Is a global high-tech work force bad for U.S.?

WASHINGTON--Could the much-discussed globalization of the high-tech work force mean gloom and doom for historical U.S. dominance in the industry?

Economists debated that topic at a panel discussion here on Monday hosted by the American Enterprise Institute for Public Policy Research (AEI), a not-for-profit think tank.

For Harvard University professor Richard Freeman, the answer to the question was an emphatic "yes."

Salaries in science and engineering fields are growing at a slower rate than those in, for instance, law and medicine, he said. "We are a wealthy country, we have good jobs, we have good pay, and we've had pretty good immigration policies to letting people in," Freeman said. That combination not only makes America attractive for foreign workers but results in lower salaries for native workers, he said.

The nation needs to be more nurturing toward younger Americans, he suggested, by bumping up the number and value of scholarships for scientific study. The United States recorded about 40 percent of the world's science and engineering Ph.D. students in 1970, but he predicts that number will decline to 15 percent by 2010, with "populous" countries such as China surely outpacing the United States in Ph.D. production.

Nevertheless, there are long-term consumer benefits that spring out of a welcoming attitude toward foreign participation, despite the shrinking numbers of Americans with advanced science and engineering degrees, said Steven Davis, a University of Chicago economics professor and a visiting scholar at AEI.

Much in the way that developing nations have benefited from American innovation, "we can also be a lot better off if the Chinese and the Indians...start developing more commercially relevant innovations, as long as we have the wherewithal to adopt, implement and apply them," he said.

In the long-run, a growing amount of research by foreigners is a winning situation because it leads to increased choices for consumers, added David Weinstein, a Columbia University economics professor. "If you happen to be that person who loses their job or doesn't invent the next Web browser because some Chinese person invents it, you may personally lose, but the economy as a whole may benefit," he said.

Innovation and global competition have become veritable buzzwords in the political sphere in recent months, with both Democrats and Republicans in Congress unveiling proposals geared toward bolstering the nation's stance. Both sides--and President Bush in his State of the Union address--have called for upping research dollars and scholarships for American math, science and engineering students.

But the welcoming attitude toward foreigners expressed by some panelists on Monday--and long favored by high-tech companies lamenting what they deem an American worker shortage--has proved a magnet for controversy. Groups like the U.S. division of the Institute of Electrical and Electronics Engineers have argued that the skilled-worker visa system is used not to bring in the best and the brightest foreign talent, but to some extent, the cheapest.

Look a law and medical salaries in foreign countries

Medical and law salaries are much less in foreign coutries. Individuals are still encourage to enter technical professions. In the US where the medical salaries and law salaries have been protected, individuals are moving to those professions. This makes sense.

The question is where is the real value and benefit created? Statistics show that the US pays more than anyone for medical care yet the life expectancy and quality of life is not proportional. What value is created in a courtroom?

Without crating value on a global scale, the US will have a problem as consumer. Why should China continue to support our lifestyle?

[concernedcitizen]

Foreign Leadership = US Follower

"If you happen to be that person who loses their job or doesn't invent the next Web browser because some Chinese person invents it, you may personally lose, but the economy as a whole may benefit," he (David Weinstein) said.

Wrong! China's GRP increases, US GRP decreases. It's not just about one person losing, it's about the Chinese econcomy benefition MORE than the US economy.

[concernedcitizen]

typo

"benefiting MORE than the US economy."

[R. U. Sirius]

Good point

> Wrong! China's GRP increases, US GRP decreases.
> It's not just about one person losing, it's
> about the Chinese econcomy benefition MORE than
> the US economy.

Apologists for offshoring keep pushing the idea that 1 +1 = 3.

Your point is good, and it's not something you hear about in the typical media discussion around this subject. There is no way that declining salaries in the US and loss of manufacturing capability are a good thing for our economy (which is consumer based) overall.

[snagrajn]

Can be bad for the world if US people don't pay attention

The answer to the question is not simple. It requires a deeper learning from the history. There was a time in history when India was the leading country for learning. Systematically that position got eroded. Today US is leading learning in the world--with the benefit of getting the best minds from the world some time ago. The work that gets exported are not often the most creative, but the most transactional work. As a result, both locations will not develop deep creative capabilities and ecosystems. The disruptive innovation centers like the AT&T Bell Labs and the Xerox PARC are slowly getting to be non-existent. Their equivalents are not coming up anywhere else in the world either. This is a bad trend. Service economy is a short-term economy. Service economy can only amplify and lubricate a strong agro- and industrial-economy. In the process, if we distroy the fundamentals, for all nations it can be bad in the long run. My 2c worth of observation.