Citation URL: http://www.urban.org/LeonardLynn

Current shifts of technology development work by multinationals to the emerging economies is now high-end (rather than adaptive) development. Our study of processes and outcomes of globally distributed engineering involves field work at 67 sites in eight countries. Based on our fieldwork we conclude that this new shift in the location of technology work at the top of the value chain is not only distinctive, but also disjunctive, not following past trajectories of offshoring. This is occurring as a matter of incremental value chain creep, rather than guided by "strategy." The consequences are not well conceptualized by managers and policymakers.

Growing the U.S. economy and maintaining its global economic strength depends on developing the “new breed” of technical and non-technical workers who can work across national, organizational, and cultural boundaries. The US economy is not threatened by the increase of scientists and engineers in China and India, nor is there a lack of qualified science and engineering graduates in the U.S. The best competitiveness policy would focus on strengthening basic education, on the performance of those at the bottom, on providing a broad-based education, and on developing a cohort of cosmopolitan scientists and engineers who will give the U.S. “collaborative advantage.”

Hal Salzman and Leonard Lynn argue that recent reports warning of a rising threat posed by hordes of scientists and engineers graduating from Chinese and Indian universities are wrong on several counts, countering that rather than technonationalism, the United States should invest in education, research and development with a mind to the global community and markets.

As the U.S. loses its monopoly in high technology, policymakers are calling for increases in the number of science and technology graduates and in R&D investment. We believe these proposals fail to recognize what is distinctive about the emerging global economy. Our studies of engineering in multinational home countries and in emerging economies suggest that the U.S. cannot match the numbers of engineers being trained in India and China, and it is not clear how much benefits to U.S. firms will help the U.S. economy. Instead, the U.S. should seek "collaborative advantage" by developing a new role in the global technology system. We should train "global engineers," support research where there is true comparative advantage, and develop mutual-gain partnerships. [This article appeared in the National Academies of Science journal Issues in Science and Technology Winter 2006. www.issues.org.]

This paper examines offshoring of advanced engineering to emerging economies by multinational enterprises (MNEs) through case studies of U.S. and European MNE engineering development sites in China, India, and Mexico. We assess the offshoring of core technologies, impact on MNE engineering capabilities, and degree of technology transfer to emerging economies. We find significant technology transfer to emerging economies, but MNEs are developing multiple national identities, weakening their strong national ties and technology capabilities of their home countries. Although the global state of technology will benefit, it is less certain what the country-specific impact will be on jobs and economic growth.

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