Are we at the throes of losing our brainpower bailout?

Here is a news story that came over the wires today (text of one of the stories below):

http://www.mangalorean.com/news.php?newstype=broadcast&broadcastid=114874

"America's loss is India and China's gain: US study

Washington, March 2 (IANS) Loss of tens of thousands of skilled immigrants to countries like India and China "is an economic catastrophe that will hurt US competitiveness for decades to come", says Vivek Wadhwa, lead author of a new study done at leading American universities.

Wadhwa and his team at Duke, Harvard and Berkeley universities uncovered several trends in their study on the plight of 1,203 skilled immigrants who came to the US from India and China to work or study and returned home:

* Most returnees originally came to the United States for career and educational opportunities. The majority of returnees cited career and quality of life as primary reasons to return to their home countries.

* The most common professional factor (86.8 percent of Chinese and 79.0 percent of Indians) motivating workers to return home was the growing demand for their skills in their home countries.

* Returnees also believed that their home countries provided better career opportunities than they could find in America.

* Most respondents (53.5 percent of Indian and 60.7 percent of Chinese) said opportunities to start their own businesses were better in their home countries.

* Most respondents (56.6 percent of Indians and 50.2 percent of Chinese) indicated that they would be likely to start a business in the next five years.

* Being close to family and friends was a significant consideration in the decision to return home, with many returnees considering their opportunities to care for ageing parents to be much better in their home countries (89.4 percent of Indians and 78.8 percent of Chinese).

* Most of the Indian and Chinese immigrant subjects who returned to their home countries were relatively young (in their low-30s) and were very well educated. Nearly 90 percent held master's and PhD degrees, primarily in management, technology or science.

* Immigrants historically have provided one of America's greatest competitive advantages. Between 1990 and 2007, the proportion of immigrants in the US labour force increased from 9.3 percent to 15.7 percent, and a large and growing proportion of immigrants bring high levels of education and skill to the US.

* Immigrants have contributed disproportionately in the most dynamic part of the US economy - the high-tech sector - co-founding firms such as Google, Intel, eBay and Yahoo.

* In addition, immigrant inventors contributed to more than a quarter of US global patent applications. Immigrant-founded US-based companies employed 450,000 workers and generated $52 billion in revenue in 2006."

The story pretty much sums it up. We have been getting a brainpower bailout for the last few decades, and now the trend is reversing. Voluntarily (because the living conditions are improving elsewhere), or involuntarily (because the government is clamping down on H-1 visas), the brain drain appears to be in full force, with no end in sight.

Let us take a minute and think about why this reverse brain drain is taking place at all. For decades now, the vast majority of graduate students in the graduate schools in Science and Engineering have been foreign born. The distribution by nationality pretty much imitates world demographics, with China and India leading the numbers. When the rest of the US educated students were aspiring to be doctors, lawyers, businessmen and investment bankers, these immigrants were getting their masters and PhDs in science and engineering, and starting up companies in Silicon Valley that fueled most of the high tech boom in the 1990s, and continue to do so to this date (albeit at a much slower pace).

What does this mean for our efforts to "rebuild" as Obama would like to? Plenty. But first, I think we need to connect the dots, and understand how a nation becomes prosperous enough to support the standard of living that we have all come to love. Here is my attempt at laying out the process:

1. Any economy that aspires to dominate the markets needs some way to continuously come up with better products and services (and no, financial derivates do not fit the description of an "innovative product or service").

2. Not only that, it needs to quickly find a way to mass produce it faster, better, and cheaper than anyone else.

3. Then go back to #1 and do it over and over again.

Sounds simple, but the US economy has stumbled at every step in every endeavor it has undertaken. We used to have a lock on step #1 and step #2 in early 20th century. Then later on we lost the lead in step #2 to Japan, Taiwan and Korea, and lately, to China. Now we are at the threshold of losing step #1 to Japan, Korea, Finland, Singapore, and most recently, India and China. If we do lose, then we are forever second best, a position that no American will relish. So, I think it is important to understand how we became economic leaders, and what we can do to remedy the situation.

Here is how I connect the dots. In order to come up with more innovative products which will be successful in the marketplace, one needs to have a large pool of Research and Development from which to draw, and create new patents for new products. Unfortunately, using Google to find answers for "innovation" does not fit this criterion. We need more science and engineering graduates willing to go into research and development, and the R&D funding from public and corporate sources to help finance them. But we need to create those science and engineering graduates first. Which means we need more high school graduates excited about science and engineering. Which means we need more middle school graduates excited about science and math, and are willing and able to take challenging math and science courses in high school. Which means we need more elementary school graduates who know their math facts cold, are well versed in algebraic fundamentals like manipulating fractions and long division, and are excited to get into math competitions in middle schools. It means we need more middle school teachers who are math and science graduates themselves, and are excited about the prospect of educating a whole new cadre of nation builders. It means we need more elementary school teachers who have enough real math and science education in college to be able to teach elementary school kids real math, rather than the watered down version being pushed in school districts all over the nation. We need all the materials, the support structures, and most of all, the leadership to make it all happen.

I continue to be disappointed with the standard of material that is considered "acceptable" in today's education system. In my recent trip to India, I saw that a typical 10th grade graduate there is more likely to have a better education than a typical 12th grader in the US. Then I hear that "but our kids catch up in college" from some parents and teachers. I beg to disagree. Once a student graduates 12th grade with today's version of "reform" math, the doors will be forever shut for them in science and engineering. They most probably lost the battle in elementary school if they were not taught the basics well, and never realized it.

Recovery from a hole that we have dug so deep has to start somewhere. One of my friends often says "when you are in such deep doo doo, you better stop digging". I think it is a great place to start.