FROM STRENGTH TO STRENGTH:

Engineering Gap? Fact and Fiction: It's no time to panic about the numbers of engineers India and China are graduating compared with the U.S. Here's the real story in this big debate (Vivek Wadhwa, 7/10/06, Business Week)

There are many opinions about what is happening in the engineering field, but here are some of the facts that routinely get lost in the debate:

1. Shortages usually lead to price increases. If there were a shortage of engineers, salaries should have risen. Yet in real terms, engineering salaries have actually dropped (see BusinessWeek.com, 9/15/05, "Good Time to Learn Accounting").

2. Twenty-five to 40% of engineering graduates don't become engineers. At Duke, I noted that 40% of our Masters of Engineering Management students were accepting jobs in fields such as investment banking and management consulting. Our researchers called other engineering schools and found this was common. Don Giddens, dean of engineering at the Georgia Institute of Technology, says that this is by design—U.S. schools provide a broad education that prepares students for careers other than "strictly" engineering.

3. Quantity usually comes at the cost of quality. China has increased the number of engineers it graduates by a staggering 126% over the last five years with a factory-like approach to education. Degree quality can't be maintained unless academic staff and facilities grow with student populations. According to the Chinese Ministry of Education, from 1999 to 2004 the number of technical schools in China actually fell from 4,098 to 2,884. During that same period, the number of teachers and staff at these institutions fell 24%.

4. Graduate too many and you'll create unemployment. China's National Development and Reform Commission recently reported that job openings in China have dropped 22% over the last year and that 60% of China's upcoming university graduates will be unable to find work. Media reports say that in an effort to "fight" unemployment, some universities in China's Anhui Province are refusing to grant diplomas until potential graduates show proof of employment. And Premier Wen Jiabao announced that China would be cutting university enrollment levels.

5. We've got enough qualified computer programmers. The Wall Street Journal reported that Microsoft received résumés from about 100,000 graduating students in 2004, screened 15,000 of them, interviewed 3,500, and hired 1,000. It said that Microsoft receives about 60,000 résumés a month for its 2,000 open positions.

6. The vast majority of engineering undergraduates aren't foreign nationals. According to the American Society of Engineering Education (ASEE), the percentage of undergraduate engineering degrees awarded to students with U.S. citizenship or permanent residency has remained close to 92% for the past seven years.

7. U.S. students don't gain enough financial benefit from postgraduate engineering education. The proportion of domestic to foreign students completing graduate degrees in engineering dropped from 60.3% in 1999 to 57.4% in 2005, and doctoral degrees from 54.4% to 40.4% in the same period, according to the ASEE. In a National Bureau of Economic Research working paper, Harvard economist Richard Freeman says this is because salaries for scientists and engineers are lower than for other professions, and the investment that students have to make in higher degrees isn't cost-justified.

Doctoral graduate students typically spend seven to eight years earning a PhD, during which time they are paid stipends. These stipends are usually less than what a bachelor's degree-holder makes. Some students never make up for this financial loss. Foreign students typically have fewer opportunities and see a U.S. education as their ticket to the U.S. job market and citizenship.

8. The majority of foreign engineering students come here to stay. A report prepared for the National Science Foundation showed that the number of foreign-born doctorates who chose to stay in the U.S increased from 49% to 71% from 1989 to 2003. While these numbers are likely to decline, I'd bet Friedman that they don't decline to 1989 levels.