US National Science Board's Science and Engineering Indicators 2012. (January 26, 2012)

The overseer of the US' National Science Foundation (NSF), the National Science Board (NSB) has released its 600 page 2012 edition of National Science Indicators. And while Australia is not directly assessed many of the reports conclusions are worthy of careful consideration by our political leaders.

The report notes:

The overview focuses on the trend in the United States and many other parts of the world toward the development of more knowledge-intensive economies in which research, its commercial exploitation, and other intellectual work are of growing importance. Industry and government play key roles in these changes.

The overview sketches an analytical framework for, and a broad outline of, the main S&T themes, which it then examines through the lens of various indicators. R&D and human resources indicators feature prominently, along with indicators of research outputs and their use in the form of article citations and patents. The overview then describes the growth and structural shifts in international high-technology markets, trade, and relative trade positions.

Some of the data available as of this writing cover all or part of the period of the 2007–09 financial and economic crisis that continues to unsettle the world. The crisis has affected the range of S&T endeavors, from basic research to production and trade of high-technology goods and knowledge-intensive services.

And then concludes:

Science and technology are becoming ubiquitous features of many developing countries, as they integrate into the global economy. As a group, developing countries appear to either have been less severely affected by the worldwide financial crisis and recession than the United States, EU, and Japan, or to have recovered more rapidly. Governments in these countries have held firm in building S&T into their development policies, as they vie to make their economies more knowledge- and technology-intensive to ensure their competitiveness. These policies include long-term investments in higher education to develop human talent, infrastructure development, support for research and development, attraction of foreign direct investment and technologically advanced multinational companies, and the eventual development of indigenous high-technology capabilities.

The resulting developments open the way for widespread international collaboration in science and engineering research. The broad trend in this direction is reflected in increasing numbers of research articles in the world’s leading journals with authors in multiple countries. These researchers are increasingly able to draw on high-quality work done outside the traditional S&T locales, and international connections are deepened by globally mobile experts.

Competitive elements, such as the quest for international talent, enter as well. Once largely limited to major Western nations, the quest for international talent is now pursued by many and “brain drain” has evolved into cross-national flows of highly trained specialists. Governments are eager to develop more modern economies that will increase the wealth of their populations. They seek to establish specialty niches and indigenous world-class capacity and to become competitive in international investment, development, and trade.

The globalization of the world economy has brought unprecedented levels of growth to many countries, demonstrating that benefits can accrue to all. These trends continue, but the structural changes that are part and parcel of rapid growth bring with them painful dislocations that are amplified by the continuing changes forced by the recent recession.

Nature, in interviews, obtained mixed opinions on what those data suggest.

“One hopes that the new data will help to reinforce the message that the US government (as well as industry) needs to keep R&D investments at the top of its priorities, despite current fiscal constraints,” says Claude Canizares, vice-president for research at the Massachusetts Institute of Technology in Cambridge.

Ron Hira, an engineer and science-policy expert at the Rochester Institute of Technology in New York, says that the real problem is that the United States invests too little in R&D, but that its ability to channel that investment into high-tech manufacturing has been declining since 2000. Hira says that India and China have been more pro­active in protecting and fostering high-tech industries. In the United States, “we have a surplus of researchers doing endless postdocs”, he says. “The worry is how that translates into economic growth.”

Henry Sauermann, who studies science and innovation at the Georgia Institute of Technology in Atlanta, says The United States should take advantage of Asian ideas and expertise rather than thinking of itself as a producer of value that may be lost: “Increasingly we see China paying for research and putting it out there for everyone to use. That’s an opportunity.”

Finally, Caroline Wagner, a science-policy expert at Ohio State University in Columbus, told Nature that it is important to be aware that much of the science done in developing countries is not captured by the report, which covers only research published in journals that are indexed by Thomson-Reuters.

Then there is The New York Times' Thomas Friedman who fastens on the "number of [articles] that have recently appeared making the point that the reason we have such stubbornly high unemployment and sagging middle-class incomes today is largely because of the big drop in demand because of the Great Recession, but it is also because of the quantum advances in both globalization and the information technology revolution, which are more rapidly than ever replacing labor with machines or foreign workers".

And quoting from Adam Davidson's recent article in the Atlantic: “In the 10 years ending in 2009, [U.S.] factories shed workers so fast that they erased almost all the gains of the previous 70 years; roughly one out of every three manufacturing jobs — about 6 million in total — disappeared.”

Mr Friedman follows up with: Consider this paragraph from Sunday’s terrific article in The Times by Charles Duhigg and Keith Bradsher about why Apple does so much of its manufacturing in China: “Apple had redesigned the iPhone’s screen at the last minute, forcing an assembly-line overhaul. New screens began arriving at the [Chinese] plant near midnight. A foreman immediately roused 8,000 workers inside the company’s dormitories, according to the executive. Each employee was given a biscuit and a cup of tea, guided to a workstation and within half an hour started a 12-hour shift fitting glass screens into beveled frames. Within 96 hours, the plant was producing over 10,000 iPhones a day. ‘The speed and flexibility is breathtaking,’ the executive said. ‘There’s no American plant that can match that.’ ”

His solution to overcome looming chronic high unemployment: "Here are the latest unemployment rates from the Bureau of Labor Statistics for Americans over 25 years old: those with less than a high school degree, 13.8 percent; those with a high school degree and no college, 8.7 percent; those with some college or associate degree, 7.7 percent; and those with bachelor’s degree or higher, 4.1 percent." Therefore, "some kind of G.I. Bill for the 21st century that ensures that every American has access to post-high school education."

But is that really a solution? Nobel Laureate Economist, Paul Krugman, posits a "'Hollowing Out' in Skills Demand -- Degrees Per Se Don't Bring Dollars."

It is a truth universally acknowledged that education is the key to economic success. Everyone knows that the jobs of the future will require ever higher levels of skill. [but] what everyone knows -- is wrong.

He then gives an exmple:

...the growing use of software to perform legal research. Computers, it turns out, can quickly analyze millions of documents, cheaply performing a task that used to require armies of lawyers and paralegals. And Professor Krugman continues saying that's not an isolated case: [S]oftware has also been replacing engineers in such tasks as chip design. More broadly, the idea that modern technology eliminates only menial jobs, that well-educated workers are clear winners, may dominate popular discussion, but it’s actually decades out of date.

So first world societies will have to find ways that will allow the unemployed to occupy their wakeful hours if not usefully at least interestingly. And thereby lies an enormous challenge.