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The U.S. is Losing Its Competitive Advantage

By , About.com Guide

National Research Council Warns U.S. Losing Leadership Role:

The National Research Council warned that the U.S. may lose its 50 year leadership in basic particle research by 2010. Particle physics relies on research facilities, the accelerator and the collider.

The European Center for Nuclear Research opened the world's biggest and most complex machine, the Large Hadron linear collider in Cern, Switzerland in September 2008. It will be the center of attention for particle physicists over the next 15 years because of its unique ability to address questions about the structure of matter and the evolution of the universe.

The U.S., on the other hand, will shut down the world's largest particle accelerator in 2010. To retain its leadership position, the U.S. needs to increase its particle physics research budget by at least 2-3% per year.

U.S. Slips in Training Engineers:

Furthermore, since the 1980’s, Chinese college enrollment has quadrupled to 20 million. They graduate 200,000 engineers per year, compared to 60,000 in the U.S. (Source: Computer Systems Policy Project).

U.S. Companies are Outsourcing Skilled Jobs to China:

China's technology exports total $8 billion, while U.S. technology exports to China are only $1.6 billion. However, China's "exports" are from U.S.companies like Intel, Motorola, Microsoft and Cisco Systems to take advantage of China's technologically trained labor force. Wages for these workers are 88% less in China than in the U.S.

Chinese technology firms are increasing their skills. These companies include semiconductor companies (e.g. Semiconductor Manufacturing International), telecommunication equipment manufacturers (e.g. Huawei, ZTE Corporation) and Internet portals (e.g. Baidu, Alibaba/eBay partnership).

U.S. Slips to #2 in WEF Global Competitiveness Report:

The World Economic Forum (WEF) reported that the U.S. slipped from #1 to #2 position in its 2009-2010 Global Competitiveness Report. According to the WEF, a highly competitive country is one that has high productivity, and therefore high prosperity, return on investment and economic growth. Switzerland moved up from #2 to #1. The U.S. fell as a result of the crisis in its financial markets and weaker macroeconomic fundamentals.

U.S. Had Been #1:

In the 2006-2007 WEF Report, the U.S. was sixth because its 2008 budget focused on defense and homeland security rather than workforce education and science research. The U.S. jumped up to #1 in the 2007-2008 Report and stayed there in 2008-2009 Report. This was due to its innovative companies, excellent university system and strong collaboration between the two in research and development. (Updated December 30, 2009)

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