Engineer Shortage? Duke Study Says No

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Why are so many engineering jobs being sent overseas? Leaders of tech companies say the United States does not produce enough engineers. But a Duke University study says the real issue is cheap overseas labor. Vivek Wadhwa discusses his study's findings.

Here's a challenge to a popular assumption.

The assumption is that the United States is not coming up with enough skilled people to support its high-tech industries. Two years ago, no less a figure than Bill Gates of Microsoft issued a warning.

(Soundbite of archived interview)

Mr. BILL GATES (Chairman, Microsoft Corporation): Our elite position where we develop the best people in this country and people from other countries come here - that's certainly eroding.

INSKEEP: To Gates, that explains why Microsoft now has a campus in India for example. That's where you find the qualified engineers. But it's not what a Duke University study found. Vivek Wadhwa is co-author of that study, and he's on the line from Duke. Welcome to the program.

Mr. VIVEK WADHWA (Executive-in-Residence/Adjunct Professor, Duke University): Hi, Steve.

INSKEEP: I wonder if we can hear a little bit more of this argument now from Bill Gates. Why it is that he's moving jobs or creating jobs, perhaps we should say, in places like India?

Mr. GATES: Many people who look at off-shoring are looking at it to save cost. In fact, the way we do R and D, that's not the key thing. It's the quality of the innovation, how quickly we get things done. If we look at the pipeline, it's going to be a tougher and tougher situation for us to hire.

INSKEEP: He's basically saying we can find more qualified people more easily in India. Is that true?

Mr. WADHWA: Steve, the fact is that we looked into it. We researched exactly what was going on in India and China and the USA. We looked at the graduation rates of all three countries. What we found was that India and China have no real advantage in the quantity or the quality of the graduates they produce.

In fact, the USA is far ahead by almost any milestone. We also asked companies why they're going overseas and the number 1 reason was cost, cost, cost. It's not about a deficiency in the U.S. worker or shortage over here. It's about the economic benefit that they get in India and China.

INSKEEP: Are you saying that they would make a public claim that they're going to India for the qualified engineers, but when it came time to privately take a survey, they'd say, yeah, actually the Americans are better?

Mr. WADHWA: Well, we asked - we didn't ask them, you know, the questions that directly. We asked, for example, how does India compare to China? What skills do you find here? We asked a whole series questions, which got to the core of issues. I was a tech executive myself. I founded two technology companies and I was one of the people used to lobby for H1B Visas and I was one of the first to outsource to India and to Russia.

INSKEEP: H1B Visas…

Mr. WADHWA: Now…

INSKEEP: …where the ones that allowed qualified people to be brought here to the United States very easily.

Mr. WADHWA: Exactly. Now, when I - when I'm looking at as a researcher, I'm getting worried because what I'm seeing - the net effect of this trend is to outsource, you know, critical research and design jobs and it's not good for the USA.

INSKEEP: Have you actually changed your mind about whether it's worth it then?

Mr. WADHWA: My fear right now isn't what - isn't the current run of outsourcing. What's happening right now is fine. For example, think dress design and dress manufacturing. If you lose dress manufacturing, you still have dress design. When you lose dress design, what's left?

And that's what I'm worried about right now, that it's fine that if we outsource some of the manufacturing of goods and the lower level technology jobs. But when the research and design jobs go overseas, that's when the U.S. has a lot to worry about.

INSKEEP: Well now, if you were a tech entrepreneur once again, which I suppose you might well be at some point…

Mr. WADHWA: Yes.

INSKEEP: …what would you do differently?

Mr. WADHWA: Well, if I was a tech entrepreneur, I would act in my own company's interest and I would find the cheapest labor, the best quality I could, and I would go overseas right now. And that's where the problem is - the system that…

INSKEEP: You're telling me that even though you've done this study and you think you know better, you would still go right overseas again?

Mr. WADHWA: Well, that's what the problem is. That's capitalism. The system rewards you for doing what's in your own interests. Bill Gates' interest as chairman of Microsoft are different than Bill Gates' interest as a philanthropist.

He doesn't get paid to worry about U.S. competitiveness and to worry about social issues as the chairman of Microsoft. That's what the problem here is. That if I was a tech executive, which I've been, I will look after my company's best interests, which are to reduce costs and to gain efficiency.

INSKEEP: Vivek Wadhwa is co-author of a study that looked at the quality of engineering graduates in the United States versus those overseas. Thanks very much.

Mr. WADHWA: Sure. Absolutely.

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