U.S.: Plenty of engineers, plenty of innovation

[R]esearchers at Duke University have determined that some of the most cited statistics on engineering graduates are inaccurate [study here]. Statistics that say the U.S. is producing 70,000 engineers a year vs. 350,000 from India and 600,000 from China aren’t valid, the Duke team says. We’re actually graduating more engineers than India, and the Chinese numbers aren’t quite what they seem. In short, America is far ahead by almost any measure, and we’re a long way from losing our edge. Unfortunately, the message students are getting is that many engineering jobs will be outsourced and U.S. engineers have a bleak future of higher unemployment and lower remuneration. This could result in a self-fulfilling prophecy, as fearful young scholars stick to supposedly “outsourcing-proof” professions. In other words, we have more to fear from fear itself.

It’s interesting how much gets lost in translation:

The word “engineer” didn’t translate well into different Chinese dialects and had no standard definition. We were told that reports received by the ministry from Chinese provinces didn’t count degrees in a consistent way. A motor mechanic or a technician could be considered an engineer, for example. Also, the numbers included all degrees related to information technology and specialized fields such as shipbuilding. There were also “short-cycle” degrees, which were typically completed in 2 or 3 years. These are equivalent to associate degrees in the U.S. Nearly half of China’s reported degrees fell into this category. … We found that the U.S. was graduating 222,335 engineers, vs. 215,000 from India. The closest comparable number reported by China is 644,106, but it includes additional majors. Looking strictly at four-year degrees and without considering accreditation or quality, the U.S. graduated 137,437 engineers, vs. 112,000 from India. China reported 351,537 under a broader category. All of these numbers include information technology and related majors.

The author’s bottom line:

We hear repeatedly that America is in trouble and that the root cause lies with our education system. There’s no doubt that K-12 science and math could be improved, and few will dispute that America needs to invest more in education and research. However, our higher education system isn’t in trouble — in fact, it’s still the world’s best. We spend the most on research, produce the most patents…

But how important is spending or producing patents?

As MIT researcher Michael Schrage pointed out in a controversial op-ed piece in the Financial Times recently, there’s no verifiable link between the number of patents granted and innovation. In fact, there’s not even a verifiable link between corporate R&D spending and innovation: “Any policymaker, chief executive or innovation champion who relies on R&D intensity and R&D budgets as a meaningful or usable metric to assess global competitiveness virtually guarantees shoddy analysis and distorted decisions. Few things reveal less about a company’s ability to innovate cost-effectively than its R&D budget.” Moreover, a recent Booz Allen Hamilton research study pointed out companies have mistaken R&D spending as a proxy for innovation. It’s just not possible to spend your way to innovation. The consulting firm analyzed the world’s Top 1000 corporate R&D spenders and found no substantial evidence to corroborate the conventional wisdom that greater R&D spending leads to more innovation. In fact, there was no link whatsoever between R&D spending and key financial factors such as growth, profitability and shareholder return.

And yet the two articles (here and here) have much in common. Like the first, the second argues that the U.S. is doing better than gloomy reports suggest. Here the issue is innovation, but again much of the confusion is definitional in nature. It’s not really fair to measure innovation on the basis of patents because:

companies no longer produce patents and innovations in the same way that they produce widgets. Focusing on a metric like “number of patents granted” is simply not an intellectually honest way of calculating how innovative a nation is.