U.S. Science and Engineering Careers Outlook:
Are We Looking at the Future in the Right Light?

by Richard Ellis and George F. McClure

Periodically, various groups assess the prospect for U.S. citizens to meet the future need for skilled technical talent. It is this very talent, most agree, that will keep the United States at the forefront in global competitiveness.

The National Science Board (NSB), established to advise the White House and Congress, released such an assessment in August 2003. The report, The Science and Engineering Workforce: Realizing America’s Potential, reflects the perspectives of NSB’s 24 members, all but one of whom are academics.

NSB Findings and Recommendations

As stated in the report’s introduction, NSB offered two major findings:

• Global competition for science and engineering (S&E) talent is intensifying, such that the United States may not be able to rely on the international S&E labor market to fill unmet skill needs; and
• The number of native-born S&E graduates entering the workforce is likely to decline, unless the nation intervenes to improve success in educating S&E students from all demographic groups, especially those underrepresented in S&E careers.

Referring to U.S. strength in science and engineering as being in “potential peril,” NSB endorsed an imperative for federal action: “The federal government and its agencies must step forward to ensure the adequacy of the U.S. science and engineering workforce. All stakeholders must mobilize and initiate efforts that increase the number of U.S. citizens pursuing science and engineering studies and careers.”

NSB developed its fundamental arguments for this imperative in the report. For example, Chapter Two, “The Global and Domestic Contexts,” includes data to support the Board’s two major findings. Chapter Three offers specific “Findings and Recommendations” in five policy areas:

• Undergraduate education in science and engineering
• Advanced education in science and engineering
• Knowledge base of the science and engineering workforce
• Pre-college teaching workforce for mathematics, science and technology
• U.S. engagement in the international science and engineering workforce

NSB’s report is available online at www.nsf.gov/nsb/documents/2003/nsb0369/start.htm.

Problems With the NSB’s Conclusions

Many practicing engineers disagree with the recommendation to increase the number of U.S. citizens pursuing science and engineering studies and careers. Given the recent record numbers of foreign H-1B and L-1 guest workers filling high-tech jobs in the United States, the accelerating trend to outsource engineering work offshore, and a weak economy succeeded by a jobless recovery that has resulted in sustained unemployment for many engineers and computer scientists, it is difficult to make a persuasive case for urging larger numbers of students to prepare to enter engineering careers.

As further evidence, consider these realities: We have a glut of PhDs today. Universities may receive hundreds of applications for every one tenured academic position they advertise. Further, the purchasing power of engineers’ salaries has not increased in more than 20 years. And in 2002, some schools reported that 70 percent of engineering graduates did not have job offers when they received their degrees. Many of those graduates elected to continue on in graduate school until the job market improved. These data do not encourage new entrants into the field.

NSB’s report notes that over half of degreed S&E workers are more than 40 years of age, and that the number of personnel retiring could increase dramatically over the next two decades, at current retirement rates. But current retirement rates have been driven in part by industry’s need to reduce costs. Some companies are offering early retirement to current workers, while many others are sending more and more work offshore.

The real issue is not just one-for-one replacement of current high-tech workers in the United States. Indeed, Forrester Research’s estimate that companies will outsource 3.3 million technical jobs offshore by 2015, has been widely quoted, and the economic imperatives for continued outsourcing are compelling. As Table 1 shows, when comparing the direct costs of hiring software professionals in companies active in offshoring with the United States, eight workers can be hired in any of seven countries for the cost of one worker in the United States. Lower employment benefits in other countries make the comparison even more dramatic. If we consider the 140-percent overhead rate in the United States to other countries’ 110-percent rate, the 8:1 ratio would increase to 10:1.

Source: “The New Software Exporting Nations: Success Factors”
www.is.cityu.edu.hk/research/ejisdc/vol13/v13r4.pdf

The future supply outlook for high-tech workers is linked to global demographics. Table 2 shows population projections out to 2050 for selected countries. Note that while Japan shrinks and China grows more slowly than the United States — India, Indonesia, Brazil, Mexico, Philippines, Iran and Vietnam all grow faster than the United States. And Pakistan explodes — more than doubling in population by 2050, and then having 41 percent of its population under age 15, with only 55 percent of working age (15-64).

Sources: www.os-connect.com/pop/ and www.sdnbd.org/sdi/issues/pollution/world-population-2050.htm

These projections indicate that the supply of workers will increase globally over the next four decades, beginning now, when the unemployment rate for U.S. electrical and electronics engineers is at an all-time high. A 2002 IEEE-USA survey of unemployed members found that the median duration of unemployment was 38 weeks, with this period increasing with the age of the jobseeker.

Are We Retiring our Intellectual Capital too Early?

NASA, which not too long ago offered retirement bonuses to thin its ranks, now worries about a future loss of intellectual capital as normal retirements occur. The trend is not limited to engineers. The Workforce 2020 report has noted that as the baby boomer generation retires, it will be succeeded by smaller generations. Many boomers may elect to delay retirement and continue working part time, both to supplement their pensions and other retirement savings, and to keep intellectually engaged.

The benefit to preserving intellectual capital is considerable. The U.S. Treasury Department has been studying proposals for “phased retirement” to modify present rules that prohibit workers from continuing to work as company employees if they are drawing from a defined-benefit pension from the company.

Forecasting Workforce Demand

Workforce demand is difficult to forecast. Macroeconomic models link demand by occupations to growth in the Gross Domestic Product (GDP), but not all sectors grow evenly and the GDP does not always respond as forecast. Recent productivity rate increases — to nine percent — imply a reduction of workforce required to maintain output. Industry recently began reducing R&D budgets and moving more manufacturing operations offshore. As a result, since more than 60 percent of all R&D and 90 percent of all patents involve manufacturing technology, it appears that the United States will see its share of research jobs in manufacturing decline.

NSB’s report points to projected rapid growth of S&E occupations over the next decade — at three times the rate of all occupations. But projections do not always match reality. In fact, last year the Bureau of Labor Statistics (BLS) reviewed its batting average for 338 occupations in its biannual Occupational Outlook Handbook (www.bls.gov/opub/ooq/2003/spring/contents.htm). BLS found that between 1988 and 2000, its forecasts for information technology workers (during a period when industry was “networking the world”) were reasonably close, however, BLS had overstated the demand for electrical and electronics engineers by 56 percent and for aerospace engineers by 46 percent. The number of EEs was projected to grow during that period from 439,000 to 615,000, but in 2000, only 369,000 jobs actually existed.

Plenty of Qualified Students, Dim Career Prospects

The report also expresses concern that a large percentage of graduate science and engineering students in U.S. universities are foreign-born. Graduate students form the backbone for university research programs. But U.S. engineering students often find it more expedient to enter the job market with a bachelor’s degree, rather than run up higher student loan bills by attending graduate school.

The report notes: “Attracting more U.S. students to enroll in and complete graduate training depends in part on their expectations that investment in science or engineering education will be rewarded by careers employing the skills they acquire. It also depends on considerations, including costs to the students in lost opportunities they might otherwise have pursued; (their) quality of life during the educational period; and the debt burden (they incur) while pursuing a degree. The opportunity and educational costs of graduate education in science and engineering fields can be high, especially for U.S. students who, unlike many foreign students, are able to take advantage of a range of career opportunities open to high-ability baccalaureate S&E graduates.”

This passage hints at — but does not follow up on — the fact that there is no shortage of students expressing initial interest in scientific and technical careers. Rather, a large number of students who begin as engineering majors transfer into other programs during undergraduate school. If insufficient participation problems exist, they stem from student perceptions of poor career prospects in science and engineering, not from the lack of qualified candidates. For example, the return for a U.S. student is greater for earning an MBA than a graduate technical degree. Michael Teitelbaum recently discussed these and other issues in his essay “Do We Need More Scientists?”
(www.thepublicinterest.com/archives/2003fall/article2.html).

What’s Best?

NSB’s report views the pipeline for future engineers and scientists in isolation, without regard for job-demand fluctuations with economic conditions, trends to export work to a lower-paid offshore workforce, or trends to import guest workers to meet industry’s needs in America. The most powerful incentive is salary. As shortages develop, the bid price (salary purchasing power) goes up. With minor exceptions, this trend hasn’t occurred for more than 40 years.

The need for improved K-12 education, and for better math and science instruction in secondary schools is self-evident; a scientifically literate population is a national asset. But the need to encourage building a larger S&E workforce, where greater competition will work against career rewards, is not.

Opinions expressed are the authors' and are not necessarily representative of IEEE-USA's policy positions.

 

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Richard Ellis is head of Ellis Research Services in Carlisle, Pa., and a member of IEEE-USA's Career and Workforce Policy Committee.

George McClure is chair of the IEEE-USA Communications Committee and technology policy editor for IEEE-USA Today’s Engineer.