National Science Board Report: US Losing Research and Development Jobs to Asia

The United States is losing ever more jobs and becoming ever less competitive as our universities are cut back and companies move R&D jobs to Asia. We lost 687,000 high-tech manufacturing jobs lost since 2000. Universities cut back 20% on public research. 85% of growth in R&D employment by American companies occurred abroad.

Jobs Lost

Product Design and Development News: U.S. High-tech Jobs Lost as Technological Lead Shrinks

The United States lost 28 percent of its high-technology manufacturing jobs over the last decade, as the nation’s rapidly shrinking lead in science and technology in the global marketplace was accompanied by a toll on U.S. high-tech jobs, according to a new study released today by the National Science Board (NSB), the policy making body for the National Science Foundation.

One of the most dramatic signs of this trend was the loss of 687,000 high-technology manufacturing jobs since 2000. U.S. multinational corporations also created research and development (R&D) jobs overseas at an unprecedented rate. Meanwhile, China became the world leader in high-technology trade and, for the first time, Asia matched the United States in R&D investments.

Companies Moving R&D

WSJ: US Loses Out as R&D Shifts to Asia,

The U.S. is rapidly losing high-technology jobs as American companies expand their research-and-development labs in China and elsewhere in Asia, the National Science Board said Tuesday.

[. . .] Since 2004, about 85% of the growth in R&D workers employed by U.S.-based multinational companies has been abroad, according to the National Science Board, a policy-making arm of the National Science Foundation, a U.S. agency. U.S. companies generally aren't closing labs at home but rather focusing their expansion abroad. The overseas portion of their R&D employment grew to about 27% in 2009 from 16% in 2004, the report said.

Universities Cutting Back, Too

At the same time, budget cuts are forcing our Universities to cut back on R&D.

The Chronicle of Higher Education: State Budget Cuts for Research Universities Imperil Competitiveness, Report Says

States have cut funds for public research universities by 20 percent in constant dollars from 2002 to 2010, according to a report issued on Tuesday by the National Science Foundation.

The report, “Science and Engineering Indicators: 2012,” is a compendium almost 600 pages long of scientific trends in the United States and around the world. The agency releases such data every two years.

The findings in this year's report demonstrate a continuing trend in scientific innovation. While countries like China and India have increased their spending on technology and education, the United States has found itself hamstrung by a weakened economy since 2008.

Other Findings

From the Product Design and Development News story,

Other key findings in the report include:

  • Three countries—the United States, China and Japan—were responsible for more than half of the world’s $1.28 trillion in R&D spending in 2009. (China overtook Japan during the last decade to become the second-largest R&D-performing nation.)
  • Between 1999 and 2009, the United States’ share of R&D dropped from 38 percent to 31 percent; the EU’s share declined from 27 percent to 23 percent; and the Asian region grew from 24 percent to 32 percent.
  • Many Asian countries have increased their investment in R&D relative to their GDP, with China almost tripling its R&D/GDP ratio since 1996. The United States’ R&D/GDP ratio recently has edged upward, while that of the EU has remained steady.
  • The developed world’s lead in higher education has declined dramatically. In 2008, only 4 percent of the world’s engineering degrees were earned in the United States, while 56 percent were awarded in Asia, including one-third in China.
  • The number of natural sciences and engineering doctorates awarded by Chinese universities has more than tripled since 2000. At 26,000 awarded in 2008, the number of these Chinese doctorates now exceeds the number earned in the United States. And, unlike in China, a large share of these U.S. doctoral degrees are awarded to foreign students. In 2009, 44 percent of the 24,700 U.S. natural sciences and engineering doctorates were awarded to temporary visa holders. Some 57 percent of engineering doctorates were awarded to foreign students.
  • American industry, which historically has supported about 60 percent of U.S. R&D, reduced R&D funding by nearly 4 percent in 2009. (A rise in U.S. government R&D funding under the American Recovery and Reinvestment Act partially offset the private-sector reduction.)
  • Job losses from the 2007–2009 recession were less severe for science and engineering workers than for the U.S. workforce as a whole. In 2010, the median income for workers in science and engineering jobs ($73,290) was more than double the median income of all U.S. workers ($33,840).

What To Do?

The Obama Administration has been working to address some of these trends, for example by setting up a cabinet-level Office of Manufacturing Policy. To improve our position they could take more action against trade law violations and currency manipulation, address tax policies that encourage companies to move manufacturing jobs out of the country and renegotiate badly-designed trade treaties.

The Alliance for American Manufacturing offers a number of concrete steps for reversing these trends, including,

  • Establish a manufacturing investment facility to leverage private capital for domestic manufacturing
  • Expand and make permanent clean energy manufacturing tax credits and industrial energy ef?ciency grants to allow America to lead on green job creation
  • Refocus on technical and vocational education, providing a seamless program that bridges high school and post-secondary education to produce the next generation of highly skilled manufacturing workers
  • Penalize and deter mercantilist nations such as China that manipulate their exchange rates and implement non-tariff barriers to gain an unfair trade advantage
  • Make permanent the research and development tax credit and enhance it to incentivize commercialization and production in America
  • Focus federal investments in new technology and workforce training on promoting regional clusters of innovation, learning and production

Meanwhile, conservatives oppose a national industrial policy, oppose restructuring our trade deals, oppose increased funding for our universities, oppose changes to tax policies to incentivize returning manufacturing to the US, oppose paying good wages here to bring researchers here, oppose national policies helping companies become more competitive internationally and oppose border tariffs to compensate for advantages gained from environmental degradation and poor human rights practices.

Other countries take this seriously. From the Chronicle of Higher Education story,

While spending on research and development has increased globally over the past decade, such expenditures in the United States fell from 38 percent of the worldwide total to 31 percent. In comparison, China's R&D spending increased from 22 percent as recently as 2007 to 28 percent in 2009.

From the Product Design and Development News story,

Dr. José-Marie Griffiths, chairman of the NSB committee that oversees production of the report, “Other nations clearly recognize the economic and social benefits of investing in R&D and education, and they are challenging the United States’ leadership position. We’re seeing the result in the very real, and substantial, loss of good jobs.”