Will there be enough technical talent to recruit in twenty years?

Feb 9, 2011

In President Obama’s recent State of the Union address he said, “We need to out-innovate, out-educate, and out-build the rest of the world.” He’s 100% correct, but is the United States prepared to focus its education system on building tomorrow’s generation of engineers and scientists so it can “out-innovate” and “out-build” its competition?

Before you ask, “What this has to do with recruiting?” consider that if America does not invest in education and innovation we as professional recruiters may not have the quality candidates to recruit and place with our clients in the future.  This means a potential and significant reduction in fees!  If the United States starts to run out of domestic technical talent to fill the ranks of companies such as IBM, John Deere, or Yahoo!, what is to prevent them from moving their technical/engineering centers to countries like India and China that have more readily available technical talent to fill their job openings?

We’re deeply mired in the age of globalization.  US-based companies have not hesitated to move jobs to developing countries where the technical talent and quality exists at a lower price.  I believe today’s third-party recruiters need to be deeply concerned about this technical brain-drain phenomenon because if we bury our heads in the sand we’ll end up being sorry for it in the not too distant future.

I believe this has everything to do with recruiting, and we should be paying attention and doing what we can to help further this cause.

This is a topic I’m obviously passionate about because it has already started to affect my business; moreover, I fear that it will significantly impact my business for the worse ten or twenty years from now. I specialize in placing engineers with Commercial Vehicle and Diesel Engine manufacturers. There are times when I’m called upon to recruit for engineering positions that require the candidate(s) to have a Master’s or PhD Degree. Last year I filled three PhD-level positions with my clients. Not one of the candidates I placed was born in the United States; however, they all received their Master’s and/or PhD Degrees at universities in the United States. According to the 2010 report provided by the highly respected Academic Ranking of World Universities (ARWU) the United States possesses eight of the top ten universities in the world, but what is the United States doing as a country to “out-educate” our global competitors at the K-12 level? The answer is appalling because the United States lacks focus, commitment, and a concerted effort to emphasize STEM (Science, Technology, Engineering, and Mathematics) education at the non-university level. With the dearth of STEM education, how will the United States be able to “out-innovate” and “out-build” the rest of the world? Here are some eye-opening statistics to consider:

  • On January 30, 2011, CBS’s Sunday Morning program televised a segment called, “America’s Brain Drain.” In this program, it stated, “…more than 690,000 foreign students came to the United States to study this past year. Nearly 105,000 of those came from India and nearly 128,000 came from China.” The segment also went on to state that foreign students “earned more than half of the doctorates awarded by American universities in math, computer science, and engineering.”
  • According to the National Center for Education Statistics, “In 2007, U.S. eighth-graders’ average mathematics score (508) was higher than the average scores of eighth-graders in 37 of the 47 other participating educational systems, lower than the scores in five educational systems, and not measurably different from the scores in the remaining five educational systems. All of the educational systems that outperformed the United States in eighth-grade mathematics were in Asia (Chinese Taipei, Hong Kong SAR, Japan, the Republic of Korea, and Singapore).
  • Bruce Nussbaum, who wrote a blog on January 26, 2011 in the Harvard Business Review on-line edition titled, “What’s Wrong With America’s Innovation Policies,” stated, “A devastating National Science Foundation Business R&D and Innovation Survey that generated almost no media discussion when it was released in the fall showed that only 9% of the 1.5 million for-profit public and private companies in the U.S. had any product, service, or process innovation between 2006 and 2008. Of manufacturing firms, 22% innovated. In non-manufacturing, a mere 8% innovated.”

I’ve presented just of a few of the eye-opening details. It’s obvious the United States isn’t committed to “out-educating” and “out-innovating” its global competition at the present moment. What can be done to rectify this problem? Here are some of my solutions:

  1. Federal and State governments need to mandate that 75% of curriculum taught at the K-12 levels in public schools or any parochial schools that receive Federal or State funding needs to be focused on STEM education. Moreover, any educator that teaches in a STEM field at the middle school or high school level needs to possess a Master’s or PhD Degree in their discipline to further drive home subject mastery to their students.
  2. Any student who is identified as above average or superior by means of their high school transcripts and SAT/ACT scores in a STEM field will have their tuition completely paid for at a top technical university in the United States. How will this be paid for? By what Fareed Zakaria calls an “Innovation Tax.” An “Innovation Tax” is a 4-6% tax incurred by all working Americans that will go to fund STEM education, at all educational levels. The tax will also go to fund government-run (e.g. DARPA, NIH, etc.) agencies so that they can invent new products or services that when commercialized create jobs for the 21st Century. For example, without the innovative and government-funded work – from American taxpayers – that DARPA performed previously the commercial business world would not have IT-related technologies such as time-sharing, computer graphics, microprocessors, and the Internet. There is a price to be paid for anything worthwhile. I would not mind paying this tax if I knew it would ensure America’s place as the global leader in STEM education, innovation, and job creation.
  3. I would also propose what I like to call a “Corporate Innovation Tax Credit.” Every time a company that is incorporated and has its headquarters and over 50% of its workforce located in the United States is awarded a patent or creates an invention that has the potential to create tangible domestic job growth in 5-10 years, the organization will receive a Corporate Innovation Tax Credit for its following fiscal year. I’m not an economist or finance expert by training, but I’m sure smarter people than me can flesh out my “Corporate Innovation Tax Credit” so that a company’s tax rate is reduced to foster further innovation, capital investments, and training for its employees.
  4. Foreign-born students who come to the United States to receive a Master’s and/or PhD Degree in a STEM field who graduate and are subsequently hired by a company that is incorporated and has its headquarters and over 50% of its workforce located in the United States will immediately receive their US Permanent Residency. Also, these foreign-born students will have a five-year obligation to remain in the United States to work for the company that hired them. If they do not honor their five-year obligation then they will receive a substantial fine including paying full restitution (i.e. tuition, roam and board, etc.) for their graduate level education.
  5. All recruiters who place professionals in STEM fields need to play an active role in promoting STEM education at the K-12 levels. Recruiters should get involved and volunteer in after-school science programs. Also, recruiters should volunteer to speak to high school math and science classes so that we can give these students a glimpse of the fruitful opportunities that await them after they graduate with their technically-focused college and graduate degrees.

I want to leave the readers with one final story and thought. When Thomas Edison, the inventor of the light bulb and numerous other sublime inventions, merged his Edison General Electric Company with the Thomas-Houston Company to form the General Electric Company in 1892, little did he know that his light bulb would eventually create over 300,000 jobs around the world today. Google, Apple, Caterpillar, and Proctor & Gamble are also companies with strong brand reputations, innovative products, and thousands of employees around the world. What do these four stalwarts of the global economy have in common? They’re all science and engineering companies at their core. Without the scientists and engineers at these companies no one, not the human resources generalist, the accountant, or the manufacturing worker, would have a job. Without their continuous research, development, and innovations the rest of the company would cease to exist.

If America wants to “out-innovate” and “out-build” the rest of the global economy in the 21st century, it needs to wake up fast and start focusing on STEM education, investing in government and commercial innovation, and rewarding those organizations that do create jobs through their innovative ideas or face falling significantly behind its competitors in the next ten to twenty years.

As recruiting professionals, we need to embrace this and support it, or else our livelihoods may very well be at risk in the coming years.