Commentary: Training our Workforce to Meet Demand

| FROM THE PRINT EDITION |
 
 

Business and community leaders in Seattle and the Puget Sound region have built a strong foundation for a diverse economy, but developing a vibrant economic base is not enough. Making it sustainable is critical. In order to maintain the regional competitive advantage we have built, we must deepen our local talent pool to support the businesses that create new, innovative jobs.

An increasing number of those jobs require advanced education and training in critical sectors. In fact, Washington needs to add 9,000 graduate degrees per year in STEM (science, technology, engineering, mathematics) fields through 2019 to keep up with employer demand. Seattle, like Boston and San Jose, has a bachelor’s degree attainment rate of nearly 25 percent. However, when comparing graduate degree attainment, Seattle has a rate that is only two-thirds of those cities. It would take more than 100,000 graduate degrees to reach the per capita rate of Boston and San Jose.

Further highlighting our needs in higher education, Seattle ranks comparatively low when it comes to availability of part-time graduate degree programs that can support the schedules and goals of our region’s working professionals. Per capita, Seattle’s supply of part-time graduate degrees is less than half of cities with similarly high attainment levels of bachelor’s degrees.

Seeing this educational gap, Northeastern University, a global, experiential, nonprofit research university based in Boston, is opening a graduate campus in Seattle’s burgeoning South Lake Union neighborhood in January 2013. Northeastern has developed 15 professional graduate degrees tailored to Seattle’s needs in science, engineering, technology, health care, business, education and nonprofit.

Each degree is specifically designed to meet the talent demands of our local innovation economy. A master’s degree in information assurance, for example, is regionally in high demand and also tailored to some of Seattle’s top-tier IT companies and their workforce needs.

We have worked closely with local business leaders for the past year—through more than 250 meetings—to identify the areas of graduate education needed to propel our economy forward and to retain companies known for innovation, companies like Amazon, Microsoft, Starbucks, Seattle BioMed and Fred Hutchinson Cancer Research Center.

We’re also responding to the need for more accessible graduate degree programs through a hybrid delivery system that combines classes at the South Lake Union campus and online course work. This hybrid approach is designed to suit Seattle’s high-tech culture, combining mobile and wired education with the benefits of face-to-face faculty/peer interaction and teamwork. It provides high-caliber learning with a level of flexibility that allows both busy professionals and stay-at-home parents to get the education they need to take the next step in their careers.

We are inviting companies to get directly involved through partnerships that enable them to help design curricula and customize programs in a way that produces the skilled workforce those firms need to prosper and compete globally.
But purely educational partnerships can only be part of the solution to the challenges faced by our region. We need to develop a strategic approach to broader partnerships involving business and higher education. One possible model for this is the collaboration between the Northeastern Integrated Initiative in Global Health, driven by faculty in Boston, and Seattle BioMed, to develop tailored graduate courses for Seattle and explore joint research initiatives.

Institutions of higher education should be committed to collaborative relationships with area employers who are driving the local economy, thereby creating a truly educated, highly skilled and competitive workforce that aligns talent with industry needs. It’s innovation at work.

Tayloe Washburn
is the graduate campus CEO and dean of Northeastern University–Seattle. He has held leadership roles in education throughout his career. He was recently named Economic Development Champion of the Year by enterpriseSeattle, a regional economic development council.

Looking for high investment returns? Consider investing in a family business.

Looking for high investment returns? Consider investing in a family business.

 
 

Investors do not lack opportunities to deploy their capital, but being able to generate respectable returns is much more difficult. Part of the problem is finding unique investment opportunities with significant upside in a crowded market. The best option may be to put money to work in a privately-held company.

But private companies pose challenges when it comes to understanding their business, and analysis of the company may be fraught with pitfalls. Or it may be that investors are simply not aware of the opportunity in the first place.

There is, however, an important trend that is clearly discernable in relation to family-held businesses. Wealthy families and individuals are increasingly attracted to the idea of providing capital directly to family businesses as part of their overall investing strategy. And the attraction is reciprocated – family-owned businesses are increasingly open to the idea of wealthy families and individuals providing capital.

At Cascadia Capital, we are seeing a rapid increase in the practice of families investing in families, which can be a highly effective solution for both businesses and investors. Family businesses can be attractive investments, particularly for other family businesses, private companies, individuals, or family offices, which are wealth management companies investing on behalf of a single family or individual. Family run businesses often employ management styles that these investors understand well and can offer portfolio diversification without the hefty fees charged by private equity funds and investment firms; fees that, over time, can add up to millions of dollars.

According to a recent survey by the Family Office Exchange, about 70 percent of family offices now pursue this strategy of direct investing. This may be, in part, due to a shift by family offices seeking to bypass layers of fees and a lack of transparency and control that are inherent to the private equity fund model. Instead, many family offices now prefer to invest directly on a deal-by-deal basis offering more direct control, additional flexibility for longer-term holds, and lower fees. 

From the perspective of family businesses, a significant number are considering alternative solutions to meet their strategic objectives. In the event of a sale, an acquisition by another family can be a compelling solution compared to a private equity or strategic buyer transaction. And when seeking financing for business activities, direct investments from family offices can offer significantly more flexibility than funding from private equity firms that are beholden to rigid criteria and fixed investment periods.

 

The benefits for family businesses of having a direct relationship with their investors or buyers can be numerous. For example, if a family is looking to sell its business, family office buyers can provide liquidity and the opportunity for owners to exit without having to sell to a competitor. If a family is looking for additional financing to fund growth, direct family office investments can offer more favorable terms than other traditional sources of financing.

 Importantly, wealthy families and individuals are more likely to take a long-term view of their investment and are not constrained by exit strategies devised to maximize value within a given time period. Further, these investors often made their money owning and operating successful companies and, as a result, are more likely to understand the nuances and unique challenges of family run businesses. 

This investment trend, while also being experienced in other parts of the country, is gaining momentum in the Pacific Northwest. We are increasingly finding private direct investments to be an effective solution for our family-owned business clients and our family office clients.

Choosing the right investment partner is one of the most challenging decisions a family business can make. We have worked with many private, family run businesses to design long-term, flexible capital solutions and introduce our clients to suitable family office and private investors with common objectives.

 For family offices, like any investment opportunity, buying into family businesses can be very attractive, but it is not without risk. Prior to investing, proper analysis calls for extensive financial due diligence to ensure interests and incentives are well aligned in the transaction. Success depends on ensuring both a structural and cultural fit. We actively encourage family business owners and family investors to work with experienced advisors to carefully explore every available option before determining the best course of action.

Christian Schiller is a managing director at Cascadia Capital, specializing in advising family businesses. Cascadia Capital is a Seattle-based investment bank serving middle market clients, globally.