Industry executives have for years bemoaned the decline in the number of U.S. college students who pursue science and engineering degrees. So far, the U.S. high-tech business has not felt an acute impact from this drop, primarily because of the steady influx into this country of foreign-born science and engineering students and graduates. But now many of the foreigners are leaving—or not coming at all—which means that the lack of U.S. engineering graduates may soon affect electronics companies more severely.

The key to producing more U.S.-born engineering graduates is to inspire U.S. kids when they are young and then make sure they receive good science and math education at the primary and secondary levels, most experts agree (see "Why Johnny can't engineer," July 2004). But that solution will take decades. "The students entering the science and engineering workforce in 2004 with advanced degrees decided to take the necessary math courses to enable this career path when they were in middle school, up to 14 years ago," notes a report published in January by the National Science Board. "The students making that same decision in middle school today won't complete advanced training for science and engineering occupations until 2018 or 2020."

Meanwhile, the United States has been able to maintain its science and engineering workforce by attracting foreign engineers and scientists, the NSB notes. Between 1990 and 2000, the proportion of U.S. science and engineering jobs performed by foreign-born people with bachelor's degrees in science and engineering rose from 11 to 17 percent; the proportion of foreign-born people with master's degrees in these fields rose from 19 to 29 percent; and the proportion of foreign-born people with science and engineering Ph.D.s rose from 24 to 38 percent, according to the NSB report. Meanwhile, the number of U.S. bachelor's degrees granted to all students in engineering has declined by 8 percent, and degrees in mathematics have dropped by about 20 percent since 1990, it noted.

Ibiquity Digital, a private startup that has developed a high-definition radio technology, is indicative of today's workforce. Of the company's 80 employees, one third are foreign-born, according to Bob Struble, president and CEO. Of that third, half are on visas. Sponsoring foreigners through the H1B process until they get a green card costs $10,000 to $12,000 per person, according to Judy Kennedy, vice president of human resources. "All else being equal, we'd prefer to hire people who don't have visa issues to deal with," says Struble. But when Ibiquity was staffing up, in 2001, it wasn't able to find enough U.S. engineers with the highly specialized skills it needed for areas such as RF engineering, DSP and ASIC programming and specific test technologies.

And it's still having trouble. The Columbia, Md.-based company recently had an opening for a manager of semiconductor testing. Its search was only within the state and metropolitan D.C. area—the company wasn't willing to pay relocation expenses. "Still, I find it hard to believe that you can't find a test engineer in Maryland," says Struble. He ended up promoting from within, even though the employee didn't have the master's degree Struble would have preferred.

Such problems are likely to get worse as the baby boomers that entered the profession in the 1960s and 1970s retire over the next 20 years. So the industry is trying to find some short-term solutions. Chief among them is to keep more of the foreign students who come here for postgraduate education. In electrical engineering, foreign nationals earn some 61 percent of Ph.D.s and 51 percent of master's degrees, says Paula Collins, director of government relations at Texas Instruments. And that's just an average. At one university where TI recruits, 90 percent of the Ph.D.s are foreign nationals, she says. "If we want to recruit at U.S. universities, then we have to have access to all the graduates." But many of the foreign nationals require H1B visas. The United States limits the number of H1B visas it grants to 65,000 a year, and that limit has already been reached for fiscal year 2004, which began October 1, 2003.

"These students are the brightest minds in the world, and they come to the U.S. to get a top-notch education," says Dave Ferrell, director of workforce strategy for the Semiconductor Industry Association. As graduate students and postdocs, they conduct research that's often funded by the U.S. government, he notes. They develop all this specialized knowledge and cutting-edge research, and "then we make them go home," says Ferrell, who is on loan to the SIA from his human resources position at IBM.

Right now the only way a foreign national can stay in this country beyond a year after graduation (unless that person marries a U.S. citizen) is to get hired and have employer sponsorship for an H1B visa. But once the 65,000 limit is reached, as it was in February of this year, that option is closed. The SIA wants the government to exempt master's and Ph.D. graduates at U.S. schools from the H1B cap, says Ferrell. "We need their talent," he says. "It's not like we are turning down U.S. kids who want to go to grad school for science and engineering."

In April Representative Lamar Smith (R-Texas) introduced a bill that would exempt as many as 20,000 foreign nationals holding a master's or higher degree from the H1B limits. But no action was expected on it this summer.

And while industry wants to encourage foreigners to stay, more and more seem to be leaving or staying away. The number of high-skill-related visas issued to foreigners has been dropping since 2001, both because of a drop in the number of applications and due to higher State Department refusal rates, reports the NSB. From 2003 to 2004, graduate school applications from international students declined 32 percent, according to a survey by the Council of Graduate Schools. The survey found that 76 percent of the responding schools reported drops from China and 58 percent reported decreases from India, the two countries that had previously sent the most graduates. The most striking decreases came in engineering and the physical sciences. Nearly 80 percent of graduate schools reported decreases in international applications for graduate engineering programs, and 65 percent reported declines in the physical sciences.

Apparently, the U.S. has erected barriers that students aren't willing to scale. Graduate schools are reporting delays in the processing of visas for international graduate applicants, particularly those pursuing study in the sciences, says the Council. "There is increasing evidence that visa-related problems are discouraging and preventing the best and brightest international students, scholars and scientists from studying and working in the United States," the Council said in a statement. "The United States cannot hope to maintain its present scientific and economic leadership position if it becomes isolated from the rest of the world."