From the Science and Engineering Indicators 2012

Source: National Science Board

"The United States remains the global leader in supporting science and technology (S&T) research and development, but only by a slim margin that could soon be overtaken by rapidly increasing Asian investments in knowledge-intensive economies.......According to the new Indicators 2012, the largest global S&T gains occurred in the so-called "Asia-10"--China, India, Indonesia, Japan, Malaysia, Philippines, Singapore, South Korea, Taiwan and Thailand--as those countries integrate S&T into economic growth. Between 1999 and 2009, for example, the U.S. share of global research and development (R&D) dropped from 38 percent to 31 percent, whereas it grew from 24 percent to 35 percent in the Asia region during the same time."

Worldwide, commercial KTI exports have grown faster than their KTI production, indicating increased globalization in these industries.

• The export share of commercial KI production rose from 5% in 1995 to 8% in 2010 suggesting a modest rate of globalization. Advances in information and communications technology (ICT) and emerging capabilities in both developed and developing countries, such as India, are driving globalization of commercial KI services.
• The export share of HT manufacturing production rose from 36% to 53% in 2006 before drifting downward to 50% in 2010.

The United States is the second-largest exporter behind the EU of commercial KI services and runs a large surplus. In HT goods, the United States has lost export share and faces a widening trade deficit.

• The United States exported $290 billion of commercial KI services (business, computer and information services, finance, and royalties and fees), with a 22% share of global exports behind the EU's 30%. The Asia-8 and China are the next two largest exporters with global shares of 15% and 8%, respectively.
• The U.S. trade surplus in commercial KI services rose from $55 billion in 2000 to reach more than $100 billion in 2009; during this same period, however, the U.S. trade deficit in HT manufacturing goods grew.
• China's and the Asia-8's surpluses in commercial KI services have grown over the last decade to reach about $30 billion in 2009. The increase in the Asia-8's surplus reflects rising surpluses in computer and information services.

While the U.S. share of global HT exports declined, China became the world's largest exporter of HT goods.

• The U.S. share of global HT exports rose from 19% to 22% from 1995 to 1998 before declining to 14%–15% during the period from 2003 to 2010 because of losses in communications and computers. The U.S. deficit in HT trade widened from $67 billion to $94 billion during the 2000s, driven by rising deficits in communications and computer goods.
• China's share of global HT goods exports more than tripled, from 6% in 1995 to 22% in 2010, making it the single largest exporting country for HT products. China's trade surplus in these products increased from less than $20 billion in 2002 to nearly $160 billion in 2010, largely because of rising surpluses in computer and communications goods.
• China's rise as the world's major assembler and exporter of many electronic goods is reflected in a sharp increase in China's share of imports of intermediate communications and computer goods originating from other Asian economies. Most of China's exports of electronics goods are destined for the United States, the EU, and Japan.

We actually want an economic convergence of poor countries toward rich countries in order to reduce the worst aspects of poverty. The Asia 8 have a huge portion of the world's poor.

We also want a convergence in knowledge generation -- at least in the sense of science -- since scientific knowledge benefits all. The convergence in fundamental research and development means that the other 95 percent of the world's population is beginning to pick up and do its share of global research.

We also know that in the field of computers, software and knowledge services represent the more expensive part as compared with hardware.

Still, we want to remain competitive in the global markets. We have been doing so in large part by importing talent from other countries. We should of course continue to offer opportunities to live and work in the United States to those talented people who bring their talent with them, but we need to get our own students to go into the economically productive fields. While we need young people to chose science and engineering in college, we also need K-12 to prepare kids better to want to go into science, technology and engineering fields in college and beyond. A recent report from the National Science Board has three sets of recommendations:

• Provide opportunities for excellence.
• Cast a wide net
• Foster a supportive ecosystem

I would stress that neglecting the education of Blacks, Hispanics and the White underclass is a huge waste of talent that we increasingly need to develop.