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Amy Kaslow, Senior Fellow Council on Competitiveness The Council on Competitiveness draws its membership from an un- usual mix of leaders from business, academia, and labor. While that can mean many disparate views, our members firmly agree upon the need to compete. And what puts the United States on the leading edge of global competition is our economy's most important asset: human capital. From the factory floor to the nation's most sophisticated laboratories, it is the workers who are engaging in just-in-time training to apply their newly gained knowledge to ever-changing workplace demands. It's the talented people who are improving on, creating, and deploying new ideas and technologies that keep the economy strong. Critical to U.S. competi- tiveness, of course, is our development of an American science and engi- neering workforce. We recognize that this development commands the learning opportunities that spark creativity and help people to develop . 1 1 1 1 . . 1 1 1 1 TO ~ 1 . 1 . 1 . - tne SKlllS tO take on new challenges. it we tall to provide those opportum- ties, we will never cultivate a dynamic corps of homegrown scientists and engineers. Why the emphasis on an indigenous workforce? Because it is expensive and shortsighted to rely so heavily on imported skills. One of the striking findings from the Council's most recent Competi- tiveness Index (see is that the number of innovator countries is fast growing and they are becoming strong contenders for the very scientists and engineers American firms have been able to lure. Evi- dence of global competitiveness in the production of technically trained workers can be seen in Figures 1-6. Where the research is weak, and greatly needed, is in determining (1) precisely where the talent pool for innovator countries is drawn from, and (2) the rates at which foreign sci-

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70 60 En m o s Is ~ -10 - 50 40 30 20 10 o 20 30 PAN-~CANIZAHONAL SUMMIT Biological & Agricultural Physical Sciences Engineering Mathematics - / - - \ / I, ~ = -art - 2Q9 ~ ~ 09 '~96\ ,~9o ,~9 ,~99~ ,~99 .~99~ '~99~ ~99> ~99~ 99 FIGURE 1 Growth in U.S. SUE degrees, indexed to 1986. t' 12 M En `~ 10- i ~ s ~ 8 .~ ~ 'it' ~ 6 co lo TO ~ o' 4 - 0 o in '~99 ,~99 ~999 10 2 - O - 9 8 7.8 7.8 7.7 7-7 6.9 6 9 6.6 6.5 6 ,1, ,1,1,1,1, ,,1,,, Off ~~/ \~ FIGURE 2 Ratio of Natural Science and Engineering degrees to the 24-year-old population, 1999 or latest year available.

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COUNC~ ON COMPE~S to 120 o ~ 100- o lo ~ 80- In 60- 40- o cat 20- Q At O - 5~9 ~~ ~~ 90~ ~~ ~~e ~~ b FIGURE 3 Researchers per 10,000 workers. 120 100 80 - 60 - 40 - o -20 40 - ~3 96 64 1 985 1 998 86 501 74 68 70 c:v 1 a' 28 411 60 60 43 [ 50 1 . 56 5755 40 4848 32 221 27 ~-0 Kent ~0~e W 119 62 63 42 Science E. . , nglneerlng 41 30 -20 Sweden Italy Germany Canada Japan U.S. FIGURE 4 Change in SUE degrees as a percent of first university degrees.

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PAN-~CANIZAHONAL SUMMIT ,, 60- En o 50- ~ 40- ,L 30- s ~ 20- I' 10- O - ~_ 53 55 41 42 30 40 _ 0~ ~e `~ ~0p I 424?' ~0' _0~ FIGURE 5 Foreign doctoral recipients who plan to stay in the U.S., 1999. 50 45 40 35 30 In ~ 25 - 47 40 35 20 15 10 5 o 1991 . 2000 34 So So 36 31 19 18 28 19 Engineering Physical Mathematical Computer Biological Agricultural science science science science science FIGURE 6 Percent of master's & doctorate degrees in SUE earned by foreign citi- zens by field, 1991 and 2000.

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COUNC~ ON COMPE~S enlists and engineers are repatriating. We see anecdotal evidence in many middle-income countries where one of the principal exports is human capital, and where a stronger economy and more robust innovation are attracting more of this "export talent" back home. This is a concern, of course, because American companies will quickly follow in their wake. Another area we plan to look at more closely is the troubling trend of American companies producing their intellectual property overseas. It's an economic necessity if our firms forage for workers abroad, if they set up operations overseas to meet local demand; it's a national economic loss if our firms move their creative capacities out of our country. This, by the way, is where real public-private partnerships make all the difference in keeping that innovation stateside. Historical successes like Research Triangle demonstrate the economic power generated by university, business, and government partnerships. We've documented and continue to support that nexus on the local, even grassroots, level. We know that innovation from workforce preparedness to research and de- velopment is best accomplished community by community (see Win- ning the Skills Race, a Council on Competitiveness report generated in 1998 after more than a year of field work, task force assessments, and national meetings to document best practices in bridging the skills and income gaps among U.S. workers). The past years' liberalizations of visa restrictions to accommodate em- ployers' urgent needs have been acts of triage, not strategic planning. They are a reflection of how short-term the United States has become in its ap- proach toward a problem with profound, and long-term consequences. The Council knows that the hardest choice is to make a generational investment in preparing, and to engage all of the players with a stake in the success of, a vibrant population of homegrown scientists and engineers. Because with- out that effort, American companies will continue to go offshore for their talent, or worse, set up shop abroad and never look back. The Council strongly argues for building our own American capacity, but we are not suggesting that the United States operate in a vacuum. As the Council's university vice chairman and Massachusetts Institute of Technology (MIT) president Charles Vest wrote persuasively in a recent Wall Street Journal op-ed, science is a collective endeavor; it is a global enterprise of independent and interactive verification of discoveries made around the world. Knowledge is honed through global dialogue. Dr. Vest points to European and Asian universities, which together produce more Ph.D. degrees in science and engineering than U.S. universities. Knowl- edge creation, and the leadership that flows from it, thrives in openness. Indeed, Vest warns, they suffer in isolation. Yet if we are to forge these global ties, we must do so from a strong national base. To do otherwise is to lose our leadership in innovation.

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PAN-~CANIZAHONAL SUMMIT The Council supports policy initiatives to sharpen the competitive edge of American workers in the critical fields of science, engineering, and math. We want to see a far greater diversity of the workforce. We want to see women and minorities, the fastest-growing segments of the workforce, transform from being underrepresented in technical occupations to being the dominant new entrants into the SHE marketplace. We support financial incentives for universities to train scientists and engineers. It's an expensive education, and cost prohibitive to many, especially for the fastest-growing subsets of the workforce women and . . . m~nor~hes. We want to see graduate students choose their preferred special- izations based on market factors and career opportunities, rather than gravitate to fields where funding just happens to be available. We also know that K-12 issues are embedded in all of the workforce policy debates. Although K-12 education is a national priority, the science and math component merits special attention for several reasons. First, the demand for technical literacy and independent problem solving in the workplace puts a premium on math and science education in schools and not just for students pursuing science and engineering careers. Second, our democracy requires a population that can understand the scientific and technical underpinnings of contentious political issues: cloning, glo- bal warming, energy efficiency, missile defense, and stem cell research, to name a few. But finally, and most compelling, is the reality that math and science command special attention because even our best students are underperforming compared with the rest of the world. The deficiencies rep- resented in our education achievement that science and math weakness cuts across all schools, that relatively strong-performing fourth graders lose a lot of steam by their senior year in high school, that U.S. twelfth graders score far lower in math and science than their peers in other coun- tries these deficiencies are well documented. In addition, the Council supports a number of policy recommenda- tions to enhance math and science teaching and learning, including im- portant curriculum changes, more rigorous graduation requirements, higher teacher pay, more professional development opportunities, and ways to strengthen the scholastic connection between K-12 and beyond. The Council has done a great deal of cross-country fieldwork to deter- mine the most practical, the most cost-efficient, and the most effective local initiatives to build and broaden the talent pool. We have broken ground in documenting how local coalitions made up of learning institu- tions, businesses, workers' advocates, and governments are bridging the

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COUNC~ ON COMPE~S ~7 skills and income gaps among U.S. workers. Skills shortages, we quickly learned, know no borders. They transcend demographics, geography, in- come levels, and every other divider in American society. We have done a great deal with clusters, with Council Executive Committee member and Harvard professor Michael Porter. And now we are embarking on ways to develop innovation models of so-called underachieving areas around the country. At present, our focus is on midsized cities such as Akron and Albuquerque where public-private partnerships go a long way toward affecting change. The Council has acted on its commitment to a world-class workforce by initiating programs like Building Engineering and Science Talent (BEST), which encourages diversity in the SHE pipelines, and, which strives for excellence in math and science educa- tion in America's primary and secondary schools. As the economy becomes more knowledge based, there is a surge in demand for more knowledge workers. To boost the growth prospects of the science and engineering workforce, the Council launched BEST in 2001. It's a public- private partnership designed to identify the best strategies for generating a more diverse science, engineering, and technical workforce and to bring these best practices to communities around the country. One of the more immediate and practical ways we've approached the K-12 priority is through, which is a recent spin-off of the National Association of Manufacturers. The Council created the interac- tive Web site to increase students' interest and literacy in science, math- ematics, and technology. A complementary goal is to provide a useful resource for parents and teachers. The site offers free, no-risk K-12 self- assessment for students to instantly compare their performance in science and mathematics with that of students around the world. They can also use the entertaining Web portal to gain access to hints, tutorials, and links to the best Web sites on improving math and science skills. Inspired new additions to include Math and Science Television (MSTV), a feature that shows high schoolers how relevant math and science are to their daily lives. Finally, the Council this year launched a multiyear initiative called Competitiveness and Security to determine the economic implications of sudden (and what experts expect will be sustained) investments to make our society safe. Along with panels of experts, we are examining the roles of both the public and the private sectors in virtually every sector of the economy from critical infrastructure to financial services to food safety. The nation's leading economists will help us to examine the links between those investments and productivity. And of course, the Council is looking closely at the impact of security issues on our workforce. These include the increased pressure put on our incumbent workers to embed security in

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PAN-~CANIZAHONAL SUMMIT their daily routine, as well as pressures on the composition and move- ment of the science and engineering workforce that have surfaced in the current concerns about protecting our country and keeping our universi- ties open. The Council on Competitiveness is working on many policy and prac- tical fronts to make certain the United States has an adequate pipeline of American scientists and engineers. As we continue to help build it, we are intent on cultivating partnerships.