San Luis Valley Model for Agricultural Water, Energy, and Workforce Resilience
In the San Luis Valley, agriculture remains a foundational employer and economic engine, yet producers face increasing water constraints, rising energy costs, and aging irrigation systems. Qualified modernization projects stall for lack of affordable financing and skilled local labor. Closing that gap does not require a new state grant program or a broad new appropriation, because Colorado already has the building blocks in place: San Luis Valley Rural Electric Cooperative, Tri-State, and the Collective Clean Energy Fund (formerly the Colorado Clean Energy Fund) launched the Electrify and Save On-Bill Repayment Program in 2024, and rebates already cover eligible measures. What is missing is state recognition, credit support, and trained local capacity to move qualified projects forward at scale. The Colorado State Legislature should advance enabling legislation for a focused three-year San Luis Valley pilot that builds on existing on-bill repayment and rebates with three additions: a state-qualified credit support program, a workforce pathway through Adams State University, and a regional performance dashboard. Done well, the pilot would help producers lower energy use, cut operating costs, and manage water better, while giving other rural agricultural regions a model they can adapt.
Challenge and Opportunity
The San Luis Valley illustrates a broader challenge confronting rural agricultural regions across Colorado: the systems that produce crops, move water, deliver electricity, and train the workforce needed to maintain those systems are tightly linked, but policy responses are often fragmented.
This is not a new problem. Producers have long managed groundwater limits, high pumping demands, and large capital costs, but the urgency has grown as drought conditions, aquifer decline, equipment age, and farm operating margins have converged. Producers need irrigation reliability, efficient pumping systems, affordable capital, and a local workforce capable of installing and maintaining modern equipment at the same time. Cooperatives and local utilities need stable load, cost recovery, and healthier distribution systems. The state needs to sustain rural economies, protect Interstate Compact compliance, support water management goals, and ensure that rural communities outside the urban Front Range can participate in modernization efforts rather than fall behind them.
The Colorado Department of Agriculture emphasizes that the state is facing a significantly dry year in 2026, with the Governor activating Phase 2 of the Drought Response Plan in March 2026. The Upper Rio Grande is expected to see poor spring runoff (roughly 25% of average) alongside declining aquifers, adding continued stress on producers who already operate under strict groundwater management requirements.
At the same time, San Luis Valley agriculture remains too important to ignore. Colorado’s potato economy is heavily concentrated in the Valley, and regional economic analysis has shown that agribusiness is a major share of local employment. The scale of irrigation infrastructure is substantial: the Valley operates up to 3,000 center pivots and more than 14,000 wells, and replacing or reconstructing a single center pivot can be costly. In 2019, estimates found that building a well-irrigated, single center pivot could cost approximately $170,000. Even incremental modernization represents a major capital demand for individual producers. The workforce challenge is just as central as the financing challenge. Even when a project is technically sound and financially attractive, it can stall if the Valley lacks enough trained engineers who understand irrigation systems, pumps, controls, motors, rural electric infrastructure, and local water conditions. If producers cannot access both affordable modernization pathways and the local talent needed to deliver them, the likely results are a continued squeeze on farm margins, reduced competitiveness, delayed capital upgrades, and added pressure on the local electric system and workforce base.
Colorado Leadership Opportunities
This challenge also creates a concrete opportunity for state leadership. Colorado does not need to build a policy response from scratch or commit to a large new spending program. The Electrify and Save On-Bill Repayment Program and existing rebates already provide a practical deployment platform for rural consumers and small businesses, with repayment tied to the utility bill rather than conventional credit underwriting. The remaining barrier is that some qualified agricultural projects still need additional credit support, implementation capacity, or capital flexibility to pencil out.
A targeted state-qualified credit support program would strengthen the existing system by backing the financing gap that remains above on-bill repayment. It would also enable qualified projects to secure additional capital at lower rates without replacing local program delivery. The more flexible financing options available will increase accessibility and help reduce barriers and motivate improvements.
Meanwhile, the Adams State University and Colorado State University mechanical engineering partnership has now produced its first graduating class in Alamosa, proving that the Valley can grow technical talent locally rather than relying entirely on outside labor. The workforce component is not secondary; it is what makes the financing strategy deployable. Together, these developments create the foundation for a place-based initiative that links financing support, local technical talent, deployment, and measurement in one coordinated effort.
If Colorado acts now, it can accelerate qualified irrigation and farm energy projects that are already close to viable but remain constrained by financing gaps and limited implementation capacity. Benefits include lower energy use, lower water waste, stronger farm balance sheets, more resilient rural electric infrastructure, and a stronger local workforce trained to install, maintain, and improve these systems. The state would also gain a replicable framework for other agricultural basins by demonstrating how limited public credit support and existing programs can unlock more private and cooperative financing. If Colorado does not act, many producers will continue to navigate a fragmented capital stack in which even well-designed projects stall despite existing rebates and on-bill repayment options. That delay raises the odds of slower adoption, missed savings, and weaker long-term outcomes for both communities and the state.
Plan of Action
Here are the recommendations to construct a pilot program that will help producers lower energy use, reduce operating costs, and support better water management.
Recommendation 1. Create a state-qualified credit support program for agricultural water and energy projects.
The Colorado State Legislature should direct the Colorado Energy Office, in partnership with the Colorado Clean Energy Fund and participating utilities, to establish a state-qualified credit support program for irrigation and farm energy projects in the San Luis Valley. This should be structured as an enabling credit support tool, not as a request for a new state grant program for individual projects. The state should reinforce the existing Electrify and Save On-Bill Repayment Program and available rebates by backing the financing gap that remains above on-bill repayment, so eligible projects can secure additional capital at lower rates to proceed. Eligible measures could include irrigation pump upgrades, variable frequency drives, control systems, motor replacements, and related efficiency investments. The purpose is to expand financing options for producers whose projects are operationally sound and policy-aligned but still need added assurance or structured capital support.
The Colorado Energy Office should serve as the lead state coordinating entity, with the Colorado Clean Energy Fund administering or supporting financing mechanics in partnership with San Luis Valley Rural Electric Cooperative, Tri-State Generation and Transmission Association, and other participating distribution cooperatives. Participating utilities would identify eligible customers, support on-bill repayment coordination, and help verify utility-related project performance. The Colorado Department of Agriculture and Colorado Water Conservation Board should advise on project qualification criteria so the program aligns with agricultural resilience, groundwater management, and state water goals. Local water entities, irrigation districts, and producer organizations should provide field-level input on whether proposed measures are practical under Valley conditions.
Because this request centers on agricultural water resilience, rural energy financing, and state credit support, it would likely be best supported through the Colorado General Assembly’s Agriculture, Water and Natural Resources committees. The Energy and Environment and Appropriations committees could coordinate as needed. Framing the request as an agricultural water and energy resilience pilot gives it the strongest policy fit while recognizing that the financing structure and any reserve funding would also require energy and fiscal review.
The state could operationalize the program through a reserve, guarantee structure, or other credit support mechanism that is only available for projects meeting defined technical and repayment standards. Because credit support leverages private and cooperative capital rather than spending it, the program can be seeded with $25 million from the state’s Unclaimed Property Trust Fund rather than a new general-fund appropriation, with each dollar of reserve backing several dollars of producer and cooperative financing. The Colorado Unclaimed Property Trust Fund holds abandoned or forgotten property in trust until rightful owners make valid claims, and its funds do not revert to the state general fund at the end of the fiscal year. Because this proposal would use the fund as a credit support reserve rather than as direct grants, it fits the fund’s structure by preserving principal, supporting claims obligations, and recycling public backing to leverage private, cooperative, and producer investment.
To keep the program practical, participating entities should use simple application standards, approved equipment lists, and contractor or vendor pathways that reduce transaction costs for producers. The state should require annual reporting on supported project counts, financing leverage, repayment performance, estimated energy savings, and water-related operational benefits.
Recommendation 2. Build a workforce pathway focused on agricultural energy and water systems.
Colorado should make workforce development a core feature of this policy by supporting Adams State University as the regional training hub for agricultural energy and water systems. Rather than creating an entirely new degree from scratch, the state can build on the existing mechanical engineering and water program partnerships in Alamosa. The university should add coursework, internships, and applied projects focused on water resource, irrigation systems, pumps, controls, motors, rural electrification, and farm equipment optimization. Students who complete the pathway should receive an Adams State University Agricultural Water and Energy Engineering Certification that demonstrates applied engineering competency in agricultural energy and water systems. This approach would help retain local students, support employers in the Valley, and reduce the need to import specialized labor for every installation or retrofit. It also ensures that financing support leads to completed projects, not just approved applications. Because this pathway builds on an existing program rather than a new one, the most direct way for Colorado to support it is to prioritize existing state higher-education funding toward the Adams State University certification program, consistent with this proposal’s broader approach of using existing resources rather than new appropriations.
Adams State University should serve as the regional training hub, in coordination with support from the Colorado Commission on Higher Education and the Colorado Office of Economic Development and International Trade. Local cooperatives, irrigation districts, contractors, equipment vendors, and regional employers should help define applied skills; host paid internships, provide capstone project opportunities, and connect students with real infrastructure needs. The goal is to create a local pipeline of certified engineers who understand Valley conditions and can help farmers adopt modern irrigation and energy technologies more affordably.
Recommendation 3. Launch a regional performance dashboard to measure outcomes and support replication.
The Colorado Energy Office should lead the regional performance dashboard and publish annual pilot updates. The dashboard would feature project and program data transmitted by participating utilities, the Colorado Clean Energy Fund, Adams State University, Colorado State University, contractors, and state agency partners. The dashboard should track projects completed, estimated energy savings, water-related operational improvements, repayment performance, financing leverage, workforce participation, internships, capstone projects, and local economic impacts where feasible. This does not need to be a burdensome reporting regime. The purpose is to give policymakers and implementing partners an evidence base that shows how well the model works, how well the local workforce pipeline is growing, and which elements should be expanded to other rural communities. California offers a useful precedent: the California State Treasurer’s Office publishes periodic public reports on its credit enhancement financing programs, covering participation, capital leveraged, and portfolio performance in a format Colorado could adapt for the Valley pilot.
The pilot should run for three years, followed by a formal evaluation report prepared by the Colorado Energy Office in consultation with the Colorado Department of Agriculture, the Colorado Water Conservation Board, participating utilities, financing partners, and higher-education partners. That report should assess project performance, repayment results, producer participation, workforce outcomes, administrative burden, and regional benefits. Ultimately, these reports would reveal whether Colorado should expand the model, maintain it as a targeted Valley program, modify it, or sunset it based on performance.
The three recommendations should be implemented as one coordinated pilot rather than as separate programs. The Colorado Energy Office should convene the implementing partners, set reporting expectations, and coordinate annual updates. Senator Cleave Simpson and other rural legislators could play a pivotal role by advancing enabling legislation, securing any needed budget direction, and convening cross-agency alignment. A three-year pilot timeline would allow Colorado to move quickly, learn from implementation, and determine whether a broader statewide model is warranted.
The foundation for this effort is already in place. The Valley has producers who understand the challenges of managing water and operating costs, water leaders focused on long-term sustainability, colleges and universities training future engineers, and energy and financing partners with programs that are already delivering results. Rural economic development organizations and other local stakeholders bring additional experience and support. Rather than creating a new system from scratch, this proposal builds on existing relationships, programs, and local expertise. That makes it a practical candidate for state support and positions the Valley to move quickly from policy to implementation.
Conclusion
Colorado should act now to create a state-qualified credit support program for San Luis Valley agricultural water and energy projects while making workforce development a central part of implementation.
This is not a request for a broad new state spending program. It is a practical pathway that uses existing programs, available rebates, targeted credit support, and regional higher-education capacity to help qualified projects move forward. Doing so would respond directly to drought pressure, rising operating costs, and the need to preserve the Valley’s agricultural base while modernizing critical infrastructure. If implemented well, the San Luis Valley can become a state-tested model for using limited public credit support and locally trained talent to unlock more rural investment, conserve resources, and build long-term community resilience.
Not in the form of a new general-fund grant program. The proposal does request a one-time $25 million credit support reserve drawn from the state’s Unclaimed Property Trust Fund rather than the general fund. Because that reserve backs financing rather than being spent as grants, it is recyclable and is designed to leverage several dollars of private, cooperative, and producer investment for each dollar committed. It does not replace existing financing tools. It asks the state to recognize qualified projects, provide enabling credit support where appropriate, coordinate existing programs, and help align workforce training with local implementation needs. The goal is to make current tools work better and attract more private, cooperative, and producer investment.
Some qualified projects still do not move forward even with on-bill repayment and rebates in place. A state-qualified credit support program would not replace the existing program. This proposal would support additional financing options for projects that meet technical and repayment standards but still need added credit support or capital flexibility to proceed. That approach helps Colorado get more value from systems and incentives that are already working.
Similar efforts can stall when programs are too complicated, when local contractors are not prepared to deliver projects, or when agencies work in silos. This proposal addresses those pitfalls by emphasizing simple rules, a defined pilot geography, local higher-education and workforce alignment, and clear annual reporting. A small but well-supported pilot is more likely to succeed than a statewide rollout that lacks implementation capacity.
Federal resources may still play an important role, but state action can move faster, be tailored to Colorado’s water and agricultural realities, and position the Valley to absorb future federal funds more effectively. Acting now allows Colorado to shape the model, generate evidence, and demonstrate bipartisan value through rural cost savings, resource efficiency, and workforce development.
Close Physician Gaps in Rural and Underserved Areas By Leveraging Global Talent Already in Colorado
Colorado faces a projected shortage of more than 2,400 physicians by 2030, alongside the growing shortage nationwide, particularly in rural and certain underserved urban communities. Meanwhile, as of 2017, there were an estimated 3,000 immigrants in Colorado with healthcare-related degrees in jobs that do not utilize their training, 2,000 of whom received their training outside the United States. Many immigrants, including physicians with extensive experience in their countries of origin, are unable to practice without policy changes and/or support in navigating licensing requirements. Colorado has already invested in solutions. HB22-1050, enacted in 2022, created two pathways for internationally trained physicians — a clinical readiness program (CRP) that prepares international medical graduates (IMGs) for U.S. residency and an expanded re-entry license for internationally trained physicians (ITPs) — individuals who have completed postgraduate training and hold a foreign medical license. The CRP has produced real results, including a 100% residency match rate, all in rural and underserved communities. But CRP grant funding is expiring, the re-entry pathway has not yet been utilized, and a critical third pathway — supervised provisional licensure — remains absent from Colorado statute despite having been enacted in 24 states and two territories.1 This memo calls on the incoming Governor to complete the architecture that HB22-1050 began and strengthen implementation of all three pathways through data assessment, interagency coordination, private funding, and outreach to ITPs and employers. Together, these actions can help close documented gaps in health services for communities with the greatest need. This is an opportunity for the Colorado government to deliver by maintaining rigorous physician standards while eliminating unnecessary barriers to practice.
Challenge and Opportunity
Colorado is entering a healthcare workforce crisis decades in the making, at a moment when the state’s capacity to respond through traditional pipelines is shrinking. Colorado faces an estimated shortfall of 2,400 physicians by 2030, consistent with national projections of a shortage of 86,000 physicians by 2036.2 The needs align with the state’s most vulnerable communities: rural counties, primary care, mental health, and obstetrics face the deepest gaps, with some eastern regions reporting ratios as high as 5,600 residents per primary care provider; and the vast majority of Colorado’s 64 counties contain at least one federally designated health professional shortage area. Colorado’s residency pipeline is insufficient to meet statewide needs.
Meanwhile, demand is accelerating, especially for older adults who require more care. For the first time, more Coloradans are over 60 than under 18, and by 2030, roughly 20 percent of the population will be 65 and over, with many living in the rural communities where physician access is most acute.
HB22-1050, enacted in 2022, established a framework for activating the state’s immigrant physician workforce by creating a program to help IMGs enter a U.S. residency and a pathway to gain licensure through a competency assessment. The bill envisioned that IMGs needing additional training and assistance, such as provided through a residency, could access the CRP program. Those that did not need additional training could access a streamlined path to full and unqualified licensure through the re-entry pathway. However, the bill did not provide a pathway for those who may benefit from additional supervision but who do not need a full residency. Since HB22-1050 became law, other states have enacted a provisional pathway for this purpose. This path does not lower standards — it creates a supervised, employment-linked route to demonstrate equivalency. It is the missing piece in Colorado’s framework to ensure pathways to licensure for all incoming international talent. It is also the piece with the most potential to scale, since it is employer-driven. (See Table 1.)
Navigation and Support — IMG Assistance Program. Threading across all three pathways listed above3 is the IMG Assistance Program, which connects individual IMGs to whichever pathway they are best positioned to enter through career coaching, credential evaluation, and USMLE preparation support. Without this connective tissue and support structure, even a broader set of pathways will be inaccessible to immigrants with underutilized healthcare credentials currently living in Colorado and even more in the region.
Research by More in Common found that healthcare workers are among the most broadly supported immigration categories among Americans across the political spectrum4. This proposal is a workforce competitiveness initiative: it addresses a documented shortage with a tested, supervised pathway. New policy that translates into lifesaving services for Colorado communities would be a clear win for the new governor.
Plan of Action
Recommendation 1. Commission an assessment of physician and policy gaps and crosswalk with information on international medical graduates in Colorado.
Colorado’s physician shortage data exists, but is incomplete for policymaking. Aggregate shortage statistics — doctor-to-patient ratios, HRSA Health Professional Shortage Area designations — tell us where gaps exist in general terms, but do not tell the incoming administration which specific locations and specialties face the most acute near-term hiring needs, or which segments of the IMG population in Colorado are closest to practice-readiness. Without this crosswalk, it is difficult to effectively target efforts to fill physician workforce gaps.
The incoming Governor should direct Colorado’s Department of Public Health & Environment (CDPHE) and Department of Labor & Employment (CDLE), in coordination with the Office of New Americans (ONA), the Colorado Rural Health Center, the Department of Health Care Policy and Financing (HCPF), and the Department of Regulatory Agencies (DORA) to publish a physician workforce gap assessment within 90 days. Building on existing data, the assessment should map shortage areas by county, specialty, and care setting; document unfilled physician positions by metrics such as time-to-fill and applicants-per-posting; and identify and prioritize rural and frontier counties with the most acute needs. Simultaneously, CDLE’s Global Talent Survey and other data sources should be used to produce an updated estimate of the IMG and ITP populations in Colorado, their degree of practice-readiness, and which licensing pathway — CRP, re-entry, or provisional — each segment is best positioned to enter.
The assessment should also analyze the ITP evaluation criteria for the provisional pathway, including by reviewing and building upon the existing evaluation criteria used in the re-entry pathway. Prior outreach generated interest in assisting Colorado to build out this specific pathway for ITPs (rather than having the same criteria used for evaluations of U.S.-trained doctors seeking re-entry), but the assessment plan should ground-truth the viability, costs, and potential scale.
This assessment will serve as the evidentiary backbone for the action plan and will allow the administration to set measurable targets and create a monitoring and evaluation framework: how many IMGs and ITPs to activate, in which specialties, and in which communities, over a defined timeline. The assessment should be conducted with input from health systems, rural hospital associations, the Colorado Medical Society, and others, and should be completed in time to inform the 2027 legislative session.
Recommendation 2. Build on HB22-1050 by amending Article 87 of the CO Revised Statutes to authorize the Colorado Medical Board to grant provisional licenses to qualified international medical graduates.
Colorado is one of fewer than half the states in the country that do not yet authorize a supervised provisional licensure pathway for ITPs. 24 states and two territories — including Arkansas, Illinois, Florida, Louisiana, Massachusetts, Washington, and Wisconsin — have enacted versions of this pathway, and the list is growing. Colorado’s current framework requires both IMGs and ITPs to either complete a U.S. residency program (highly competitive, with very few slots successfully allocated to them) or navigate the re-entry license, which has not yet been used in part due to the high cost in time and dollars. The result is that many qualified physicians already living in Colorado cannot practice. 5
The incoming Governor should work with legislative champions to amend HB22-1050 in the 2027 session to authorize the Colorado Medical Board to issue provisional licenses to qualified ITPs. To be eligible, an applicant would need to: hold a current or recently active foreign medical license in good standing; demonstrate substantially equivalent postgraduate training; hold ECFMG certification; have passed USMLE Steps 1 and 2; demonstrate English proficiency; and secure a full-time offer of employment from a sponsoring healthcare entity — including hospitals, Federally Qualified Health Centers (FQHCs), rural health clinics, or medical practices — that agrees to provide supervision and periodic competency evaluation. The provisional license would be valid for two to four years. Upon passing USMLE Step 3, receiving a positive evaluation from the supervising physician or medical director, and maintaining good standing, the license would convert to a full, unrestricted license.
A new provisional pathway would maintain current standards by ensuring strict eligibility criteria followed by an extended evaluation period — it creates supervised, assessment-based routes to demonstrate equivalency. The provisional license increases the pool of potential applicants because it allows physicians to earn income while practicing under supervision, while they work toward a full license. The bill should explicitly prioritize placement and retention in rural counties, primary care shortage areas, and/or facilities serving Medicaid populations, and also include guidance on supervision, employer eligibility, malpractice coverage, reporting, discipline, patient safety, and conversion to the full license. Placement in rural and underserved areas could be incentivized by prioritizing the assessment of provisional license applications for those with job offers in rural and underserved areas, among other measures.
Recommendation 3. Collaborate with healthcare employers, philanthropies, and impact investors to create revolving fund, loan, and scholarship programs that sustain alternative licensure pathways for physicians across all three pathways, with incentives for doctors to work in rural and underserved areas.
Given Colorado’s budget challenges and competing funding priorities, support for alternative pathways must be sustainable with philanthropic and private support, rather than relying on ongoing state appropriations. The CRP and IMG Assistance Program created by HB22-1050 were funded through state appropriations that are now expiring. Without a durable, privately capitalized financing mechanism, programs that have produced strong results will fail. The costs IMGs face on the path to licensure are substantial and prohibitive for many candidates: ECFMG certification, USMLE preparation and testing fees, credential evaluation, and living costs during non- or low-income training periods.
The Governor should direct a senior advisor (see Recommendation 5) to convene a working group in the first 90 days of the initiative, including health systems, rural hospitals, philanthropic funders, assessment providers, and impact investors, to design a revolving and loan fund structure. The blended-capital revolving fund — seeded with public and philanthropic dollars and replenished by loan repayments and employer contributions so it needs no recurring appropriations — should build on past lessons from successful models of State Revolving Funds and CDFIs, including the in-state precedent of the Denver Regional TOD Fund, and Minnesota’s grants for IMG residencies, which apply the concept directly to internationally trained physicians. The fund could include an allocation for grants and incentives for ITPs to serve in rural and underserved areas; where there are persistent physician gaps, incentives could also be offered to ITPs from other states who commit to working in an underserved area in Colorado for a specific term. The fund should draw on three primary sources of private and non-state capital.
Healthcare employer co-investment. Hospitals, health systems, rural health clinics, and FQHCs that hire ITPs through the provisional licensure pathway — and that currently spend significantly on temporary (locum tenens) coverage — are the natural anchor funders. The per-year cost of a locum tenens physician routinely exceeds $150,000; co-investment in the talent pipeline is substantially cheaper and produces a permanent hire rather than a temporary fill. Employers who place ITPs through the provisional licensure pathway should contribute a defined amount per placement back into the fund, creating a self-reinforcing cycle as the pipeline scales.
Philanthropic capital. Colorado philanthropies with missions aligned to health equity, workforce development, and immigrant integration are natural partners: the Colorado Health Foundation, the Denver Foundation, the Denver Health Foundation, the Rose Community Foundation, and national health funders such as the Milbank Memorial Fund and the Commonwealth Fund.
Impact investment and loan programs. Loan programs that allow individuals to finance their own path to licensure — with repayment structured around physician income once practicing — can support candidates who have the credential profile but lack upfront capital. Loan repayment and/or other financial incentives tied to rural or shortage-area service commitments can further align individual financial incentives with community needs.
A note on the Rural Health Transformation Program (RHTP). Colorado has secured up to $1 billion in federal RHTP funding over five years to strengthen health systems across the state’s 52 rural and frontier counties. While this initiative does not require RHTP funds, it can help Colorado meet the workforce goals RHTP is designed to achieve. The administration should engage the CO Department of Public Health and Environment to explore whether rural placement of ITPs can be recognized within Colorado’s RHTP implementation plan as a workforce strategy. This is not simply a funding ask: it is an opportunity to demonstrate to the Centers for Medicare and Medicaid Services that Colorado has an implementation-ready plan for activating the physician workforce in rural communities.
Recommendation 4. Launch employer outreach to build a pipeline of sponsoring institutions and connect IMGs and ITPs to available pathways.
A provisional licensure pathway is only as effective as the employer network ready to use it. The incoming administration should start building that network as soon as possible, so that willing sponsors are identified and the business case is established to support the bill and its implementation.
The Governor should direct a senior advisor (see Recommendation 5) to launch a targeted employer engagement campaign, working through the Colorado Hospital Association and the Colorado Rural Health Center as primary conveners. The campaign should identify health systems, rural hospitals, rural health clinics, and FQHCs willing to serve as sponsoring employers and make the business case directly; someone who becomes a permanent hire is substantially cheaper than a temporary physician and produces durable workforce gains. The shortage assessment commissioned under Recommendation 1 should drive targeting, concentrating outreach in the specialties and geographies where employer gaps are most acute.
In parallel, Colorado’s Office of New Americans, in partnership with stakeholders, should reach IMGs and ITPs through trusted community channels — immigrant-serving organizations, refugee resettlement networks, and professional associations — to map the eligible population and connect candidates to whichever pathway they are best positioned to enter.6 A single state-maintained landing page consolidating all pathway options, eligibility criteria, and contact points should be established to simplify navigation for both applicants and employers. Progress should be reported annually on the number of employer sponsors identified, individuals contacted, and candidates who entered each pathway.
Recommendation 5. Direct a senior advisor in the Governor’s office to sustain momentum through the 2027 legislative session and work with the legislature to create a statutory position in CDLE to coordinate longer-term implementation across agencies.
The four recommendations above require sustained coordination across at least five state agencies — CDPHE, CDLE, ONA, HCPF, and DORA/the Medical Board — as well as ongoing engagement with the legislature, health systems, immigrant-serving organizations, and philanthropic funders. Colorado’s current institutional arrangement has no single point of accountability for this work. Without a named senior official in the incoming Governor’s office with explicit responsibility for the health workforce (whose larger portfolio could be broader health or workforce issues), implementation could fragment across agencies and lose momentum.
The senior advisor should have explicit authority to coordinate across CDPHE, CDLE, ONA, HCPF, and DORA;7 convene the medical workforce coalition described above; and serve as the administration’s lead point of contact for legislative champions on the provisional licensure bill. The Governor and legislature should evaluate whether a more durable governance structure — a statutory position in CDLE that liaises with the Governor’s office, a permanent medical workforce function within CDPHE,8 and/or a statutory health workforce commission — is warranted to carry the initiative beyond a single administration.9
Conclusion
Colorado does not need to wait for the next generation of medical school graduates to begin closing its physician shortage. The workforce is already here — trained, experienced, and ready to serve the communities that need them most. The five recommendations in this memo build on the foundation Colorado established with HB22-1050, completing the architecture the legislature began with a provisional licensure pathway, a durable financing model, and the institutional leadership to drive it across the finish line.
The 2027 legislative session opens January 11. The incoming Governor has a narrow and favorable window to act — with cross-partisan support, a ready coalition, and peer states that have already proven the model works. A successful physician pathway also lays the groundwork for extending provisional licensure to nurses, behavioral health professionals, and others facing similar barriers. The race for talent is here and this initiative is a win that can jumpstart the Governor’s workforce leadership.
A new provisional pathway would maintain current standards by ensuring strict eligibility criteria followed by an extended evaluation period — it creates supervised, assessment-based routes to demonstrate equivalency. Candidates typically must hold ECFMG certification and pass the same U.S. Medical Licensing Examinations that U.S. graduates take. Under the proposed provisional pathway, a physician is required to pass USMLE Steps 1 and 2 and meet other strict eligibility criteria before they can be considered for a provisional license that allows them to practice under the supervision of a fully licensed physician in the state for two to four years. Only after the successful completion of this provisional practice and passing USMLE Step 3, the candidate may be eligible to convert their provisional license to an unrestricted license. The re-entry pathway requires a Colorado Medical Board competency assessment and is a direct pathway to full licensure, and the Clinical Readiness Program routes candidates through a full U.S. residency. In every case, the standard is the same one applied to domestically trained physicians; the pathway simply changes how competency is demonstrated.
These pathways are built to incentivize hiring in the areas with the most need through speed and financial benefits. In addition, employers have a business incentive to recruit and retain staff so they can meet their workforce needs, which are highest in rural and underserved urban areas. The evaluation framework in Recommendation 1 would monitor practice patterns to confirm that placed physicians are serving the high-need patients and communities the policy is intended to reach. For example, employers in underserved and rural areas made offers of employment to all eight graduates of the Clinical Readiness Program.
Yes — but with clear eyes about its role. The CRP has produced a 100% residency match rate, which makes it a proven, high-quality model worth sustaining. Its graduates emerge as fully residency-trained U.S. physicians, and the majority of individuals get placed within the state. However, its limitation is throughput and cost: it serves only about four participants per cohort, candidates must still complete a residency before practicing, and its state funding is expiring. The recommendation is to continue the CRP — ideally placing it on the durable, privately-capitalized financing footing described in Recommendation 3 rather than relying on expiring appropriations — while recognizing that it cannot close the shortage on its own. The provisional licensure pathway provides the scale that the CRP cannot.
In theory, the re-entry pathway is the most direct route to practice — it does not require a U.S. residency or a provisional license period — but it has gone essentially unused, so near-term expectations should be modest unless its barriers are addressed. Those barriers are identifiable: the roughly $9,500–12,500 cost of the competency assessment with an uncertain result, the time required to prep for the assessments, a lack of recent clinical hours for many candidates, and limited awareness of the pathway.
To make it viable, the state can (1) defray the assessment and preparation costs through the financing mechanism in Recommendation 3, (2) work with the Colorado Medical Board to clarify what evidence meets the competency standard so candidates better understand their likelihood of success of their ~$10,000+ investment, (3) raise awareness through the targeted outreach in Recommendation 4, and (4) help candidates bridge clinical-hours gaps. Done well, re-entry becomes a fast track for the most highly qualified internationally trained physicians, complementing — not duplicating — the provisional pathway.
The central rationale is activating the talent already living in Colorado. But eligibility for the pathways themselves should not be restricted to current Colorado residents. Provisional and re-entry pathways to licensure are credential-based, and limiting them to in-state residents would needlessly shrink the pool. The practical approach is to keep eligibility open while concentrating outreach and prioritization on the in-state pool. There is also a competitive dimension worth naming: as more states stand up these pathways, Colorado’s own internationally trained physicians become recruitment targets for other states — so a credible, well-supported Colorado pathway is partly about retaining the talent already here.
The shortage extends well beyond physicians, and is often even deeper for other healthcare professions — for example, nursing is the single largest category of underutilized immigrants with health degrees nationally and in Colorado. Every medical profession has its own requirements, pathway, and process. Therefore, understanding the barriers and processes for individual medical professions is necessary to design the best solutions. For instance, the specific barriers to licensing, recruitment, retention, etc. may differ across medical professions.
The recommendation is to start with physicians — where the gap is acute, the model is tested (24 states), and the licensing stakes are highest — and then extend any lessons learned for designing and implementing this pathway to other professions. Designing the physician pathway and its supporting infrastructure (financing, navigation, interagency coordination) with that expansion in mind means the state builds a platform rather than a one-off fix. It is also worth noting that internationally trained physicians complement, rather than compete with, the nurse practitioners and physician assistants already in the workforce — in many rural settings, a physician of record is what allows mid-level-staffed clinics to operate at all.
Create a Colorado Skills Map to Close the State’s Talent Gap
By 2031, 73% of Colorado jobs will require postsecondary training, yet fewer than 30% of Colorado graduates go on to earn any postsecondary credential. The state’s high educational attainment is a result of credentialed adults moving in, rather than the development of homegrown talent. Colorado is already investing in multiple pathways to improve workforce readiness, but Colorado is spending public money on credentials, course credits, work-based learning, and a data system without a common way to determine whether those investments develop skills that secure jobs. Colorado’s investments demand urgent and meaningful coordination to function as a coherent system.
To address this, the state should establish a Colorado Skills Map developed and validated by a cross-agency and stakeholder working group. The Colorado Skills Map would define the technical and durable skills employers expect by sector and occupation, then attach a common skill identifier to ensure that credentials, courses, and work-based learning experiences are recognized as equivalent and portable across the state.
The timing is urgent, as the Statewide Longitudinal Data System (SLDS) is actively being developed and postsecondary and workforce programs are being consolidated under the recently passed Unified Postsecondary Talent Development System Act (HB26-1317). The Colorado Skills Map will build the interconnection needed across the education and workforce systems. As a result students can see clear pathways to a career, employers can trust credentials, and the state can make data-informed decisions and investments for a stronger talent pipeline.
Challenge and Opportunity
Colorado’s college-going rate trails the national average of 61% at just under 50%. While Colorado ranks among the most educated states on paper, that attainment comes from adults moving to the state already credentialed, not from Colorado’s own graduates finishing a pathway. This is known as the “Colorado Paradox.” Colorado needs to equip a homegrown workforce to meet the demands of a shifting and growing economy, especially if the state wants to remain competitive, continue attracting business, and provide Coloradans with pathways for economic mobility.
In 2023, the Colorado Workforce Development Council (CWDC) in partnership with the Colorado Department of Higher Education (CDHE), Colorado Community College System (CCCS), Colorado Department of Education (CDE), and Colorado Succeeds released a framework for quality non-degree pathways into the workforce. In 2025, SB25-315 established “The Big Three,” creating a postsecondary and workforce readiness funding model and setting a goal for every student to achieve one of three milestones: earn 12 college credits, earn an industry-recognized credential, or complete a work-based learning experience upon high school graduation. Today Colorado is actively consolidating and expanding its Postsecondary and Workforce Readiness programs, implementing quality standards for nondegree credentials, developing stackable credential pathways, and building the aforementioned Statewide Longitudinal Data System (SLDS) to connect K-12, postsecondary, and workforce data to inform decisions and investments.
Yet, there remains a number of challenges that need to be addressed.
- Credentials Not Leading to Employment: In 2025, Colorado’s Workforce Development Council reduced the List of Qualified Credentials by nearly a third because previously approved credentials did not offer a clear pathway to employment and economic mobility.
- Lack of Portability: Colorado’s 1215 Task Force, established to fix fragmentations between K-12, postsecondary, and workforce readiness programs, found in its 2023 report that students often lose their credit and work-based learning experience records when they change high schools, or move to between the K-12 and Postsecondary systems.
- Outcomes Not Reproducible: Most notably, there is not a common framework to connect these programs (i.e., The Big Three and non-degree pathways) and measure outcomes for the state in context of the new SLDS. Without a common basis for assessing portability and comparability, Colorado may know which program worked but lack the understanding of why it worked and therefore how to reproduce it.
The definition and tracking of skills across these programs is a critical gap. The Big Three tracks credits, credentials, and work-based learning, but does not include the skills earned through these experiences. The non-degree pathways framework identifies evidence of skills and competencies learned as a requirement, but does not define what skills matter for particular occupation. Without a standard attaching validated skills to programs or courses, the state cannot determine how experiences transfer across programs, how K-12 connects to the workforce, or what skills lead to employment. No individual school district, college, workforce board, or employer can create statewide interoperability on its own. Only the state can establish a common framework across K–12, postsecondary education, workforce programs, public funding, and statewide data infrastructure.
A Colorado Skills Map, or a shared set of skills validated by employers, educators, workforce boards, and workers, tied to specific occupations and sectors, could close this gap. Each skill would carry a common identifier (i.e., similar to a standardized course number) that courses, credentials, and work-based learning experiences would use, creating a recognizable standard of equivalency across the system. This would allow the state to validate credentials before they’re funded, enable a “validated skill” to travel with a student across schools and institutions, and provide a common language to connect existing programs across the state for measurement in the SLDS. If successful, the Colorado Skills Map would allow students to make informed decisions about their career by showing the different pathways to an occupation, prevent employers from having to vet every program individually, and empower the state to make data informed decisions and investments for a stronger talent pipeline.
The Colorado legislature passed HB26-1317 in 2026 to support the creation of a unified system of postsecondary talent development and Executive Order 2025-006 calls for an audit of Colorado’s postsecondary talent development system to reimagine a future unified system that meets the needs of learners, job seekers, and employers. Yet, this consolidation does not extend to the K-12 and PWR system, meaning the state is on track to create two individually, well-organized systems that lack a shared language. Building the Colorado Skills Map bridges this gap and integrates the system from kindergarten through employment.
Plan of Action
Recommendation 1. A Cross-agency Working Group to Define the Colorado Skills Map
Building on Executive order 2025-006’s direction to unify Colorado’s postsecondary and talent system, the governor’s office should issue an executive directive creating a cross-agency working group to define and build the first Colorado Skills Map. The working group should be led by CDE’s office of Postsecondary and Workforce Readiness (PWR), with CDHE, CCCS, CWDC, the Office of Information and Technology (OIT) and other relevant agencies and entities as participants. It should establish an advisory committee composed of small- and medium-sized businesses (including rural employers), education institutions, labor organizations, parent-student advocacy organizations, regional workforce development councils, and other relevant stakeholders. The advisory committee should be meaningfully consulted to inform how the working group develops and tests the skills maps for their respective sectors. Within 180 days, this group should define a skills map that provides a common framework linking education programs, workforce expectations, and outcomes data.
The working group should determine three priority sectors for the initial Colorado Skills Map. Examples could include healthcare certification, a skilled trade, and an emerging tech credential. . The Colorado Skills Map should define the entry-level and mid-level occupations in that sector, the technical and durable skills required at each level, and a skill identifier for each to link them back to the education or training required to attain them.The working group should consider how skills stack (i.e., build on each other in a sequence) and design the map to illustrate how skills earned today for entry level occupations can lead to potential mid-level and advanced positions.
CDE’s office of PWR should be responsible for maintaining and updating the developed skills map. Using SLDS data, CDE’s office of PWR should evaluate the Colorado Skills Map against wages and outcomes every three years and report to the State Board of Education (SBE). The CDE should update the Skills Map every three years.
Recommendation 2. Feasibility and Readiness Assessment for Colorado Skills Map Application
Before asking schools, workforce programs, and employers to adopt the Colorado Skills Map, PWR and CCCS should conduct a feasibility and readiness assessment within 180 days of defining the priority sectors. This assessment should determine whether the Colorado Skills Map can be reliably applied to existing education and workforce programs, what resources implementation would require, and whether there are regions with the institutional capacity and willing partners necessary to conduct a meaningful real-world pilot.
The feasibility assessment should:
- Select and catalog sample regions for all their existing courses, credentials, and work-based learning experiences to map them against the skills and identifiers;
- Estimate the resources and system changes required for implementation such as changes to curriculum design or capacity for data collection, and
- Identify regions with sufficient readiness to participate in a limited pilot.
Particular attention should be paid to differences in implementation capacity between large and small districts, urban and rural communities, workforce providers, and work-based learning partners. The assessment should determine whether implementation requirements would create barriers that could unintentionally exclude lower-capacity institutions or regions from participating.
After the feasibility assessment, the working group should conduct a readiness assessment to identify regions that meet a defined set of minimum requirements necessary for a meaningful pilot of the Colorado Skills Map across the education-to-workforce continuum.
The readiness assessment should produce a short implementation plan for each prospective region identifying participating organizations, the occupations and programs to be tested, anticipated costs, technical-assistance needs, data requirements, and any remaining barriers to implementation. The implementation plan should be presented to solicit interest from those regions willing to participate in an implementation pilot.
Recommendation 3. Pilot the Colorado Skills Map
If there is agreement between the working group and the region on the implementation plan, they should proceed with up to three regions for an implementation pilot within 270 days. The pilot should measure whether:
- Institutions can reliably document learner attainment;
- Validated skills are portable, i.e., can be recognized across participating programs and institutions;
- The Colorado Skills Map can effectively be incorporated into existing CDE and CCCS reporting, enrollment, and labor data;
- Employers find the information useful and trustworthy, and
- Implementation costs and administrative burdens remain manageable in real-world conditions.
CDE’s office of PWR and CCCS should report findings and make recommendations for either scaling or sunsetting this effort to the working group, the Governor’s Office, the General Assembly’s committees on education, and the State Board of Education.
Should the pilot’s findings support an expansion of moving forward with the Colorado Skills Map implementation, the Governor should reconvene the working group within 90 days to expand the map for major Colorado sectors, beyond the first three following the same sector-partnership validation process.
Recommendation 4. Publish a Public Registry for the Colorado Skills Map
Within 12 months of pilot completion, CDE and CCCS should publish the validated Colorado Skills Map in a public registry for both learners and educators. This should be modeled after CDE’s Colorado Academic Standard Online, which allows users to create customized views of state academic standards by subject and grade level, showing grade level expectations, evidence outcomes, and academic context for each. Similarly, a Colorado Skills Map public registry should allow users to navigate by sector and occupation level, viewing each sector’s entry, mid and advanced career levels along with the technical and durable skills expected at each.
The public registry should also include resources with an implementation checklist inspired by the learnings from the pilot and guidance on tagging existing courses and credentials with skills identifiers for reporting. This will provide a comprehensible and evidence-based playbook for adoption for both learners and educators.
Recommendation 5. Incentivize Adoption of the Colorado Skills Map
The State Board of Education should use its existing authority to align PWR Sustain Funding to the Colorado Skills Map. SB25-315 created the PWR Sustain funding, which is outcomes-based funding designed to incentivize schools and districts to offer postsecondary credits, credentials from the list of qualified credentials, and work-based learning experiences. PWR Sustain Funding is Colorado’s recurring financial incentive that provides reimbursements for student outcomes, which is essential in a local-control state, where districts cannot be mandated to adopt new programs. SB25-315 directs the State Board of Education to adopt rules and establish the “criteria that constitutes successful satisfaction” of the postsecondary, workforce, and work-based learning requirements. As such, the SBE should use their existing authority to revise the funding criteria to include alignment with the Colorado Skills Map after the public registry has been published for one year. With this revision, PWR funding would incentivize schools and districts to offer postsecondary credits, credentials from the list of qualified credentials, and work-based learning experiences that build the skills outlined in the Colorado Skills Map.
This will not increase costs to the state, or reinvent the program; it simply adapts it to better serve students by ensuring offerings are aligned to skills employers demand.
Recommendation 6. Build Skills Map identifiers into the Statewide Longitudinal Data System
The Governor’s Office of Information and Technology, in partnership with CDE, CDHE, and CDLE is currently building Colorado’s SLDS under HB24-1364, a cross-agency data infrastructure to connect student information to their workforce experience. If Colorado’s SLDS is to be useful to stakeholders, it needs to meaningfully compare programs. The Colorado Skills Map gives the SLDS a common comparable unit of analysis, allowing it to produce insights the state can act on. As such, the standard skill identifiers should be integrated into the SLDS. Given that the SLDS’s governing structure already includes OIT, CDE, CDHE, and CDLE, the board is positioned to decide how and when identifiers should be incorporated.
With the integration of the identifiers, the state would be able to track student and employment outcomes at the skill level, across programs. This allows the state to answer: (1) what wages are associated with a specific skill, (2) how quickly does a skill lead to employment, and (3) how often does earning a skill lead to further education, higher credentials, or higher pay.
Conclusion
Colorado has already made significant investments to build a skilled, homegrown workforce through funding models, data infrastructure, and frameworks. A Colorado Skills Map is a comprehensive solution that enables multiple investments to work together. Without shared data and language, Colorado’s consolidation efforts will result in disconnected systems unable to drive at ambitious workforce goals. The Colorado Skills Map helps Colorado close its talent gap by translating its rising credentials numbers into skills that employers trust, leading to careers and economic mobility for Coloradans. Ultimately, building a pipeline of homegrown talent to drive the future of Colorado.
Establishing the Colorado Applied AI Workforce Initiative
The use of AI in the workplace is expanding and outpacing access to applied training, which remains inconsistent or unavailable altogether. Jobseekers, employees at smaller organizations, and local public workers need more than access to a model or a vendor course. They need practice choosing useful tasks, protecting data, testing outputs, and explaining where human judgment remains necessary. The Colorado Applied AI Workforce Initiative would provide 1,000 participants in one metropolitan and one rural region training through real or realistic workplace tasks. Each learner in the two-region pilot would build a bounded agent and receive a portable record of independently assessed skills. The result would be a broader pool of workers who can use AI responsibly, smaller employers better able to adopt useful tools, and public agencies better prepared to improve services without giving up accountability.
Challenge and Opportunity
In Q2 2026, Gallup reported that 52 percent of U.S. employees used AI in their role. That adoption creates an opportunity to improve efficiency, but it also creates risk when employee access to training, approved workflows, and review controls is either inconsistent or not available at all.
Access to a large language model is not evidence of job-ready skill. A county employee, for example, might use a bounded agent to retrieve policy, draft a sourced resident notice, flag missing facts, and stop for approval. The employee still has to decide whether AI belongs in the task, protect sensitive information, test difficult cases, correct errors, and explain the decision. That is the opportunity and the gap: people can use AI to handle routine work, but they need training to decide when it is appropriate and remain accountable for the result.
Among Colorado employer businesses that reported using AI in a business function, only an estimated 15.1 percent had trained current staff in the previous six months. While Colorado’s Office of Information Technology (OIT) has published AI guidance and training, it is limited to state employees and contractors. Colorado workforce centers already provide jobseekers with computer and internet access and training, while the state’s Digital Navigator pilot demonstrated how libraries and rural workforce centers can be used to address device, connectivity, and digital-skills barriers. The Colorado Applied AI Workforce Initiative would fill this gap and create a common applied standard for local workers.
Colorado must act before unequal access becomes a durable workforce divide. In the San Luis Valley, 15.5 percent of households lacked home broadband service, so applied training must include accessible, low-bandwidth, and in-person options. Workforce centers, colleges, libraries, and local partners can bring training closer to residents. Connecticut’s Tech Talent Accelerator shows how colleges and employers can develop applied AI programs, while New Jersey’s emerging library network shows how public libraries can serve as community access points. Colorado can adapt both structures while testing one common standard across metropolitan and rural conditions.
The need is immediate; as of January 1, 2027, SB 26-189 will require developers and deployers of automated decision-making technology to provide documentation for how these tools are used. Developers must provide technical documentation describing the tool’s intended uses, categories of training data, known limitations, and instructions for appropriate use and human review, and deployers will be responsible for providing consumers with a description of the tool’s role within a consequential decision. Yet, this legislation creates no corresponding program to train employees to do this work.
Plan of Action
Recommendation 1. Establish the initiative and make an individually built AI agent the core training artifact.
The next Colorado Governor should establish the Colorado Applied AI Workforce Initiative and direct the Colorado Department of Labor and Employment (CDLE) to develop the applied AI training standard, eligibility requirements, records protections, and evaluation process within 90 days. Eligible training participants should include Workforce Innovation and Opportunity Act (WIOA) adults, youth, and dislocated workers, along with other jobseekers, workers at organizations with fewer than 250 employees and no comparable training, and local government workers.
During the 90-day design period, CDLE would collaborate with the Office of the Future of Work to bring together workers, small employers, local governments, workforce centers, colleges, libraries, rural partners, and disability-access experts. It would use that group to identify real workplace tasks, surface access barriers, and recruit regional partners. CDLE would retain control of the standard, funding, procurement, provider selection, records, compliance, and evaluation.
The training should cover six competencies needed to apply AI at work:
- Task selection: Define the user, workflow, baseline, result, and whether the task calls for no AI, a hosted model, or a managed open-weight model.
- Data protection: Classify information, restrict sources and tool permissions, and keep protected data out of the agent.
- Output verification: Test held-out cases, source grounding, repeated runs, abstention, and escalation.
- Error and bias recognition: Find security failures, factual errors, and counterfactual disparities, then correct and retest them.
- Documentation and human review: Record choices, sources, cost, corrections, residual risks, and the human approval point.
- Supervised workplace application: Build and defend a bounded AI agent that performs a real or realistic workplace task under independent assessment.
Each learner would build an AI assistant for one clearly defined workplace task. The provider would supply a secure workspace, approved source materials, and up to three managed tools. The assistant could retrieve information or simulate an action, but it could not change live records or make a decision on its own. The provider would set limits on tool calls and run time. The learner would test the result, explain the design, and obtain human approval before use. Examples could include a hosted service such as ChatGPT or Claude and a provider-managed open-weight model such as Qwen3 running through Ollama.
The training should consist of six weekly sessions totaling 24 contact hours: 12 hours of instruction, eight hours of guided construction and testing, and four hours of testing, demonstration, defense, and feedback. Sessions would progress from the problem, baseline, data, and deployment approach through configuration, security, reliability, bias, and outcome testing. Learners would be required to submit the artifact package before the final session.
Possible projects include a resident-notice agent based on county policy, a safety-procedure agent using approved manuals, or an occupation-research agent using workforce sources. Regardless of the task, every artifact package should contain five parts:
- The problem statement, affected user, baseline workflow, success measures, and a no-AI alternative (e.g., traditional automation).
- A working bounded agent with approved sources, limited tools, stop conditions, logs, and a human approval point.
- A comparison of a hosted proprietary environment, a hosted or provider-operated open-weight environment, and the no-AI baseline using the same cases.
- Functional, security, and fairness tests showing results, failures, corrections, and retests.
- Measured results and a live demonstration.
To pass, a learner must demonstrate all six competencies in a working artifact. An independent assessor would score the work during a live demonstration and brief oral defense. Providers would give managed access for one revision within five business days, without requiring a personal device, account, or home connection. The portable record would report pass or fail for each competency.
Recommendation 2. Run a two-region pilot and test whether the training standard works under different access and labor-market conditions.
CDLE should launch a pilot to test the training program over 12 months. The pilot should enroll 1,000 people across one metropolitan and one rural region, with at least 300 rural seats. Training should be run with cohorts of 20 to 25 participants, and should be delivered in-person or through an instructor-led hybrid format. Workforce centers, colleges, local governments, libraries, adult educators, and schools should serve as access points. CDLE should select providers based on population reach, task validation, instructional and assessment capacity, accessibility, connectivity, safeguards, and scheduling, without regard to vendor affiliation.
Both regions would use the same case material, rubric, and independent scoring process. Delivery must meet applicable Colorado WCAG 2.1 A and AA requirements and provide low-bandwidth options, assistive technology, accessible documents, and equivalent tool paths.
For procurement, CDLE would compare proprietary hosted, open-weight hosted, and provider-operated configurations under the same performance, security, and accessibility requirements, maintaining a tool-agnostic approach. The state should own publicly financed core training components or hold perpetual rights to reuse and adapt the training, excluding third-party intellectual property. Before pilot launch, CDLE must identify providers with a compliant design within their budget. Cost constraints should not weaken the training competencies, accessibility, security testing, or independent assessment.
Prior to enrollment, CDLE must define evaluation measures for the pilot. These measures should include employment status, wages, career level, opportunity to apply AI in the workplace, and workplace use. Wage and advancement results, measured through changes in career level, would be descriptive rather than continuation conditions. An opportunity must include paid or supervised work, approved tool access, and a pre-mapped task. Documented use requires employer confirmation or evidence that the participant applied a pilot competency to a real task in the workplace. An independent evaluator would collect these measures at enrollment and 120 days after a participant passes every competency, then report them statewide and by region.
Training expansion would require at least 75 percent completion among all enrollees statewide and in each region, usable 120-day follow-up for at least 70 percent of verified completers, an opportunity to apply AI for at least 50 percent of verified completers, and documented workplace use by at least 60 percent of opportunity-qualified completers. Only completers with usable follow-up may count as opportunity-qualified, and nonresponse would not count toward any numerator. An unresolved material safety or privacy incident would independently block expansion.
Before the final evaluation, CDLE would review the first 200 final artifact deadlines, including at least 60 learners in each region. New enrollment should pause if fewer than 150 participants have passed, either region falls below 75 percent completion, or projected spending exceeds the $2.8 million ceiling.
The pilot would have a $2.8 million spending ceiling. This proposal would cap any Workforce Innovation and Opportunity Act Governor’s Reserve contribution at $1.5 million, subject to available funds, participant and cost eligibility, lawful procurement, and required reporting. Signed nonfederal commitments would cover the balance.
Recommendation 3. Assign post-pilot training ownership if final evidence supports continuation.
If the pilot meets every continuation condition in Recommendation 2, the Colorado General Assembly should decide whether to authorize and fund statewide expansion. CDLE should lead the pilot unless later law assigns the initiative to another agency. HB 26-1317 directs its transition committee to recommend how specified workforce functions could move to the Department of Higher Education, but the act does not itself transfer CDLE programs or WIOA duties. Any continuation law should name the permanent owner. The designated agency should maintain the training standard, curriculum, rubric, records, model approvals, task and test banks, scaffold, evaluation measures, provider standards, provider roster, reporting, and evaluation. State-agency use would remain subject to Office of Information Technology review.
Timing matters because HB 22-1350’s Opportunity Now is scheduled to be repealed on July 1, 2028. If lawmakers extend it, that legislation could authorize continuation of this initiative and designate its permanent owner. Expansion funding should remain unavailable until final pilot results meet every continuation condition.
Conclusion
Colorado has a chance to shape an AI-enabled workforce before access to applied training becomes another source of inequality. A focused pilot would help workers build evidence they can carry across employers, help smaller businesses adopt useful tools without bearing the full cost alone, and help public agencies improve routine work while keeping human accountability.
It would also give the state a controlled way to learn what works in metropolitan and rural communities. If the evidence is strong, Colorado can expand a standard that workers, employers, and agencies can trust. If it is not, the state can stop before committing to a larger system.
Vendor courses are useful, but Colorado needs a common applied standard. The pilot requires a working agent, documented testing, and independent results that travel across tools and employers.
The 24 hours are structured contact time. A managed scaffold and limited tools keep the project narrow. Learners submit work before the final session, demonstrate it live, and may revise once after independent scoring.
No. Learners compare hosted, open-weight, and no-AI approaches on the same task. Choosing conventional methods is sound judgment when they perform better on accuracy, cost, accessibility, or risk.
At least 300 seats serve the rural region. Local access points provide devices, low-bandwidth delivery, assistive technology, and accessible tool paths. Participants need no personal device, vendor account, or home connection.
Expansion requires regional completion, sufficient follow-up, verified workplace opportunities, and documented use. Withdrawals and nonresponse remain visible. Any unresolved material safety or privacy incident blocks expansion.
The amount is a pilot spending ceiling, not tuition. WIOA may contribute up to $1.5 million for eligible costs. Nonfederal commitments cover the balance, and wages remain separate. The state retains rights to core materials, while legislation assigns a permanent owner only if the evidence supports continuation.
How to Plan for Future Generations of Colorado Business Owners
Colorado faces two converging shocks: over 76% of Colorado’s 730,887 small businesses are owned by baby boomers, most without a succession plan and today 92% of small business exits occur through closure. At the same time, Artificial Intelligence (AI) is thinning the entry-level job market Colorado’s college graduates have always counted on. The Colorado Succession Through Apprenticeship (STA) Program turns two problems into one solution: a state-coordinated pipeline that trains graduates to evaluate and operate existing businesses, then connects them to owners ready to show them the ropes and eventually hand over the keys. It builds on assets Colorado already owns — its universities, its small-business density, and the Office of Economic Development and International Trade’s (OEDIT) economic development tools — to keep jobs and wealth in local communities and to position the state as the national model for the Great Ownership Transfer, a term used to signify the largest intergenerational wealth shift.
Challenge and Opportunity
The impact of the Great Ownership Transfer on the U.S. economy could lead to significant job losses. While small businesses account for 99% of all U.S. companies, they employ about half of the nation’s workforce and represent 43.5% of our GDP. “Today, an alarming 92% of small-business market exits occur through closure, while only 5% are completed as sales, and 3% are transferred to new owners”.
Over three-quarters of Colorado’s 730,887 small businesses are boomer-owned, and many have no succession plan. These businesses employ an estimated 1.2 million people. According to the Small Business Administration, the leading types of Colorado small businesses include:
- Professional, Scientific, and Technical Services
- Real Estate and Rental and Leasing
- Construction
- Transportation and Warehousing
- Other Services (except Public Administration)
- Health Care and Social Assistance
- Administrative, Support, and Waste Management
- Retail Trade
According to the Exit Planning Institute, a majority of business owners want to ensure their business remains financially viable, with 70% preferring an internal transfer, 17% seeking an external sale, and 13% unsure of next steps. A willingness to find a reasonable succession is evident, and college graduates open a new bridge for ownership transfer.
College graduates are experiencing a decline in entry-level career opportunities due to AI. A 2025 study found that entry-level job postings declined by 35%. Today, according to the Federal Reserve Bank of New York, about 5.6%–5.7% of recent college graduates are unemployed, up from 3.6% in March 2019. New college graduates are facing a career headwind.
The two trends create an uncommon opportunity to create new entry-level jobs while providing boomer-owned small businesses with a potential succession and ownership path for Generation Z. The window for intervention is open, but every year without a bridge means more businesses close and more value evaporates. Colorado has the university infrastructure, the small business density, and the policy tools to act.
The Colorado STA Program addresses both challenges simultaneously by creating a structured pipeline between university students and boomer-owned small businesses seeking new ownership.The program works in sequence across three components.
- Working with local chambers of commerce and Small Business Development Centers (SBDC) in coordination with OEDIT, small businesses whose owners are within a decade of exit will be identified.
- Universities design a dedicated small business curriculum that is distinct from traditional, startup-focused entrepreneurship programs. The STA Program curriculum trains students to evaluate, acquire, finance, and operate an existing small business.
- Selected universities host an annual STA Summit that brings both groups into the same room, creating a matching marketplace supported by legal, financial, and succession planning advisors. The annual conference can be supported by sponsor and exhibitor fees.
The combination of these components results in the STA Program, in which students begin work in a small business, the small business owner transfers knowledge and gains confidence in the potential new owner, and, in several years, a bridge is formed to begin the shift to a new owner.
The model is proven with medium-sized businesses with about $8 million in revenue and thirty-plus employees. Elite MBA programs at Wharton, Chicago Booth, and UVA Darden already offer Entrepreneurship Through Acquisition (ETA) programs for mid-market companies. Colorado also has a few emerging ETA programs. However, what doesn’t exist is a version designed for Main Street that is accessible to a broader range of graduates and aimed at continuity of small business rather than closure. The Colorado STA Program builds that model first and creates the opportunity to export it nationally. It creates a new program – Succession Through Apprenticeship.
Colorado STA Program Recommendations
Recommendation 1. The Governor drafts and signs an executive order to start the STA Program pilot, instructing OEDIT to begin the work.
The Governor should launch the Colorado STA Program by executive order, without waiting for legislation. They hold the authority to direct OEDIT’s priorities, convene state agencies, and partner with local SBDCs and chambers of commerce; each having critical stakeholder roles with a full set of responsibilities the pilot requires.
The STA Program overview
A state-coordinated pipeline in three components:
- identify boomer-owned businesses within a decade of exit, working with SBDCs and local chambers of commerce.
- develop a university curriculum that trains students to evaluate, finance, and operate an existing small business.
- host an annual STA Summit that matches the two groups. Students enter as apprentices, learn the business over three to five years, and transition into ownership. Small business owners learn succession planning requirements and responsibilities.
The Goal is to have measurable structural change. The fewer small businesses closing, more transfers of ownership, and more graduates on a path to own an existing small business.
The Key players include:
- The Governor’s Office directs; OEDIT implements.
- The Colorado Economic Development Commission can facilitate funding; the Colorado Employee Ownership Commission can guide design and implementation, building on OEDIT’s existing cooperative and employee-ownership programs.
- SBDCs, local chambers, and city economic-development offices supply the business pipeline; and pilot universities and community colleges deliver the curriculum and host the Summit.
The Cost would be an estimated $200,000 to $350,000 in seed funding across the three-year pilot, drawn from existing OEDIT economic-development resources rather than a new appropriation. Seed funds cover curriculum development, business identification and outreach, and the STA Summit. No funding is necessary for student tuition or acquisition financing, which are addressed separately. The Summit is designed to become self-sustaining through sponsor and exhibitor fees.
The executive order. Appendix A sets this in motion. It establishes the Program within OEDIT, assigns the three components and the interagency roles above, directs a Request for Proposals to pilot institutions, sets pilot KPIs (100 students, 150 businesses, 25 in-process transitions by Year 3), and calls for a Year-3 evaluation with a recommendation on statutory codification.
Recommendation 2. Identify two higher education institutions (e.g., business schools within universities and community colleges) to design a curriculum, pilot the program, and host a Colorado STA Summit.
The goal is to identify two pilot institutions — one urban, one rural or regional — to launch the STA Program curriculum and host an inaugural Colorado STA Summit. Example candidates include the University of Colorado Denver Business School, Colorado Mesa University, Pueblo Community College, Western Colorado University, and Fort Lewis College. The selected educational institutions should already have a focus on first-generation students, diverse students from Colorado communities, and non-traditional programs that support unconventional career paths.
In many cases, universities and community colleges may have existing small business courses that can be incorporated into the STA Program curriculum (e.g., accounting, marketing). Others may need to be developed, such as an introduction to acquiring a small business, small business strategies, and financing for small businesses (acquisition and operations). The two pilot universities/community colleges would conduct an assessment and return to OEDIT with a proposed curriculum track, including what already exists and the gaps to be filled.
The STA Summit would be a requirement for the selected universities and community colleges. The Summit should be a collaborative effort with key players to determine whether it should be hosted in one city or two as part of the pilot, or held in conjunction with the Rocky Mountain ETA Conference.
Recommendation 3. Map and evaluate the financial resources available to support the new small business owner in the succession plan.
New owners taking over an existing business can generally finance the purchase through a combination of SBA 7(a) debt, seller financing, and outside equity, layered with Colorado’s CDFI lenders (Colorado Enterprise Fund, B:Side), state credit-enhancement programs (Cash Collateral Support, the Colorado Revolving Loan Fund), and community bank and credit union SBA lending. The STA Program should map these resources across the federal, state, CDFI, and depository levels to align them around succession transitions and identify where a targeted state intervention would fill the financing gap.
After the evaluation, if additional tax incentives or financing programs are required, OEDIT should develop recommendations and work with the Colorado House Business, Labor, and Technology Committee. Additionally, funding ideas and recommendations should be coordinated and developed with the Governor’s office.
Recommendation 4. Connect and collaborate with Colorado SBDCs, local chambers of commerce, and city economic development teams.
Working and collaborating with local businesses and development centers is essential during the first year and then ongoing. In Year 1, the Governor directs OEDIT to work in partnership with credible sources (e.g., SBDCs, local chambers of commerce, and city economic development departments) to identify the owner(s) name, business type, location, planned time for succession (e.g., within 12, 24, 36, 48, etc. months), and preferred succession plan (e.g., family member, a general sale and acquisition process, or business ownership transfer through a structured program to a recent college graduate).
A critical objective is to educate local business and economic development centers about the STA Program, identify potential candidates, and host succession-planning seminars. Small business owners attending the seminars become prime targets for the STA program and can serve as key stakeholders in its early development and implementation.
As part of this effort, OEDIT should leverage its existing co-op and employee ownership programs designed to assist with succession planning. The work needs to be complementary and collaborative.
Recommendation 5. Evaluate the STA Program outcomes and recommend next steps for the Governor and state legislature.
As the three-year pilot program concludes, OEDIT publishes a formal program evaluation with a recommendation to scale, modify, or expand. A successful pilot positions Colorado as the national model for connecting the next generation of business owners with the legacy businesses that need them.
Key metrics for evaluating structural change are simple to measure: fewer businesses closing, more businesses transferring, and more graduates on a path to own an existing small business. Within the three-year pilot, other KPIs include:
- 100 students in the STA Program curriculum across a minimum of two higher education institutions.
- 150 small businesses interested in learning about STA and connecting with enrolled students.
- Year 3 target: 25 in-process ownership transitions.
At the end of three years, the STA Program should be evaluated, with recommendations for moving forward.
Conclusion
The cost of waiting is concrete: businesses close, jobs disappear, communities weaken, and graduates remain underemployed. Today, 42% of recent college graduates are underemployed, working in jobs that don’t require their degree. At the same time, Colorado’s small businesses generate more than $225 billion in annual economic output, a foundation now at risk as a generation of owners approaches retirement. We cannot afford to lose our young talent to underemployment, nor to let the value small businesses create slip away for want of a succession plan.
The cost of acting is far smaller: a pilot program that connects two assets Colorado already has — its higher-education institutions and its legacy of small businesses — and builds a bridge between them. New undergraduates gain the chance to learn a business and, in time, to own it; aging owners gain a ready-made succession plan and a capable successor. It is an ideal match: one that preserves the state’s economic foundation while keeping our next generation of talent rooted in Colorado’s opportunity.
Initially, the program would be designed for undergraduate students. The primary reason: it is expected that an undergraduate student would spend 3-5 years as an apprentice in the small business. The process would be:
- Students enroll in the STA Program curriculum. By enrolling in the track, they indicate their interest in eventually owning a small business.
- In their senior year, the students will identify the types of small businesses they would like to pursue as a career. Information will be shared on the types of businesses that have expressed interest in working with a student.
- A capstone project during the last semester before graduation is to complete a co-designed project with a small business owner. By doing this, the small business owner and the student could determine whether they could work together.
- Before graduation, a match will be made, and a succession agreement will be signed by the owner and the student, outlining expectations and potential outcomes.
- When the student begins work at the small business, they should receive a mutually agreed-upon salary and stock ownership plan.
- In the two years before the small business owner retires, the new owner (i.e., the former student) develops a financing plan to acquire the business.
- The new owner takes over the business as the succession plan ends.
Succession through apprenticeship occurs over a three- to five-year period.
ETA has a strong, well-documented record, mostly above Main Street. The 2024 Stanford GSB Search Fund Study, covering 681 funds since 1984, found that about 57% of searchers successfully acquire a company, with an aggregate pre-tax internal rate of return of 35.1%. Programs at Wharton, Chicago Booth, and Darden have built durable pipelines around the model.
Two caveats matter for Colorado. First, traditional search funds target mid-market companies — with a median acquisition enterprise value near $8.8 million — not the corner businesses at the center of the succession crisis. Second, the model centers on young entrepreneurs backed by mentorship and capital, but typically by experienced MBAs rather than undergraduates.
The STA Program’s job is to adapt a proven mechanism to a smaller deal size and an earlier-career operator, which is precisely why structured curriculum, vetted matching, apprentice-based learning, and a tailored financing pathway are essential rather than optional. Undergraduate students would begin working in the small business as apprentices to learn the business and gain the necessary expertise and knowledge.
Because for many owners, those other doors are already closed. The Exit Planning Institute finds that 70% of owners would prefer an internal transfer, and a new graduate joining the business as an apprentice can fill this preference. In a large share of cases, no family member wants the business, and the owner has no clear succession plan. That’s who the STA Program is built for: the owner staring at closure because the obvious successors don’t exist.
The STA Program doesn’t compete with family or employee transfer. It catches the businesses that those paths leave behind and gives a prepared, vetted graduate a reason for the owner to pick continuity over a liquidation sale.
During the last two years or so, Colorado has developed an ETA ecosystem, concentrated on the Front Range. CU Boulder’s Leeds School, through its Deming Center for Entrepreneurship, is building ETA courses, an executive-education program, and the Rocky Mountain ETA Conference, whose inaugural event drew more than 200 attendees in partnership with Colorado State University, the Colorado School of Mines, and the Denver ETA Meetup. The University of Denver’s Daniels College has added ETA to its Entrepreneurship@DU offerings, launching a one-credit ETA “sprint” for undergraduate and graduate students in early 2026. In short, the model has momentum here.
That activity and the STA Program serve different people, different businesses, and a different transaction. Colorado’s existing ETA is a graduate, MBA, and executive-education offering built on the search-fund model: A buyer with capital and operating experience raises money, searches for a target, and acquires an established business — often mid-market, and typically financed through a mix of SBA loans, seller financing, and outside equity. The STA Program is an undergraduate, apprenticeship-first pathway aimed at Main Street. A student works inside a small business for three to five years, learns how it runs, and transitions into ownership through a planned succession. Put simply, ETA is buy-then-operate; STA is apprentice-then-own. The apprenticeship model, along with the Main Street succession segment it serves, is uncontested.
That makes the STA Program complementary rather than competitive. The current ETA scene is buyer-side and skews toward businesses large enough to support a search fund and acquisition debt. STA addresses the other end of the market — the Main Street businesses that today close for lack of any buyer, and the graduates shut out of a thinning entry-level job market. It also creates natural partners rather than rivals. The annual Rocky Mountain conference is a ready-made channel for the STA Summit and its advisor network; and the SBA lenders and CDFIs already active in ETA can finance STA transitions.
The takeaway for timing: Colorado’s ETA momentum validates the demand behind STA rather than undercutting it. Capital, talent, and institutions are already mobilizing around the Great Ownership Transfer, but on the buyer side and the mid-market, leaving the undergraduate-to-owner pipeline and the Main Street succession gap unserved. The STA Program is the missing complementary piece, and building it now lets Colorado lead the full model rather than just the search-fund slice.
The three-year pilot is estimated to cost an estimated $350,000, funded from existing OEDIT economic-development and Future of Work funds rather than new appropriations. Planning estimates:
- Curriculum development seed, two institutions (Years 1–2): $105K–$220K.
- OEDIT program coordination, part-time (Years 1–3): $50K–$75K.
- STA Summit state backstop (Year 1; sponsor- and exhibitor-funded thereafter): $25K–$30K.
- Independent evaluation (Year 3): $20K–$25K.
That puts the full pilot at roughly $200K–$350K over three years. Only if the pilot meets its targets does the program seek multi-year legislative appropriation.
A collaborative funding model should be pursued. The selected universities and community colleges should invest in curriculum development, as it would be a key differentiator for the institutions in attracting students interested in small business ownership. Additionally, seminars and workshops could be hosted for existing small business owners (e.g., succession planning, financing an ownership transfer, mentoring business leaders).
It connects them; it doesn’t copy them. Each existing resource solves one piece and stops at the edge of the next. The SBA finances acquisitions but doesn’t train buyers or find sellers. The SBDC advises owners but doesn’t supply a pipeline of prepared successors. Private exit planners serve owners who can already afford them — a narrow slice of Main Street. None of them does the one thing that STA does: build the buyer pipeline and the matching marketplace that makes the rest usable.
The STA Program is the connective tissue, and every participant it produces becomes a customer for the SBA, SBDC, and exit-planning tools already in place. It increases the throughput of existing programs rather than competing with them.
Innovation Ecosystem Job Board Launches to Connect Federal Talent to Opportunities
In a previous post, we announced an initiative to connect scientists, engineers, technologists, and skilled federal workers and contractors who have recently departed government service with the emerging innovation ecosystems across America that could use their expertise. With the support of FAS, we are now excited to share the launch of the Innovation Ecosystem Job Board. This unique job board contains opportunities from across the nation with the explicit goal of matching in-demand science and technology talent with open positions across the nation’s innovation ecosystems, in roles ranging from lab researchers and data scientists to workforce development practitioners and science communicators.
These innovation ecosystems – namely Tech Hubs and NSF Engines – are advancing critical technologies spanning from advanced manufacturing to quantum computing to biotech, all vital for our national and economic security. To accomplish this work, they operate as multi-stakeholder coalitions that bring together universities, industry, nonprofits, and other partners, all searching for talent to help them fulfill their missions.
These coalitions face growing talent needs, particularly for mission-driven roles that can help drive progress across critical technology areas. Meanwhile, we’re witnessing an exodus of thousands of experienced federal talent from agencies like the National Science Foundation, National Institutes for Health, and the Department of Energy whose knowledge gained from years of managing and working in multimillion-dollar technical programs could be lost entirely if not effectively redeployed.
This initiative directly addresses both challenges by collaborating with innovation ecosystems to identify their immediate talent needs while simultaneously engaging displaced federal workers through job fairs and targeted outreach to understand their backgrounds and geographic preferences. It’s a purposeful approach that ensures mission-driven federal talent can continue contributing to America’s technological leadership. By connecting talent to need, we help strategically imperative innovation ecosystems access the experienced professionals necessary for success.
We will be updating this job board regularly with opportunities from additional Tech Hubs, NSF Engines, and other innovation ecosystems. While our outreach is specifically to former federal workers and contractors, this job board is open to all, and we encourage others on the job hunt to take a look.
As economic policy wonks, we understand that there are often frictions that hinder matching between individuals with the right skills and geographic preferences and the jobs that exist. We are taking this seriously and will engage in what we’re calling “light-touch matching”. Please feel free to fill out this interest form (whether you have applied to a listing on the job board or not), and we will flag profiles that generally align with relevant innovation ecosystems and their needs.
Our process:
We spent the last several months talking to and learning from other talent connectors, innovation ecosystem builders, and the talent themselves. Through facilitated federal roundtables with former federal workers, we understood more deeply their diverse skill sets, their unwavering commitment to mission-driven work, and the unique challenges they face in their current job transition. Work for America’s research on federal workers also validated our hypotheses: these are experienced professionals (59% of survey respondents have a decade or more of experience), are geographically distributed (53% already live outside the DC-Virginia-Maryland area), and are mobile (54% are open to relocating). Job fairs additionally provided us an opportunity to meet individuals leaving the federal government and hear about their backgrounds and interests.
Simultaneously, we reached out to several innovation ecosystems to explore if they had immediate talent needs. Some ecosystems shared their most critical postings among their partners; others had recently conducted surveys of their coalitions to assess available positions and passed that information on to us; still others are actively developing comprehensive approaches to capture all the talent needs across their expansive coalitions. We reviewed and aggregated these opportunities into the job board which is now available and will be regularly updated. We are grateful for all these ecosystems that have engaged in this initiative and we look forward to continuing the conversation with more ecosystems and skilled former federal professionals alike.
Like anything new, this is an experiment. Does this effort in the end successfully match candidates and employers based on skills and geography? If you use this tool, please let us know how it goes!
Maryam Janani-Flores (mjananiflores@fas.org) is a Senior Fellow at FAS and former Chief of Staff at the U.S. Economic Development Administration. Meron Yohannes (myohannes@fas.org) is a Digital Services Alumni Fellow at FAS and most recently served as Senior Policy Advisor for the U.S. Secretary of Commerce.
Impacts of Extreme Heat on Labor
Extreme heat is a major occupational hazard with far-reaching impacts on the national economy as well as worker health and safety. Extreme heat costs an estimated $100 billion per year in lost productivity, and causes an average of at least 3,389 heat-related injuries and 33 heat-related fatalities annually – numbers that are likely vast undercounts. To protect workers, Congress must mandate a federal heat standard, retain federal workers with expertise in heat stress management strategies, and establish Centers of Excellence to support research, training, and sector-specific mitigation strategies. Through investments in infrastructure for heat safety, Congress can save lives, protect the economy, and enhance resilience nationwide.
Heat-Related Risks are Heightened in Many Work Environments
Extreme heat puts workers of all types at risk: OSHA has documented hospitalizations and heat-related deaths in close to 275 industries. Some work environments present extreme heat risk, particularly those involving high exposures to the outdoors and limited access to cooling. With roughly one in three U.S. employees regularly working outdoors, a large share of the workforce is at elevated risk during summer months. Indoor workers also face high exposure, especially in kitchens, warehouses, manufacturing plants, and other poorly ventilated environments because heat and humidity easily build up in enclosed spaces without adequate air flow and climate-control.
Business and Economic Impacts of High Heat Exposure in the Workplace
On top of the $100 billion in direct annual losses, high temperatures are also linked to increased healthcare costs for employers and workers’ compensation claims, with claim frequencies rising by up to 10% during temperature extremes. Some industries are more exposed than others; for example, agriculture, construction, and utility companies face twice the risk of incurring increased healthcare claims due to extreme weather and other environmental conditions. This growing number of claims increases companies’ experience modification rates, which insurers use as a key factor for calculating higher future premiums. Higher premiums translate to greater insurance and overall operating costs, which is especially burdensome for small and low-margin businesses. Despite all these risks, many employers continue to underestimate the financial burden of extreme heat and other weather-related health impacts.
Many Military Personnel and Federal Workers Face Above-Average Risks of Heat-Related Illness
Military personnel, federal law enforcement officers, border patrol officers, wildland firefighters, federal transportation workers like railroad inspectors, and postal employees are all in positions that require long, labor-intensive hours outdoors, raising the risk for heat-related illness. In 2024, heat-related illnesses were among the top five most reported medical events among U.S. active duty service members. Without consistent standards in place to protect these workers from extreme heat, military and other federal operations will continue to be vulnerable to disruption and reduced workforce capacity.
Advancing Solutions: Establish a Strong Federal Heat Standard and Sector-Specific Centers of Excellence for Heat Workplace Safety
To begin to address heat-related injuries and illnesses in workplaces, OSHA in 2022 established the National Emphasis Program (NEP) on Outdoor and Indoor Heat-Related Hazards, which remains in effect until April 2026. As of 2025, OSHA reports that this NEP has conducted nearly 7,000 inspections connected to heat risks, which lead to 60 heat citations and nearly 1,400 “hazard alert” letters being sent to employers.
However, in the absence of a federal mandate for effective heat safety practices, most workplaces rely on voluntary guidance that is not tailored to specific job conditions, backed by consistent data, or subject to enforcement. This puts both workers and businesses at risk. OSHA’s proposed Heat Injury and Illness Prevention rule would be a critical step forward to establishing common-sense baseline protections. According to the agency’s projections, compliance with this standard could prevent thousands of heat-related illnesses and deaths. The projected benefits from reduced fatalities, illness, and injury amount to $9.18 billion per year. Importantly, this action has broad public backing: 90% of American voters support the implementation of federal protections from extreme heat in the workplace.
Congress should act swiftly to ensure OSHA finalizes and enforces a strong, evidence-based heat standard. To do this effectively, it is essential that funding for experts at the National Institute for Occupational Safety and Health (NIOSH) is retained in the FY26 budget request, as these critical workers develop criteria for recommended standards on occupational heat stress. These experts have been impacted by reductions in force at NIOSH, and as of July 2025 have not been brought back by the agency.
Some employers have raised concerns about the technical and financial feasibility of the proposed rule. To address these concerns, Congress should pair regulation with practical support by creating federally funded, sector-specific Centers of Excellence (CoEs)for Heat Workplace Safety. These Centers would develop and implement evidence-based solutions tailored to different work environments, such as agriculture and construction. The CoE approach includes comprehensive data collection at worksites that form the basis of occupational safety and health protocols best practices and policies to enhance productivity, prevent injury and illness, and ensure a return on investment. Once strategies are developed, CoEs implement them, track their impact, and work with workers, employers, and cross-sector partners to ensure long-term success.
By leveraging advanced technology, predictive analytics, and continuously updated industry standards, CoEs can help modernize OSHA regulations and make them more aligned with current workplace realities that go beyond simple compliance or post-injury responses. Federal agencies and other industries with sizable workforces that receive government contracts are key places to develop best practices, technologies, and public-private partnerships for these interventions, all while reducing fiscal risk to the federal government.
FAS Position on “Schedule PC” and Impact on Federal Scientists
FAS shares the following formal comment in the Federal Register and asks that the scientific community, and the people across the nation who benefit from their research, to do the same.
The Federation of American Scientists opposes the proposed “Schedule Policy/Career” (“Schedule PC”) in present form because it rescinds civil servant employment protections, placing unnecessary and undesirable political pressure on highly specialized scientific and technical career professionals serving in government.
FAS encourages the Office of Personnel Management to rescind or substantially overhaul the Proposed Rule on Improving Performance, Accountability and Responsiveness in the Civil Service. We ask that OPM respond to the following comments and reflect how it will revise the Proposed Rule or abandon it.
New Employment Category is Unnecessary
Instead of creating a new employment category – the Schedule P/C for federal civil servants – the same goals can be accomplished by requiring agencies to regularly review and update critical elements in the performance appraisal system and their rating factors. Changing performance elements will have the impact of ensuring attention to accountability and responsiveness to policy without the ambiguity or determining assignment to the Schedule or the taxpayer expense of defending it.
The Administration is already taking this action by changing the performance appraisal system for the Senior Executive Service to make senior executives more responsive to Executive-branch priorities and policies. FAS advocates for updates to performance standards and rating factors appropriate for non-executives–based on the best available evidence–to achieve the intended accountability and responsiveness goals in this Proposed Rule.
Proposed Rule Conflates Accountability with Administration
The Proposed Rule makes several errors in interpretation of the Civil Service Act of 1978, including the one potentially most detrimental to scientific enquiry, innovation, and exploration:
- The proposed rule is about accountability to the President and his/her Administration policies, not about performance on the job and accountability to the Constitution. By conflating the two, Schedule P/C takes away individual appeal rights for anyone reassigned to this categorization rather than focusing on removing poor performers. An employee’s poor performance is more commonly related to a lack of quality, accuracy, and/or timeliness of their job tasks, according to the U.S. Merit Systems Protection Board. As written, Schedule P/C also discourages dissent, evidence-based policymaking, performance management to understand and track results, and program evaluation to understand outcomes.
- The proposed rule newly defines Policy-Influencing Roles for merit-based civil servants, while underutilizing existing regulations for other Policy-Making roles like political appointees and those with excepted service employment.
- Newly designating “Policy-influencing” positions as Schedule P/C provides such a breadth of interpretation for federal agencies that it could encompass most federal jobs, which currently rely on a non-partisan, merit based civil service and their associated civil service protections. Already, a Social Security Administration (SSA) leader has voiced the intent to designate nearly all SSA career employees as Schedule P/C. Furthermore, the lack of guidance to agencies in identifying “policy influencing” roles will create inconsistencies in its application across agencies and confusion in comparing similar occupations and their duties.
- Moreover, the Proposed Rule deviates from the accepted definitions for “policy determining,” “policy advocating,” and “policy influencing” roles identified in the Civil Service Act of 1978, and assigned to political appointees and excepted service employment categories. If the proposed rule were limited to “policy determining” and “policy making”, most of these positions would already be part of the Senior Executive Service (SES). These federal employment Schedules already carry the requisite responsiveness and accountability to Administration policies and priorities needed to ensure alignment of federal programs with legislative and executive branch intent.
- Newly designating “Policy-influencing” positions as Schedule P/C provides such a breadth of interpretation for federal agencies that it could encompass most federal jobs, which currently rely on a non-partisan, merit based civil service and their associated civil service protections. Already, a Social Security Administration (SSA) leader has voiced the intent to designate nearly all SSA career employees as Schedule P/C. Furthermore, the lack of guidance to agencies in identifying “policy influencing” roles will create inconsistencies in its application across agencies and confusion in comparing similar occupations and their duties.
Launch the Next Nuclear Corps for a More Flexible Nuclear Regulatory Commission
The Nuclear Regulatory Commission (NRC), the Nation’s regulator of civilian nuclear technologies, should shift agency staff, resources, and operations more flexibly based on emergent regulatory demands. The nuclear power industry is demonstrating commercialization progress on new reactor concepts that will challenge the NRC’s licensing and oversight functions. Rulemaking on new licensing frameworks is in progress, but such regulation will fall short without changes to the NRC’s staffing. Since the NRC is exempt from civil service laws under the Atomic Energy Act (AEA) of 1954, the agency should use AEA flexible hiring authorities to launch the Next Nuclear Corps, a staffing program to shift capacity based on emergent, short-term workforce needs. The NRC should also better enable hiring managers to meet medium-term workforce needs by clarifying guidance on NRC’s direct hire authority.
Challenge and Opportunity
Policymakers, investors, and major energy users, such as data centers and industrial plants, are interested in new nuclear power because it promises unique value. New nuclear power technologies could add either additional base load or variable power to electrical systems. Small modular or micro reactors could provide independent power to military bases, many of which are connected to power grids and vulnerable to disruption. Local governments can stimulate economies with high-paying and safe jobs at nuclear plants. The average nuclear power plant also has the lowest lifecycle greenhouse gas emissions compared to other available electricity-generating technologies, including wind, solar, and hydropower. Current efforts to expand nuclear power are different from those of the 1970s and 1980s, the most recent decades of significant building. Proposals today include building plants designed similarly to plants of those decades or even restarting power operations at up to three closed plants; but more activity is focused on commercializing advanced and small modular reactors, diverse concepts incorporating innovations in reactor design, fuel types, and safety systems. The government has partnered with private companies to develop and demonstrate advanced reactors since the inception of nuclear technology in the 1950s, but today several companies demonstrate advanced technical and business progress toward commercialization.
Innovation in nuclear power challenges the NRC’s status-quo approaches to licensing and oversight. Rulemaking on new regulatory frameworks is necessary and in progress, but changes to the agency’s staffing and operations are also needed. Over time, Congress, the President, and the Commission itself have adjusted the agency’s operations in response to shifts in international postures, comprehensive national energy plans, and accidents or emerging threats at nuclear plants, but the NRC’s ability to respond to sudden changes in the nuclear industry is a long-standing challenge. To become more flexible, NRC initiated Project Aim in 2014 after expectations of significant industry growth, spurred in part by tax incentives in the Energy Policy Act of 2005, were not realized due to record-low natural gas prices. More recent assessments from the Government Accountability Office (GAO) and NRC Office of Inspector General (OIG) acknowledge the challenge of workload forecasting in an unpredictable nuclear industry, but counterintuitively, some recommendations focus on improving the ability to workforce plan two years or more in advance. Renewed expectations of growth, spurred by interest from policymakers and energy customers, reinforces a point from the 2015 Project Aim final report that, “…effectiveness, efficiency, agility, flexibility, and performance must improve for the agency to continue to succeed in the future.”
Congress also called on the NRC to become more responsive to current developments as expressed in legislation enacted with bipartisan support. Across the Fiscal Responsibility Act of 2023 and the ADVANCE Act of 2024, Congress requires the NRC to update its mission statement to better reflect the benefits of civilian nuclear technology, establish regulatory frameworks for new technology, streamline environmental review, incentivize licensing of advanced nuclear technologies, and position itself and the United States as a leader in civilian nuclear power. Meeting expectations requires significant operational and workforce changes. Since NRC is exempt from civil service laws and operates an independent competitive merit system, widespread changes to the agency’s hiring practices will be determined by future Commissioners, including the President’s selection of Chair (and by extension, the Chair’s selection of the Executive Director for Operations (EDO)), and modifications to agreements between the NRC and the Office of Personnel Management (OPM). In the meantime, NRC is well equipped to increase hiring flexibility using authorities from existing law and regulations.
Plan of Action
Recommendation 1. The NRC EDO should launch the Next Nuclear Corps, a staffing program dedicated to shifting agency capacity based on short-term workforce needs.
The EDO should hire a new director to lead the Corps. The Corps director should report to the EDO and consult with the Office of the Chief Human Capital Officer (OCHCO) and division heads to develop Corps positions to address near-term priorities in competency areas that do not require in-depth training. Near-term priorities should be informed by the NRC’s existing yearly capacity assessments, but the Corps director should also rely on direct expertise and insights from branch chiefs who have a real-time understanding of industry activity and staffing challenges.
Recommendation 2. Hiring for the Corps should be executed under the special authority to appoint directly to the excepted service under 161B(a) of the Atomic Energy Act (AEA).
The ADVANCE Act of 2024 created new categories of hires to fill critical needs related to licensing, oversight, and matters related to NRC efficiency. The EDO should execute the Corps under the new authorities in section 161B(a) of the AEA as it provides clear direction and structure for the EDO to make personnel appointments outside of the NRC’s independent competitive merit system described in Management Directive 10.1. 161B(a)(A) provides up to 210 hires at any time and 161B(a)(B) provides up to 20 additional hires each fiscal year which are limited to a term of four years. The standard service term should be one year as near-term workforce needs may be temporary because of the nature of the position or uncertainty in future demand.
The EDO should adopt the following practices to allow renewals of some positions from the prior year without reaching the limits described in the AEA:
- 161B(a)(A): Appoint up to 140 new staff each fiscal year and consider staggering appointments to address capacity needs that arise later in the year. After the initial one-year term, up to half of the positions should be eligible for a one-year renewal if the need continues. After the initial cohort off-boards, an additional 140 new staff should be appointed alongside up to 70 renewed staff from the prior cohort without exceeding the maximum of 210 appointments at any time.
- 161B(a)(B): Appoint up to 20 new staff each fiscal year and consider staggering appointments to address capacity needs that arise later in the year. All positions should be eligible for a one-year renewal for up to three additional years if the need continues.
Recommendation 3. The EDO should update Management Directives 10.13 and 10.1 to contain or reference the standard operating procedure for NRC’s mirrored version of OPM’s Direct Hire Authority.
The proposed Corps addresses emergent, short-term capacity needs, but internal policy clarity is needed to solve medium-term hiring challenges for hard-to-recruit positions. As far back as 2007, NRC hiring managers and human resources reported that DHA was highly desired for hiring flexibility. The NRC OIG closed Recommendation 2.1 from Audit of the U.S. Nuclear Regulatory Commission’s Vacancy Announcement Process in June 2024 because NRC updated Standard Operating Procedure for Direct Hire Authority with more details. However, management directives are the primary policy and procedure documents that govern the NRC’s internal functions. The EDO should update management directives to formally capture or reference this procedure so that NRC staff are better equipped to use DHA. Specifically, the EDO should:
- amend Management Directive 10.13 Special Employment Programs to add Section IX. Direct Hire Authority, that formalizes the procedure in the Standard Operating Procedure for Direct Hire Authority
- update Management Directive 10.1, Section I.A. to reference the amended Management Directive 10.13 as the general policy for non-competitive hiring
Conclusion
The potential of new nuclear power plants to meet energy demand, increase energy security, and revitalize local economies depends on new regulatory and operational approaches at the NRC. Rulemaking on new licensing frameworks is in progress, but the NRC should also use AEA flexible hiring authorities to address emergent, short-term workforce needs that may be temporary based on shifting industry developments. The proposed Corps structure allows the EDO to quickly hire new staff outside of the agency’s competitive merit system for short-term needs while preserving flexibility to renew appointments if the capacity needs continue. For permanent hard-to-recruit positions, the EDO should clarify guidance for hiring managers on direct hire authority. The NRC is well equipped with existing authorities to meet emergent regulatory demand and renewed expectations of nuclear power growth.
This action-ready policy memo is part of Day One 2025 — our effort to bring forward bold policy ideas, grounded in science and evidence, that can tackle the country’s biggest challenges and bring us closer to the prosperous, equitable and safe future that we all hope for whoever takes office in 2025 and beyond.
PLEASE NOTE (February 2025): Since publication several government websites have been taken offline. We apologize for any broken links to once accessible public data.
The Corps director should create positions informed by the expertise and insights from agency leaders who have a real-time understanding of industry activity and present staffing challenges. Positions should cover all career levels and cover competency areas that do not require in-depth internal training or security clearances. The Corps should fill new positions created for special roles in support of other staff or teams, such as special coordinators, specialists, and consultants.
The Corps is not a graduate-level fellowship or leadership development program. The Corps is specifically for short-term, rapid hiring based on emergent capacity needs that may be temporary based on the nature of the need or uncertainty in future demand.
The Corps structure includes flexibility for a limited number of renewals, but it is not intended to recruit for permanent positions. Supervisors and hiring managers could choose to coordinate with the OCHCO to recruit off-boarding Corps members to other employment opportunities.
The Corps director can identify talent through existing NRC recruiting channels, such as job fairs, universities, and professional associations, however, the Corps director should also establish new recruiting efforts through more competitive channels. Because the positions are temporary, the Corps can recruit from more competitive talent pools, such as talent seeking long term careers in private industry. Job seekers with long-term ambitions in the private nuclear sector and the NRC could both benefit from a one- or two-year period of service focused on a specific project.
Establishing a Cyber Workforce Action Plan
The next presidential administration should establish a comprehensive Cyber Workforce Action Plan to address the critical shortage of cybersecurity professionals and bolster national security. This plan encompasses innovative educational approaches, including micro-credentials, stackable certifications, digital badges, and more, to create flexible and accessible pathways for individuals at all career stages to acquire and demonstrate cybersecurity competencies.
The initiative will be led by the White House Office of the National Cyber Director (ONCD) in collaboration with key agencies such as the Department of Education (DoE), Department of Homeland Security (DHS), National Institute of Standards and Technology (NIST), and National Security Agency (NSA). It will prioritize enhancing and expanding existing initiatives—such as the CyberCorps: Scholarship for Service program that recruits and places talent in federal agencies—while also spearheading new engagements with the private sector and its critical infrastructure vulnerabilities. To ensure alignment with industry needs, the Action Plan will foster strong partnerships between government, educational institutions, and the private sector, particularly focusing on real-world learning opportunities.
This Action Plan also emphasizes the importance of diversity and inclusion by actively recruiting individuals from underrepresented groups, including women, people of color, veterans, and neurodivergent individuals, into the cybersecurity workforce. In addition, the plan will promote international cooperation, with programs to facilitate cybersecurity workforce development globally. Together, these efforts aim to close the cybersecurity skills gap, enhance national defense against evolving cyber threats, and position the United States as a global leader in cybersecurity education and workforce development.
Challenge and Opportunity
The United States and its allies face a critical shortage of cybersecurity professionals, in both the public and private sectors. This shortage poses significant risks to our national security and economic competitiveness in an increasingly digital world.
In the federal government, the cybersecurity workforce is aging rapidly, with only about 3% of information technology (IT) specialists under 30 years old. Meanwhile, nearly 15% of the federal cyber workforce is eligible for retirement. This demographic imbalance threatens the government’s ability to defend against sophisticated and evolving cyber threats.
The private sector faces similar challenges. According to recent estimates, there are nearly half a million unfilled cybersecurity positions in the United States. This gap is expected to grow as cyber threats become more complex and pervasive across all industries. Small and medium-sized businesses are particularly vulnerable, often lacking the resources to compete for scarce cyber talent.
The cybersecurity talent shortage extends beyond our borders, affecting our allies as well. As cyber threats from adversarial nation states become increasingly global in nature, our international partners’ ability to defend against these threats directly impacts U.S. national security. Many of our allies, particularly in Eastern Europe and Southeast Asia, lack robust cybersecurity education and training programs, further exacerbating the global skills gap.
A key factor contributing to this shortage is the lack of accessible, flexible pathways into cybersecurity careers. Traditional education and training programs often fail to keep pace with rapidly evolving technology and threat landscapes. Moreover, they frequently overlook the potential of career changers and nontraditional students who could bring valuable diverse perspectives to the field.
However, this challenge presents a unique opportunity to revolutionize cybersecurity education and workforce development. By leveraging innovative approaches such as apprenticeships, micro-credentials, stackable certifications, peer-to-peer learning platforms, digital badges, and competition-based assessments, we can create more agile and responsive training programs. These methods can provide learners with immediately applicable skills while allowing for continuous upskilling as the field evolves.
Furthermore, there’s an opportunity to enhance cybersecurity awareness and basic skills among all American workers, not just those in dedicated cyber roles. As digital technologies permeate every aspect of modern work, a baseline level of cyber hygiene and security consciousness is becoming essential across all sectors.
By addressing these challenges through a comprehensive Cyber Workforce Action Plan, we can not only strengthen our national cybersecurity posture but also create new pathways to well-paying, high-demand jobs for Americans from all backgrounds. This initiative has the potential to position the United States as a global leader in cyber workforce development, enhancing both our national security and our economic competitiveness in the digital age.
Evidence of Existing Initiatives
While numerous excellent cybersecurity workforce development initiatives exist, they often operate in isolation, lacking cohesion and coordination. ONCD is positioned to leverage its whole-of-government approach and the groundwork laid by its National Cyber Workforce and Education Strategy (NCWES) to unite these disparate efforts. By bringing together the strengths of various initiatives and their stakeholders, ONCD can transform high-level strategies into concrete, actionable steps. This coordinated approach will maximize the impact of existing resources, reduce duplication of efforts, and create a more robust and adaptable cybersecurity workforce development ecosystem. This proposed Action Plan is the vehicle to turn these collective workforce-minded strategies into tangible, measurable outcomes.
At the foundation of this plan lies the NICE Cybersecurity Workforce Framework, developed by NIST. This common lexicon for cybersecurity work roles and competencies provides the essential structure upon which we can build. The Cyber Workforce Action Plan seeks to expand on this foundation by creating standardized assessments and implementation guidelines that can be adopted across both public and private sectors.
Micro-credentials, stackable certifications, digital badges, and other innovations in accessible education—as demonstrated by programs like SANS Institute’s GIAC certifications and CompTIA’s offerings—form a core component of the proposed plan. These modular, skills-based learning approaches allow for rapid validation of specific competencies—a crucial feature in the fast-evolving cybersecurity landscape. The Action Plan aims to standardize and coordinate these and similar efforts, ensuring widespread recognition and adoption of accessible credentials across industries.
The array of gamification and competition-based learning approaches—including but not limited to National Cyber League, SANS NetWars, and CyberPatriot—are also exemplary starting points that would benefit from greater federal engagement and coordination. By formalizing these methods within education and workforce development programs, the government can harness their power to simulate real-world scenarios and drive engagement at a national scale.
Incorporating lessons learned from the federal government’s previous DoE CTE CyberNet program, the National Science Foundation’s (NSF) Scholarship for Service Program (SFS), and the National Security Agency’s (NSA) GenCyber camps—the Action Plan emphasizes the importance of early engagement (the middle grades and early high school years) and practical, hands-on learning experiences. By extending these principles across all levels of education and professional development, we can create a continuous pathway from high school through to advanced career stages.
A Cyber Workforce Action Plan would provide a unifying praxis to standardize competency assessments, create clear pathways for career progression, and adapt to the evolving needs of both the public and private sectors. By building on the successes of existing initiatives and introducing innovative solutions to fill critical gaps in the cybersecurity talent pipeline, we can create a more robust, diverse, and skilled cybersecurity workforce capable of meeting the complex challenges of our digital future.
Plan of Action
Recommendation 1. Create a Cyber Workforce Action Plan.
ONCD will develop and oversee the plan, in close collaboration with DoE, NIST, NSA, and other relevant agencies. The plan has three distinct components:
1. Develop standardized assessments aligned with the NICE framework. ONCD will work with NIST to create a suite of standardized assessments to evaluate cybersecurity competencies that:
- Cover the full range of knowledge, skills, and abilities defined in the NICE framework.
- Include both theoretical knowledge tests and practical, scenario-based evaluations.
- Be regularly updated to reflect evolving cybersecurity threats and technologies.
- Be designed with input from both government and industry cybersecurity professionals to ensure relevance and applicability.
2. Establish a system of stackable and portable micro-credentials. To provide flexible and accessible pathways into cybersecurity careers, ONCD will work with DoE, NIST, and the private sector to help develop and support systems of micro-credentials that are:
- Aligned with specific competencies in the NICE framework: NIST, as the national standards-setting body, will issue these credentials to ensure alignment with the NICE framework. This will provide legitimacy and broad recognition across industries.
- Stackable, allowing learners to build towards larger certifications or degrees: These credentials will be designed to allow individuals to accumulate certifications over time, ultimately leading to more comprehensive qualifications or degrees.
- Portable across different sectors and organizations: The micro-credentials will be recognized by both government agencies and private-sector employers, ensuring they have value regardless of where an individual seeks employment.
- Recognized and valued by both government agencies and private-sector employers: By working closely with the private sector—where credentialing systems like those from CompTIA and Google are already advanced—the ONCD will help ensure government-issued credentials are not duplicative but complementary to existing industry standards. NIST’s involvement, combined with input from private-sector leaders, will provide confidence that these credentials are relevant and accepted in both public and private sectors.
- Designed to facilitate rapid upskilling and reskilling in response to evolving cybersecurity needs: Given the rapidly changing landscape of cybersecurity threats, these micro-credentials will be regularly updated to reflect the most current technologies and skills, enabling professionals to remain agile and competitive.
3. Integrate more closely with more federal initiatives. The Action Plan will be integrated with existing federal cybersecurity programs and initiatives, including:
- DHS’s Cybersecurity Talent Management System
- DoD’s Cyber Excepted Service
- NIST’s NICE framework
- NSF’s CyberCorps SFS program
- NSA’s GenCyber camps
This proposal emphasizes stronger integration with existing federal initiatives and greater collaboration with the private sector. Instead of creating entirely new credentialing standards, ONCD will explore opportunities to leverage widely adopted commercial certifications, such as those from Google, CompTIA, and other private-sector leaders. By selecting and promoting recognized commercial standards where applicable, ONCD can streamline efforts, avoiding duplication and ensuring the cybersecurity workforce development approach is aligned with what is already successful in industry. Where necessary, ONCD will work with NIST and industry professionals to ensure these commercial certifications meet federal needs, creating a more cohesive and efficient approach across both government and industry. This integrated public-private strategy will allow ONCD to offer a clear leadership structure and accountability mechanism while respecting and utilizing commercial technology and standards to address the scale and complexity of the cybersecurity workforce challenge.
The Cyber Workforce Action Plan will emphasize strong collaborations with the private sector, including the establishment of a Federal Cybersecurity Curriculum Advisory Board composed of experts from relevant federal agencies and leading private-sector companies. This board will work directly with universities to develop model curricula that incorporate the latest cybersecurity tools, techniques, and threat landscapes, ensuring that graduates are well-prepared for the specific challenges faced by both federal and private-sector cybersecurity professionals.
To provide hands-on learning opportunities, the Action Plan will include a new National Cyber Internship Program. Managed by the Department of Labor in partnership with DHS’s Cybersecurity and Infrastructure Security Agency (CISA) and leading technology companies, the program will match students with government agencies and private-sector companies. An online platform will be developed, modeled after successful programs like Hacking for Defense, where industry partners can propose real-world cybersecurity projects for student teams.
To incentivize industry participation, the General Services Administration (GSA) and DoD will update federal procurement guidelines to require companies bidding on cybersecurity-related contracts to certify that they offer internship or early-career opportunities for cybersecurity professionals. Additionally, CISA will launch a “Cybersecurity Employer of Excellence” certification program, which will be a prerequisite for companies bidding on certain cybersecurity-related federal contracts.
The Action Plan will also address the global nature of cybersecurity challenges by incorporating international cooperation elements. This includes adapting the plan for international use in strategically important regions, facilitating joint training programs and professional exchanges with allied nations, and promoting global standardization of cybersecurity education through collaboration with international standards organizations.
Ultimately, this effort intends to implement a national standard for cybersecurity competencies—providing clear, accessible pathways for career progression and enabling more agile and responsive workforce development in this critical field.
Recommendation 2. Implement an enhanced CyberCorps fellowship program.
ONCD should expand the NSF’s CyberCorps Scholarship for Service program as an immediate, high-impact initiative. Key features of the expanded CyberCorps fellowship program include:
1. Comprehensive talent pipeline: While maintaining the current SFS focus on students, the enhanced CyberCorps will also target recent graduates and early-career professionals with 1–5 years of work experience. This expansion addresses immediate workforce needs while continuing to invest in future talent. The program will offer competitive salaries, benefits, and loan forgiveness options to attract top talent from both academic and private-sector backgrounds.
2. Multiagency exposure and optional rotations: While cross-sector exposure remains valuable for building a holistic understanding of cybersecurity challenges, the rotational model will be optional or limited based on specific agency needs. Fellows may be offered the opportunity to rotate between agencies or sectors only if their skill set and the hosting agency’s environment are conducive to short-term placements. For fellows placed in agencies or sectors where longer ramp-up times are expected, a deeper, longer-term placement may be more effective. Drawing on lessons from the Presidential Innovation Fellows and the U.S. Digital Corps, the program will emphasize flexibility to ensure that fellows can make meaningful contributions within the time frame and that knowledge transfer between sectors remains a core objective.
3. Advanced mentorship and leadership development: Building on the SFS model, the expanded program will foster a strong community of cyber professionals through cohort activities and mentorship pairings with senior leaders across government and industry. A new emphasis on leadership training will prepare fellows for senior roles in government cybersecurity.
4. Focus on emerging technologies: Complementing the SFS program’s core cybersecurity curriculum, the expanded CyberCorps will emphasize cutting-edge areas such as artificial intelligence in cybersecurity, quantum computing, and advanced threat detection. This focus will prepare fellows to address future cybersecurity challenges.
5. Extended impact through education and mentorship: The program will encourage fellows to become cybersecurity educators and mentors in their communities after their service, extending the program’s impact beyond government service and strengthening America’s overall cyber workforce.
By implementing these enhancements to the CyberCorps program as a first step and quick win, the Action Plan will initiate a more comprehensive approach to federal cybersecurity workforce development. The enhanced CyberCorps fellowship program will also emphasize diversity and inclusion to address the critical shortage of cybersecurity professionals and bring fresh perspectives to cyber challenges. The program will actively recruit individuals from underrepresented groups, including women, people of color, veterans, and neurodivergent individuals.
To achieve this, the program will partner with organizations like Girls Who Code and the Hispanic IT Executive Council to promote cybersecurity careers and expand the applicant pool. The Department of Labor, in conjunction with the NSF, will establish a Cyber Opportunity Fund to provide additional scholarships and grants for individuals from underrepresented groups pursuing cybersecurity education through the CyberCorps program.
In addition, the program will develop standardized apprenticeship components that provide on-the-job training and clear pathways to full-time employment, with a focus on recruiting from diverse industries and backgrounds. Furthermore, partnerships with Historically Black Colleges and Universities, Hispanic-Serving Institutions, and Tribal Colleges and Universities will be strengthened to enhance their cybersecurity programs and create a pipeline of diverse talent for the CyberCorps program.
The CyberCorps program will expand its scope to include an international component, allowing for exchanges with allied nations’ cybersecurity agencies and bringing international students to U.S. universities for advanced studies. This will help position the United States as a global leader in cybersecurity education and training while fostering a worldwide community of professionals capable of responding effectively to evolving cyber threats.
By incorporating these elements, the enhanced CyberCorps fellowship program will not only address immediate federal cybersecurity needs but also contribute to building a diverse, skilled, and globally aware cybersecurity workforce for the future.
Implementation Considerations
To successfully establish and execute the comprehensive Action Plan and its associated initiatives, careful planning and coordination across multiple agencies and stakeholders will be essential. Below are some of the key timeline and funding considerations the ONCD should factor into its implementation.
Key milestones and actions for the first two years
Months 1–6:
- Create the Cyber Workforce Action Plan as a roadmap to implementing ONCD’s NCWES.
- Form interagency working group and private-sector advisory board.
- NIST’s Information Technology Laboratory, in collaboration with industry partners, will begin the development of the standardized assessment system and micro-credentials framework.
- Initiate the Federal Cybersecurity Curriculum Advisory Board.
- Launch the expanded CyberCorps fellowship program recruitment.
Months 7–12:
- Implement pilot programs for standardized assessments and micro-credentials.
- Begin first cohort of expanded CyberCorps fellows.
- Launch diversity and inclusion initiatives, including the “Cyber for All” awareness campaign.
- Initiate the National Cybersecurity Internship Program.
- Begin development of the Cybersecurity Employer of Excellence recognition program.
Months 13–18:
- Pilot standardized assessments and micro-credentials system in select agencies and educational institutions, with full rollout anticipated after evaluation and adjustments based on feedback.
- Expand CyberCorps program and university partnerships.
- Implement private-sector internship and project-based learning programs.
- Launch the International Cybersecurity Workforce Alliance.
Months 19–24:
- Implement tax incentives for industry participation in workforce development.
- Establish the Cybersecurity Development Fund for international capacity building.
- Conduct first annual review of diversity and inclusion metrics in federal cyber workforce.
Program evaluation and quality assurance
Beyond these key milestones, the Action Plan must establish clear evaluation frameworks to ensure program quality and effectiveness, particularly for integrating non-federal education programs into federal hiring pathways. For example, to address OPM’s need for evaluating non-federal technical and career education programs under the Recent Graduates Program, the Action Plan will implement the following evaluation framework:
- Alignment with NICE framework competencies (minimum 80% coverage of core competencies)
- Completion of NIST-approved standardized technical assessments
- Documentation of supervised practical experience (minimum 400 hours)
- Evidence of quality assurance processes comparable to registered apprenticeship programs
- Regular curriculum updates (minimum annually) to reflect current security threats
- Industry partnership validation through the Cybersecurity Employer of Excellence program
The implementation of these criteria will be overseen by the same advisory board established in Months 1-6, expanding their scope to include program evaluation and certification. This approach leverages existing governance structures while providing OPM with quantifiable metrics to evaluate non-federal program graduates.
Budgetary, resource, and personnel needs
The estimated annual budget for the proposed initiative ranges from $125 million to $200 million. This range considers cost-effective resource allocation strategies, including the integration of existing platforms and focused partnerships. Key components of the program include:
- Staffing: A core team of 15–20 full-time employees will oversee the centralized program office, focusing on high-level coordination and oversight. Specialized tasks such as curriculum development and assessment design will be contracted to external partners, reducing the need for a larger in-house team.
- IT infrastructure: Rather than building new systems from scratch, the initiative will use existing platforms and credentialing technologies from private-sector providers (e.g., CompTIA, Coursera). This significantly reduces upfront development costs while ensuring a robust system for managing assessments and credentials.
- Marketing and outreach: A smaller but targeted budget will be allocated for domestic and international outreach to raise awareness of the program. Partnerships with industry and educational institutions will help amplify these efforts, reducing the need for a large marketing budget.
- Grants and partnerships: The program will provide modest grants to universities to support curriculum development, with a focus on fostering partnerships rather than large-scale financial commitments. This allows for more cost-effective collaboration with educational institutions.
- Fellowship programs and international exchanges: The expanded CyberCorps fellowship will begin with a smaller cohort, scaling up based on available funding and demonstrated success. International exchanges will be limited to strategic, high-impact partnerships to ensure cost efficiency while still addressing global cybersecurity needs.
Potential funding sources
Funding for this initiative can be sourced through a variety of channels. First, congressional appropriations via the annual budget process are expected to provide a significant portion of the financial support. Additionally, reallocating existing funds from cybersecurity and workforce development programs could account for approximately 25–35% of the overall budget. This reallocation could include funding from current programs like NICE, SFS, and other workforce development grants, which can be repurposed to support this broader initiative without requiring entirely new appropriations.
Public-private partnerships will also be explored, with potential contributions from industry players who recognize the value of a robust cybersecurity workforce. Grants from federal entities such as DHS, DoD, and NSF are viable options to supplement the program’s financial needs. To offset costs, fees collected from credentialing and training programs could serve as an additional revenue stream.
Finally, the Action Plan and its initiatives will seek contributions from international development funds aimed at capacity-building, as well as financial support from allied nations to aid in the establishment of joint international programs.
Conclusion
Establishing a comprehensive Cyber Workforce Action Plan represents a pivotal move toward securing America’s digital future. By creating flexible, accessible career pathways into cybersecurity, fostering innovative education and training models, and promoting both domestic diversity and international cooperation, this initiative addresses the urgent need for a skilled and resilient cybersecurity workforce.
The impact of this proposal is wide-ranging. It will not only reinforce national security by strengthening the nation’s cyber defenses but also contribute to economic growth by creating high-paying jobs and advancing U.S. leadership in cybersecurity on the global stage. By expanding access to cybersecurity careers and engaging previously underutilized talent pools, this initiative will ensure the workforce reflects the diversity of the nation and is prepared to meet future cybersecurity challenges.
The next administration must make the implementation of this plan a national priority. As cyber threats grow more complex and sophisticated, the nation’s ability to defend itself depends on developing a robust, adaptable, and highly skilled cybersecurity workforce. Acting swiftly to establish this strategy will build a stronger, more resilient digital infrastructure, ensuring both national security and economic prosperity in the 21st century. We urge the administration to allocate the necessary resources and lead the transformation of cybersecurity workforce development. Our digital future—and our national security—demand immediate action.
Retiring Baby Boomers Can Turn Workers into Owners: Securing American Business Ownership through Employee Ownership
The economic vitality and competitiveness of America’s economy is in jeopardy. The Silver Tsunami of retiring business owners puts half of small businesses at risk: 2.9 million companies are owned by someone at or near retirement age, of which 375,000 are manufacturing, trade, and distribution businesses critical to our supply chains. Add to this that 40 percent of U.S. corporate stock is owned by foreign investors, which funnels these companies’ profits out of our country, weakening our ability to reinvest in our own competitiveness. If the steps to expand the availability of employee ownership were to address even just 10% of the Silver Tsunami companies over 10 employees, this would preserve an estimated 57K small businesses and 2.6M jobs, affecting communities across the U.S. Six hundred billion dollars in economic activity by American-owned firms would be preserved, ensuring that these firms’ profits continue to flow into American pockets.
Broad-based employee ownership (EO) is a powerful solution that preserves local American business ownership, protects our supply chains and the resiliency of American manufacturing, creates quality jobs, and grows the household balance sheets of American workers and their families. Expanding access to financing for EO is crucial at this juncture, given the looming economic threats of the Silver Tsunami and foreign business ownership.
Two important opportunities expand capital access to finance sales of businesses into EO, building on over 50 years of federal support for EO and over 65 years of supporting the flow of small business private capital to where it is not in adequate supply: first, the Employee Equity Investment Act (EEIA), and second, addressing barriers in the SBA 7(a) loan guarantee program.
Three trends create tremendous urgency to leverage employee ownership small business acquisition: (1) the Silver Tsunami, representing $6.5T in GDP and one in five private sector workers nationwide, (2) fewer than 30 percent of businesses are being taken over by family members, and (3) only one in five businesses put up for sale is able to find a buyer.
Without preserving Silver Tsunami businesses, the current 40 percent share of foreign ownership will only grow. Supporting U.S. private investors in the mergers and acquisitions (M&A) space to proactively pitch EO to business owners, and come with readily available financing, enables EO to compete with other acquisition offers, including foreign firms.
In communities all across the U.S., from urban to suburban to rural (where arguably the need to find buyers and the impact of job losses can be most acute), EO is needed to preserve these businesses and their jobs in our communities, maintain U.S. stock ownership, preserve manufacturing production capacity and competitive know how, and create the potential for the next generation of business owners to create economic opportunity for themselves and their families.
Challenge and Opportunity
Broad-based employee ownership (EO) of American small businesses is one of the most promising opportunities to preserve American ownership and small business resiliency and vitality, and help address our country’s enormous wealth gap. EO creates the opportunity to have a stake in the game, and to understand what it means to be a part owner of a business for today’s small business workforces.
However, the growth of EO, and its ability to preserve American ownership of small businesses in our local economies, is severely hampered by access to financing.
Most EO transactions (which are market rate sales) require the business owner to first learn about EO, then to not only initiate the transaction (typically hiring a consultant to structure the deal for them), but also to finance as much as 50 percent or more of the sale. This contrasts to how the M&A market traditionally works: buyers who provide the financing are the ones who initiate the transaction with business owners. This difference is a core reason why EO hasn’t grown as quickly as it could, given all of the backing provided through federal tax breaks dating back to 1974.
More than one form of EO is needed to address the urgent Silver Tsunami and related challenges, including Employee Stock Ownership Plans (ESOPs) which are only a fit for companies of about 40 employees and above, and worker-owned cooperatives and Employee Ownership Trusts (EOTs), which are a fit for companies of about 10 employees and above (below 10 is a challenge for any EO transition). Of small businesses with greater than 10 employees, those with 10-19 employees make up 51% of the total; those with 20-49 employees make up 33%. In other words, the vast majority of companies with over 10 employees (the minimum size threshold for EO transitions) are below the 40+ employee threshold required for an ESOP. This underscores the importance of ensuring financing access for worker coops and EOTs that can support transitions of companies in the 10-40 employee range.
Without action, we are at risk of losing the small businesses and jobs that are in need of buyers as a result of the Silver Tsunami.
Across the entire small business economy, 2.9M businesses that provide 32.1M jobs are estimated to be at risk, representing $1.3T in payroll and $6.5T in business revenue. Honing in on only manufacturing, wholesale trade and transportation & warehousing businesses, there are an estimated 375,000 businesses at risk that provide 5.5M jobs combined, representing $279.2B of payroll and $2.3T of business revenue.
Plan of Action
Two important opportunities will expand capital access to finance sales of businesses into EO and solve the supply-demand imbalance created in the small business merger and acquisition marketplace with too many businesses needing buyers and being at risk of closing down due to the Silver Tsunami.
First, passing new legislation, the Employee Equity Investment Act (EEIA), would establish a zero-subsidy credit facility at the Small Business Administration, enabling Congress to preserve the legacy of local businesses and create quality jobs with retirement security by helping businesses transition to employee ownership. By supporting private investment funds, referred to as Employee Equity Investment Companies (EEICs), Congress can support the private market to finance the sale of privately-held small- and medium-sized businesses from business owners to their employees through credit enhancement capabilities at zero subsidy cost to the taxpayer.
EEICs are private investment companies licensed by the Small Business Administration that can be eligible for low-cost, government-backed capital to either create or grow employee-owned businesses. In the case of new EO transitions, the legislation intends to “crowd in” private institutional capital sources to reduce the need for sellers to self-finance a sale to employees. Fees paid into the program by the licensed funds enable it to operate at a zero-subsidy cost to the federal government.
The Employee Equity Investment Act (EEIA) helps private investors that specialize in EO to compete in the mergers & acquisition (M&A) space.
Second, addressing barriers to EO lending in the SBA 7(a) loan guarantee program by passing legislation that removes the personal guarantee requirement for worker coops and EOTs would help level the playing field, enabling companies transitioning to EO to qualify for this loan guarantee without requiring a single employee-owner to personally guarantee the loan on behalf of the entire owner group of 10, 50 or 500 employees.
Importantly, our manufacturing supply chain depends on a network of tier 1, 2 and 3 suppliers across the entire value chain, a mix of very large and very small companies (over 75% of manufacturing suppliers have 20 or fewer employees). The entire sector faces an increasingly fragile supply chain and growing workforce shortages, while also being faced with the Silver Tsunami risk. Ensuring that EO transitions can help us preserve the full range of suppliers, distributors and other key businesses will depend on having capital that can finance companies of all sizes. The SBA 7(a) program can guarantee loans of up to $5M, on the smaller end of the small business company size.
Even though the SBA took steps in 2023 to make loans to ESOPs easier than under prior rules, the biggest addressable market for EO loans that fit within the SBA’s 7(a) loan size range are for worker coops and EOTs (because ESOPs are only a fit for companies with about 40 employees or fewer, given higher regulatory costs). Worker coops and EOTs are currently not able to utilize this SBA product.
The legislative action needed is to require the SBA to remove the requirement for a personal guarantee under the SBA 7(a) loan guarantee program for acquisitions financing for worker cooperatives and Employee Ownership Trusts. The Capital for Cooperatives Act (introduced to both the House and the Senate most recently in May 2021) provides a strong starting point for the legislative changes needed. There is precedent for this change; the Paycheck Protection Program loans and SBA Economic Injury Disaster Loans (EIDL) were made during the pandemic to cooperatives without requiring personal guarantees as well as the aforementioned May 2023 rule change allowing majority ESOPs to borrow without personal guarantee.
There is not any expected additional cost to this program outside of some small updates to policies and public communication about the changes.
Addressing barriers to EO lending in the SBA 7(a) loan guarantee program would open up bank financing to the full addressable market of EO transactions.
The Silver Tsunami of retiring business owners puts half of all employer-businesses urgently at risk if these business owners can’t find buyers, as the last of the baby boomers turns 65 in 2030. Maintaining American small business ownership, with 40% of stock of American companies already owned by foreign stockholders, is also critical. EO preserves domestic productive capacity as an alternative to acquisition by foreign firms, including China, and other strategic competitors, which bolsters supply chain resiliency and U.S. strategic competitiveness. Manufacturing is a strong fit for EO, as it is consistently in the top two sectors for newly formed employee-owned companies, making up 20-25% of all new ESOPs.
Enabling private investors in the M&A space to proactively pitch EO to business owners, and come with readily available financing will help address these urgent needs, preserving small business assets in our communities, while simultaneously creating a new generation of American business owners.
This action-ready policy memo is part of Day One 2025 — our effort to bring forward bold policy ideas, grounded in science and evidence, that can tackle the country’s biggest challenges and bring us closer to the prosperous, equitable and safe future that we all hope for whoever takes office in 2025 and beyond.
PLEASE NOTE (February 2025): Since publication several government websites have been taken offline. We apologize for any broken links to once accessible public data.
There are an estimated 7,500+ EO companies in the U.S. today, with nearly 40,000 employee-owners and assets well above $2T. Most are ESOPs (about 6,500), plus about 1,000 worker cooperatives, and under 100 EOTs.
For every 1% of Silver Tsunami companies with more than 10 employees that is able to transition to EO based on these recommendations, an estimated 5.7K firms, $60.7B in sales, 260K jobs, and 12.3B in payroll would be preserved.
Congress and the federal government have demonstrated their support of small business and the EO form of small business in many ways, which this proposed two-pronged legislation builds on, for example:
- Creation of the SBIC program in the SBA in 1958 designed to stimulate the small business segment of the U.S. economy by supplementing “the flow of private equity capital and long-term loan funds which small-business concerns need for the sound financing of their business operations and for their growth, expansion, and modernization, and which are not available in adequate supply [emphasis added]”
- Passage of multiple pieces of federal legislation providing tax benefits to EO companies dating back to 1974
- Passage of the Main Street Employee Ownership Act in 2018, which was passed with the intention of removing barriers to SBA loans or guarantees for EO transitions, including to allow ESOPs and worker coops to qualify for loans under the SBA’s 7(a) program. The law stipulated that the SBA “may” make the changes the law provided, but the regulations SBA initially issued made things harder, not easier. Over the next few years, Representatives Dean Phillips (D-MN) and Nydia Velazquez (D-NY), both on the House Small Business Committee, led an effort to get the SBA to make the most recent changes that benefitted ESOPs but not the other forms of EO.
- Release of the first Job Quality Toolkit by the Commerce Department in July 2021, which explicitly includes EO as one of the job quality strategies
- Passage of the WORK Act (Worker Ownership, Readiness, and Knowledge) in 2023 (incorporated as Section 346 of the SECURE 2.0 Act), which directs the Department of Labor (DOL) to create an Employee Ownership Initiative within the department to coordinate and fund state employee ownership outreach programs and also requires the DOL to set new standards for ESOP appraisals. The program was to be funded at $4 million in fiscal year 2025 (which starts in October 2024), gradually increasing to $16 million by fiscal year 2029, but it has yet to be appropriated.
EO transitions using worker cooperatives have been happening for decades. Over the past ten years, this practice has grown significantly. There is a 30-member network of practitioners that actively support small business transitions utilizing worker coops and EOTs called Workers to Owners. Employee Ownership Trusts are newer in the U.S. (though they are the standard EO form in Europe, with decades of strong track record) and are a rapidly growing form of EO with a growing set of practitioners.
Given the supply ~ demand imbalance of retiring business owners created by the Silver Tsunami (lots of businesses need buyers), as well as the outsized positive benefits of EO, prioritizing this form of business ownership is critical to preserving these business assets in our local and national economies. Capital to finance the transactions is central to ensuring EO’s ability to play this important role.
The SBA 7(a) loan program has been and continues to be, critical to opening up bank (and some CDFI) financing for small businesses writ large by guaranteeing loans up to $5M. In FY23, the SBA guaranteed more than 57,300 7(a) loans worth $27.5 billion.
The SBA 7(a) loan program’s current rules require that all owners with 20% or more ownership of a business provide a personal guarantee for the loan, but absent anyone owning 20%, at least one individual must provide the personal guarantee. The previously mentioned May 2023 rule changes updated this for majority ESOPs.
Just as with the ESOP form of EO, the SBA would be able to consider documented proof of an EO borrower’s ability to repay the loan based on equity, cash flow, and profitability to determine lending criteria.
Research into employee ownership demonstrates that EO companies have faster growth, higher profits, and that they outlast their competitors in business cycle downturns. There is precedent for offering loans without a personal guarantee. First, during COVID, the SBA extended both EIDL (Economic Injury Disaster Loans) and PPP (Paycheck Protection Program) loans to cooperatives without requiring a personal guarantee. Second, the SBA’s May 2023 rule changes allow majority ESOPs to borrow without personal guarantee.
The overlap of the EO transaction value with the $5M ceiling for the 7(a) loan guarantee has the largest overlap with transaction values that are suitable for worker coops and EOTs. This is because ESOPs are not viable below about $750K-$1M transaction value due to higher regulatory-related costs, but the other forms of EO are viable down to about 10 or so employees.
A typical bank- or CDFI- financed EO transaction is a senior loan of 50-70% and a seller note of 30-50%. With a $5M ceiling for the 7(a) loan guarantee, this would cap the EO transaction value for 7(a) loans at $10M (a 50% seller note of $5M alongside a $5M bank loan). If a sale price is 4-6x EBITDA (a measure of annual profit) at this transaction value, this would cap the eligible company EBITDA at $1.7-$2.5M, which captures only the lowest company size thresholds that could be viable for the ESOP form.
Supply chain fragility and widespread labor shortages are the two greatest challenges facing American manufacturing operators today, with 75% of manufacturers citing attracting and retaining talent as their primary business challenge, and 65% citing supply chain disruptions as their next greatest challenge. Many don’t realize that the manufacturing sector is built like a block tower, with the Tier 1 (largest) suppliers to manufacturers at the top, Tier 2 suppliers at the next level down, and the widest foundational layer made up of Tier 3 suppliers. For example, a typical auto manufacturer will rely on 18,000 suppliers across its entire value chain, over 98% of which are small or medium sized businesses. In fact, 75% of manufacturing businesses have fewer than 20 employees. It is critical that we preserve American businesses across the entire value chain, and opening up financing for EO for companies of all sizes is absolutely critical.
The manufacturing sector generates 12% of U.S. GDP (gross domestic product), and if we count the value of the sector’s purchasing, the number goes to nearly one quarter of GDP. The sector also employs nearly one in ten American workers (over 14 million). Manufacturing plays a vital role in both our national security and in public health. Finally, the sector has long been a source of quality jobs and a cornerstone of middle class employment.
Though we aren’t certain the reasoning, it is most likely because ESOPs have the largest lobbying presence. Given the broad support by the federal government of ESOPs through a myriad of tax benefits designed to encourage companies to transition to ESOPs, it is the biggest form of EO, enabling its lobbying presence. As discussed, their size threshold (based on the costs to comply with the regulatory requirements) put ESOPs out of reach for companies with below $750K – $1M EBITDA (a measure of annual profit), which leaves a large swath of America’s small businesses not supported by the SBA 7(a) loan guarantee when they are transacting an employee ownership succession plan.
Likely, the lack of lobbying presence by parties representing the non-ESOP forms of employee ownership has resulted in the rule change not applying to the other forms of broad-based employee ownership. However, the data (as outlined above) clearly shows that worker cooperatives and EOTs are needed to address the full breadth of Silver Tsunami EO need, given the size overlap of loans that fit the size guidelines of the 7(a) loan guarantee and the fit with the form of EO. As such, legislators that are focused on American business resiliency and competitiveness are in the good positions to direct the SBA to mirror the ESOP personal loan guarantee treatment for worker cooperatives and EOTs.
Work-based Learning for All: Aligning K-12 Education and the Workplace for both Students and Teachers
The incoming presidential administration of 2025 should champion a policy position calling for strengthening of the connection between K-12 schools and community workplaces. Such connections result in a number of benefits including modernized curricula, more meaningful lessons, more motivated students, more college and career readiness, more qualified applicants for local jobs, more vibrant communities, and a stronger nation. The gains associated with education-workplace partnerships are certainly not exclusive to STEM disciplines of study but given the high-demand for talent in STEM business and industry, the imperative may be greatest in science and mathematics, and the applied domains of engineering and technology.
The rationale for a policy priority around K-12 and workplace partnerships centers around waning public confidence in the ability of schools to prepare tomorrow’s workforce. A perceived disconnect between what gets taught and what learners need in order to thrive on the job threatens individual livelihoods, family and community stability, and national competitiveness in an ever-more rapidly evolving global economy. Bridges are needed that unite education and workplaces, putting students and their teachers to work beyond the classroom. A new administration should:
- Expand externships for teachers in community workplaces. The best way to help every student to explore and to be inspired about career horizons is to prepare and inspire their teachers to represent to them the opportunities that await. Externships in community workplaces sharpen teachers’ content knowledge and skills and equip them to portray the exciting careers that await students. The existing Research Experiences for Teachers (RET) federal infrastructure can be adapted for supporting externships.
- Deploy Competency-Based Education (CBE) at scale. America’s prevailing school model inhibits the expansion of experiential, or Work-Based Learning (WBL) in workplaces. The school day is a regimented sequence of seat-time tallies toward a seven-period stack of classes yielding little if any time to immerse learners in relevant experiences at workplaces. Or as one advocacy organization phrased it, “Today’s high school transcript is a record of time and activity, but not a very good measure of knowledge, skills, and dispositions. It doesn’t capture experiences or work products that provide evidence of growth and accomplishment.” An internet search of Work-based Learning nets over 3 billion hits. It’s one of the hottest topics in education. But those hits reveal a weakness to the WBL “movement”: it is almost entirely focused on career and technical education, a branch of general education serving about one-fourth of all students. Going forward, core area teachers and classes must take part. To do so, mathematics, science and other required and college preparatory courses need flexibility from seat time and content delivery. When teachers, schools and districts adopt Competency-Based Education, this allows more time for the other 75% of learners to earn credits by acquiring the knowledge and skills of a subject area while doing, making and working. Models exist for doing so.
Concerted federal policy promoting the connection between K-12 schools and community workplaces sends a strong, bipartisan message to both education and employer sectors of the nation that the myriad advantages to learners, employers, and communities of cross-sector collaboration will now be the norm, not the exception. Moreover, it requires no new or novel and untested programmatic priorities – they are already at play in forward-thinking communities. Teacher externships dot the American landscape and will fit neatly into a new RET mold (coupling Research Experiences for Teachers with Regional Externships for Teachers as menu options). Competency-Based Education, with guidelines for Work-Based Learning, is already on paper in most U.S. states. Now is prime time to expand these life-changing educational reforms for all young Americans.
Such expansions would fit neatly into existing federal structures; federal agencies have long supported competency-based education (U.S. Department of Education), Work-based Learning (U.S. Department of Labor), and Teacher-Externships (U.S. Department of Energy, and National Science Foundation). The current national landscape of teacher-externships, while promising, is fraught with inconsistency and low participation: presently there are thousands of local teacher-externship models of wide variation in duration and rigor operated by school districts, local business organizations, higher education institutions, and regional education groups. Federal research-based guidelines and example-setting is a desperately needed function for standardizing high-quality experiences. Federal guidance and promotion could also help expand those experiences from the present low-capacity (estimating 10 teachers per year in 5,000 local programs equates to 50,000 teacher-externs annually while there are over 3 million K-12 educators nationwide, meaning 60 years to reach all practitioners) to greater volume through more workplace and educator involvement.
Similarly, the national portrait for competency-based education leading to work-based learning presents a golden opportunity to usher educational transformation. At present, many schools and districts implement CBE to limited degrees in specific courses (typically Career and Technology Education, or CTE) for certain students (non-college bound). The potential for far greater impact across courses and the entire student spectrum awaits federal guidance and support.
Challenge and Opportunity
Urgency for Action
Thousands of businesses in towns and cities across the United States use science, mathematics and technology to engineer global goods while struggling to find and employ local talent. Thousands of schools across the U.S. teach science, mathematics, engineering and technology yet struggle to inspire their students toward local career opportunities. These two seemingly parallel universes overlap like the acetate pages of an anatomy textbook—muscle over bone—while largely failing to unite for mutual benefit. Iowa for example, is home to 4,273 global manufacturers depending on 263,870 employees to move product out the door. Pella Window, John Deere, Vermeer, Diamond-Vogel, Collins Aerospace, Winnebago, Tyson and others scramble to fill roughly 15,000 STEM job openings (p. 61) at any given time. The good news is that 75% of the state’s high school graduates profess interest (p. 29) in STEM careers. The bad news is that just 37% of graduates (p. 30) intend to live and work in Iowa. That is unless they’ve enjoyed a work-based learning experience and/or had a teacher who had spent a summer in industry. The Iowa experience parallels that of many rural and urban regions across the country: students whose teacher externed find more relevance in STEM classes applied to local jobs, And students who enjoy work-based learning are more likely to pursue careers locally after graduation. In combination, these two programs serve up a culture of connectedness between the world of work and the world of education, generating a win-win outcome for educators, employers, families, communities, and most importantly, for students.
Opportunity for Impact
Immersing students and their teachers in workplace experiences is not a new idea. Career and technology education (CTE) has been a driving force for WBL for over 100 years. More recently, federal policy during the Obama administration re-shaped the blueprint for Perkins reauthorization by encouraging models that “better focus on real world experiences” (p. 3). And under the Trump administration the federal STEM education strategic plan called for a new and renewed emphasis on “…education-employer partnerships leading to work-based learning…” (p. 4). The key word here is “new”, and it’s not being emphasized enough: the status quo remains centered on CTE when it comes to teachers and students connecting with the work world, leaving out nearly three-quarters of all students. High school internships, for example, are completed by only about two percent of U.S. students, and CTE programs are completed by approximately 22 percent of white students but 18 percent of Black and 16 percent of Hispanic students. The national standards upon which states and districts base their mathematics and science curricula, including the Common Core and the Next Generation Science Standards, are not much help. They urge applied classroom problem-solving but fail to promote WBL for students or teachers. Today, the vast majority of K-12 student WBL opportunities—internships, apprenticeships, job shadows, collaborative projects, etc., take place through the CTE wing of schools. Likewise, most teacher-externship programs engage CTE educators almost exclusively.
The potent WBL tools of career-technical education transposed over to core subject area students and teachers can invigorate mathematics, science and computing class, too.
Impact Opportunity for Externships
As one former extern put it, “If you send one kid on an internship, it affects that one kid. If you send a teacher, the impact reaches their 200 students!” Especially for today’s rapidly growing and economically vital career sectors including Health Science, Information Technology, Biotech, Manufacturing, Agriculture, Data Analytics, Food, and Nature Resources, teacher externships can fuel the talent pipeline. Iowa has been conducting just such an experiment for a decade, making this type of professional development available to core discipline teachers. “Surveyed teacher-externs agreed or strongly agreed that it affected the way they taught, their understanding of 21st century [transportable] skills through math and science, and they agreed or strongly agreed that more students expressed an interest in STEM careers as a result of their having participated in the externship (p. 12). Nearly all participating teachers (93%) described the externship as “more valuable than any other PD in which they had ever taken part” (p. 13).
Specific impacts on teachers included the following:
- Greater awareness of the importance of 21st century skills—critical thinking, technology, and collaboration—and greater integration of these skills into teaching practice.
- Improved knowledge of and skills in using technology.
- Greater understanding of the workplace expectations students will encounter.
- Increased professional confidence.
- Improved capacity to use real-world examples in the classroom.
- Better advising for students about STEM jobs.
Specific impacts on their students include the following:
- Increase in science and STEM career interest.
- Highest gain for female interest in science, math, and a STEM career compared to before-externship (p. 29).
Beyond the direct effects upon students and their teachers, externships in local workplaces leave lasting relationships that manifest year after year in tours, projects, mentorships, equipment support, summer jobs, etc. Teacher testimonials speak to the lasting effects.
Impact Opportunity for CBE and WBL
Although rarely implemented, every U.S. state now allows Competency-Based Education. Broadly defined, CBE is an education model where students demonstrate mastery of concepts and skills of a subject to advance and graduate, rather than log a set number of hours seat-time and pass tests. Students move at individualized pace, concepts are accrued at variable rates and sequences, teachers operate as facilitators, and the work is more often projects-based—much of it occurring outside classroom walls. CBE solves the top inhibitor to Work-Based Learning for non-CTE, core content areas of study including science, mathematics, and computing: it frees up time.
Utah, Washington, and Wyoming are considered leaders in the CBE arena for crafting policy guidelines sufficient for a few schools to pilot the model. In Washington, 28 school districts are collaborating to establish at least one CBE school in each, the Mastery-Based Learning Collaborative (MBLC).
Another trailblazer in CBE, North Dakota, was recently recognized by the Education Commission of the States for legislating a series of changes to school rules to disinhibit CBE and WBL: (a) A competency-based student graduation pathway and allowance for outside work to count for course credit; (b) Level state support per student whether credits are earned inside or outside the classroom; and (c) Scholarships that honor demonstrated competency equally to the standard credits and grades criterion.
Finally, a school that typifies the power of CBE across subject areas, supported by the influential XQ Institute, is a metropolitan magnet model called Iowa BIG in Cedar Rapids. Enrollees choose local projects in partnership with an industry partner. Projects, like real life, are necessarily transdisciplinary. And project outcomes (i.e., mastery) determine grades. Outcomes include:
- Average ACT scores of 22 (21 is state average, just under 20 is national average).
- 97 percent of graduates report feeling at least somewhat prepared for the future.
- 92 percent cite “collaboration [and] working in groups” as strengths most developed.
Yet, for all its impact and promise, Iowa BIG, like many CBE pilots, struggles to broaden offerings (currently limited to English, social studies, and business credits), and enrollment (roughly 100 students out of a grade 11-12 regional population over ten-times that amount). As discussed in the next section, CBE programs can be significantly constrained by local, state, and federal policies (or lack thereof).
Challenges Limiting Impact
The limited exposure of American K-12 students to teachers who enjoy an Externship, or to Competency-Based Education leading to Work-Based Learning testifies to the multiple layers of challenge to be navigated. At the local district level, school schedules and the lack of communication across school – business boundaries are chief inhibitors to WBL, while educator professional development and crediting/graduation rules suppress CBE. At the state level, the inhibitors reveal themselves to be systemic: funding of and priority needs for educator professional development, a lack of a coherent and unifying profile of a graduate, standardized assessments, and graduation requirements retard forward movement on experiential partnerships. Logically, federal challenges have enormous influence on state and local conditions: the paucity of research and development on innovative instructional and assessment practices, inadequate communication of existent resources to drive WBL and other national education imperatives, insufficient support for the establishment of state and regional intermediary structures to drive local innovation, and non-complimentary funding programs that if coordinated could significantly advance K-12 –workplace alignment.
The pace of progress at the local school level is ultimately most strongly influenced by federal policy priority. The policy is well-established by the federal STEM education strategic plan Charting a Course for Success: America’s Strategy for STEM Education, a report by the Committee on STEM Education of the National Science and Technology Council, Pathway 1: Develop and Enrich Strategic Partnerships (p. 9). The plan was developed through and embraced for its bipartisan approach. Refocusing on its fulfillment will make the United States a stronger and more prosperous nation.
Plan of Action
The federal government’s leadership is paramount in driving policy toward education-workplace alignment. Specific roles range from investment to asset allocation to communication, specific to both teacher externships and CBE leading to WBL.
(1) Congress should legislate that all federal agencies involved in STEM education outreach (those represented on the Committee on STEM Education [Co-STEM] and on the Subcommittee on Federal Coordination in STEM Education [FC-STEM]) establish teacher-externship programs at their facilities as capacity and security permit. The FC-STEM should designate an Inter-agency Working Group on Teacher-Externships [IWG-TE] to be charged with developing a standard protocol consistent with evidence-based practice (e.g., minimum four-week, maximum eight-week summer immersion, authentic work experience applying knowledge and skills of their teaching discipline, close mentorship and supervision, the production of a translational teaching product such as a lesson, unit, or career exploratory component, compensation commensurate with qualifications, awareness and promotion activities, etc.). The IWG-TE will provide an annual report of externships activity across agencies to the FC-STEM and Co-STEM.
(2) Within two years of enactment, all agencies participating in teacher externships shall develop and implement an expansion of the externships model to localities nationwide through a grant program by which eligible LEAs, AEAs, and SEAs may compete for funding to administer local teacher-externship programs in partnership with local employers (industry, nonprofit, public sector, etc.) pertinent to the mission and scope of the respective agency. For example, EPA may fund externs in state natural resource offices, and NASA may fund externs in aerospace industry facilities. The IWG-TE will include progress and participation in the grant program as part of their annual report.
(3) The IWG-TE shall design and administer an assessment instrument for components (1) and (2) that details participation rates by agency, demographics of participants, impact on participants’ teaching, and evidence of impact on the students of participants related to interest in and capability for high-demand career pursuit. An external expert in teacher-externships administration may be contracted for guidance in the establishment of the externships program and its assessment.
As to funding, the agencies charged with implementation are those already conducting outreach, so it could be that initially no new dollars accompany the mandate. However, for the second component (grants), new funding would definitely be needed. A budget line request in 2027 seeking $10 million to be distributed proportionally to agencies based on numbers of externs – determined by the Office of Science and Technology Policy in close consult with FC-STEM – such that a goal of 1500 total externs be supported nationwide at an estimated cost of $6,000 each, plus administrative costs. In summary:
Teacher Externships
- The next administration should work with Congress to authorize the use of the RET infrastructure (NOAA, NASA, Dept. of Energy, NSF, and other variants) across agencies to administer Teacher-Externships at federal facilities.
- Congress should authorize a new grant program where agencies participating in teacher externships develop and administer grant programs by which eligible LEAs, AEAs, and SEAs may compete for funding to administer local teacher-externship programs in partnership with local employers.
Competency-based Education leading to Work-Based Learning
- Congress should ensure that a reauthorized WIOA could support the establishment and operation of state or regional intermediaries like The Center in Iowa and the MBCL in Washington state to conduct professional development and facilitate information exchange.
- Increase R&D on knowledge transfer and mobilization around CBE via funding for Education Innovation and Research and the Advancing Research in Education Act.
- ED and DOL should issue joint guidance to allow for flexible use in combination with WIOA, Perkins V, ESSA and other federal resources to expand CBE and WBL.
Recommendations supporting both innovations
- For all awarded R&D proposals across all member agencies of CoSTEM, encourage Externships and WBL as Broader Impact functions.
- Establish a single, searchable resource specific for finding federal activities and resources for Externships, CBE, and WBL.
- Sustain the call for strategic partnerships of education and workplace as a national imperative in the updated 2025 federal STEM strategic plan.
Conclusion
Teachers prepared to connect what happens between 8:00 am and 3:00 pm to real life beyond school walls reflect the future of education. Learners whose classrooms expand to workplaces hold our best hopes as tomorrow’s innovators. Studying forces and vectors at the amusement park make Physics come alive. Embryo care at the local hatchery enlivens biology lessons. Pricing insurance against actuarial tables adds up in Algebra. Crime lab forensics gives chemistry a courtroom. Designing video games that use AI to up the action puts a byte in computer study. And all such experiences fuel passions and ignite dreams for STEM study and careers. Let America put learners and their teachers to work beyond classrooms to bridge the chasm between classrooms and careers. This federal policy priority will be a win-win for learners, their families and communities, employers, and the nation.
This action-ready policy memo is part of Day One 2025 — our effort to bring forward bold policy ideas, grounded in science and evidence, that can tackle the country’s biggest challenges and bring us closer to the prosperous, equitable and safe future that we all hope for whoever takes office in 2025 and beyond.
PLEASE NOTE (February 2025): Since publication several government websites have been taken offline. We apologize for any broken links to once accessible public data.