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number of foreign´born S&E graduates migrated to the United States。 The proportion 
of foreign´born students in S&E fields and workers in S&E occupations continued to 
rise steadily in the 1990s。 The NSB said that persons born outside the United States 
accounted for 14 percent of all S&E occupations in 1990。 Between 1990 and 2000�察�the 
proportion of foreign´born people with bachelor's degrees in S&E occupations rose 
from 11 to 17 percent�察�the proportion of foreign´born with master's degrees rose from 
19 to 29 percent�察�and the proportion of foreign´born with Ph。D。's in the S&E labor 
force rose from 24 to 38 percent。 By attracting scientists and engineers born and 
trained in other countries we have maintained the growth of the S&Elabor force without 
a commensurate increase in support for the long´term costs of training and attracting 
native U。S citizens to these fields�察�the NSB said。 
But now�察�the simultaneous flattening and wiring of the world have made it much easier 
for foreigners to innovate without having to emigrate。 They can now do world´class 
work for world´class companies at very decent wages without ever having to leave home。 
As Allan E。 Goodman�察�president of the Institute of International Education�察�put it�察�
;When the world was round�察�they could not go back home�察�because there was no lab to 
go back to and no Internet to connect to。 But now all those things are there�察�so they 
are going back。 Now they are saying�察�'I feel more comfortable back home。 I can live 
more comfortably back home than in New York City and I can do good work�察�so why not 
go back��'; This trend started even before the visa hassles brought on by 9/11�察�said 
Goodman。 ;The brain gain started to go to brain drain around the year 2000。; 
As the NSB study noted�察 �Since the 1980s other countries have increased investment 
in S&E education and the S&E workforce at higher rates than the United States has。 
Between 1993 and 1997�察�the OECD countries ��Organization for Economic Co´operation 
and Development�察�

a group of 40 nations with highly developed market economies�А�increased their number 
of S&E research jobs 23 percent�察�more than twice the 11 percent increase in S&E 
research jobs in the United States。; 
In addition�察�it said�察�visas for students and S&E workers have been issued more slowly 
since the events of September 11�察�owing to both increased security restrictions and 
a drop in applications。 The U。S。 State Department issued 20 percent fewer visas for 
foreign students in 2001 than in 2000�察�and the rate fell farther in subsequent years。 
While university presidents told me in 2004 that the situation was getting better�察�
and that the Department of Homeland Security was trying to both speed up and simplify 
its visa procedures for foreign students and scientists�察�a lot of damage has been 
done�察�and the situation for foreign students or scientists wanting to work in any 
areas deemed to have national security implications is becoming a real problem。 No 
wonder New York Times education writer Sam Dillon reported on December 21�察�2004�察�that 
;foreign applications to American graduate schools declined 28 percent this year。 
Actual foreign graduate student enrollments dropped 6 percent。 Enrollments of all 


foreign students�察�in undergraduate�察�graduate and postdoctoral programs�察�fell for the 
first time in three decades in an annual census released this fall。 Meanwhile�察�
university enrollments have been surging in England�察�Germany and other countries。 。 。 
Chinese applications to American graduate schools fell 45 percent this year�察�while 
several European countries announced surges in Chinese enrollment。; 
Dirty Little Secret #2�此�The Ambition Gap 
The second dirty little secret�察�which several prominent American CEOs told me only 
in a whisper�察�goes like this�此�When they send jobs abroad�察�they not only save 75 percent 
on wages�察�they get a 100 percent increase in productivity。 Part of that is 
understandable。 When you take a low´wage�察�low´prestige job in America�察�like a call 
center operator�察�and bring it over to India�察�where it becomes a high´wage�察�
high´prestige job�察�
261 
you end up with workers who are paid less but motivated more。 ;The dirty little secret 
is that not only is ��outsourcing�А�cheaper and efficient�察─�the American CEO of a 
London´headquartered multinational told me�察 �but the quality and productivity ��boost�А�
is huge。; In addition to the wage compression�察�he said�察�one Bangalore Indian retrained 
will do the work of two or three Europeans�察�and the Bangalore employees don't take 
six weeks of holidays。 ;When you think it's only about wages�察─�he added�察 �you can 
still hold your dignity�察�but the fact that they work better is awful。; 
A short time after returning from India�察�I was approached in an airport by a young 
man who wanted to talk about some columns I had written from there。 We had a nice 
chat�察�I asked him for his card�察�and we struck up an e´mail friendship。 His name is 
Mike Arguello�察�and he is an IT systems architect living in San Antonio。 He does 
high´end IT systems design and does not feel threatened by foreign competition。 He 
also teaches computer science。 When I asked him what we needed to do in America to 
get our edge back�察�he sent me this e´mail�此�
I taught at a local university。 It was disheartening to see the poor work ethic of 
many of my students。 Of the students I taught over six semesters�察�I'd only consider 
hiring two of them。 The rest lacked the creativity�察�problem´solving abilities and 
passion for learning。 As you well know�察�India's biggest advantage over the Chinese 
and Russians is that they speak English。 But it would be wrong to assume the top Indian 
developers are better than their American counterparts。 The advantage they have is 
the number of bodies they can throw at a problem。 The Indians that I work with are 
the cream of the crop。 They are educated by the equivalents of MIT back in India and 
there are plenty of them。 If you were to follow me in my daily meetings it would become 
very obvious that a great deal of my time is spent working with Indians。 Most managers 
are probably still under the impression that all Indians are doing is lower´end 
software development´;software assembly。; But technologies�察�such as Linux�察�are 
allowing them to start taking higher´paying system design jobs that had previously 
262 
been the exclusive domain of American workers。 It has provided them with the means 
to move up the technology food chain�察�putting them on par with domestic workers。 It's 
brain power against brain power�察�and in this area they are formidable。 From a 


technology perspective�察�the world is flat and getting flatter ��if that is possible��。 
The only two areas that I have not seen Indian labor in are networking architects 
and system architects�察�but it is only a matter of time。 Indians are very bright and
they are quickly learning from their interaction with system architects just how all
of the pieces of the IT puzzle fit together 。 。 。 Were Congress to pass legislation
to stop the flow of Indian labor�察�you would have major software systems that would 
have nobody who knew what was going on。 It is unfortunate that many management 
positions in IT are filled with non´technical managers who may not be fully aware 
of their exposure 。 。 。 I'm an expert in information systems�察�not economics�察�but I 
know a high´paying job requires one be able to produce something of high value。 The 
economy is producing the jobs both at the high end and low end�察�but increasingly the
high´end jobs are out of reach of many。 Low education means low´paying jobs�察�plain 
and simple�察�and this is where more and more Americans are finding themselves。 Many 
Americans can't believe they aren't qualified for high´paying jobs。 I call this the 
;American Idol problem。; If you've ever seen the reaction of contestants when Simon
Cowell tells them they have no talent�察�they look at him in total disbelief。 I'm just
hoping someday I'm not given such a rude awakening。
In the winter of 2004 I had tea in Tokyo with Richard C。 Koo�察�chief economist for
the Nomura Research Institute。 I tested out on Richard my ;coefficient of flatness;��
the notion that the flatter one's country is´that is�察�the fewer natural resources 
it has´the better off it will be in a flat world。 The ideal country in a flat world 
is the one with no natural resources�察�because countries with no natural resources 
tend to dig inside themselves。 They try to tap the energy�察�entrepreneurship��
creativity�察�and intelligence of their own people´men and women´rather than drill


an oil well。 Taiwan is a barren rock in a typhoon´laden sea�察�with virtually no natural 
resources´nothing but the energy�察�ambition�察�and talent of its own people´and today 
it has the third´largest financial reserves in the world。 The success of Hong Kong��
Japan�察�South Korea�察�and coastal China can all be traced to a similar flatness。
;I am a Taiwanese´American with a father from Taiwan and with a Japanese mother�察─�
Koo told me。 ;I was bom in Japan and went to Japanese elementary school and then moved
to the States。 There is a saying in China that whatever you put in your head and your
stomach�察�no one can take away from you。 In this whole region�察�that is in the DNA。
You just have to study hard and move forward。 I was told relatively early by myteachers��
'We can never live like Americans and Canadians。 We have no resources。 We have to 
study hard�察�work hard�察�and export hard。';
A few weeks later I had breakfast in Washington with P。V。 Kannan�察�CEO of 24/7 Customer。 
When it comes to the flat world�察�said P。V。�察�he had just one question�此 �Is America
prepared�拭�It is not。 。 。 You've gotten a little contented and slow�察�and the people
who came into the field with ��the triple convergence�А�are really hungry。 Immigrants
are always hungry´and they don't have a backup plan。;
A short time later I read a column by Steven Pearlstein�察�The Washington Post's business 
columnist/reporter�察�under the headline ;Europe's Capitalism Curtain。; From Wroclaw�察�
Poland ��July 23�察�2004���察�Pearlstein wrote�此 �A curtain has descended across Europe。



On one side are hope�察�optimism�察�freedom and prospects for a better life。 On the other 
side�察�fear�察�pessimism�察�suffocating government regulations and a sense that the best 
times are in the past。; This new curtain�察�Pearlstein argued�察�demarks Eastern Europe�察�
which is embracing capitalism�察�and Western Europe�察�which is wishing desperately that 
it would go away。 
;This time�察�however�察�it is the East that is likely to prevail�察─�he continued。 ;The 
energy and sense of possibility are almost palpable here 。 。 。 Money and companies 
are pouring in´not just the prestige nameplates like Bombardier�察�Siemens�察�Whirlpool�察�
Toyota and Volvo�察�but also the network of suppliers that inevitably follows them。 
At first�察�most of the new jobs were of the semi´skilled variety。 Now they have been 
followed by design and engineering work that aims to tap into the largest concen264 
tration of university students in Eastern Europe 。 。 。 The secret isn't just lower 
wages。 It's also the attitude of workers who take pride and are willing to do what 
is necessary to succeed�察�even if it means outs

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