As US competitiveness is increasingly challenged on all sides, the forced attrition of women from the science, engineering, technology, and mathematics (STEM) workforce represents an annual cost of billions of dollars. This loss comes at a time when the United States is facing an absolute decline in entry-level engineers and growing rivalry from foreign innovators. Most discussions hold that gender equality is the primary benefit of, and reason for, getting more women into science. But this is not the primary benefit. Instead, the failure to expand women’s participation in science is not simply an issue of “feminism” or civil rights but increasingly a problem for US economic security.

Problem: Decline in US Technological Capabilities

For the last decade, a parade of reports has documented a slow erosion of the United States’ relative advantage in science and technology. The alarm sounded by the National Academy of Sciences analysis, “Rising Above the Gathering Storm,” is only the latest of these troubling surveys. After almost a century of near technological predominance, the United States has become a consistent net importer of high technology, shifting slowly from a US$22.4 billion high-tech trade surplus in 1990 to a US$134.6 billion trade deficit by 2005. The United States’ share of world science and engineering research publications has also fallen; while the United States now trails even in the use of high technologies, most of which were US inventions, including (per capita) the internet (9th), broadband (12th), and cellular phones (53rd).

The implications for US competitiveness should be clear to all. National strength in science and technology directly feeds US economic growth, industrial prowess, military might, and increasing living standards. Economists estimate that half of US economic growth since World War II has come from new technology, creating productivity improvements in every sector of its economy.

After peaking during the 1990s, the wellspring of US science and technology appears to have slipped into relative decline and is evident in the broader economy. Over the last decade, US patents as a percentage of world patents have fallen by one percent each year. And while per capita patenting rates are climbing within the United States (1.66 percent annually during 1996-2005), innovation rates are rising even faster outside the United States (2.31 percent annually from 1996-2005).

Perhaps more worrying is the fact that US high-technology small business formation has dropped in every sector. This is important because small business formation represents the traditional seedbed for new technologies and industries. Hewlett-Packard, Microsoft, Apple, and Google all began in garages and university dorms as small businesses, as did many of the telecom, internet, alternative energy, and even some of the biotechnology firms of the 1990s.

In contrast, foreign firms have vastly improved their scientific and technological capabilities. We have seen the rise of technological competitors in Ireland, Israel, Finland, Taiwan, South Korea, and a half-dozen other countries. Toyota and Honda now mass-produce the most advanced hybrid automobiles. Spain is home to Europe’s first commercial concentrating solar power plant and is a lead producer of wind power technologies, and Israel’s Checkpoint is the inventor and market leader of network security “firewalls.”

China, according to most analysts, now looms as the next major technological competitor to the United States. Although the data remain cloudy, China produces at least twice the number of engineers as the United States. In published research, China now ranks second in engineering and chemistry and third in physics and mathematics. High-tech production has been outsourced to take advantage of this labor supply, making China the world’s biggest exporter of telecom equipment, computers, electronic components, and now even the world’s largest producer of solar panels.

Diagnosis: Scientist-Engineer-Entrepreneur Gap

Why has this happened? Many observers blame globalization, but these criticisms are misplaced. Certainly globalization has allowed corporations to split up their research, development, and manufacturing processes, spreading them around the world. But while opening the door, globalization did not cause high-tech production, and the high-wage jobs that accompany it, to walk out that door. Indeed, globalization could have worked in the opposite direction by providing a springboard for US technology to dominate world markets. This leads to the question: Why did the flood of competitive prowess go out of the United States rather than in?

A lack of financial capital is not the answer. Controlling for inflation, total US research and development (R&D) spending is higher now than it has ever been, at or near record levels. However, critics are correct to point out that US R&D spending per GDP peaked in 2001 and has declined ever since. US R&D outlays now trail behind the per GDP expenditures of eight other high-tech competitors, including Japan, South Korea, Switzerland, Israel, and Taiwan.

The reason for the decline of the United States’ leadership role in technology appears to be that the country has drastically slowed its production of competitive STEM workers and entrepreneurs. As Intel spokesman Howard High put it in 2005, the top high-tech firms now “go where the smart people are.” Several recent studies have shown that high-tech multinational corporations heavily base their location and outsourcing decisions on the availability and quality of a country’s STEM workforce and of the research universities that produce them. Indeed, the data reveal the drop in relative US technological competitiveness to be highly correlated with a decline in the US STEM workforce. The United States had fewer college students pursuing engineering degrees in 2005 than in 1985, despite a rising undergraduate population. In 2000, more than 25 countries had higher percentages of 24-year-olds with degrees in science and engineering than did the United States. The country is losing its lead in science and technology because it is losing its edge in producing what high-tech companies call “smart people!”

Changing Trends: Men Leaving, Women Entering

The good news is that some components of the STEM workforce are improving. Reversing the traditional trend, more women than men are now entering college and have increased their pursuit of STEM careers. Women now make up just under 60 percent of both undergraduate and master’s degree students. In college, women now spend more time studying, earn higher grades, and achieve more awards and honors than men. As a result, US women have earned the majority of all bachelor’s degrees in science and engineering since 2000.