Report Warns Congress Of Eroding IT, Science Sectors

Among the depressing conclusions: a company can pay 11 engineers in India for the price of one in the United States. The report was commissioned by Congress and can be downloaded for a fee from the National Academies Press Web site.
Though that initially impacted manufacturing, the reverberations have since reached out into software and design, as well as administrative and support services. Now, professional services, research, and management are affected.

Augustine pointed to the following as proof that the "Death of Distance" is driving high-end jobs rapidly offshore:

The 24-hour workday is here, with U.S. companies receiving and testing software written overnight in India and returned there for production again in the evening. Back-office firms operate in countries across the globe. Drawings for American architectural firms are produced in Brazil. Call centers are in India, where employees are learning to speak with a mid-western accent. X-rays and CAT scans are taken in the U.S. and read by radiologists on other continents.

High tech exports have fallen from 30 percent 20 years ago to 17 percent now, while the trade balance has plummeted more than $50 billion, in less than 15 years, from $33 billion to -$24 billion last year.

A company can pay 11 engineers in India for the price of one in the United States and said it's going to get more difficult to attract outsiders to America if the job market is unstable and work visas remain difficult to obtain, Augustine said.

While the standard of living is high now, it will not be if current trends catch up, he said.

"The consequences of these developments are profound," Augustine said. "Soon, only those jobs that require near-physical contact among the parties to a transaction will not be opened for competition from job seekers around the world. How will America compete in this rough and tumble global environment that is approaching faster than many had expected? The answer appears to be, "not very well" -- unless we do a number of things differently."

The report suggests 20 actions, based on four major recommendations, to bolster competitiveness. The recommendations are to: increase the country's talent pool by improving mathematics and science education in America's schools; sustain and strengthen commitments to long-term basic research; develop, recruit, and retain top students, scientists, and engineers from inside the U.S. and abroad; and ensure that America is the premier place for innovation.

Those actions would likely require changes to existing laws and financial support from reallocating or increasing budgets.

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