US’ education system produces a supply of qualified STEM graduates in much greater numbers than jobs available ...less attractive career opportunities

Globalization of R&D and Innovation: Implications for U.S. STEM Workforce and Policy | Testimony before the U.S. House Subcommittee on Technology and Innovation

Author(s): Harold Salzman

Other Availability: PDF | Printer-Friendly Page

Posted to Web: November 06, 2007

Permanent Link: http://www.urban.org/url.cfm?ID=901129

Dr. Harold Salzman tells a House subcommittee on innovation and technology that new perspectives on competition and new routes for sharing knowledge freely across borders have prompted firms and universities to globalize. Salzman argues that globalization is not prompted by any deficiencies in the domestic supply of trained workers, and that "techno-nationalist" policies of the past are outdated and ineffective.
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science, technology, engineering, and mathematics (STEM) workforce ...
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The available data indicate that the United States’ education system produces a supply of qualified STEM graduates in much greater numbers than jobs available. If there are shortages, it is most likely a demand-side problem of STEM career opportunities that are less attractive than career opportunities in other fields. However, standard labor market indicators do not indicate any shortages.
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The standard education measures indicate there are enough students with the requisite skills to succeed in science and engineering courses of study, and managers we have interviewed rarely if ever note a lack of technical skills among their STEM workers.
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Supply and Demand for STEM workers
Common to many policy reports is a call for large increases in the STEM workforce, and improvement in K-12 math and science as the means of achieving this increase.4 The data do not reflect the claim that U.S. students show declining interest in science and engineering fields, either in college or in entering the workforce.
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From 1985 to 2000, the United States graduated about 435,000 S&E students annually with bachelor’s, master’s, and doctoral degrees—that total includes only U.S. citizens and permanent residents (about 72 percent of STEM workers hold a bachelor’s, 20 percent a master’s, and 7 percent a doctorate degree). Over the same period, the net change in STEM occupational employment ran about 150,000 annually, such that the average ratio of all STEM graduates to net employment change was about three to one.
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... However, there is a surprisingly low rate of STEM retention for the 1993 to 2001 cohorts of STEM graduates.
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For example, in a bid to increase visa caps, a number of high-tech CEOs discussed the demand their companies had for U.S.-based science and engineering workers to a Wall Street Journal reporter in June, 2006:

• Mr. McNealy says Sun does 75% to 80% of its research and development in the U.S. Craig Barrett, chairman of Intel Corp., says his company also employs most of its researchers in the U.S. and wants to keep it that way. The reasons? … “If engineering is happening here in the U.S., I think my children will have a richer work environment.” (Wall Street Journal 2006)

However, college graduates might have been influenced by an announcement Sun made to Wall Street analysts in May 2005:

• Sun Microsystems Inc. has chosen four of its facilities around the world to take the place of its Silicon Valley office as the research and development hub…. “We are over-invested in high-cost geographies like the U.S., and underinvested in low-cost geographies like India,” … the company's senior vice president of global engineering told reporters in Bangalore. [He] said the company will not lay off programmers in the U.S.—but won't hire many, either.… The company has reduced its staff to about 30,000, from roughly 43,000 four years ago. (Associated Press 2005; emphasis added)

One can imagine that companies who are offshoring would have hiring problems even with an adequate labor market supply in the United States. Similarly, IT executives calling for greatly increasing, or even completely removing, numerical caps on foreign worker visas (e.g. the H-1B) may be sending strong signals to students and current workers about diminished career opportunities. Human capital is a long-term investment and potential STEM students read all the tea leaves before investing. We have conducted interviews with current managers and engineers who believe that there is little future in entry-level engineering jobs in many industries, and IT in particular. Not only will it be difficult to fill mid-level and higher-level positions from an inexperienced workforce that never had an entry-level position, but several future generations of workers, currently in school, are developing their work interests and career aspirations based on their perceptions about the future state of labor markets. A range of public policies, such as immigration policy and corporate practices such as offshoring R&D, affect the career choices of current workers and future generations as well.

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Current policy is driven by the twin perceptions of a labor market shortage of scientists and engineers and of a pool of qualified students that is small in number and declining in quality. Math and science education are viewed as the primary policy levers to increase labor market supply, supplemented by increased immigration. But the data show little evidence to support those positions, and, in fact, indicate an ample supply of students whose preparation and performance has been increasing over the past decades. We are concerned that the consensus prescriptions are based on some misperceptions about efficient and sustainable strategies for economic and social prosperity. ...