The Impact of Defense Spending on Nondefense Engineering Labor Markets A Report to the National Academy of Engineering (1989) / Chapter Skim
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Appendix A: Commissioned Papers
Appendix A: Commissioned Papers
Pages 23-66
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From page 23... ...
, 43 "What Can Demand and Manpower Requirements Models Tell Us About the Impact of Defense Spending on the Labor Market for Scientists and Engineers?
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population can recall f~rst-hand the extent to which our participation in World War IT altered the directions of our national life and expenences. Nowhere was the sea change greater than in the new roles of research, research-based activity, and scientific and engineering personnel in the performance of priority work in all sectors of our national life -- in government, in nonprofit institutions (universities)
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Looked at with the benefit of hindsight, they often turn out to be old issues in new dress. A Retrospective of Critical Incidents This venture at retrospective assessment will focus on a limited number of "cntical incidents" affecting the formulation of science and engineering personnel policy from the waning days of World War IT to the most recent concerns (1985-86)
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From page 27... ...
l o be effective, that intelligence must be trained.... Our plans, simply, are plans -- as regards science and engineering -- to train for the national welfare the highest ability of the youth of the nation without regard to where it was born and raised, and without regard to the size of the family income." The Bush Report asked for a level of $122.5 million of federal funding five years into the future, with $29 million earmarked for the Division of Scientific Personnel and Education.
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With the end of the fighting in Korea, the lightness ~ We engineering market moderated. 5Nadonal Manpower CounciL A Policy for Sczentif c and Professional Manpower, New York: Columbia University Press, 1953, pp.
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estimated that only about half of the coHege-age population with an AGCT score of 120 or above entered college and that only about one-third went on to graduate.6 Continuing federal support in the decade after the passage of NDEA, as well as the substantial efforts of many state governments to expand their systems of higher education, led to the substantial elimination of the financial barriers that had earlier blocked high school graduates with good aptitudes from entering and graduating from college. The Revision of the Immigration Act in 1965 Twenty years after the conclusion of World War IT, Congress finally acted to revise our immigration laws to bring them more into consonance with He changing role of the United States in world affairs.
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While earlier shifts in the financing of space and defense projects and the weakening in We civilian economy had resulted In selected cutbacks, this was the first time so large a segment of the market for trained personnel -- literally tens of thousands of scientists and engineers -- was affected. Further, the concentration of so many aerospace activities on Me West Coast -- and the unwillingness of most of the displaced professionals to relocate -- intensif1ed He emblems of designing and implementing remedial programs.
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The industry's lack of broad investment in keeping its engineering work force up to date squared with the evidence of many engineers' having become superannuated after 10 years of aerospace employment. Fortunately, the economy expanded in the early 1970s -- in fact, our highest rates of real growth in the entire postWorId War rid era occurred in 1971-72 -- and what had earlier appeared to be a difficult, almost an insoluble problem disappeared while remedial actions were still being explored.
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market as a consequence of which the search for new oil accelerated, a search further intensified by the second oil price increase that OPEC instituted in the late 1970s. As a consequence of this roiling of the oil market, a vastly increased demand for petroleum engineers, geologists, and related specialists was met not by only attracting scientists and engineers from related fields, but also by stimulating the expansion of key college and university departments that were in a position to respond More important in terms of the numbers involved was the growth in "computer sciences," including the aDied fields of electrical engineering and applied mathematics.
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This conclusion was predicated on the evaluations by the deans of engineering schools and further supported by the deteriorating ratio over the decade between facula and students. While facula salanes have increased and outside consulting provides some additional source of income to faculty members, the ratio of academic to industrial salaries, particularly in electrical engineering and computer sciences, is still inadequate to provide an adequate supply of faculty personnel.
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From page 34... ...
, there was considerable movement between the defense and nondefense sectors: in the 1983-85 period there was a net inflow of 740 doctoral personnel into DoD-type work but an outflow of 537 engineers into non-DoD work. The explanation for the relative ease with which the nation was able to accommodate the steep buildup of defense in the 1980s without experiencing any serious S/E shortages must be sought In the following: (~)
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With the defense budget as a percentage of GNP likely to level off in the remainder of the 198Os, if it does not decline, there is little risk of any serious imbalances in the engineering and scientific manpower market In the near and middle term. Continuing Concerns: Supply and Utilization Women and Minorines In the decade 1963-73, major governmental and non-governmental initiatives were undertaken to remove barriers from the paths of women and minorities seeking to pursue educational and career objectives in science and engineering.
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Since the Russians were unable to repeat their triumph in space in other technological spheres, the supposed vuinerabili~ of the U.S. stemming from an insufficient number of engineering personnel lost credence.
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companies utilize their scientific and engineering personnel. If this explanation has meet, then the challenge that we face may be less connected with the size of the pool than with the more effective utilization of the available supply.22 Considerable efforts have been expended over the years to develop and improve estimates of the future supply and demand for engineers.
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The substantial appropriations of the Congress for defense have played a major role in expanding and maintaining a much enlarged infrastructure of scientific research and higher education, far larger than would have been likely in the absence of the "cold war." · The fluctuations in defense expenditures had greater or lesser consequences on particular organizations, groups of specialists, and locations that were directly affected by the start-up or completion/cancellation of a major defense program. But for the most part, the two major nondefense sectors -- the higher educational establishment and the civilian economy -- were able to adjust reasonably wed to these fluctuations, We early 1970s alone excepted.
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To structure the following discussion of policy directions, we will take up issues connected first with supply and then with the utilization of scientific and engineering personnel and conclude with some broader considerations bearing on policies affecting the educational and research infrastructure. With respect to the future supply, it is important to note the following: .
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Larger capital investments by employers, particularly in the rapidly advancing computer technologies, which win enable scientists and engineers to increase Heir productivity substantially. Proved direction and leadership of large scientific and eng~neenng groups in both the defense and nondefense sectors.
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Since the problems involved in assuring an adequate national supply of welleducated scientists and engineers and their effective utilization have come center stage not once but repeatedly since the end of WW IT, and since Me successive debates concerning these issues have repeatedly suffered from inadequate data, weak models and fault analyses, the knowledge base required for sound policy formulation urgently needs to be strengthened. Accordingly, the National Academies of Engineering and Sciences should take the lead to obtain the resources required for an ongoing and enlarged research effort that could improve the decision-making process with respect to S/E personnel both inside and outside the federal establishment.
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of science and engineering labor markets. Some general Signets on the aims of work in this area should be noted.
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(2) Occupational mobility flows measure the entry to a science and engineering profession by persons previously employed in another science and engineering profession or in another part of the labor force.
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S & E field mobility inflow , l new S&E _ additions stock to stock ~ grants foreign national students Figure 1. Schematic representation of the S/E labor supply system.
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The recent D-F work on engineering for EMC examines only the degree attainment and curricular choice subcomponents of a new entrants' model, but it considers those over a longer time frame. This interesting study links rates of degree production by field of engineering and level of degree to demographic trends (number of ~ 8-year-olds)
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the degree of excess demand for workers in that field and used this estimate to project future reliance on mobile workers. This analysis (as the authors recognize)
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It's possible to see the current situation as one in which universities perceive the costs of expanding engineering enro~nents and degree production as high and are, therefore, in effect forcing industry to rely on the "alternative technology" of hiring experienced workers trained in other fields. Whether this is a sensible long-run response requires investigation.
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was really not designed to pack quick responses to such fluctuations. Turning to the long run, the basic concern is with the implications of long-run growth in military requirements for science and engineering personnel, especially if accompanied by strong growth in industrial needs for such workers.
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Thus, the hallmark of the D-F work is the effort to provide a comprehensive framework for modeling the supply of science and engineering personnel. The strengths of this ambitious approach are clear: it provides an overview of the supply system, especially of the interconnections among science and engineering fields -- and between them and the rest of the labor market -- that are created through occupational mobility.
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"Supply Projections of Scientific and Technical Personnel: Dynamic Response to Changing Employment Requirements," Annual Meeting of the American Association for the Advancement of Science, May 29, 1984. Freeman, Richard.
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program, on the nondefense labor market for S/E personnel. Of special interest is the ability of these models to indicate whether, in light of the prospective supply of S/E personnel, enough manpower resources will be available so that defense spending programs can move ahead at their projected rates without curtailing productive activity in the nondefense sectors of the economy.
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In view of the importance attached to recent proposals for increasing defense spending and implementation of the SDI program, it is surprising that so little analysis has been done.2 Not only is the narrow technical feasibility of the SDI program at issue, but there is also uncertainty about whether the unique constelIai~on of S/E personnel required by this program will be available. Considerable effort has gone into developing a system for exploring these issues, but the system has not yet evolved to the point that anyone can be reasonably confident about resolving them.
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program and overall defense spending over each of the next five years and through the five years beyond that? We recognize that SD!
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Indeed, because of Heir may limitations, these models may not receive high marks when evaluated against these critena. The only way to remedy this is to make efforts to enrich these models, to develop alternative models, and to find new approaches so that more effective assessments can be made of the impact of SDI and other defense spending on SIE labor markets.
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Every five years or so, BES produces employment projections on a lO-year horizon for 550 detailed occupations in each of 378 industries. These projections are generated by combining its labor force projection model, aggregate economic projections denved from the Wharton Econometncs macroeconomic model, its own industry demand model, its own industry employment model, and its own occupational employment model, which relies on the BES industryoccupation matrix.
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This mode} was developed by Wassily Leontief, Faye Duchin, and their associates at New York University for the purpose of estimating the employment effects of automation for 53 different occupations In 85 different industries over a long-run time honzon -- e.g., to the year 2000. No explicit attention is given to the defense and nondefense sectors but, in principle, there is no reason why this model could not be adapted to estimate defense employment impacts, something that Leontief has done In earlier work.9 Microeconomic Approaches These approaches are more difficult to descnbe, largely because we have few examples that are linked to the defense sector.
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In this case, respondents might be asked to estimate the impact of increased defense spending and the SDI program on employment requirements.
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Undoubtedly, He names of others should be added to this list. Sterling Hobe Corporation, Scientific and Technical Personnel Requirements Related to Activities of Innovative Science anal Technology Office Strategic Defense Initiative Organization Washington, D.C., January 1986.
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Without such detailed information, it would be difficult, if not impossible, for the firm to make appropriate job matches. If this amount of detail is essential to S/E labor markets as they actuary operate, one cannot help but wonder about the utility of the usual macro approaches for estimating He impact of defense spending on S/E personnel.
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o ct Id a Ct .c is ED S Cal .= I: .
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In sublunary, these models are no doubt useful first efforts, but they do not take us very far in understanding how the SIE labor markets operate. It is not even clear in what sense they reflect requirements for S/E personnel.
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Hence, we provide no table comparable to Table I The micro models, both production function and recursive, can be applied-quite flexibly but, unlike the macro moclels, can do little to reflect interdependencies among markets for different types of S/E personnel or the defense and nondefense sectors.
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From page 65... ...
"Analysis of the Costs of the Administration's Strategic Defense Initiative, 1985-1989," staff working paper, Washington, D.C., May 1984. Defense Spending and the Economy.
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