Date: Wed, 18 Feb 2004 11:10:41 -0800 From: Norm Matloff To: Norm Matloff Subject: "the rest of the story" on a new CMU report To: H-1B/L-1/offshoring e-newsletter I've often warned people that universities are highly corrupted by an enormous hunger for money, especially from industry. Hence we've seen fervent support by universities for industry's claims that there is a tech labor "shortage," that H-1Bs are "needed," etc. Here is what I wrote in my new paper: In addition, academia actively supported the industry's claims of a shortage, as well as the industry's demands that Congress expand the H-1B program. The universities [have] very strong incentives to back industry on the shortage and H-1B issues: Universities receive large donations from the industry. [For example] the Web page of the Computer Science Department at the University of Washington, a leading supporter of industry's labor shortage claims, showed the following as of March 16, 2000: $1.5 milion from Ford Motor Co. in research funds; ``several million dollars'' in equipment from Intel; $500,000 from Boeing for an endowed faculty chair; another $500,000 chair from Microsoft; another chair from Boeing; and finally, $3 million from the Bill and Melinda Gates Foundation for two endowed chairs. Department chair Ed Lazowska, who has been an outspoken supporter of the H-1B program, personally benefits financially from a cozy relationship with industry too. According to his personal Web page, http://lazowska.cs.washington.edu/, he is ``member of the Technical Advisory Boards for Microsoft Research, Voyager Capital, Ignition, Frazier Technology Ventures, Madrona Venture Group, and Impinj, and of the Boards of Directors of Data I/O Corporation and Lguide.com.'' The first enclosed article from Information Week reports on a new study from Carnegie Mellon University's Software Industry Center, warning us that critics of H-1B and other tech visa programs are harming the U.S. economy. Well, "the rest of the story" about this Software Industry Center is told in the second enclosed article below, a press release from H-1B king Tata Consultancy Services (TCS), titled, "TCS, Other High-Tech Leaders Launch America's First 'Software Industry Center' at Carnegie Mellon University"! So who is it that is telling us our attitudes toward importation of foreign labor are harming us--one of the major importers of foreign labor! This is really rich. And of course this CMU study cites the study of another academic: In the past, the United States took advantage of mixing American and foreign-born know-how to develop new technologies and expand the economy. The report cites a study by Annalee Saxenian at the University of California showing that new immigrants founded about one-third of all high-tech businesses created in Silicon Valley in the 1990s. "The rest of the story" there is that Saxenian's research was also funded (and published) by another industry-related source, and that Saxenian's data, upon closer inspection, actually shows that the immigrants are LESS entrepreneurial than the natives. Here is what I say about Saxenian's work in my H-1B/L-1 summary paper: Industry lobbyists often cite a study extolling the entrepreneurial activity of Asian immigrants in Silicon Valley: AnnaLee Saxenian, Silicon Valley's New Immigrant Entrepreneurs, Public Policy Institute of California. (PPIC is in funded by an industry-related source, William R. Hewlett, co-founder of Hewlett-Packard. Much of PPIC's endowment consists of Hewlett-Packard stock. See The Role and Impact of the Public Policy Institute of California: An Operating Foundation as Think Tank, David W. Lyon, presented to the PPIC Board of Directors at its quarterly meeting, March 4, 2004.)...However, the study does not claim that immigrants are more entrepreneurial than natives, and in fact the study data for Silicon Valley show that the rate of Asian immigrant entrepreneurship (29% in the late 1990s) is less than Asian immigrant representation in the tech workforce (37% in 2000). Finally, the stuff on CMM at the end of the TCS press release is a bunch of garbage, as I've said before. I'll be posting more on that point when I have a chance. Norm http://informationweek.com/story/showArticle.jhtml?articleID=17700524 Study: Foreign-Born Workers Look To Non-U.S. Locales Feb. 17, 2004 A report by Carnegie Mellon University's Software Industry Center suggests the perception that U.S. attitudes toward foreign-born workers could weaken the economy as foreign scientists and technologists go elsewhere. By Eric Chabrow American attitudes toward foreign-born workers in the wake of the Sept. 11, 2001, terrorist attacks could weaken the U.S. economy as overseas scientists and technologists go to to other countries to develop new technologies, suggests a new study from researchers at Carnegie Mellon University's Software Industry Center. A growing worldwide perception that the United States acts in a unilaterally aggressive manner and doesn't welcome foreign-born people could mean experts born in other countries could choose to conduct research and development in more-tolerant nations than in the United States, writes economics professor Richard Florida and doctoral candidate Irene Tinagli write in the report, Europe In The Creative Age. "Its [America's] direct policies restricting the flow of individuals and scientific information has unintentionally chilled the climate for all creative talent," the researchers write. The report contrasts the potential of scientific and technological innovation in Europe to that in the United States and contends that tolerance along with technology and talent play a crucial role in creating an environment to drive innovation and economic growth. Simply, more-tolerant nations will attract the best talent, according to the 48-page report released Tuesday by Demos, a London think tank. "America's current political environment may be undermining its competition advantage, for example, by restricting scientific research and making border entry harder," says Tom Bentley, Demos' director, citing stats showing that U.S. visas for foreign-born workers in science and technology fell by a staggering 55% between 2001 and 2002. For years, America possessed an unchallenged, completive advantage in its ability to attract the best and brightest from around the world. For the first time, the researchers say, that advantage seems to be imperiled. As many European countries, Canada, and Australia have liberalized their immigration policies and increased efforts to attract and retain talent, the United States has made it harder for people to enter the country. The researchers contend the key element of global competition no longer centers on the trade of goods and services or the flow of capital, but on competition for people. Though they'll be centers for cost-effective manufacturing and delivering of basic business processes, emerging giants like India and China likely won't be the economic leaders. The leadership will come from the nations that can best mobilize the creative capacities of their people and attract creative talent from around the world, the researchers say. "The more tolerant or open a nation or region is, the more talent it is able to mobilize and attract," they write. "This is a critical dimension of economic competitiveness today." In the past, the United States took advantage of mixing American and foreign-born know-how to develop new technologies and expand the economy. The report cites a study by Annalee Saxenian at the University of California showing that new immigrants founded about one-third of all high-tech businesses created in Silicon Valley in the 1990s. The United States remains the clear global leader in technology development and continues to benefit from its longstanding ability to attract top scientific, artistic, and entrepreneurial talent from around the world, Florida and Tinagli say. But, they add, traditional economic leaders can lose their position in the nascent creative economy as vibrant, new creative centers quickly emerge. "We stand at an intriguing inflection point," they write. "The United States, which has for years enjoyed a undisputed eminence in attracting the best and brightest from all countries of the world, seems poised to surrender its lead." http://www.tcs.com/0_media_room/releases/200106june/20010621_carnegie.htm TCS , other high-tech leaders launch America's first 'Software Industry Center' at Carnegie Mellon University TCS press release, June 21, 2001 Industry, Academia, Government Promote High Quality Software Development as 'Fuel for the Economy' Tata Consultancy Services (TCS), in cooperation with Carnegie Mellon University and other high-tech leaders, today launched the Software Industry Center, the world's leading university-based center to investigate emerging trends in economics, management and technology for the software industry. TCS is Asia's largest software services consultancy and the fourth fastest-growing consultancy in the United States. "Technology - particularly the development of new, high quality software technology - is the fuel of a healthy global economy from India to the United States and beyond," said Arup Gupta, president of TCS America. "The Software Industry Center will encourage healthy competition, creativity and quality processes. All of these are the key ingredients to better software technology and a growing global economy." The first of its kind in the country, the Software Industry Center is a research facility staffed by a multidisciplinary group of faculty and staff experts from many Carnegie Mellon units, including the School of Computer Science, the H. John Heinz III School of Public Policy and Management and the Software Engineering Institute. Software Industry Center researchers will examine a variety of issues that may affect established modes of competition, including: Innovation and Competition; Software Development Practices; Talent; Workforce and Human Capital; and Globalization. TCS, as a founding partner of the Software Industry Center, has first access to the research produced, has a seat on the Center's board, helps to set the research agenda, and has access to the Center's researchers and graduate students. TCS' support of the Software Industry Center solidifies its commitment to high-quality software research and development. TCS currently operates 13 Development Centers ranked at the highest levels of quality (SEI CMM Level 5) by the Software Engineering Institute. Only 36 Centers in the world (including TCS' 13 Centers) are ranked at SEI CMM Level 5. More than 9,500 TCS consultants work at this level, the largest number of any organization in the world. And, over 1100 consultants are qualified as Certified Quality Analysts, the largest number of any company in the world. "TCS' software development practices result in a superior value proposition for our customers," said Gupta. "We are continuously improving the range of our process capabilities, thereby improving the performance of our projects, and delivering timely and best-in-class solutions to clients located globally. Our partnership with the Software Industry Center enhances our capabilities and provides TCS' clients with another invaluable resource." "TCS has always given top priority to Research and Development as it significantly inputs to TCS' consulting practices in studying and inventing a number of leading-edge technology tools and engineering techniques," said Amitava Lahiri, regional manager for TCS' Pittsburgh office. "Having an office in Pittsburgh, along with our association with Carnegie Mellon University, will help TCS immensely in being at the forefront of carrying out research in tomorrow's technology and policy matters. TCS is already proud to be a founding member of the Internet Security Alliance, a joint initiative between the Electronic Industries Alliance and the Software Engineering Institute at Carnegie Mellon."