USA to Pass Science Crown to China

USA to Pass Science Crown to China

Contributed by editorone
Tuesday, 26 July 2005
Source

According to a working paper of the National Bureau of Economic Research, rapid development of a science and technology base by populous Asian countries soon may threaten the economic position of the United States. Not only is the U.S. losing ground in high technology exports, but its very capacity to develop new technologies is declining rapidly with respect to the rest of the world. According to Richard Freeman, the paper's author, the sheer population of Asian countries may allow them to train more scientists and engineers than the U.S. while devoting a smaller share of their economy to science and technology.


Over a decade ago, Japan exceeded the United States in technology-based competitiveness. Since then, the two nations have run neck and neck while China surged upward. From 1993 to 2003, China more than doubled its competitiveness by measures of Georgia Tech’s Technology Policy and Assessment Center. Since 1999, China has particularly excelled in two input indicators to the measure - its production of scientists and engineers and its capacity to manufacture technology-based products.

The phenomenal growth of China's industrial base has been widely publicized, but Freeman focuses on what is perhaps the more important long-term indicator of a nation's prosperity - its re-investment in science and technology education.

In 1970, when over half of the world's science and engineering doctorates were minted in the U.S., China granted virtually none. The U.S. dominated both the high technology and general world economy in the following decades, but the two country's investments in their technological infrastructure took divergent courses. By 2000, only 17% of bachelor's degrees granted in the United States were in natural sciences and engineering versus the worldwide average of 27%. China was already issuing 52% percent of its bachelor's degrees in science and engineering. Today Asia grants more science and engineering doctorates than the United States. By 2010, Freeman estimates that China alone will grant more than the U.S.

These changes translate directly into an impact on the economy since technology products represent a larger share of our exports than imports. They also drive a feedback loop as more U.S. technology jobs are outsourced to Asian countries, discouraging U.S. students from pursuing science and engineering. Freeman concludes that research and techological activity and production are moving to China because China is graduating huge numbers of scientists and engineers.

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Does Globalization of the Scientific/Engineering Workforce Threaten U.S. Economic Leadership?

By Richard B. Freeman
Source

NBER Working Paper No. 11457
Issued in July 2005
NBER Program(s): ED ITI LS PR


---- Abstract -----

This paper develops four propositions that show that changes in the global job market for science and engineering (S&E) workers are eroding US dominance in S&E, which diminishes comparative advantage in high tech production and creates problems for American industry and workers: (1) The U.S. share of the world's science and engineering graduates is declining rapidly as European and Asian universities, particularly from China, have increased S&E degrees while US degree production has stagnated. 2) The job market has worsened for young workers in S&E fields relative to many other high-level occupations, which discourages US students from going on in S&E, but which still has sufficient rewards to attract large immigrant flows, particularly from developing countries. 3) Populous low income countries such as China and India can compete with the US in high tech by having many S&E specialists although those workers are a small proportion of their work forces. This threatens to undo the "North-South" pattern of trade in which advanced countries dominate high tech while developing countries specialize in less skilled manufacturing. 4) Diminished comparative advantage in high-tech will create a long period of adjustment for US workers, of which the off-shoring of IT jobs to India, growth of high-tech production in China, and multinational R&D facilities in developing countries, are harbingers. To ease the adjustment to a less dominant position in science and engineering, the US will have to develop new labor market and R&D policies that build on existing strengths and develop new ways of benefitting from scientific and technological advances in other countries.