Recently, I had lunch with several chemical industry executives. All of us at that lunch were old enough to remember "our father's chemical industry," so we talked about how the chemical industry has changed. We remarked about the many chemical companies--household names in the 1950s and 1960s--that no longer exist. Yet the industry, we agreed, had continually innovated and reinvented itself to retain its vigor. We also talked about employment in the chemical industry and how this had been a cyclical phenomenon for at least 40 years. Yet, we agreed, we could always count on a robust rebound after a downturn in employment.
What happens in the next few years will have profound implications for U.S. preeminence in science and technology.
But soon the mood of my luncheon companions turned somber. One CEO didn't mince words: "We are facing a fundamental sea change in the U.S. economy. What has been true in the investment community is now definitely true for the chemical and allied industries: Past results are not a predictor of future performance."
What accounts for this air of pessimism? The facile answer is that the fallout from globalization has begun to hit home.
During the 1990s, globalization led to increased trade and investment outside the U.S. Globalization also led to offshore outsourcing--the transfer of millions of manufacturing jobs from the U.S. to lower wage countries such as Mexico, China, and, increasingly, India. But job creation remained strong in the U.S., as millions of new jobs were created in the high-technology and services sectors.
Now, my lunch companions agree, we can no longer count on this type of job creation. They fear that the U.S. is in danger of losing its competitive and creative edge.
Countries such as China and India are competing with the U.S. for high-technology jobs, and not just in the software and customer service arenas. It's a double whammy: U.S. chemical and pharmaceutical companies are setting up research and technology facilities overseas and hiring local scientists and engineers; entrepreneurs in China and India now compete directly with U.S. companies in custom chemical and pharmaceutical related research and manufacturing.
India has an extensive educational system that has turned out millions of English-speaking scientists and engineers. China is catching up, pouring huge sums of money into science and technology education, particularly at the graduate level--China experienced an increase of 1,492% in the production of Ph.D.s in the sciences between 1989 and 1998. U.S. chemistry professors who have visited China recently return and rave about well-equipped laboratories and infrastructure at major universities.
In the past, many Indian and Chinese scientists and engineers studied in the U.S. for graduate degrees, and because jobs were not always plentiful in their homeland, many stayed here, bringing their expertise to our economy. Now, they find excellent graduate schools and jobs at home.
Tighter visa restrictions imposed after Sept. 11, 2001, have also squelched the flow of people to the U.S. The result of opportunities at home and tighter visa restrictions is a broad decline in the number of foreign students applying to graduate and doctoral programs in science at American universities, according to a recent survey of 130 such programs conducted by the Association of International Educators.
In the February 2004 issue of Harvard Business Review (82, 13), Carnegie Mellon University professor Richard Florida writes: "The United States, while retaining an edge in [creativity], is far from unbeatable. In fact, its position is more tenuous than commonly thought. For most of human history, wealth came from a place's endowment of natural resources, like fertile soil or raw materials. But today, the key economic resource, creative people, is highly mobile. And it gravitates toward places with certain underlying conditions."
Florida says these conditions are the three Ts: technology, talent, and tolerance. "What's frightening is that, far from cultivating its creative advantage, our society at a national level seems determined to undercut it. ... The real threat to our competitiveness lies in new restrictions on research, scientific disclosure, immigration, and flows of people, because those limits are starting to affect our ability to attract creative and talented people from around the world."
The economic leaders of the future will be those countries that invest heavily in cultivating the talent of their own citizens through excellent educational programs and that create a culture that attracts talented and creative people from other countries. This means that the U.S. government must craft a strong, comprehensive policy to keep this nation competitive. It must pay more attention to the development of its long-neglected science and technology policy, reexamine its visa procedures, and invest in education at all levels in the U.S. to ensure that this nation has an adequate supply of well-educated scientists and engineers.
What happens in the next few years will have profound implications for U.S. preeminence in science and technology. As C&EN editor-in-chief, I worried about these trends on the Editor's Page. Now as ACS executive director and CEO, it is my job working with the ACS Board of Directors and Council to worry about these trends on behalf of the more than 159,000 members of ACS. What do you think ACS should be doing to help the U.S. maintain its creative edge? I'd like to hear from you. Send me your ideas at firstname.lastname@example.org.
Views expressed on this page are those of the authors and not necessarily those of the ACS Board.