Sunday, January 9, 2011

Will United States lose its ability to invent the next big technology?

Outsourcing engineering jobs to countries like India and China is a norm these days. The sequence of events which generally follow such developments are scary. Eventually research and design jobs will also be outsourced to India and China. Next Google or Apple could be lingering in the alleys of Bangalore or Shanghai.

Popular belief seems to be that US needs to graduate more engineering students to compete globally. This  argument is fallacious on multiple fronts, but primarily it leads us to believe that the outsourcing trend is tied to the shortage of engineering graduates in United States. Such conclusions are dangerous because they could lead to wrong policy decisions, there by further jeopardizing the long term competitive advantage of United States.

Closely looking at the unemployment numbers and tracking engineering graduates seem to indicate that there is no real shortage of engineering graduates. Ofcourse these numbers could be eschewed by international students graduating from masters and Phd programs from US schools.

I suspect that it has a lot to do with the H1B policies and the salary parities between the countries rather than the shortage of engineering graduates. United states used to be a dream land for education, but the recent Visa restrictions and the non-transparent process of granting or rejecting Visas has made it difficult for bright students to consider US for their future education. Its difficult for international students to integrate with the society here. H1B visa regulations are very difficult and restrictive. Temporary workers cannot start a business or make long term plans to stay in United States. Losing these highly skilled labors can ultimately have next Google and Apple dwelling in the countries outside US.

Another big reason for this trend, is that the cost of operations in US is much higher compared to the cost of running the same operations in India/China.  Outsourcing trend first started with jobs which did not require high skilled labor. But ultimately this has grown to nearly all kind of jobs being outsourced. Product oriented companies have research centers set up in India and China and a chunk of innovation for these companies comes from there. Government is trying to stop blind outsourcing by imposing tax restrictions, but they will not be very effective keeping in mind the high financial gains made by such efforts. In such scenario, not motivating international students to settle in the US can be a bad strategy.


US should create the excitement for domestic students, and make it really cool and rewarding to become a scientist or engineer. They should make it easier for temporary workers to start businesses, and  help the United States compete globally. H1B workers contribute to the economy, create jobs, and lead innovation.We must also make it easier for foreign students to stay after they graduate. 

1 comment:

  1. "US should create the excitement for domestic students, and make it really cool and rewarding to become a scientist or engineer."

    Classic. I love you, man.

    ReplyDelete