalytic funding. It’s seed capital for the first five years rather than implementing a federal program,” says Schnur.

If they’re successful, the tech hubs will show companies and investors that places like Tulsa can drive and sustain innovation. 

The Kicker: “Sometimes to be able to attract the attention of investors you have to show a certain critical mass and potential,” Schnur says. —By Elyse Ashburn

Open Tabs

Foundation Funding
Maine’s Community College System will receive a $75M philanthropic gift to support short-term workforce training. The new investment from the Harold Alfond Foundation follows roughly $19M in previous gifts for short-term training programs. That money, combined with $35M in pandemic relief funds, has supported training classes for more than 26K students. The system says the foundation’s funding will support training for 100K people.

AI and Higher Ed
AI will be a boon for self-motivated students and create both challenges and opportunities for universities, Mary Meeker, a high-profile tech investor, says in a new report. Universities should embrace innovation to maintain their academic relevance and market share, she writes, pointing to Georgia Tech’s new Division of Lifetime Learning. “Yesterday’s signaling credential may not make sense in a more meritocratic, skills-based world.”

Inclusion and Diversity
SHRM has dropped “equity” from its take on workplace inclusion and diversity, which the HR association had represented with the acronym for inclusion, equity, and diversity. “By emphasizing inclusion-first, we aim to address the current shortcomings of DE&I programs, which have led to societal backlash and increasing polarization,” the group said. Critics told Axios that the move will embolden those who want to eliminate DEI work.

Accreditation and ROI
Trellis Strategies has acquired the quality assurance practice of the Workforce Talent Educators Association. WTEA is among a group of upstart accreditors that seek to hold college programs accountable based on their ability to prepare learners for workforce success. The acquisition allows Trellis to use those quality assurance processes in its work with colleges, wroteJennifer Dirmeyer, WTEA’s co-founder.

Skills Training
Amazon has exceeded its goal on free cloud training, with 31M learners around the world receiving training from AWS. The company said it spent hundreds of millions on the initiative. Amazon recently said it will offer free generative AI–focused courses, with a goal of training 2M people globally by next year. AWS also launched training to help people develop essential soft skills, like communication and problem-solving.

Big Gift
Opportunity@Work has received a $20M grant from MacKenzie Scott and Yield Giving. The nonprofit group said it would use the money to equip large employers and the public sector to hire workers without four-year degrees into good, in-demand jobs.

Plenty of worthy news didn’t make it into this busy issue. We’ll try to include what we missed next time. Also, I’ll be attending JFF Horizons next week. Say hi if you’ll be there? Thanks for reading. —PF