This paper develops four propositions that show that changes in the global job market for science and engineering (S&E) workers are eroding U.S. dominance
in S&E, which diminishes comparative advantage in high tech production and
creates problems for American industry and workers:
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 U.S. degree production has stagnated.
The job market has worsened for young workers in S&E fields relative to
many other high-level occupations, which discourages U.S. students from
going on in S&E, but which still has sufficient rewards to attract large immi- grant flows, particularly from developing countries.
Populous low income countries such as China and India can compete with
the U.S. 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 "NorthSouth"
pattern of trade in which advanced countries dominate high tech while developing countries specialize in less skilled manufacturing.
Diminished comparative advantage in high-tech will create a long period of adjustment for U.S. workers, of which the offshoring 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 U.S. will have to develop new labor market and R&D policies that build
on existing strengths and develop new ways of benefiting from scientific and
technological advances in other countries.