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.”