• U.S. industry as a whole is further reducing its investment in research,2 with, for example, iconic institutions such as Bell Labs now diminishing in size and no longer U.S. owned.

• Government contractors have become increasingly risk-averse, constrained as they are by increasingly complex defense acquisition laws (Dunlap, 2011) and competing for fewer acquisition programs that have longer acquisition cycles—all of which make the work less attractive to prospective STEM hires (National Research Council, 2012a).

• The U.S. higher education system finds its predominant global position threatened by declining investments in education by state and local governments as well as by greatly increasing competition from government-funded universities and research institutions abroad.

• The United States scores average or below average among OECD countries in the proficiency of its K-12 students (OECD, 2010), and U.S. nationwide testing has shown that the average 4th grader was less than proficient in mathematics and science.3

THE CONUNDRUM

U.S. employers nearly unanimously cite the need for additional employees with specialty skills, including STEM workers, yet the nation’s overall unemployment rate remains high. Steve Jobs told the President that one of the reasons his firm had to employ 700,000 workers abroad was the ability of China to supply engineers much more rapidly than the United States, including 8,700 industrial engineers to oversee the 200,000 assembly-line workers, who were found in China in just 15 days (Duhigg and Bradsher, 2012; Wingfield, 2012). But what the United States confronts as a nation, and what DOD confronts to an even greater extent, is not an unemployment problem but a knowledge gap (i.e., a quality) problem, particularly with the potential STEM workforce.

DOD representatives state virtually unanimously that they foresee no shortage of STEM workers in the years ahead except in a few specialty fields such as cybersecurity and intelligence. However, the aerospace and defense industry has experienced difficulty in hiring systems engineers, aerospace engineers, and mechanical engineers. Pondering the projected decline in defense spending, it is not difficult to imagine a reduction in the perceived need for STEM employees by DOD and its contractors. The problem is that with the rapid pace of advancement in STEM and the uncertainty of future threats, a shortage of STEM workers, particularly those with knowledge in evolving fields, could occur at any time.

The DOD’s STEM needs, as well as those of its contractors, represent a relatively modest facet of the challenge faced by the nation’s workforce as a whole in today’s burgeoning, technologically driven economy. Total DOD civilian STEM employment is approximately 150,000, with 47 percent in engineering and 35 percent in computer and mathematical science occupations; this workforce represents only a small fraction (approximately 2 percent) of the total U.S. STEM workforce. For the private sector, although STEM jobs are a major component of the defense industrial base (approximately 3 in 10 jobs), these jobs also represent a small fraction of total U.S. STEM employment (likewise approximately 2 percent). A notable exception is aerospace engineers, a substantial proportion of whom are employed in the aerospace and defense industry.

Ironically, it is unlikely that the United States will suffer from an overall shortage of scientists and engineers. The principal reason is globalization. Today, it is a relatively straightforward matter for a U.S. commercial firm to fulfill its STEM capacity needs abroad—particularly given the large numbers of STEM workers being educated elsewhere in the world, a growing number of whom are highly qualified.

As U.S. industry’s research laboratories move abroad (National Science Board, 2012, Figures O-6 and O-7), so too do the prototype shops that design and evaluate new concepts, and so too do the production lines and eventually the maintenance facilities (in order to reap higher returns on their investment (Economist, 2011))—and so too do the continuous design modifications over the product life cycle and the ideas for subsequent innovations and generation of equipment. Further, most of tomorrow’s commercial customers will be in the developing nations,

2 The R&D investment by U.S. business declined faster than GDP in 2008-2009 and the decade ending in 2009 saw a slowing of R&D expenditures versus earlier periods. See for example, Chapter 4 in National Science Board (2012).

3 See, for example, Figures 8-1 and 8-4 in National Science Board (2012).



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