Leaders of San Diego's technology sector believe they have a lot to offer the high-tech workers of the United States. The trouble, they say, is the United States doesn't have many such workers to offer them.
The Daily Transcript's Executive Editor George Chamberlin recently sat down with local technology and biotechnology companies to discuss the state of their industry. Working in partnership with Connect, participants of the roundtable included: Lou Kelly, chairman of CCAT; Bruce Hansen, chairman and CEO of ID Analytics; Tyler Orion, chief operating officer Connect; Randy Woods, president and CEO of NovaCardia; Julia Wilson, CEO of CommNexus; Ed Shonsey, CEO of Diversa; Paul Laikind, chairman and CEO Metabasis; Stan Fleming, managing partner at Forward Ventures; Peter Farrell, chairman and CEO of ResMed; Kevin Carroll, executive director of AeA; Bob Slapin, board member at San Diego Software Industry Council; as well as Phil Baker, The Daily Transcript's Technology Correspondent.
Companies that require highly skilled workers to develop products like wireless technologies, pharmaceuticals and medical devices are having a hard time finding workers who are up to the task.
When it comes to finding American-born workers, technology leaders blame both the domestic education system and the culture in general, which they say doesn't support interests in math and science. Other countries are handing out plenty of math and science degrees, but the post-9/11 climate makes it harder to get green cards for foreign students and workers whose services would be useful.
"The number one issue of my memberships right now is recruiting a skilled work force," said Kevin Carroll, executive director of San Diego's American Electronics Association, or AeA, a technology trade group. "I had a CEO meeting (recently), about 20 people, and they all were complaining about finding people. It is a huge issue. We are not graduating enough engineers; we are not bringing in enough from outside. The question is, what are we going to do?"
There are other factors that make recruiting difficult, leaders say, particularly housing costs that prevent workers from owning homes or force them to live an hour's drive from the office.
Carroll said San Diego's housing costs are similar to those of most other high-tech centers like the San Francisco Bay area and the Northeast. Housing is generally only a problem if you want a recruit from areas with a lower cost of living. Even then, the supportive academic community of San Diego, strong business relationships and the area's geographic charms are often enough to lure top recruits. The real problem is getting access to those recruits.
"I'd say probably a third of the engineers we have are actually Ph.D. level scientists; mathematics, physics, that sort of thing," said Bruce Hansen, chairman and chief executive officer of local fraud prevention company IDAnalytics. "I'd say at least two-thirds (of those engineers) aren't American, and by the way, the other one-third are graduates we took out of UCSD, and some of those are not native American."
The issue may be gaining attention in San Diego because the area's technology sector, particularly biotech, is maturing, and therefore needs workers with higher skills, according to Randy Woods, president and CEO of pharmaceutical company NovaCardia.
"As these very innovative biotech companies are now maturing, one of the things that they're finding, like the Amylins and the Neurocrines of the world, is that before when it was all very heavily research oriented you had all the different scientific organizations here in town to draw from," Woods said. "Now as they get closer to commercialization and they commercialize products, they don't have the talent pool here to draw from."
The current trend could bode poorly for America's future in the global economy, where workers must compete against their counterparts in places like China and India. Acknowledging that the statistics he has heard are estimates, ResMed chairman and CEO Peter Farrell said China will graduate 400,000 engineers this year, India plans to graduate 300,000, and China wants to get that number to 1 million. The United States graduates about 30,000 engineers a year.
"The statistics are actually a little bit frightening," Farrell said. "It is a major national issue."
Farrell pointed out that part of the problem is cultural. In countries like China and India, students seem more inclined to go after math and science careers. Bob Slapin, who serves on the board of directors of the San Diego Software Industry Council (SDSIC), noted that while the numbers may be getting higher, this is not an entirely new topic; American parents have been telling their kids for years to get into high-tech industries. U.S. students don't seem to take to it. Carroll agreed.
"We all know the statistics. We all know that between fourth through eighth grade, (U.S. students) are OK (at math and science) and in eighth grade we start to lose them. I started thinking, What happens when kids are in eighth grade?" Carroll said. "And I would contend, not so humorously perhaps, that it's the opposite sex. The point is that it's not cool to be into math and science."
The education system in the United States seems to reflect that, experts said. Farrell said teachers were very resistant to standardized tests that he thinks would raise the math and science bar in American schools, and that when competing against other countries, that will hurt the United States in the long run.
An irony, however, is that most foreign-born high-tech workers who come to the United States for jobs are educated at American universities. With American-born students not always proving up to snuff, employers said they would gladly take these students on as workers, but they have found it hard to get them green cards and think the government should address this issue if they want U.S. companies like those in San Diego to remain competitive.
Rod Lanthorne, president of Kyocera International, said it was important to keep in mind that no trends last forever. He said he'd seen evidence that Japan, still viewed as a major competitor in the electronics sector, does not graduate nearly as many engineers as it used to.
"Twenty years ago Japan had the same sort of statistics" as China and India, he said. "Now they don't graduate engineers any more."