To: cosmicforce who wrote (96122 ) 2/18/2005 8:50:49 AM From: epicure Read Replies (1) | Respond to of 108807 Losing the Competitive Advantage? The Challenge for Science and Technology in the United States EXECUTIVE SUMMARY Losing the Competitive Advantage? explores the challenges the United States currently faces and, in many ways, is ignoring at its peril. Our purpose is to alert audiences that America’s edge, particularly in science and technology, is increasingly at risk. AeA began this discussion in March 2004 with our report on offshore outsourcing. Our view then, as it remains now, was that offshoring is merely a symptom of a dramatically shifting global economy and the U.S. role within it. This report serves as a natural sequel, in that it addresses this big picture. Many of the findings may sound vaguely familiar, even obvious; others may seem surprising. We analyze a number of competitiveness factors within these pages that, when taken in isolation as they so often are, would not necessarily constitute a crisis. But the interrelationship --- the cumulative effect of these trends --- makes the more compelling argument that the status quo is unsustainable, and that any reasonable person will see the need to act. Even if the United States were doing everything right, the world still poses unprecedented competitive challenges. Ensuring future prosperity depends on decisions that move us forward today. As the legendary Wayne Gretzky once said, “I skate to where the puck is going, not to where it’s been.”3 In a rapidly changing global economy, the United States needs to address the implications of the following critical issues to prevent an impending slide in U.S. global competitiveness: Economic Reforms Are Transforming Other Countries’ Economies and Making Them Dramatically More Competitive The United States has long urged the rest of the world to adopt free market principles. The good news is that many countries have now listened and represent new markets for U.S. products and services. Globalization has benefited no country more than the United States. But the bad news is, ironically, that many countries listened. They have entered the global economy and now aggressively compete against the United States --- or soon will. Other Countries Are Adopting and Utilizing Technology To Enhance Their Economic Growth and Competitiveness These countries now invest heavily in their high-tech infrastructure and produce talented, highly educated workers and cutting-edge companies. China graduates almost four times as many engineers as the United States and offers lucrative tax breaks to companies conducting R&D there. India is pouring money into technology parks to lure back native talent and produce world class tech companies. South Korea has leveraged rapid technology diffusion to “leapfrog” into the global economy. But the larger point is: a host of countries are catching up to the United States. U.S. Federal R&D Funding That Spawned So Many Technological Breakthroughs in the Twentieth Century Is Faltering The Internet, MRI, the mouse, and GPS --- to name a few --- were born from federally sponsored research. R&D funding is vital in supporting innovation because it invests in the technologies that will advance society in the future. Unfortunately, R&D funding has declined over the last decade and a half and the priority has shifted to life sciences. If U.S. Workers Are To Compete in a World Economy That Is Knowledge Based and Driven by Technology, the American Education System Must Improve Substantially A highly skilled workforce is the lifeblood of any successful company, industry, or national economy. Regrettably, the American K-12 system is failing to provide the math and science skills necessary for kids to compete in the 21st century workforce, and the U.S. higher education system cannot produce enough scientists and engineers to support the growth of the high-tech industry that is so crucial to economic prosperity. For the Past 60 Years America Has Been the Beneficiary of an Influx of Many of the Most Talented Minds on the Planet. That Period Could Grind to a Halt Given Restrictive Immigration Policy, Tremendous Opportunities Abroad, and the Perception of Not Being Wanted Immigration policy post 9/11 has deterred foreign nationals from coming to the United States to study or work. They are choosing to go elsewhere and we lose when this happens. Last year, foreign applications to American graduate engineering programs plummeted 36 percent. This is tragic because over 50 percent of doctoral engineering and math degrees awarded in the United States go to foreign nationals whose financial support makes many of these programs economically viable. If we cannot graduate enough American workers, then we need to understand that keeping out foreigners is not the answer. One out of five scientists and engineers in the United States are foreign born. We cannot afford to lose their intellectual abilities, innovations, and ultimately, the hundreds of thousands of jobs they create. aeanet.org