Committee on Science and Technology
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Press Releases :: June 12, 2007

Where Are U.S. Tech Jobs Going?

Committee Continues Look into Flow of U.S. STEM Jobs Overseas

(Washington, DC) The House Committee on Science and Technology today heard from a distinguished panel of experts on the current state of technical jobs in the United States, as well as on the implications of innovation offshoring for U.S. workers and the economy.

“This Committee has been working hard to address one of the country’s most pressing issues, U.S. competitiveness,” said Committee Chairman Bart Gordon (D-TN). “As is widely recognized, our competitiveness and high standard of living is derived largely from our technological superiority. But almost on a daily basis we read announcements that more high-tech jobs are being offshored to developing countries.”

There is little dispute that technological innovation is the key to improving America’s standard of living, yet science and engineering work – the fundamental building block of innovation – has become increasingly vulnerable to offshoring.

Newspaper reports and company announcements seem to confirm that the offshoring of high-skill high-technology work is increasing, with even research moving offshore. Chairman Gordon cited numerous examples today: Accenture’s CEO announced that it will have more employees in India than the U.S. by this August; IBM is projected to have 100,000 workers in India by 2010, more than one-quarter of its worldwide workforce; companies like General Electric, Eli Lilly, Google, and Microsoft are expanding R&D centers in India and China.

“The Committee continues to be very concerned about the effects of globalization and off-shoring. The American people have been told for years that globalization will be a boon for our best-educated workers, but this has not necessarily been the case. Moreover, more evidence is mounting that the statistics we use to measure the effects of globalization and off-shoring on our economy are inadequate and mask the negative aspects of these activities. We must pay particular attention to the future health of our domestic manufacturing industries - including high-tech manufacturing - as we need to maintain good-paying jobs in the U.S,” added Committee Member Jerry Costello (D-IL).

A recent University of Texas study found that of the 57 major announcements of locations of global telecom R&D facilities in the past year, more than 60 percent were located in Asia, versus a meager nine percent located in the U.S.

As Dr. Alan Blinder, one of today’s witnesses testified, these examples seem to be only the tip of the iceberg. Dr. Blinder has estimated that more than one in four American jobs are vulnerable to offshoring. More striking is his finding that most American technical jobs in the science, technology, engineering and mathematics (STEM) fields are amongst the most vulnerable to offshoring.

“There is no single cause for the concerns being raised, and there is no single policy prescription available to address them. But looking the other way and hoping for the best -- not to mention suppressing government studies -- is irresponsible. The stakes are simply too high to adopt a ‘don’t worry be happy’ approach,” added Chairman Gordon.

There is no consensus on the likely impacts of offshoring, and the consequences of these changes are still being sorted out. Some experts argue that this offshoring trend will be as dramatic as the industrial revolution, requiring significant policy changes, while others view it as a minor phenomenon. The ambiguity is aggravated by the very poor quality data we have about offshoring.

It is the lack of quality data on offshoring that drove Committee Democrats in the 109th Congress to pursue the release of a taxpayer funded federal report on offshoring from the U.S. Department of Commerce. That report, entitled An Overview of Workforce Globalization in the U.S. IT Services and Software, U.S. Semiconductor and the U.S. Pharmaceuticals Industries, provided an in-depth analysis of the ongoing loss of U.S. high tech jobs to lower wage environments.

The message of that report: Offshoring is happening at significant levels in some industrial sectors and the phenomenon will continue and is likely to accelerate.

“We fought hard to get that offshoring report released from the Commerce Department, and we've passed a number of legislative initiatives based on the recommendations of experts from the National Academies. But this should be viewed only as a necessary start. There is much more work to be done,” said Gordon.

This hearing is the first of a series being conducted this Congress, following on the Democrats’ investigation of the matter in the 109th Congress.

“Providing high-quality jobs for hard-working Americans must be our first priority,” concluded Chairman Gordon. “I want to make it clear that I’m not casting blame or making accusations. Companies are simply responding to an increasingly globalized marketplace and high-tech workforce. What we want to do is make certain that companies find that U.S. engineers, scientists, and students are the best in the world. That is the Committee’s goal. We want to make sure that we enact the policies that keep us from offshoring our future.”



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