"Brain Drain," Feature Article, May 2007

brain drain

A new study affirms that U.S. schools are turning out high-level engineers, but many are returning to their homes abroad.

by Alan S. Brown, Associate Editor

The United States may be holding its own in graduating numbers of highly qualified engineering undergraduates, but many of them are foreign-born and returning to their home countries, according to a new study from Duke University. The study's authors warn that the U.S. may grow less competitive globally if it cannot find a way to entice enough foreign-born graduate engineers to remain in the States.

The report, published in the latest issue of the National Academy of Sciences magazine, Issues in Science and Technology, was spearheaded by Vivek Wadhwa of Duke University's Pratt School of Engineering.

Two years ago, Duke researchers published a study that showed that India and China graduated far fewer qualified engineers than reported. Published reports said the two countries were graduating hundreds of thousands of engineers every year. But according to Duke's research, those numbers were exaggerated. The ranks of graduates included motor mechanics and technicians, and people receiving associate degrees.

The latest study finds significant issues with both Chinese and Indian engineers. In 2003-2004, the United States awarded 137,437 undergraduate degrees in engineering, computer science, and information technology. This compared with 139,000 in India and 361,270 in China.

Shortage of Places

Many new Chinese graduates have no place to go, Wadhwa reports. He cites an estimate by China's National Development and Reform Commission that three of five engineering graduates in 2006 won't be able to find work.
Indian engineering graduates appear more in line with demand. Wadhwa believes the government-funded Indian Institute of Technology provides a good education, but other public and private institutions vary widely.

Wadhwa's team surveyed 58 corporations that outsourced engineering jobs. He found that 44 percent of them said their U.S. engineering jobs were more technical than the ones sent abroad, while 33 percent said they were equivalent. In terms of work quality, 38 percent said U.S. engineers were better, while 40 percent said they were equal to their counterparts overseas.

The companies said the disadvantages of working with Chinese and Indian engineers were poor communication skills, inadequate experience, cultural differences, and distance. They also thought that Chinese engineers lacked loyalty, had a limited "big picture" mindset, and raised intellectual property concerns. Indian engineers had limited project management skills and high turnover rates.

Saving money for services of entry-level engineers was the most frequently cited reason for outsourcing engineering jobs. Indian engineers also get credit for technical knowledge, English language skills, strong education or training, ability to learn quickly, and a strong work ethic.

R&D Stays Home

If cost is driving engineering overseas, engineering research and development has remained in the United States. Yet that could change. The Duke study shows that close to 60 percent of U.S. engineering Ph.D. degrees go to foreign nationals, many of whom are Indian or Chinese. According to the Chinese government, 30 percent of all Chinese students abroad return home after they receive an advanced degree and the percentage appears to be increasing.

"The bottom line," Wadhwa writes, "is that China is racing ahead of the United States and India in its production of engineering and technology Ph.D.'s and in its ability to perform basic research. India is in particularly bad shape, as it does not appear to be producing the numbers of Ph.D.'s needed even to staff its growing universities."

To stay ahead of such dedicated competitors, the United States must encourage foreign national graduate students to stay in America. The authors analyzed the impact of such students on 2,054 engineering and technology companies.

They found that one out of every four chief executive officers or chief technologists was a first-generation immigrant. Nearly 80 percent of immigrant-founded companies were concentrated in software or innovation/manufacturing-related services. Those businesses generated $52 billion in sales and employed 450,000 workers in 2005. Indians founded more engineering and technology companies during the past decade than immigrants from Britain, China, Taiwan, and Japan combined.

"If the nation truly needs workers with special skills, it should make them welcome by providing them with permanent resident status," Wadhwa writes. "Temporary workers cannot start businesses, and the nation currently is not giving them the opportunity to integrate into society and help the United States compete globally."