Category Archives: Economics

Posts exploring the economic impacts of science and engineering. The value of strong science and engineering practice has many benefits to the economy – directly and indirectly. Many countries are focusing their future economic plans on advancing their scientific, engineering and technology communities and creating environments that support scientists and engineers.

Brain Drain Benefits to the USA Less Than They Could Be

Study Points to ‘Brain-Drain’ of Skilled U.S. Immigrant Entrepreneurs to Home Countries. I am not totally sure reverse brain drain is the proper term. It appears to me this is really saying the size of the brain drain, coming to the USA, is less than it could be (many brains that came are returning). Yes in some senses it is a brain drain from the USA but still…

In this study, “Intellectual Property, the Immigration Backlog, and a Reverse Brain-Drain,” researchers offer a more refined measure of this rise in contributions of foreign nationals to U.S. intellectual property and analyze the possible impact of the immigrant-visa backlog for skilled workers. The key finding from this research is that the number of skilled workers waiting for visas is significantly larger than the number that can be admitted to the United States. This imbalance creates the potential for a sizeable reverse brain-drain from the U.S. to the skilled workers’ home countries.

“These findings are important, highlighting the invaluable contribution of foreign nationals to our country’s technological and economic vitality,” said Duke Provost Peter Lange, the university’s top academic officer. “We know from our own experience here that students from China, India and other nations can play an outstanding role in advancing knowledge and creating new jobs, especially in cutting-edge fields.”

I don’t think this result is going to decrease. And I believe the actual loss of scientists, engineers and entrepreneurs born in the USA for significant portions of their careers to other countries will increase dramatically over the next 25 years. I agree that it is in the interests of the USA to try and retain the ‘Brain Drain’ advantages it has been receiving.

‘Looming Crisis’ from NIH Budget

‘Looming crisis’ from NIH budget by Ted Agres:

“Promising research is now being slowed or halted,” said Edward Miller, dean of Johns Hopkins Medicine. “We are seeing veteran scientists spending time not in labs but on the fundraising circuit. We are seeing young researchers quitting academic research in frustration, having concluded that their chances of having innovative research funded by NIH are slim to none,” Miller told a Capitol Hill news conference yesterday.

The scientists released a report prepared by 20 leading researchers from a consortium of nine academic institutions and universities, that outlines the benefits of increased NIH funding on biomedical innovations, and warns of the negative implications should the present budget be left unaddressed. The report cited threats from unexpected new diseases, such as SARS and pandemic influenza, as well as obesity, HIV, and bioterrorism.

While Congress and the White House doubled NIH’s budget from 1998 to 2003, funding has failed to keep pace with inflation. NIH’s budget has hovered at around $28 billion, but once inflation is factored in, its purchasing power has fallen 13% over the past four years. According to the report, an average of eight out of ten NIH grant applications currently go unfunded, while at the National Cancer Institute, only 11 percent of grants are funded. “This is a recipe for disaster,” Miller said. “The number of termination letters at Johns Hopkins is up three-fold.”

Nanotechnology Investment as Strategic National Economic Policy

We have quite a few posts on the intersection of science, research, economic, investment… such as: Diplomacy and Science Research, Science and Engineering in Global Economics and Engineering the Future Economy. Here is another example, from the Wired Science BlogBeating the United States in the Race for Nanotechnology:

When the United States began the National Nanotechnology Initiative, it became clear to a number of small countries including Singapore, Taiwan, and Israel that it was time to invest heavily in similar frontier areas of science. With a level of decisiveness and determination comparable to the efforts of the United States after the launch of Sputnik, Singapore quickly became a global niche player in nanotechnology.

It’s fascinating to hear a high ranking government official who is so incredibly technology savvy and focused on economic development through investment in science. It makes the current climate in the U.S. look really bad, but on the other hand the other countries followed our lead. Since then, they have sort of outdone us at our own game.

Singapore is doing the right things to invest in a science and engineering economy. 10 minute webcast of Foreign Minister George Yeo at the 3rd International Conference on Bioengineering and Nanotechnology:

Best Research University Rankings – 2007

There are several rankings of universities. They can be interesting but also have obvious limitations. I find Shanghai’s Jiao Tong University’s the most interesting (especially the international nature of it). Their real focus seems to be in providing a way for China to get a feel for how they are progressing toward developing world class universities (interesting slide presentation on their efforts). The methodology values publications and faculty awards and is provides a better ranking of research (rather than teaching). Results from the 2007 rankings of Top 500 Universities worldwide showing country representation of the top schools:

location	Top 101	% of World Population	% of World GDP	% of top 500
USA	54	4.6%	27.4%	32.7%
United Kingdom	11	0.9	4.9	8.3
Germany	6	1.3	6.0	8.1
Japan	6	2.0	9.0	6.3
Canada	4	0.5	2.6	4.3
France	4	0.9	4.6	4.3
Sweden	4	0.1	0.8	2.2
Switzerland	3	0.1	0.8	1.6
Australia	2	0.3	1.6	3.3
Netherlands	2	0.3	1.4	2.4
Israel	1	0.1	0.3	1.4
Finland	1	0.1	0.4	1.0
Norway	1	0.1	0.6	0.8
Denmark	1	0.1	0.6	0.8
Russia	1	2.2	2.0	0.4
China		20.1	5.5	2.8
India		17.0	1.9	0.4

China has 1 ranked in the 151-202 range as do Taiwan, Korea and Brazil. Singapore has one in the 102-151 range. The other country without any in the top 101 with representation in the next 101 is Italy with 3 schools in the 102-151 range and 2 in the 152-202 range. India has 2 in the 305-401 range.

Top 10 schools (same schools as last year, Cambridge moved from 2nd to 4th):

Harvard University
Stanford University
University of California at Berkeley
Cambridge University
Massachusetts Institute of Technology(MIT)
California Institute of Technology
Columbia University
Princeton University
University Chicago
Oxford University

University of Wisconsin – Madison is 17th 🙂 My father taught there while I grew up.
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Authors of Scientific Articles by Country

The United States National Science Foundation published – Changing U.S. Output of Scientific Articles: 1988–2003.

In an unexpected development in the early 1990s, the absolute number of science and engineering (S&E) articles published by U.S.-based authors in the world’s major peer-reviewed journals plateaued.
…
The unprecedented plateau in the number of U.S. S&E articles should not be confused with a decades-long and familiar decline in the U.S. share of the world’s S&E articles. As other states built up their S&E capabilities, the U.S. share of the world’s articles in natural sciences and engineering dropped from 38% in 1973 to 28% in 2003. This decline in share is not surprising, nor has it been viewed as a cause for concern. By many measures, including articles published in peer-reviewed journals, the United States has been the world’s leading scientific nation for decades and remains the world’s leading scientific nation.
…
Although the U.S. share of the world’s influential articles dropped substantially, the United States remained dominant in this area. At the end of the period studied, U.S. institutions were at least partially responsible for half of the world’s influential articles; no other major publishing center approached this figure. Moreover, compared with other major publishing centers, a considerably higher percentage of total U.S. output was classified as influential.

NSF includes a great deal of interesting data along with commentary. One compelling area is that of the location of authors of the top 1% of the most cited papers. The USA leads with 64.6% in 1992 and 56.6% in 2003. European Union-15 (15 countries for this measure) 23.3% to 27.7% (interesting, not what I would have predicted – which would have been a decline, though a small one). Japan 4.2% to 5.3%. East Asia – 4 (China, Singapore, South Korea, and Taiwan) from .1 to 1.1% (and rising rapidly – .5% in 2001 to .8% in 2002) – interesting but not so surprising, basically what I would expect – rapid gains. All other countries: 7.8% in 1992 and 9.3% in 2003. I predict these figures will have to break out India sometime in the next 10 years – I wish they did now though I expect it is a fairly low figure. China will also be reported separately, I believe.

The NSF data includes all sorts of great stuff. For the same top 1% of cited articles by topic East Asia – 4 in Engineering/Technology: 1992 .9% – 2003 7.2% in Social Sciences 0.0% to .6% in Mathematics 1.3% to 5.6%. In Engineering/Technology the USA dropped from 63.3% to 45.4%.

This is more data supporting what I have said before Science Excellence and Economic Benefits:
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Google: Patent System in Crisis

Google’s patents chief believes the US patent system is “in crisis” and I agree, see related posts below. Google: Kill all the patent trolls

There are too many businesses, she added, who do little more than use patents as a means of making money. Such businesses, often referred to as trolls in patent law, have proved to be a serious minefield for tech companies over the last few years. Lee highlighted the tribulations of Research in Motion, maker of the BlackBerry handheld, which settled a patent lawsuit for $612m last May.

Speaking alongside Lee, Apple’s chief patent counsel, Chip Lutton, wouldn’t go quite so far as his Google counterpart. He said the US patent system was “not broken” and that it was “not in crisis,” calling it “the best in the world”. But he acknowledged that there was a “huge bubble” of patent assertions that needs to be scaled back. “The question with this bubble market, as with any bubble market, is ‘Can we solve it without a crisis arising?'” he said.

Lutton believes that the key to fixing the country’s patent problems lies with the courts, not the patent office. “Most patents issued are never litigated and never licensed,” he said. “We need to focus on fixing the litigation system. That’s most relevant.”

Highly Paid Professor

A Raise for the Record Books:

Under the new agreement, the base state salary for Alain E. Kaloyeros, a professor of nanosciences and vice president and chief administrative officer for the college, rose from $525,000 to roughly $667,000.

That’s in addition to money he earns from his research efforts: In the 2006 fiscal year, he also received $258,701 based on his generation of external grants, contracts, licenses and royalties, which Kaloyeros estimated via e-mail amount to about $250 million per year. (He added in his e-mail that he turns down all offers for consulting, board service, and the like, so does not have any income external to the university).
…
“Alain has been responsible for bringing in billions of dollars to U Albany for nanotechnology research and development … about $4 billion to date,” said Susan V. Herbst, provost and officer in charge, or acting president, at Albany. Herbst approved the raise, which was subsequently approved by SUNY’s former systemwide chancellor, John R. Ryan. “Certainly in medicine, engineering, the life sciences, the great universities across the country need to pay competitive salaries to keep the very best faculty with them. We are no different.”

Kaloyeros’s salary increase comes with an increase in duties related to economic development, for which a full announcement is pending in a few weeks, Herbst said. She pointed, though, to one major economic development initiative already announced and under way: Kaloyeros’s work to bring the international headquarters for SEMATECH, a consortium of semiconductor manufacturers representing about half the world’s production, to Albany.

Lifestyle Drugs and Risk

I see taking drugs as risky. Certain drug have long histories and seem safe and even seem to have positive side effect like Aspirin (though even it is not without risks – see below). Even if a drug has a good chance of a positive result in treating some medical condition – assuming it is otherwise safe is not wise. I believe you have have a significant positive known benefit to consider taking drugs given the unknown problems that are likely to be lurking. I find the pop a pill culture for anything that might be a minor annoyance to be foolish – taking risks without consideration. Taking drugs entails taking a risk and the more you take the risks of interactions and cumulative effects increase the risks to you. Business Week (somewhat surprising given the huge amount drug makers pay to advertise lifestyle drugs) has a decent article pointing out some of the foolishness involved in the Lifestyle Drug Binge:

The renewed excitement is most evident in four treatment areas that account for the bulk of lifestyle-drug sales: weight loss, hair loss, sleep, and sexual dysfunction.

This trend is surprising because such treatments can expose patients to risks, sparking criticism of drug companies at a time when patient safety is already under a spotlight. Lifestyle drugs are defined loosely as products used to treat conditions that are not life-threatening. Because people take them over long periods of time, sometimes on a daily basis, they may be more dangerous than they first appear.

We have found amazingly helpful and useful drugs. This is great. But people need to remember these drugs are not without potential negative consequences. Take advantage of them when appropriate but don’t forget the risks each instance has for negative side effects. Related: health care improvement articles – health care blog posts
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Engineering – Economic Benefits

The issues involved in the impact of engineering education and a strong economy are not easy to address in one short article. Impacts are delayed over time. Confusion between available skills and available skills at a certain price is often raised (people claiming there can’t be a shortfall of engineers if salaries are not rising even higher). But I continue to post about these topics because I think they are important (and I find it interesting to think about and read about…). And hopefully a good understanding can be gained through the many post (and the sources referenced in those posts – Economic Strength Through Technology Leadership, includes a listing of over 15 posts on these topics). Another article addresses some of these issues with some interesting points – Innovator fears U.S. losing edge:

Not unlike Hewlett and Packard or Harley and Davidson, Bob Kern created a company while tinkering in a rented garage in Waukesha more than five decades ago. To him, too few Americans seem capable of doing that today. “There’s a gross shortage of engineering talent in the country,” Kern says. Now 81, Kern built Generac into a company that employs some 2,000 people at three factories in Wisconsin and one in his native Iowa.

Generac makes power generators, the type that back up data centers, hospitals and homes during power failures. Equipped with a mechanical engineering degree from the University of Illinois, Kern spent his career searching for inventive folks to maintain a culture of constant innovation. More often than he cares to admit, he couldn’t find them in his home country. Since the 1970s, he has contracted with engineers in Korea, Taiwan, China, Japan and Great Britain.

What Kern represents is exactly what countries around the world are trying to duplicate. Talented businessmen creating good job. And note he started as an engineer and retired as the head of a 2,000 person company (S&P 500 CEOs – Again Engineering Graduates Lead).
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Economic Strength Through Technology Leadership

One of the topics I keep coming back to is the future economic impact of science, engineering, technology and the supporting structures in countries for the same. I believe a significant part of the benefit we enjoy today and will enjoy in the future is tied to how well those areas are integrated with economic factors (raising capital, open financial markets, infrastructure…). Some past posts include: The Future is Engineering, U.S. Slipping on Science, Diplomacy and Science Research, Shrinking Science Gap and Engineering the Future Economy. Fortune discusses the issue in – The United States of Technology?:

As we celebrated the nation’s birthday, I asked myself a patriotic question: Does the United States still lead in tech? As an American myself, my lens is inevitably distorted. Even so, the answer is hardly an unqualified yes.

I agree. While I still think the USA leads the question is debatable in various fields and as I have said before the future looks to be moving in the other direction. This is more due to the rest of the World improving than the USA failing. The continued reduction in advanced science and engineering degrees awarded to USA citizens compared to the rest of the world is a leading indicator I believe. Along with my belief that we will attract fewer leaders to the USA than we have in the past.

No other country can duplicate the American environment of tech creativity, which arises from a unique stew of entrepreneurs, academics, engineers, imaginative marketers and savvy financiers packed together in an atmosphere of risk-taking and plentiful capital. There is nowhere outside the United States remotely like the three places where this formula is most clearly at work – Silicon Valley of course, plus Austin and Boston.

True but the precursors for doing so are being created, the question is whether countries can pull all of it together. If only one country had a shot, I would guess that they would fail, because it is a difficult thing to do. But given how many places have a chance (including: China, Japan, UK, Singapore, France, India, Germany, Korea, Canada, Finland…) it seems very possible other centers of such excellence will appear. I must admit I would not put Austin in such a class, but maybe I am uninformed…