The North American higher education system – with emphasis on its research universities – had already acquired size in 1930. It was already strong enough to attract European scientists, worried about the turbulence and political uncertainties in their countries.
But it was after World War II that this system transformed into a tremendous research and innovation machine, innovation strongly driven by military spending – large-scale commissioned research that was practically non-refundable. This machine – the industrial-military-academic complex – generated technologies of generic application and spilled over into civilian applications that gave the American productive world an additional advantage in the post-war scenario. This is how, for example, research into the development of the B-52 unfolded at Boeing. Or that the Tiger project unfolded at Federal Express. There are thousands of examples. Even trivial things like the microwave oven were born in military laboratories.
We say that this complex resulted in an additional advantage because there was already an advantage derived from the war itself, from its destructive effect – the European and Asian economies (Japan, specifically) emerged from this scenario destroyed, while American industry and its public sector, on the contrary , had been built through war.
This scenario was decisive while it lasted – until the end of the 1960s, more or less. From then on, the reconstruction of allies began to generate competitors. In some areas, European and Japanese industries were even ahead of the Americans, benefiting from something that is often called the latecomer's advantage – they could adopt the latest in equipment, processes, and production designs, while the Americans had a wealth of facilities and older production lines.
After the “glorious twenty-five” post-war period, North American companies would have to deal with this new adverse situation – and adjust to it. Perhaps it was Robert Reich who was the first to disseminate the thesis that this adjustment, instead of following the old process of technological innovation (in production), opted for a less virtuous, even perverse path, through speculative and accounting innovations, the “paper capitalism”. Companies began to compete for chunks of public funds, exploiting loopholes in legislation to pay less taxes, bypass regulations, speculate in financial products, etc. A variant of these tactics is the massive renunciation of American citizenship – hundreds of companies now declare themselves citizens of the Bahamas, Bermuda and other tax havens. A byproduct of this new mood of its own. It would have been, for example, the redesign of the managers' profile – they would no longer leave the sales and engineering sector, they would leave finance; were no longer organizational men, who came up in the company after years and years within the firm, were hired financial experts, who sometimes didn't even know what the company produced. From there to paper speculation and 'creative accounting' there is only one step. For the installation of “headquarters” in tax havens... perhaps a step and a half. Several studies have been done showing such a change. And another byproduct, apparently, was the greater inclination of students towards fields other than engineering and science, but towards law and business schools. Yet another by-product appears to have been the shift away from “consulting” activities. Companies of this type stopped working on products and processes, manufacturing, etc. Another type of consultancy has developed tremendously: creative accounting, tax guidance, studies on ways to circumvent legal regulations, etc.
When we look at the table of Nobel Prizes, prepared by specialized scholars, we have this revelation:
What Richard Nelson and Gavin Wright seek to show in this essay is a clear trace of American economic and technological leadership in the second half of the 20th century. While the “hard science” of the Europeans stagnates or reduces its speed, the Americans take off, including by incorporating scientists from those countries, another outcome of the war.
The line moves, says the popular phrase. This situation has changed over time, with an inflection point there in the mid-1980s. There is something revealing about identifying the date of such an inflection point – the mid-1980s, precisely when Americans are undergoing the “financial revolution” of their economy, in which engineering in the strict sense seems to give way to financial engineering, both in the management of corporations and in the expectations of young students (the choice of courses).
Years later, a National Science Foundation study [Human Resources for Science & Technology: The European Region, NSF-96-316] warns:
“European and Asian universities are generally more focused on natural sciences and engineering (NS&E) than those in the United States. Around 30 percent of undergraduate degrees in European Union (EU) countries are in the areas of natural sciences and engineering; about 15 percent of bachelor’s degrees are completed in these fields.”
In this regard, the following graphs (always from the same NSF study) are thought-provoking and suggestive:
Intrigued by this contrast, I started paying attention to this specific aspect in studies on American society. One of these studies, by William Lazonick, records that in the 2003-2004 academic year, American universities had generated some 137 thousand bachelor's degrees in the areas of engineering, computer science and information technology. In the same period, India had graduated 139 thousand – and China, no less than 361 thousand. Lazonick comments that a large number of these Indian and Chinese graduates then went to the United States for postgraduate studies. For anyone interested, the study is this: Sustainable prosperity in the New Economy – Business Organization and High-Tech Employment in the United States, Upjohn Institute for Employment Research, Kalamazoo-Michigan, 2009]
Lazonick discusses this situation within a traditional American controversy – almost an obsession – with the flagrant declines in the performance of high school students, especially when measured in international standardized exams, in which they were behind much less well-off countries. This is not the bias I am going to explore. Lazonick points out another, perhaps more intriguing one – the particularly poor performance of 'minority' students, such as Latinos and blacks. And the declining (for blacks) or stagnant (Latinos) participation of these minorities in employment in large corporations – and especially in these STEM (Science, Technology, Engineering, Mathematics) jobs. And the growing employment of Asians. Even more revealing is another indicator that has been pointed out by several studies: the export of higher education jobs to branches of American companies in Asia (India, China, etc.) or to Asian companies that provide services to American companies (outsourcing).
I then noted other data from a study on recent North American higher education (especially postgraduate education): Wendler, C., Bridgeman, B., Cline, F., Millett, C., Rock, J., Bell, N ., and McAllister, P. (2010). The Path Forward: The Future of Graduate Education in the United States. Princeton, NJ: Educational Testing Service.
In this study, I learn that the dropout percentage in postgraduate courses is close to 50% (p. 27). Loud, but that's not the only thing that intrigues. Data like this:
In 1977, 82% of doctorates in the United States were awarded to American citizens, but by 2007 that number had dropped to 57%. In engineering, only 29% of doctorates were obtained by American citizens (down from 56% in 1977), and the percentage today in the physical sciences is 43% (down from 76% in 1977). Even in the area of education, the percentage of doctorates for US citizens has declined, from 91% in 1977 to 81% in 2007. (p. 21)
Many of these foreigners stay in the USA. Another part returns to their countries and is employed there by American branches or local companies that supply them – at much lower prices than if they were selling their workforce in the USA. And so the distribution of the higher education workforce in the world is being redesigned, a phenomenon that some studies are already pointing out.
It remains to be seen what the cumulative impact of this trend will be within the United States. Income and its distribution, for example. When we combine this 'export' of jobs with the transfer of company headquarters to tax havens – a flourishing sport in the United States – we have a picture of how predatory the activity of large American corporations can be. They earn in several ways, including reducing their tax obligations. Eventually, some qualified employees in the third world also gain from this – and the American state loses the capacity to invest in infrastructure, social policies, and education. It could be that something that was said as a jocular provocation years ago is becoming true - is the United States really becoming a third world country? Yes, exaggeration, exaggeration, impressions that are still unfounded. But the last two presidents – as different as they are – have made constant statements implying that they found such impressions at least worthy of concern.
