students making that same decision in middle school today won't complete advanced training for science and engineering occupations until 2018 or 2020. “If action is not taken now to change these trends, we could reach 2020 and find that the ability of U.S. research and education institutions to regenerate has been damaged and that their preeminence has been lost to other areas of the world,” the science board said.
These shortages could not be happening at a worse time-just when the world is going flat. “The number of jobs requiring science and engineering skills in the U.S. labor force,” the NSB said, “is growing almost 5 percent per year. In comparison, the rest of the labor force is growing at just over 1 percent. Before September 11, 2001, the Bureau of Labor Statistics (BLS) projected that science and engineering occupations would increase at three times the rate of all occupations.” Unfortunately, the NSB reported, the average age of the science and engineering workforce is rising.
“Many of those who entered the expanding S&E workforce in the 1960s and 1970s (the baby boom generation) are expected to retire in the next twenty years, and their children are not choosing science and engineering careers in the same numbers as their parents,” the NSB report said. “The percentage of women, for example, choosing math and computer science careers fell 4 percentage points between 1993 and 1999.”
The 2002 NSB indicators showed that the number of science and engineering Ph.D.'s awarded in the United States dropped from 29,000 in 1998 to 27,000 in 1999. The total number of engineering undergraduates in America fell about 12 percent between the mid-1980s and 1998.
Nevertheless, America's science and engineering labor force grew at a rate well above that of America's production of science and engineering degrees, because a large number of foreign-born S&E graduates migrated to the United States. The proportion of foreign-born students in S&E fields and workers in S&E occupations continued to rise steadily in the 1990s. The NSB said that persons born outside the United States accounted for 14 percent of all S&E occupations in 1990. Between 1990 and 2000, the proportion of foreign- born people with bachelor's degrees in S&E occupations rose from 11 to 17 percent; the proportion of foreign- born with master's degrees rose from 19 to 29 percent; and the proportion of foreign-born with Ph.D.'s in the S&E labor force rose from 24 to 38 percent. By attracting scientists and engineers born and trained in other countries we have maintained the growth of the S&E labor force without a commensurate increase in support for the long-term costs of training and attracting native U.S citizens to these fields, the NSB said.
But now, the simultaneous flattening and wiring of the world have made it much easier for foreigners to innovate without having to emigrate. They can now do world-class work for world-class companies at very decent wages without ever having to leave home. As Allan E. Goodman, president of the Institute of International Education, put it, “When the world was round, they could not go back home, because there was no lab to go back to and no Internet to connect to. But now all those things are there, so they are going back. Now they are saying, 'I feel more comfortable back home. I can live more comfortably back home than in New York City and I can do good work, so why not go back?'” This trend started even before the visa hassles brought on by 9/11, said Goodman. “The brain gain started to go to brain drain around the year 2000.”
As the NSB study noted, “Since the 1980s other countries have increased investment in S&E education and the S&E workforce at higher rates than the United States has. Between 1993 and 1997, the OECD countries [Organization for Economic Co-operation and Development, a group of 40 nations with highly developed market economies] increased their number of S&E research jobs 23 percent, more than twice the 11 percent increase in S&E research jobs in the United States.”
In addition, it said, visas for students and S&E workers have been issued more slowly since the events of September 11, owing to both increased security restrictions and a drop in applications. The U.S. State Department issued 20 percent fewer visas for foreign students in 2001 than in 2000, and the rate fell farther in subsequent years. While university presidents told me in 2004 that the situation was getting better, and that the Department of Homeland Security was trying to both speed up and simplify its visa procedures for foreign students and scientists, a lot of damage has been done, and the situation for foreign students or scientists wanting to work in any areas deemed to have national security implications is becoming a real problem. No wonder New York Times education writer Sam Dillon reported on December 21, 2004, that “foreign applications to American graduate schools declined 28 percent this year. Actual foreign graduate student enrollments dropped 6 percent. Enrollments of all foreign students, in undergraduate, graduate and postdoctoral programs, fell for the first time in three decades in an annual census released this fall. Meanwhile, university enrollments have been surging in England, Germany and other countries... Chinese applications to American graduate schools fell 45 percent this year, while several European countries announced surges in Chinese enrollment.”
Dirty Little Secret #2: The Ambition Gap
The second dirty little secret, which several prominent American CEOs told me only in a whisper, goes like this: When they send jobs abroad, they not only save 75 percent on wages, they get a 100 percent increase in productivity. Part of that is understandable. When you take a low-wage, low-prestige job in America, like a call center operator, and bring it over to India, where it becomes a high-wage, high-prestige job, you end up with workers who are paid less but motivated more. “The dirty little secret is that not only is [outsourcing] cheaper and efficient,” the American CEO of a London-headquartered multinational told me, “but the quality and productivity [boost] is huge.” In addition to the wage compression, he said, one Bangalore Indian re-trained will do the work of two or three Europeans, and the Bangalore employees don't take six weeks of holidays. “When you think it's only about wages,” he added, “you can still hold your dignity, but the fact that they work better is awful.”
A short time after returning from India, I was approached in an airport by a young man who wanted to talk about some columns I had written from there. We had a nice chat, I asked him for his card, and we struck up an e-mail friendship. His name is Mike Arguello, and he is an IT systems architect living in San Antonio. He does high- end IT systems design and does not feel threatened by foreign competition. He also teaches computer science. When I asked him what we needed to do in America to get our edge back, he sent me this e-mail:
I taught at a local university. It was disheartening to see the poor work ethic of many of my students. Of the students I taught over six semesters, I'd only consider hiring two of them. The rest lacked the creativity, problem- solving abilities and passion for learning. As you well know, India's biggest advantage over the Chinese and Russians is that they speak English. But it would be wrong to assume the top Indian developers are better than their American counterparts. The advantage they have is the number of bodies they can throw at a problem. The Indians that I work with are the cream of the crop. They are educated by the equivalents of MIT back in India and there are plenty of them. If you were to follow me in my daily meetings it would become very obvious that a great deal of my time is spent working with Indians. Most managers are probably still under the impression that all Indians are doing is lower-end software development-“software assembly.” But technologies, such as Linux, are allowing them to start taking higher-paying system design jobs that had previously been the exclusive domain of American workers. It has provided them with the means to move up the technology food chain, putting them on par with domestic workers. It's brain power against brain power, and in this area they are formidable. From a technology perspective, the world is flat and getting flatter (if that is possible). The only two areas that I have not seen Indian labor in are networking architects and system architects, but it is only a matter of time. Indians are very bright and they are quickly learning from their interaction with system architects just how all of the pieces of the IT puzzle fit together... Were Congress to pass legislation to stop the flow of Indian labor, you would have major software systems that would have nobody who knew what was going on. It is unfortunate that many management positions in IT are filled with non-technical managers who may not be fully aware of their exposure... I'm an expert in information systems, not economics, but I know a high-paying job requires one be able to produce something of high value. The economy is producing the jobs both at the high end and low end, but increasingly the
