US could lose high-tech edge, study says

By Robert Gavin - The Boston Globe: "China and India are educating so many scientists and engineers that it is all but certain that the United States will lose some of its technological advantage and will suffer difficult economic adjustments, according to a recently published paper.

By 2010, Chinese universities will graduate more students with science and engineering doctorates than their US counterparts; India will also gain ground, according to the paper, by Richard Freeman, a professor in Harvard University's economics department. And once these countries achieve a large enough pool of technical talent, they can challenge established trade patterns in which the United States exports advanced technology and developing nations produce commodities.

Freeman argues that the growing legions of scientists and engineers, underpinned by huge labor forces, could allow China and India to produce both cutting-edge products and low-cost commodities. He warns that the outsourcing of technical jobs is a harbinger of US economic dislocations.

''When you combine low-wage workers with the ability to compete with your technology," Freeman said in an interview, ''then you have a problem."

Freeman's paper, published in June by the nonprofit National Bureau of Economic Research in Cambridge, came to light as US corporations warned again of shortages of technical talent -- particularly American-born talent. Last week, 15 business groups called for a commitment to double by 2015 the number of bachelor's degrees in science technology, engineering, and mathematics; to strengthen math and science programs in public schools; and to encourage students to pursue careers in these fields.

The nation today relies heavily on foreign-born scientists and engineers, who make up more than half of the doctoral-level scientists and engineers younger than 45, according to Census data cited by Freeman. But businesses have voiced fear that strict immigration policies following the Sept. 11, 2001, terrorist attacks and expanding opportunities overseas will deplete this pool.

In the 2003-04 academic year, for example, foreign enrollment in US colleges and universities fell for the first time in more than 30 years, the Institute of International Education in New York said.

''Foreign workers have allowed us to remain competitive, and businesses across the board are very, very worried," said Chris Goode, senior director of public policy at EMC Corp., a Hopkinton data storage company. ''We need a sense of urgency like after Sputnik," the Soviet satellite that was a catalyst in the space race.

Freeman said businesses need more than a sense of urgency: They must pay more.

In his paper, Freeman argues that fewer American-born workers pursue science and engineering not only because they have more career choices than foreign workers, but also because some choices offer better wages. Average annual salaries for lawyers, for example, amounted to more than $20,000 above those for doctoral-level engineers and $50,000 more than those for life scientists with doctorates, according to Census data that Freeman cites in the paper.

In contrast, science and engineering offer many foreign workers earnings that few occupations in their countries can match, not to mention ''a ticket to the US job market" and even higher comparative earnings, Freeman says.

US companies, he added in an interview, have been quite willing to encourage a foreign supply of technical workers. This has allowed them to pay lower wages, but it has also created conditions that make science and engineering less attractive to Americans.

''You can't say, 'I want more visas' and 'I expect more Americans to enter the field,' " Freeman said. ''The thing that always strikes me about these business guys is they never say, 'We should be paying higher salaries.' "

Increasing financial incentives is just part of the solution, Freeman said. The technological preeminence of the United States will erode because a country with 5 percent of the world's population cannot have an indefinite hold on a third of the world's scientific and engineering researchers. The spread of technology around the world will prove a benefit, but US workers are likely to suffer lost jobs, Freeman writes."