Educated people are the hottest natural resource of today, and the US is not as focussed on producing them and luring them to the US as it used to be. Long term this will prove to be disastrous to the US economy, which has thrived on innovation.
It is ironic that ‘over populated’ countries like India and China are now the envy of established economies. 50 years ago, they were studies as recipes for disaster, too many people, too few resources. Now those ‘teeming millions’, combined with a highly subsidized education are creating a resource hotly sought after by the high tech and high tech based companies of the west.
Skilled white collar jobs are flowing off shore from the US to other countries. Its not surprising, given that educating people in the West is expensive, and countries like India highly subsidize education, right up to the college level. I had the privilege of attending the Indian Institute of Technology in Delhi in the late ’70s and early 80s. Based on the exchange rate of the time, my fees for a semester was $8. That was for a world class education that has produced engineers that are much sought after both by western universities as well as high-tech companies. I was not on any sort of scholarship, beyond what the Indian government subsidized all students. Room and board was an additional $15 a month. Education was cheap.
Getting hitech skills is also cheap. Hitech has created a paradox. It took billions of dollars to create computers, software and the internet. We created a robust industry and brought down the cost of entry into a high tech career. It now costs very little for anyone anywhere in the world to get a PC, and a few books and start to learn the basics of programming. I have a friend who sends old computers to schools in Uganda. Perhaps Africa will be the Indias and Chinas of this century, where scores of children will learn computer skills on slightly older, but utterly capable computers. After all, computers that are a few years old are more powerful than the ones that people like me learned on in the 70s and 80s. Add open source software like Linux, GCC, Apache and MySQL, and it doesn’t take much to create the infrastructure needed to train people in the most complex technologies of today.
By providing cheap education to their children, countries like India and China are creating a resource that is highly sought after by the West.
It is unclear to me how the US will compete in this space. In the US I see a constant erosion of funds for education, while at the same time increasing the number of things that schools have to do. They are struggling to keep up. As we continue to under fund education, we are allowing the Indias and Chinas of the world to get and stay ahead.
For years the US created a wonderful place for people to come, get educated and stay, contributing knowledge and income to the US economy. Over the years that has eroded, partly through underfunding education, partly through things like the Patriot Act, which has made it far more difficult for students to get visas to come to the US. For a while, countries like India were subsidizing the US by fully or partly education engineers who then went to the US for further studies and eventually settled down there. I guess I’m an example. Now they have other options.
There was a time, before the ‘Hi Tech bubble’ that companies in the US, and particularly in Silicon Valley were desperate for skilled workers. They pleaded with the US government to increase the H1 visa cap. The US government did somewhat, but powerful lobbies in the US kept the cap at a minimum. That left the Hitech companies with no option but to take their operations overseas. It lead to the development of a need in countries like India, Ireland, the Czech Republic etc. They had lots of workers who were willing to work for a fraction of a US salary. The effort by the anti-H1 lobbies in the US has backfired spectacularly. Instead of lots of foreign-educated engineers getting jobs in the US and settling down here and boosting the US economy, they are in their own countries, boosting the economies there.
Labor is a resource, and companies will go to wherever the resource is the most cost effective. That is currently not in the US for hi tech jobs.
