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.

USA Losing Brain Drain Benefits

US should act to curb reverse brain drain, India Times:

“Indians are among the best educated of all immigrant groups,” he says, adding that Indians founded more engineering and technology companies in the US in the decade up to 2005 than the next four groups combined-those from Britain, China, Taiwan and Japan. They accounted for 26 percent of all start-ups, about 117,000 jobs and $14 billion in revenue in 2005.

But that trend could be arrested or reversed by a growing phenomenon: Large numbers of skilled Indian immigrants are returning home. Many of them are heading back, Wadhwa says, because of the six-to-10 years it takes for their green cards – or permanent immigrant status – to arrive. “This is a double loss for the US. One is that we lose good people. The second loss is that they will become our competitors,” he notes, adding that this is true for many Chinese, Russian and European immigrants too.
…
Unlike in earlier years, Wadhwa doesn’t expect the Indian government, for one, to lobby for easier green cards for its people in the US “Right now, India wants its people to come back home,” he says. “India has gone from a country which was dependent on revenues from foreign workers to one that is booming on its own. It needs all the skilled people it can get.”

I have discussed before that my belief is the USA will not continue to be able to attract as large a percentage of the highly educated and skilled scientists and engineers as they have in the last 30 years. Obviously other countries will take actions that they believe will benefit them and as times change what they seek will change – as they should. In my opinion other countries are doing a better job of encouraging investment in science and engineering excellence. The USA continues to do very well but risks having their positions deteriorate much faster than is expected (especially since some don’t seem to expect any relative deterioration) as others continue to make great strides.

The USA has taken for granted the many advantages of hosting scientific, engineering and related entrepreneurship excellence. As other locations establish centers that can draw the best minds and capital they will get the benefits the USA has grown to expect. Countries that aim to gain these benefits are doing the right thing. And the USA continues to make good progress (the biggest comparative advantage the USA has now is in entrepreneurism and the combination of technology and business) but the competitions continues to grow stronger and the level of performance to remain at the top continues to increase. And if the USA doesn’t respond with appropriate investments and action it will suffer economically.

Home Engineering: Windmill for Electricity

photo of windmill

William Kamkwamba’s Malawi Windmill:

I built my first windmill when I was 15. Over the next few years I kept refining the design. I made many modifications to the plans i found in the book. For example, I increased the blades from three to four to provide more power output. The windmill now powers lights for 3 rooms and a light over our porch outside. I also use it to power my family’s two radios. I also can charge mobile phones that the neighbors have.
…
Two weeks ago I used a computer for the first time. I learned about Google and searched for “windmill” and “solar energy.” I was amazed to learn how many entries there were for both subjects. My friends showed me how to create an email address and now I am on Gmail. Now I am practicing sending and receiving emails when I have access to a computer.
…
On Sunday, my friends from National Solar and I completed the next phase of work on my electrical system. You can see a compete set of (my first) digital photos at my new site on Flickr. I had the following goals:

1. Upgrade the power generation in the windmill
2. Upgrade the battery technology and capacity, to provide more even power for more hours at a time
3. Increase the brightness of the lighting (lumens) to make it easier for my family to accomplish tasks at night, especially to read…

Photo: Back in November, the windmill was only 5 meters (15 feet) tall compared to 12 meters (36 feet) today. I raised the height because I discovered that the best wind was just over the top of the shorter windmill.

Microfinancing Entrepreneurs

From the Curious Cat Investing and Economics Blog: Microfinancing Entrepreneurs:

Kiva is another interesting organization that lets you loan directly to an entrepreneur of your choice. In fact, I have just placed $350 in loans to 5 business entrepreneurs (in Kenya, Mexico, Cameroon and Azerbaijan) – and a made a $50 donation to Kiva. Kiva provides loans through partners (operating in the countries) to the entrepreneurs. Those partners do charge the entrepreneurs interest (to fund the operations of the lending partner). Kiva pays the principle back to you but does not pay interest. And if the entrepreneur defaults then you do not get your principle paid back (in other words you lose the money you loaned). I plan to just recycle repaid loans to other entrepreneurs.

The Kiva web site does a great job of using the internet to create a direct connection between those with money to lend and those in need of money to grow a business.

Science Focus in New UK Government

Science wins champion in shake-up

Mr Brown often warned as Chancellor that Britain needed a strong scientific base to punch above its weight in an increasingly competitive global market. By including innovation and science in the higher education brief for England the new prime minister is throwing his weight behind the sector for the long term. Although Britain’s scientific research is regarded as among the best in the world, the decline in the numbers studying science has sounded alarm bells throughout academia and industry. A string of universities have closed physics or chemistry departments in recent years because of a lack of would-be students.
…
This has sparked fears that the country’s science and engineering base may not be able to cope with the ever-increasing competition from nations like China and India.

As I have stated numerous times previously I believe those countries that manage to gain (or retain) centers of science and engineering excellent will gain significant economic advantage.

Singapore Research Fellowship

Singapore National Research Foundation Research Fellowship (updated link which was broken – why can’t web site stop breaking links?) offers complete freedom and a 3-year research grant of up to US$1.5million, with possible extension for another 3 years for talented scientists and researchers at or under the age of 35 years at the date of application. This is another example of Singapore investing in creating a scientific and engineering community to strengthen their economy.

Engineers: Future Prospects

In the The Future is Engineering I discussed some of the benefits of engineering education. And previous posts shows that S&P 500 CEOs are more likely to be engineering graduates than any other discipline. The future of engineering looks at what is in store for students of engineering today:

I doubt many of the incoming freshmen at Lehigh who are about to enter the College of Engineering have any clue what they are getting themselves into. I suspect they will end up very pleased with their choice… especially when they realize large numbers of engineering graduates before them did not take jobs as engineers but instead were hired as consultants – as a result many graduates are paid much higher salaries than they would have dreamt of as freshmen.
…
But are they waging a rearguard battle, will the US become a services-land where most of the real engineering is outsourced to countries that value science more, and where the so-called engineers are number-crunching problem-solvers who stare at computers all day long? Or will the pendulum swing back in the engineers’ favor after a Sputnik-like incident that will bring engineering back into the list of national priorities?

It is very important to remember that the benefits of studying engineering cannot be measured solely by looking at engineers in the workplace – many go into different job title and are promoted into management… and as stated above CEOs. The second point will be an important determinant of the economic strength of the USA as I have addressed many times I think it is important the USA maintain science and engineering expertise. The multiple benefits of having research centers here, manufacturing engineering expertise… is huge. See: Continue reading →

Education, Entrepreneurship and Immigration

Education, Entrepreneurship and Immigration: America’s New Immigrant Entrepreneurs is part 2 of a study by Duke’s Pratt School of Engineering and UC Berkeley. Some interesting points from the study:

52 percent of immigrant founders initially came to the United States primarily for higher education, 40 percent entered the country because of a job opportunity, 6 percent came for family reasons, and only 2 percent to start a business.
91 percent of Indian founders, 35 percent of Chinese and 97 percent of Taiwanese founders completed their undergraduate degrees in their home country
Indian and Chinese founders graduated from a diverse set of schools in their native countries, many of which are considered
second- or third-tier universities (only 15 percent of Indian founders were graduates of the IIT).
Immigrant founders of technology and engineering firms have strong backgrounds in science, technology, engineering, and mathematics (STEM) fields. 75 percent had completed their highest degree in a STEM field.
Advanced education in science, technology, engineering, and mathematics is correlated with high rates of entrepreneurship and innovation. The U.S. economy depends upon these high rates of entrepreneurship and innovation to maintain its global edge.

International Student Collaboration

Contest links high school students worldwide:

During the school year, 58 teams of American students coupled with students from China, India and Japan tackled technological solutions to global warming. They chatted online, divided jobs based on skill, consulted with advisers, and in the final grueling weeks, wrote a professional business plan.

“The most important goal is to engage U.S. students in international collaboration using science and technology,” said David Gibson, executive director of the Global Challenge and a research assistant professor in computer sciences at the University of Vermont. The idea for the contest came to management consultant Craig DeLuca two years ago as one of his clients planned to outsource design and manufacturing, and his community in Stowe considered putting off buying science textbooks.

“I’ve got to do something so that our kids have a shot in the global economy,” he said then. He launched the contest in Vermont, and last fall it was awarded a $900,000 National Science Foundation Grant and expanded worldwide. Winners will be announced in June.

Not only does the contest encourage interaction between students across the globe to solve problems, it also exposes them to opportunities in science, technology, engineering and math, Gibson said. “We need projects like this across the nation, so we can scoop these kids up because schools don’t do it for them,” he said.

Deforestation and Global Warming

Deforestation: The hidden cause of global warming:

In the next 24 hours, deforestation will release as much CO2 into the atmosphere as 8 million people flying from London to New York. Stopping the loggers is the fastest and cheapest solution to climate change.

Tropical Deforestation, Climate Impacts (NASA by Rebecca Lindsey):

Undisturbed tropical forests may be nearly neutral with respect to carbon, but deforestation and degradation are currently a source of carbon to the atmosphere and have the potential to turn the tropics into an even greater source in coming decades.

South Pacific to Stop Bottom-trawling

S Pacific to stop bottom-trawling:

A quarter of the world’s oceans will be protected from fishing boats which drag heavy nets across the sea floor, South Pacific nations have agreed. The landmark deal will restrict bottom-trawling, which experts say destroys coral reefs and stirs up clouds of sediment that suffocate marine life. Observers and monitoring systems will ensure vessels remain five nautical miles from marine ecosystems at risk.

From my previous post, Fishy Future?:

The measured effects today should be enough for sensible people to realise the tragedy of the commons applies to fishing and obviously governments need to regulate the fishing to assure that fishing is sustainable. This is a serious problem exacerbated by scientific and economic illiteracy. The obvious scientific and economic solution is regulation. Determining the best regulation is tricky (and political and scientific and economic) but obviously regulation (and enforcement) is the answer.

Granted I have a very limited knowledge of this area, but this ban seems like a good idea to me.