We Need Foreign Talent

We Need Foreign Talent

Judy Olian

(Judy Olian is Dean of Penn State's Smeal College of Business and a leading expert in strategic human resources management.)

We are a welcoming country, a melting pot for immigrants, a society predicated on social openness and mobility. These values are at the heart of our democracy. They are also key to our continued market growth and dominance in the global economy.

The U.S. economy has expanded at a rate of 3.7 percent over the last decade and as a country we have welcomed 1 million immigrants annually. Economists attribute part of the unprecedented growth to the influx of a new labor supply. In contrast, countries that are not as willing as the U.S. to absorb new immigrants are suffering population implosion as well as brain drain. For example, Germany would have to grow its immigration rate by a factor of 20, and Japan by a factor of 50, to maintain the size of their current populations.

Even with consistent inflow of immigrants, we will suffer severe labor shortages by 2010, especially among technical professionals. Yes, there is life after this recession. The Bureau of Labor Statistics predicts that the number of technology-related jobs in the U.S. will rise from 3.3 million in 2000 to 5.5 million in 2010, with too few technically trained graduates to fill them. For example, there are less than 110,000 annual undergraduates and graduates in electrical engineering in the U.S., compared to 200,000 in China. Of the U.S. graduates, more than half of the engineering doctorates return to their home countries once they complete their degrees. With only limited numbers of domestic graduates entering the work force, American employers must turn elsewhere, to immigrants and temporary visitors from abroad to replenish an aging workforce and to fuel a growing knowledge-based economy.

That's where H-1B visas for foreign workers come into play. These are visas granted to professionals for a stay of up to 6 years in the U.S. that then can be converted into permanent residency with employer sponsorship. Georgetown University researchers estimate that as many as 710,000 individuals in this country hold H-1B visas, and more than half are concentrated in engineering programming and other computer-related jobs. Traditionally, the annual award of H-1B visas was capped at 65,000. After intense lobbying from the electronics industry at the heyday of the dot.coms, the American Competitiveness and Workforce Improvement Act was passed in 2000 raising the H-1B cap to 195,000 through September 2003. Over half of the applications in 2000 were in computer-related fields, and 42 percent of the applicants originated in India. At the peak economic boom in 2001, the INS granted a total of 163,000 H-1B visas for the year. That's 163,000 system engineers, software designers, or information security professionals available to U.S. firms they could not otherwise have hired. Congress will be re-evaluating the H-1B cap this year given expiration of the Act and excess supply of hi tech professionals.

Looking beyond present economic woes, major technical corporations in the U.S. including Intel and Microsoft are fairly glum about the prospects for an adequate pipeline of technical talent. This talent is the essential ingredient for continued leadership of U.S. corporations in the global competition for technology innovation. So over the longer term, our dependency on non-domestic talent, especially in technical areas, will persist.

But we are in a changed time, in the midst of a protracted recession, with 2 million Americans laid off in 2001 and 1.5 million layoffs in 2002 according to the outplacement firm Challenger, Gray and Christmas. And post 9-11 there are heightened needs to protect Americans from the foreign elements that seek to harm us. These difficult economic and security challenges cause friction among workers, tempting us first to protect domestic workers and to clamp down on admission of professionals from other countries regardless of the talent need. Several groups including the Institute of Electrical and Electronic Engineers - U.S.A. and the Coalition for Fair Employment in Silicon Valley are challenging visa and immigration caps that in their view disadvantage U.S. residents and citizens by creating a labor glut during this market downturn. And employers are caught in the epicenter of this dilemma.

It would be a mistake to close our national doors to outside talent and creativity. That's been an essential ingredient of our economic vitality and innovation. Employers must find the difficult balance between policies and practices that protect their long time employees, prepare for talent succession during the next economic boom, and safeguard our national security. In some instances, it's a teetering balance but it will determine our economic vibrancy into the future.

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