U.S. Risks High-Tech Talent Gap

The enrollment of U.S. citizens in advanced engineering and technical programs has declined steadily in the past decade. Meanwhile, the demand for scientists and engineers in domestic high-tech industries is greater than ever.

These diverging trends have alarmed academics and executives alike. By the early 1980s, many feared that university programs would wither and that a growing professional gap would cripple U.S. high-tech competitiveness.

Yet the gap failed to materialize because foreign students quickly filled the empty university desks. In computer science alone, the share of graduate degrees earned by foreign nationals in the United States jumped from 32% in 1977 to 45% a decade later. Many of these graduates elected to remain in the United States after receiving their degrees simply because few other destinations offered similar opportunities to work on the cutting edge of their profession.

Far from withering away, Silicon Valley and other domestic high-tech centers have become global magnets for professional talent. Foreign engineers form the backbone of many high-tech companies, and more than a few foreign firms have opened research and development labs in the United States to take advantage of this pool of resident multinational expertise. For example, Sony, Fujitsu and Canon have research facilities in Silicon Valley, and Matsushita recently hired a top computer scientist from Princeton to head a lab it is establishing near that institution.

But what if these multinational professionals departed for jobs in the new high-tech centers appearing abroad? The high-tech industry is becoming more global, and the list of locations to work and remain on the cutting edge of one’s profession is growing steadily. From a corporate perspective, there is growing international competition for technical talent and experienced professionals from the United States are especially promising candidates, particularly for businesses back in their homelands.

Hints of this competition can be found in the help-wanted pages of Silicon Valley newspapers. Nippon Motorola Ltd., a Japanese subsidiary of Motorola, opened a recent advertisement with the invitation to “make your move back to Japan.”

Similar ads for European and Pacific Rim destinations are becoming commonplace, while recruiters for foreign companies are even more blunt. As one executive from Taiwan recently explained to a Silicon Valley engineer: “Show us your pay stub, and we will match it.” A sudden exodus is unlikely, but the growing number of appealing foreign destinations makes a “leakage” of talent abroad more certain in the decade ahead. Add other trends to this mix, and even a small leakage could create high-tech headaches.

A generation of scientific and technical professionals hired in the 1950s and 1960s will retire in the next decade, causing overall retirement rates to increase 15%. Throw in declining enrollments and rising industry needs, and the long-feared professional gap could become a reality despite the contribution of foreign residents.

Silicon Valley is a place where the inventory that matters most walks home every day after work. A shortage of labor could act as a magnet to attract more talent from abroad--or it could encourage companies to relocate elsewhere.

The growth of U.S. high-technology centers has been driven by the ready availability of scientific and engineering professionals. Make the available expertise scarce enough, and the consequences could leave American industries on the sidelines as professionals and companies alike move abroad.