Rising Above the Gathering Storm Energizing and Employing America for a Brighter Economic Future (2007) / Chapter Skim
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9 What Might Life in the United States Be Like if It Is Not Competitive in Science and Technology?
9 What Might Life in the United States Be Like if It Is Not Competitive in Science and Technology?
Pages 204-224
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From page 204... ...
How we respond to the challenges will affect our prosperity and security in the coming decades. To illustrate the stakes of this new game, it is useful to examine the changing nature of global competition and to sketch three scenarios for US competitiveness -- a baseline scenario, a pessimistic case, and an optimistic case.
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From page 205... ...
. By 1970, the United States enrolled 30% of all postsecondary students in the world, and more than half the world's science and engineering doctorates were awarded here.3 Today, with just 5% of the world's population, the United States employs nearly one-third of the world's scientific and engineering researchers, accounts for 40% of all R&D spending, publishes 35% of science and engineering articles, and obtains 44% of science and engineering citations.4 The United States comes out at or near the top of global rankings for competitiveness.
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From page 206... ...
The importance of sustaining our investments is underscored by the challenges of the 21st century: the rise of emerging markets, innovation-based economic development, the global innovation enterprise, the new global labor market, and an aging population with expanding entitlements. Emerging Markets Over the last two decades, the global economy has been transformed.
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From page 207... ...
World Out of Balance: Navigating Global Risks to Seize Competitive Advantage.
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From page 208... ...
India already has nearly as many young professional engineers (university graduates with up to 7 years of experience) as the United States does, and China has more than twice as many.16 Multinational corporations are central to innovation-based development strategies, and nations around the world have introduced tax benefits, subsidies, science-based industrial parks, and worker-training programs to 13Organization for International Investment.
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From page 209... ...
And while the United States does currently maintain an advantage in terms of the availability of venture capital to underwrite innovation, venture capitalists are increasingly pursuing what may appear to be more promising opportunities around the world. The Global Innovation Enterprise Among the most powerful drivers of globalization has been the spread of multinational corporations.
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From page 210... ...
That said, it should be noted that the United States also benefits from offshore R&D -- the amount of foreign-funded R&D conducted here has quadrupled since the mid-1980s. In fact, more corporate R&D investment now comes into the United States than is sent out of the country.23 The Emerging Global Labor Market The three trends discussed already -- the opening of emerging markets, innovation-based development, and the global innovation enterprise -- have created a new global labor market, with far-reaching implications.
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From page 211... ...
But new technologies and business processes are opening an increasing number of services to global competition, from technical support to the reading of x-rays to stock research to the preparation of income taxes and even to the ordering of hamburgers at drive-through windows. There is a US company that uses a receptionist in Pakistan to welcome visitors to its office in Washington via flat-screen television.25 The transformation of collaboration brought about by information and communications technologies means that the global workforce is now more easily tapped by global businesses.
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From page 212... ...
Aging and Entitlements The enormous and growing supply of labor in the developing world is but one side of a global demographic transformation. The other side is the aging populations of developed nations.
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From page 213... ...
• Aging populations and rising healthcare costs will drive demand for innovative and cost-effective medical treatments. Taken together, those trends indicate a significant shift in the global competitive environment.
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From page 214... ...
The National Intelligence Council argues that the United States will remain the world's most powerful actor -- economically, technologically, and militarily -- at least through 2020.40 But that does not mean the United States will not be challenged. The Center for Strategic and International Studies concludes, "Although US economic and technology leadership is reasonably assured out to 2020, disturbing trends now evident threaten the foundation of US technological strength."41 Over the last year or so, a virtual flood of books and articles has appeared expressing concern about the future of US competitiveness.42 They identify trends and provide data to show that the relative position of the United States is declining in science and technology, in education, and in high-technology industry.43 All of this leads to a few simple extrapolations 40National Intelligence Council.
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From page 215... ...
• Most corporate R&D is focused on short-term product development rather than on long-term fundamental research. • US multinational corporations will conduct an increasing amount of their R&D overseas, potentially reducing their R&D spending in the United States, because other nations offer lower costs, more government incentives, less bureaucracy, high-quality educational systems, and in some cases superior infrastructure.
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From page 216... ...
• In 2003, foreign students earned 38% of all US doctorates in science and engineering, and they earned 59% of US engineering doctorates.49 • In 2000, foreign-born workers occupied 38% of all US doctorallevel science and engineering jobs, up from 24% just 10 years earlier.50 Our ability to attract the best international researchers will continue to decline. • From 2002 to 2003, 1,300 international students enrolled in US science and engineering graduate programs.
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From page 217... ...
Cambridge, MA: National Bureau of Economic Research, June 2005. • After a decline of 6% from 2001 to 2002, first-time, full-time enrollment of students with temporary visas fell 8% in 2003.52 • Snapshot surveys indicate international graduate student enrollments decreased again in 2004 by 6%53 but increased by 1% in 2005.
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From page 218... ...
• Foreign direct investment will decrease. • Multinational corporations (US-based and foreign)
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From page 219... ...
Like a supertanker, the US economy does not turn on a dime, and if it goes off course it could be very difficult to head back in the right direction. Given that they already have a commanding lead in many key sectors, it is likely that US multinational corporations will continue to succeed in the global marketplace.
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From page 220... ...
• If they were faced with a lack of qualified workers, multinational corporations might accelerate their overseas hiring, building the capabilities of other nations while the US innovation system atrophies. • Multinationals from China, India, and other developing nations, building on success in their domestic markets and on supplies of talented, low-cost scientists and engineers, could begin to dominate global markets, while US-based multinationals that still have a large percentage of their employees in the United States begin to fail, affecting jobs and the broader economy.
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From page 221... ...
Scenario 3: Optimistic Case, America Leads in Key Areas The relative competitive lead enjoyed by the United States will almost certainly shrink as other nations rapidly improve their science and technology capacity. That means greater challenges for the United States, but it also presents an opportunity to raise living standards and improve quality of life around the world and to create a safer world.
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From page 222... ...
Meanwhile, aging populations will require new treatments for chronic diseases. • As the means to develop weapons of mass destruction become more widely available, security measures must advance.
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From page 223... ...
Without a renewed effort to bolster the foundations of our competitiveness, it is possible that we could lose our privileged position over the coming decades. For the first time in generations, our children could face poorer prospects for jobs, healthcare, security, and overall standard of living than have their parents and grandparents.
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