Sunday, March 06, 2005

What do India and China's newly minted engineers mean for US competitiveness?

The Times of India quotes Intel's CEO:
"If the world's best engineers are produced in India or Singapore, that is where our companies will go," Barrett says without batting an eyelid. "This is the reality in the modern world. We locate facilities where we can find or import talent."
The concerns have to do with slippage in the US education system, along with an improvement in the higher education systems in India and China.
Asian colleges now produce six times the number of engineering degrees produced in the US. For the first time, other nations are about to produce more patents per year than the US.
I don't completely share those concerns. First of all, Asia might produce a very large number of engineers, but frankly the quality is quite low, especially in India. Of 2 million engineers that India mints each year, only about 150,000 are good enough to work in the IT industry. The rest...I have no idea what they do. Second, the existing infrastructure in the US is much, much better than anything that can be found in India or China, and the real problem is one of cost. A weaker dollar would go a long way toward bringing the IT industry back to the US.

The real problem is with competitiveness of the real exchange rate. If dollars become cheaper, suddenly there are a lot of bodies and graduates around and available to invent things.
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