From Our Readers

THE COMPLEXITIES OF GLOBALIZATION

Congratulations on the excellent article in Prism on the effects of globalization on engineering jobs. [Two-part series, December, 2003, January, 2004]

The President's Council of Advisors for Science and Technology (PCAST) has recently addressed the topic of globalization, particularly as it pertains to the IT sector and what is needed to keep the United States competitive. This effort was chaired by George Scalize, president of the Semiconductor Industry Association, and a report is being issued. I think it does a good job of clarifying the changing employment environment in the semiconductor/
manufacturing sector.

While it is clear that there is a decline in jobs in this sector, not all of it is due to overseas competition. A significant factor is the growing maturity of this segment of the manufacturing industry, where increases in productivity (e.g., automation) are leading to a decline in employment overall. There are some who would argue that semiconductor manufacturing is moving on a trajectory like that of agriculture, where productivity increases allow market needs to be met using the services of a small number of people. While we need to be concerned about technology jobs “going overseas,” we need to also understand all of the other underlying drivers of the trends if we are to be successful in finding solutions that will work for the future. The recommendations in the upcoming PCAST report reflect the complex nature of the landscape.

An effort that will be examining what our nation can do to maintain its overall technological leadership is the National Innovation Initiative of the U.S. Council on Competitiveness. This initiative will culminate with a summit in Washington, D.C., in December. I am privileged to co-chair this with Sam Palmisano, the CEO of IBM. A diverse group of industry, university, labor, and government experts are studying all aspects of the nation's innovation system, seeking to identifying steps we need to take if we are to remain a global innovation leader. This will include examination of our R&D investments, new technologies, and workforce development, as well as global fair trade issues and financial infrastructure for innovation.

Finally, I would note that there are three other aspects of importance on this general topic. First, we do not yet have a handle on all of the dimensions of global job flow. There are technology jobs from overseas coming to the United States that partially offset those headed overseas. We need to understand the “reverse flow,” since simplistic approaches to economic policy could damage this positive side of the trend. Second, if U.S. technology companies are to remain successful they must have some operations physically located where the growth in the market will be, and this dictates that offices be established in China and elsewhere. This is particularly true in the case of the IT sector and is not necessarily an “outsourcing” issue. Third, as your article pointed out, the United States presently has the edge in its ability to innovate relative to any other nation. Our political systems are stable, we do not have huge disparities between the haves and the have nots, we have good infrastructure for venture investment, our tax policies are favorable, R&D investments are strong, and we have the best higher education system in the world.

If we are going to capitalize on “next wave” technologies such as those from nanotechnology, where entire new industries and job bases will be created, we must do all we can to keep these assets in top shape. The competition is growing increasingly sophisticated, and other nations have invested well in their education systems to the point where they are producing more engineers than we are. We have work to do and should take nothing for granted.

Wayne Clough
President
Georgia Tech

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