China is a formidable and growing challenger to American economic primacy. But while it has so far relied on a low-cost manufacturing strategy for its success, it is shifting gears as a restless work force and the results of its one-child policy threaten its manufacturing advantage.
China’s forward-looking strategy focuses on being a knowledge leader and acquiring this knowledge from other countries in different ways. For instance, China has laws requiring those doing business in China to share intellectual property in a joint venture; it appropriates research; and the government even purchases innovation from Chinese companies. An example of this strategy in action is the recent announcement that Hisense, a huge electronics company based in China, is working with MIT’s Media Lab – the first alliance between the MIT Media Lab and a Chinese company – on talent training and project cooperation regarding smart technology, artificial intelligence and human-computer dialogue.
But one little-noticed strategy is a formal ten-year plan (2010-2020) backed by the Chinese government to seduce the best and brightest Chinese who have moved abroad to return. Headed by Dr. Wang Huiyao, Vice-Chairman of the China International Economic and Cooperation Society, and under the China Ministry of Commerce, this program directly contacts accomplished U.S.-trained PhDs, many U.S. citizens, and seeks to entice them to return to China with promises of huge compensation (one person told me millions of dollars per person) and great power, including top leadership positions in Chinese universities and companies.
On a panel I shared with Dr. Huiyao last year, he said China had sent 100 million students to study abroad over the past 30 years. He described his country’s National Talent Development Plan to propel China as a world leader. But Dr. Huiyao also lamented that the Chinese are not world-class innovators, a result of an education system that focuses heavily on training students to take tests rather than to be innovators. To compensate for this, he described a plan for 10,000 Chinese students to train at U.S. universities to learn the basics of innovative thinking (and open Chinese universities to a like number of Americans).
While the Chinese have developed and are executing a plan to re-gain their most highly educated citizens, Americans are assisting their efforts by denying legal status to the thousands of Chinese who earn PhDs from U.S. universities. Once we award the degrees, we have no plan for keeping the recipients here. Instead, we send them – and thousands of other foreign-born PhD graduates – to the back of the visa line. This is a terrible strategy. We are essentially training our competition. China and other rising nations know they can’t compete with America in terms of education excellence. So, they smartly “off-shore” that responsibility to us, then devise creative ways to lure their citizens back home.
Fortunately, we have bipartisan interest in changing it from both President Obama and his presumptive opponent Governor Mitt Romney. As Obama said during his 2011 State of the Union Address, “Today, there are hundreds of thousands of students excelling in our schools who are not American citizens. Some ... come here from abroad to study in our colleges and universities. But as soon as they obtain advanced degrees, we send them back home to compete against us. It makes no sense.”
Romney, speaking at a CEA and Northern Virginia Technology Council event last month, was more blunt: When a foreign student earns a PhD at an American institution, he said, “staple a green card to it.”
Yes, it can be as simple as that. The Chinese and the rest of the rising nations of the world aren’t waiting around for the United States to get its act together. They’ll gladly take the world’s best and brightest that we kick out. So America’s innovation strategy and our economic future require we engage in the war for international talent. We can’t afford not to.
Gary Shapiro is president and CEO of the Consumer Electronics Association (CEA), the U.S. trade association representing more than 2,000 consumer electronics companies, and author of the New York Times bestselling book, “The Comeback: How Innovation Will Restore the American Dream.”
