[ECAR 2007 Summer Symposium] Higher education and the future of U.S. Competitiveness


David Attis, Senior Director of Policy Studies, Council on Competitiveness, is giving the final talk.

Concerns about U.S. competitiveness now appear almost daily in the national news – every country is facing this in the global environment, and feel they’re behind. There as sense that we’ve taken our eye off the ball. Industrial leaders link competitiveness and prosperity to leadership in science and technology. And politicians on both sides of the aisle have followed their lead. There’s a broad political consensus that has emerged through the legislative process – the agenda is increased basic research funding in science and engineering, increased funding for graduate education, increased k-12 science education, high-skilled immigration, and r&d tax credits.

These proposals implicitly assume that higher education is the linchpin of U.S. competitiveness. The assumption is that if more funding gets pushed into the system, more innovation comes out. What do we mean by innovation? Doesn’t have a precise economic definition, though politicians love the term. Secretary of Commerce now has a commission on measuring innovation. We have some idea of how to increase the number of PhDs and publications, but that’s not necessarily innovation. And how does that translate into jobs?

In 80s US was responsible for 46% of RD investment, now it’s 37%. In 1986 US produced 52% of new doctorates in science and engineering in 2003 it was 22% – what does that mean for our future? China’s the top high tech exporter now, and five of the top 10 countries are developing economies. China is a leader in production, but not in innovation – it’s a lot of foreign companies producing in China. China’s investment in R&D spending grew 19.3 percent 1995-2004.

David cites the shrinking influence of Great Britain in the world between the 19th and 20th centuries as perhaps a good model of what happens to the U.S. in the near future.

The rise of global research networks – the location of corporate research labs. China and India are cited as the best places to put new R&D facilities.

Dispite significant increases in basic research funding, output (publications, patents) have grown slowly.

Regional knowledge spillovers – putting people into one place and foster relationships and networks fosters innovation. Innovation as a contact sport – happens through personal connections, not licensing and patents. The amount you spend on R&D determines how many people go into science and engineering – getting these people trained and out into working environments is how innovation spreads. Tacit knowledge – what cannot be captured in publications and patents – is the most valuable.

What does that mean for education? There’s been a lot of talk about the shortage of scientists and engineers. There’s a real gap between what CEOs see and what students see. Students see higher wages for MBAs, JDs and MDs; long routes to specialized degrees; more S&E’s working outside the profession; rising unemployment rates for S&Es; middle-aged S&E’s struggling to find work; rapidly growing S&E workforce in developing countries.

What are employers really looking for – survey by conference board:

1. critical thinking/problem solving
2. information technology application
3. teamwork/collaboration
4. creativity/innovation
5. diversity
5. leadership
7. oral communications

13. math
16. science

Most PhD programs don’t typically teach these soft skills. Technical skills are not enough. Cites Georgia Tech’s computer science program as an example of an integrated program that puts things together for a CS major – “Threads and Roles”

“Send me engineers who are adaptable – who can think across disciplines.”

“Industry needs employees who not only understand the technical nature of their projects, but the business and legal aspects as well…” IBM exec

“We need engineers who think like artists and artists who think like engineers”

The Spellings Commission report – misses a lot of these points.

Information technology: a double-edged sword?

Driver for growth: productivity growth; lower prices; more efficient markets; higher quality goods and services; innovation and new products and services.

Disruptive force: IT-enabled dislocations; offshoring; skill-biased technical change.

Churn is essential to dynamism and growth, but it’s disruptive to workers. Average household income has actually declined from 2001-2006.

Will off-shoring hollow out our economy? We don’t have good data – it’s hard to measure. Companies don’t say “we’re taking our jobs here and moving them to India”.

How many jobs have been lost – estimate is about 1 million – a drop in a bucket. There’s no net loss of jobs in the US economy.

What types of jobs are likely to be offshored? If you can do it remotely, it can be offshored. Call-centers, programming, reading radiology, some high-end R&D.

How many jobs could potentially be offshored? Consensus is about 20 million. It’s really guesswork – can’t predict the effects of technology.

How many jobs will actually be offshored? 4-5% of some regions of US, 2% of others.

Will there be any offsetting increase in jobs due to expanded exports? Could be that there’s no net loss.

The returns to education rose significantly in the late 90s, but stalled after 2000 – is this a long-term change or not?

Higher order skills continue to increase in importance across all occupations. The “New Geography of Work” – routine work will be done offshore or by machines, creative work will be done here by people. New Commission on the Skills of the American Workforce report (2007). Recommend re-inventing high schools, putting everyone in two year schools and then some move on to higher ed.

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