Oct 22 2009
Manufacture or collapse?
Last night at the Royal Society I was invited to debate the question of whether manufacturing could save the UK economy or not. John Hutton, the former Defence Secretary, and several representatives of the media and business also contributed.
There is a defeatism about some British attitudes towards manufacturing, which was reflected in the voting of the audience. They were strongly of the view that manufacturing would not “save” the UK economy, and felt that its steady decline as a proportion of our total activity would continue.
There was general agreement that the UK does not value engineers and manufacturers in the way a country like Germany does. The media usually present torrid images of clapped out oily old machine tools as the backdrop for a manufacturing story. The images usually only come onto our screens if there has been a bankruptcy, a catastrophic decline in activity, or a safety problem. Schools are prone to present industry as a pollution or safety hazard rather than as a an exciting challenge to design the new and conquer the old problems.
Corporatism is alive and well, with many looking for a government “20 year plan” to chart a way to a bigger sector. The answer lies not in government offices, but in manufacturing itself. The pound has fallen a long way, so the UK can now be competitive on price and cost. There are many talented people in the UK, some now out of work. We need to find the entrepreneurs who can organise the talent, and mobilise the capital behind them.
I drew attention to the things that government can do. It could have less and more effective regulation – indeed the two often go together, as the volume and complexity of much of our present regulation gets in the way of its doing its job. All the extra financial regualiton failed to stop banks collapsing. John Hutton agreed with the proposal that we need regualtory budgets, with downward pressure on the costs government is allowed to impose on business.
We can have more competitive tax rates. Capital and labour are footloose in the modern manufacturing world. If we take too much in tax people will build their factories elsewhere. Tax takes away money needed for new equipment, for design and innovation, for marketing and sales.
I asked why it is that the UK government is so bad at buying things. The NHS purchases of drugs has been an important prop to the large and successful UK pharmaceutical industry. The substantial and badly handled defence procurement programmes have nonetheless kept industrial capacity in the UK. Yet when it comes to buying trains – paid for out of public subsidy – cars for government and quango officials, and much else, we buy from abroad. You do not see a French Minister or German broadcasters riding around in foreign vehicles, yet in the UK it seems to be de rigeur to drive or be driven in an import.
Of course we need to seek value for money by competitive purchasing. Of course we need to observe world trade rules. Yet just as we do this and buy British pharmaceuticals, surely we can do the same and buy some British trains and cars?
The overall position is clear. We have been consuming, spending, borrowing and importing too much. We need to save, invest, make and export more. There is no way around this necessary adjustment. So let’s welcome it. Let’s celebrate the engineer and the manufacturer. Let government try to act in a way which makes it more likely products will be made in Britain.
Manufacturing has to make more of its successes. Companeis have to pay engineering talent world class salaries and use the poeple concerned to design and build the products of the future. If the engineer is a manager not on the board, given a small plywood and glass box next to the shop floor, it is going to be difficult to get the engineering talent which will be offered better terms and conditions to work for an engineering consultancy or as a financial specialist in the City. Some yesterday told me they had difficulty attracting good engineers. Grand prix car makers in Britain have no such problems, because they offer an exciting project and an attractive package. The City has no problem, because it pays high salaries. Manufacturing just has to compete with these, and make sure they work the best hard once hired.
26 Responses to “Manufacture or collapse?”
John Redwood has been the Member of Parliament for Wokingham since 1987. First attending Kent College, Canterbury, he graduated from Magdalen College...
I think that the problems with manufacturing run very deep.
There are some exceptions of course, in the aerospace industry in particular, but manufacturing does not attract the brightest and the best, they go into the law, medicine, the city.
Not so in Germany, just look at Stuttgart – not a huge city, but home to Mercedes and Porsche, attracting top quality engineering graduates.
Why did General Motors’ put its European technical centre in Germany all those years ago?
The decline in engineering has happened under every government. The UK remains the only country in the world to launch a satellite into space once, now we’re overtaken by India.
What’s more we’ve stepped out of the race now, once you’re behind it’s so difficult to claw back, because the infrastructure isn’t there.
The main reason that the Germans were hit by the recession was because their export markets dried up. I wish we had the same problem, rather than the deep structural issues that exist.
Yes the UK can still shine as a specialist manufacturer in tight niches, but the days of manufacturing excellence are long over.
Would this be the same John Hutton who oversaw the sale of British Energy to the French government (EDF energy are 80% state owned) (words left out ed)?
All these new nuclear power stations are going to be built and owned by a French company (EDF), with French reactor technology (AREVA). Yet another British invention (we built the world’s first nuclear power station) that, through poor management and government, we’ve allowed others to economically exploit.
I agree with Bill when he says that “manufacturing does not attract the brightest and the best, they go into the law, medicine, the city.”
It’s to be expected when many lawyers, doctors and bankers are on £100k or more, but engineers in the widest sense might never get much more than £30k unless they go into management.
I studied computer science and linguistics, and my wife studied French and German. We both have Master’s degrees. We could both have studied law or medicine instead, but chose not to, with the result that we’re now making only a fraction of what we would have if we have made different choices when we were young.
Is it any wonder that we’re advising our kids to go into law, medicine or banking rather than engineering or similar?
Much of the manufacturing base in the UK is small businesses, be they traditional “metal bashing” engineering works, or newer disciplines such as electronics and software engineering. Many are very specialist, which makes generalisation impossible – I know companies that have gone to the wall, others who are struggling, and some who have flourished in the recession.
However, there’s no joined-up thinking going on in Government. Many small engineering works are being strangled by red tape, either by the HSE or the employment rules. Firms are having to dispose of perfectly good machinery because an HSE inspector arbitarily claims it’s not safe. Rather than replace the machinery (which cannot be afforded – forget the practicalities or cost of taking out a loan), the company just stops doing the work. How does that help anybody? The employment rules mean that companies have major legal hurdles to clear when they need to lay off staff due to lack of work, and the delay in redundancies can bring small struggling companies down.
As for “careers in engineering” – if your primary choice of employers are all small companies, you are limited in how you can grow your skills. Small companies need people who can adapt to fill many roles – this is a useful skill in this environment, but not a route to a seat on the board of a multi-national! Let’s face it, the entire board of directors for the average engineering firm is often the two blokes who initially started the company in a garage.
I totally agree. UK Plc needs to see a revival of both its manufacturing sector and its agriculture. Given that we have opted for national bankruptcy the numbers won’t add up if we continue with large imports as if nothing had happened.
However, there are huge cultural problems. The last thing that the home counties and metropolitan middle class want is for Julian and Samantha to end up in manufacturing after all that sweat over their education. Far better to be a City lawyer or banker or some kind of media hot shot. Working for Government quangos is also OK. Better paid and better prospects. The last thing anybody needs is to be stuck in some failing manufacturing town in the Midlands or the North of England. Who wants to be playing the house price game in such areas when the serious property profits are in London and the South East.
The political classes and the media don’t really understand manufacturing and are naturally suspicious of it. Ministers much prefer photo opportunities in factories wearing white coats and hard hats whilst the government car purrs away in the car park ready to take them back to London.
However, the revival of manufacturing should be encourage and enjoy a decent profile in the Conservative election manifesto.
Try looking at some of those glossy buildings in the outer suburbs of Turin if you want to see an environment in which the efforts of those who work in manufacturing are actually valued.
I have two main points to make here
1. Engineers want technical challenges. That is what they thrive on. That is why Formula 1, Rolls Royce, aerospace, Astrium, etc, have no difficulty getting engineers. The wages help too, but offer an engineer loads of money and a job with no technical challenge or a job with less money and huge technical challenges and most engineers will choose the lower paid job. They are problem solvers and a job with no problems holds no interest. Money is NOT an engineer’s main motivation. This applies to scientists as well.
2. The definition of manufacturing needs to be broadened. Software development is a form of manufacturing – it produces a product which can be boxed and sold and show up in exports, yet is it called a SERVICE industry. Web design goes under “creative” yet something that businesses can use as a tool is being made and paid for. Maybe we need to shuffle the SIC codes around a bit?
There is more to solving the manufacturing problem than worrying about cars that ministers drive around in. What is lacking is the BIG PROJECTS.
The Apollo or Space Shuttle program directly attracted lots of people into science and engineering, but they also required other supporting companies who also assisted with the production of the technologies needed. Big science produces a lot of spin-offs, some more obvious than others. One spin-off is a glut of scientists and engineers who can then be redeployed in other sectors of the economy.
Sort out the big vision and manufacturing will sort itself out.
What we may be short of is entrepreneurs with engineering aptitude. In my time at Cambridge in the sixties, the top half of the engineering intake completed their engineering studies in two years rather than three, and in their third year took a business studies course.
Part of that course involved a business game, in which the students were presented with prices and sales figures for various products, and overall company profit, and had to determine pricing policy, an advertising budget, and investment levels for production capacity and R&D. The figures were updated every simulated year, so that the results of their strategic decisions could be assessed, and adapted for the next year. No doubt the game was slightly artificial, but it got them thinking in the right way.
I think that nowadays our education system encourages us to be followers, not leaders.
Regarding which manufacturing markets to attack, we have to remember our geograhical position within Europe. We are not best placed for industries where being at the centre of a land based distribution network is an advantage; Germany is. High value niche markets suit us better. We should invest in good transport to our ports and airports. It would also be a good idea to lobby within the EU so that some of the Trans European Network money is diverted from roads and rail pointing at Germany to improving short sea shipping and links to the ports.
So, now we’re long gone you suddenly decide you need us after all. We engineers left the country in the 80s and 90s, leaving the rest of you to handle low wages, stupid managers and people who think engineers repair cars. Here in Germany we get a constant stream of disaffected Brits looking for (and finding) a better world. We get paid as much as doctors, and a Dipl.Ing. commands the same respect as a professor.
Here a small anecdote. Robert Bosch – yes, that Robert Bosch – liked to train his own mechanics and engineers. When he needed more, he attracted the best away from his competitors by offering higher wages and better working conditions. His competitors complained, it isn’t fair, you can afford to pay your workers more than we do because you are rich. No, he said, I am rich because I pay my workers more than you do.
You want us back? Pay decent wages, copyright the word Engineer, give us 6 weeks holiday and Christmas boni and a decent canteen. And pigs might fly.
Bill – Agree with your sentiments – Stuttgart then depends very heavily on one industry, a risk in itself. Also it sadly means that they don’t make very good Bankers, that I do know!
Scrapping business taxes and business rates would only lose the Exchequer about GBP 75 billion. Some of that could quicky clawed back by scrapping sheaves of regulation. Much more than that would be gained by the consequent invigoration of enterprise in the UK. If the next government has anything to contribute it would be to hang out a flag saying “UK, enterprise capital of the world”.
If manufacturing is to thrive here then it must be at the highest end. Our workforce cannot compete on cost with China or India so we have to accept that commoditised manufacturing is a thing of the past. So for governments to bang on about saving manufacturing here is a waste of breath. The only thing the govermnent can do is get out of the way of the wealth creators.
I listened to an interview with James Dyson on Radio 4 recently and the obstructionism of the planning system over his vision for a technical academy was enough to make a grown man weep. After years of battling the local planners his scheme was accepted, only to be called in by the DoE, or whatever it is called now. When it became obvious that it would take another three years for a decision he gave up. This from a man who created something over 3,000 prototypes in the many years it took for his eponymous vaccum cleaner to come to fruition. That the state should drive such a focused individual to quit is an extraordinary indictment.
The Dyson story is also a good example of how innovation and dynamism is the only way forward – having created lots of local employment in the early phase of the business, many Dyson jobs have now been moved abroad, to lower-cost locations. This is a perfectly natural process and would not be a problem were it not for the stifling effects of tax and regulation that deters investment in the next wave of innovatiion and wealth creation.
By the way, although I agree with a lot of what JR says I disagree on the procurement argument. Whenever public money is spent it should be on whatever represents the best value. Public spending should not subsidise inefficient businesses. As for ministerial motors, I agree with Boris – let them travel by train, tube and Shanks’s pony, like the rest of us.
If the cuts in carbon emissions now law are effected manufacture will collapse anyway.
Are you Mr Redwood aware of this below? Is it true this is under consideration? It mentions energy and travel but the logical extension would be food, goods and other services.
I would be the simplest most effective means of State control of our lives – the Socialist dream.
(Environmental Audit Committee minutes-House Of Commons-London)
“Personal carbon rations would have to be mandatory, imposed by Government in the same way that food rationing was introduced in the UK in 1939… Each person would receive an electronic card containing their year’s carbon credits …see the Tyndall Centre’s study on “domestic tradable quotas”… and their recent establishment on the political agenda…the card would have to be presented when purchasing energy or travel services, and the correct amount of carbon deducted. The technologies and systems already in place for direct debit systems and credit cards could be used.
Reply |: It’s not on my list of things to do
One of the problems about any form of Engineering in this country is that anyone can call themselves an engineer. I am told “An engineer will be round to fix your washing machine” – My reply “I don’t want an engineer, I am one, I want a fitter”.
When I had contacts with the Germans, I was always addressed as “Herr Ing” and treated with the same respect as Doctors and Lawyers. The French had a similar attitude and there engineering is treated as probably the top profession; in both countries the pay reflects the status of the work, unlike the UK where it is probably the worst paid of all those occupations requiring formal qualifications.
My father was an accountant and Company Secretary; he urged me to consider doing similar work, but I insisted that it was not for me. Looking back, financially, it was probably one of the worst decisions that I made in my life. Yes I enjoyed my work, but in retirement I am probably the worst off of all the various professionals that I know and would certainly not recommend anyone intending to work in he UK to go into engineering.
Let’s not get carried away.
My Great Grandmother was the daughter of a very rich land owner and she fell in love with my great grandfather way back in the 1890s. Oh dear – he was “in trade” because he was interested in bicycles. So the romance was cancelled.
Luckily for me, they met in secret and eloped!
After 1918, the cycle expert launched into early cars and turned into Haynes Motors of Maidstone.
All this stuff about manufacturers not being appreciated is not new.
The answer lies in the changes to the emphasis of secondary education outlined during the Party Conference. The initial aspiration is for twenty specialist technical schools. A Conservative Government should aim for at least five times this number over the next two decades. This would be a true legacy
The 1944 Education Act legislated for a tripartite system of grammar/technical/secondary modern. But the few technical schools that were established were sacrificed for the comprehensives. What a wasted opportunity!
As a generalisation politicians don’t understand engineering or engineers. How many politicians are engineers or have done an engineering degree? Most seem to me to be lawyers, or accountants, we have far to many of them! Someone once said to me the reason there are no engineers in politics is due to them all working to keep the country going, no time for politics.
I have worked as the most senior engineer on several sites within the food and drink industry and trying to get anything done in the right manner is almost impossible. I am not suggesting for one minute that engineers should have a bottomless pit of money, but sometimes an extra 10% can make a huge difference to how a project will turn out in the long run over years.
And then you have the engineers reporting at a lower level to production all to drive down the costs of employing you. The thought of getting a job that pays £65K is a dream for most engineers.
Daedalus
AH ! At last a politician who recognises the value of engineers.
You are one of the few.
Speaking as a fully time served engineer who completed a 5 year apprenticeship, and continued with study for another 4 years afterwards, and is thus highly qualified.
I was employed in the R&D department of a major motor accessory manufacturer and supplier, initiating projects from inception to manufacture.
I left some 10 years after qualification.
Reason: Labourers on a building sites were earning up to 50% more than I could.
Job satisfaction only takes you so far when you have a family depending upon your earning capability.
Whilst I now run my own business in the Construction industry, I still keep in contact with many who are in the engineering sector, and so am aware of what is going on in that industry, and they are falling like flies, as companies purchase from abroad.
I agree if you are at the cutting edge of technology then fine, but if not, then forget it, we simply cannot compete with those abroad on price, and price is king. Its not just labour cost its the cost or rental of buildings, machinery, business rates, insurance, etc etc.
The problem John is that people who work with their hands (and creative brains) are simply not valued in this Country, as they are in many others, and have not been so for the past 40 years.
Politicians have in part been to blame, as have those in education, the accent for years has been better go to University otherwise you may end up in a factory.
Gone are the days when we produced fully qualified tradesmen, now its a quick 6 week traning course at a Government centre, and hey ho you are qualified, its a joke.
If you are ever unlucky enough to have one of these people turn up for a job or to do work for you, the results will speak for themselves.
The problem you now have is that not many who have had the proper experience and training are still working many are now retired, and so those skills will be lost for ever.
We reap what we sow.
We cannot compete with low cost low tax economies that disregard health and safety, decent employment practises, and protection of intellectual property. It is for these reasons that mass manufacturing in the UK cannot succeed. Manufacturing also depends on a decently educated and trained workforce, our record in these areas is wanting.
So niche very unique stuff while we have a lead maybe, once it turns into commodity “turn a handle” manufacturing – no chance.
I agree with most of JR’s points and those made by Hawkeye, Robert Oxford and Brian E in particular.
Manufacturing is too narrow a term, if you re-define manufacturing as technology, engineering, manufacture and science then you get a very different picture of UK accomplishment and potential. The 2009 Nobel prize for Physics was awarded to Charles Kao who invented effective fibre optics while at STC, the whole world is dependent on that technology for communications, information access and dissemination. Unfortunately, we don’t really celebrate such accomplishments and potential, instead it’s the TV personality or soccer player who get all the civic pride.
Recently the PM congratulated a sportsman for getting to number 1 driving a car this year, I wonder if he bothered to congratulate Charles Kao who changed the world for literally everyone by creating a new technology? If he did it wasn’t highlighted to the same extent.
In the meantime much of the technology people rely on originated in the UK. For example, more than 200 million mobile phone users incuding all the GSM users in the US rely on UK developed software technology to be able to reliably use their phone anywhere in the developed world. This technology and skillset, in many respects world leading, were given away a few years ago to an Indian company, who did not have anything like the necessary skillset originally. If economics is war by other means, what should you call execs who facilitate this sort of information and skills transfer to preserve their bonuses? Should they be rewarded or punished?
This sort of excessive irresponsibility is akin to the recent behaviour of bankers but there is no sign of curtailing such destructive activity. The only option I have as an engineer is to withdraw my skills and creativity from those people. I have very little interest in working for any company where some accountant or MBA decide they can further their career and bank balance off my work and creativity by giving it away to the economic competition. This severely limits my employment opportunities in the UK.
If we are to trully become a sustainable knowledge economy then we need to start treating knowledge, skills and experience underlying key areas of science, technology, engineering and manufacturing as a valuable strategic resource and capability. We need to develop, promote and protect it appropriately.
By protection I don’t mean hide it away but make it very difficult for others to steal it or give it away without significant penalty.
As to how, I don’t think there are easy answers, but I have some thoughts;
- Reduce the financial and bureaucratic burden on innovation, Set taxes and tax reliefs to encourage R&D to be done in the UK and to stay and grow in the UK.
- Recognise that innovation comes from individuals and small informal teams, not just SMEs and businesses that can afford accountants. Why can’t I as an individual get tax relief for equipement and costs to do my own R&D as I am doing it. Innovation can take a long time so why must I wait until I get revenue which could take years and even then I probably can’t offset historic costs?
- Fix education and allow access by all ages and levels. As an adult why shouldn’t I be able to access a GCSE D&T course? I can’t figure out what is there, what is real, who I talk to, what I am allowed to do. Reduce the multiplicity of competing/duplicate activities.
- Why is everyone but the hidden unemployed allowed discounts on training!
- Reinstate the ELQ funding or equivalent. Even if I am prepared to fund my own education institutions are dropping subject areas because ELQ has been withdrawn
- Require the universities and colleges to act as centres of support for innovation, these places have facilities, and skills for that matter, which could help a lot. De-cloak the bureaucracy and make such support cost neutral for them. They are a perfect place for people to meet, learn and collaborate, to act as focal points to identify what is available or going on for people who want to innovate or use what has been innovated.
- If you must offer grants, schemes etc simplify the current mess. I can’t figure out what is there, what is real, who I talk to and what I need to do. Reduce the multiplicity of competing/duplicated schemes.
- Help innovators protect their innovations, simplify registration and recourse to law.
I had the privilege of serving a 5 year apprenticeship at the Austin Motor Co and they sponsored me on an engineering degree, a professional background that propelled me eventually to become the CEO of British Leyland’s operations in Japan. We sold thousands of MGs, Minis and Jaguars at prices far higher than domestic cars and made a profit into the bargain, despite all the quality and supply problems that BL faced at the time.
One thing that grieved me even then was the loser’s mentality that gripped our political classes. You would never see Japanese government agencies buying imported cars (except for the Emperor’s Rolls-Royce) because they saw no sense in supporting foreign competitors. Assured of big orders, the likes of Toyota would produce vehicles specifically for official use. Just common sense, and you find the same mentality in other successful manufacturing countries such as France and Germany. Yet having invested millions in nationalising BL, the British government allowed police, and other public agencies to buy any vehicle they wanted from anywhere. BL had a huge range of vehicles available and in the unlikely event that there wasn’t a suitable product they could have chosen something from Ford, Vauxhall or Chrysler that was at least made in the UK. Any police chief dreaming of buying BMWs should have been sent to see Jaguar’s or Rover’s engineers to get a proper car made for the purpose – and if they didn’t like British quality just keep on shouting about it until they got it right. That’s what I had to do to make Jaguars saleable to the Japanese!
If you are the British government living off the British taxpayer isn’t it your obvious duty to support British industry in any way you can? I have no time for these arguments about theoretical free trade or level playing fields etc as espoused by the FT or Economist when it comes to procurement. The real world is highly competitive, it’s a war out there and it comes down to a simple choice: do you want your country to be a winner or a loser?
If you want to win, support the home team, a principle which our politicians seem to have forgotten – if they ever knew it.
We no longer have an exporting manufacturing base to take advantage of the low pound.
We have an education system devoted to box-ticking and looking out for the emotional well being of <>.
We’re educating out the ability of people to think for themselves and to effectively solve problems. We’re hardly going to become a nation of inventors and entrepreneurs with an army of school leavers highly qualified in tv presenting yet unable to write properly or even work effectively without being led from task to task like a two year old.
There are two problems with manufacturing in this country.
Firstly there is where do the manual employees come from. There was a time when you could easily get an apprenticeship in just about any industry you could imagine. Now it is nigh on impossible because firms do not want to subsidise training, or even have the hassle of training someone. When an apprenticeship is advertised by my company there are always a high number of applicants, there are a high number of people willing and want to do an apprenticeship. I find it quite remarkable how many companies that advertise for time served apprenticeships whewrew I live, however when you enquire if they actually want to train someone in an apprenticeship they don’t. Maybe it’s time to require all companies to either offer apprenticeships, or offer to help the funding of an apprentice in another company. This would also help reduce the jobless total and get the younger generation into actually working rather than just expecting the government to pay for them.
The second problem is actually investing in manufacturing. This country expects almost immediate returns for any investment. The firm I work for judges everything on yearly budgets, so any investment must come out the yearly budget and must bring a saving in that budget. We had a problem with a site which had to stop a process because of problems with the way it was constructed. Because it would have cost just over £1.1 million to rebuild, it was decided to transport the product to another site at a cost of £120000, which is going up every year. This has being going on for over eleven years now and will continue. It was justified because it saved £980000 in the budget eleven years ago, and of course the manager received his bonus for saving money on his budget. He couldn’t look to future budgets and make a long term judgement on fixing that part of the site. For this country to actually manufacture to any great degree it has got to be accepted that it is going to take allot of investment and it is not going to pay off immediately.
Oh and if there apprentice wasn’t taxed on their meagre wage then the usual low wages offered to apprentices would not be so off putting to alot of people who would consider them.
Do you mean to tell me it has to be debated whether manufacturing is good for the Economy of the Country.
I used to Joke that I could run this country better than all of our MP’s put together, on my own and by spending most of my time in bed.
I stated this rather half heartedly but now I know beyond question I could.
All of te productive economy suffers from massive state parasitisn but manufacturing is more oppressed in 2 ways.
1 – the elfin-safety industry affects them far more thanoffice workers because lathes are more dangerous than typewriters. With these bureaucrats destroyung 20 times as much wealth, as a rule of thumb, as they cost government they are destroying the productive capacity of about 4 million workers, most of whom are presumably in various sorts of manufacturing.
2 – electric power is the lifelblodd of the country but even moreso of manufacturing. Because our Luddite government has doubled the cost of electricity & looks to be going to raise it another 60% & bring about blackouts, when they could have halved it with nuclear, we gardly look like a food place for maunfacturers to invest.
That Chinese workers earn 10th as much as ours is less important, because they don’t have the same skills as still exist here, than the fact that Chinese electricity, indistinguishable from our own, costs 1/4 of ours.
Both of these are politician-inflicted & self-removable handicaps.
Germany has a declining supply of engineering graduates which is why German companies relocate to Czech Republic or Slovakia. German employers also complain about semi-literate school-leavers especially from those areas where the SPD imposed comprehensive schools – Gesamtschulen
The USA has a shortage of engineers and imports from India. Those doing graduate degrees in hard sciences are less likely to be American and more likely to be Chinese or Indian or Korean or Taiwanese…….there are however jobs for MIT graduates building quant models on Wall Street where PhDs in Physics can be hired cheaply to build models for bond trading funds and I-banks.
Germany again, to complete the story a bit. Germany is a federal state, which means to us that every Land has its own education system. The most successful regions with regard to high tech are Baden-Württemberg and Bavaria, and it is no coincidence that these are the places where the 3-stream school system is still complete, and the exams are most difficult.
The difference is huge. In a reddish place like Berlin it is easier to pass exams, with the result that their qualifications are worth less; a teacher from a e.g. Rheinland-Pfalz will find his qualifications are not accepted in Bavaria.
We here in B-W employ many engineers from local universities, and also people from those excellent universities in eastern Germany. As a matter of fact my employer employs quite a lot of European foreigners, like me.
It was seen as a problem that many children prefer to study psychology etc than something useful. On the other hand, in engineering we need pragmatic people who would not contemplate the social sciences anyway. Since the introduction of study fees (my daughter costs us €1000 a year for Informatik) the numbers studying art History have decreased, good thing too.