In tech and science, U.S. won't be first for long if Trump gets his way

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(Bloomberg) -- America’s century-old dominance in science and technology is slipping and top academics and executives worry Donald Trump’s insistence at curtailing immigration will only accelerate the decline.

At the World Economic Forum in Davos, Switzerland, several major university chiefs and research executives said Trump’s attacks on democratic conventions and jabs at foreigners risk crushing its competitive edge just as the race with China to lead a revolution in artificial intelligence and robotics heats up.

“We’ve been so lucky over the years that the best in the world have wanted to come to the U.S.,” Rafael Reif, the president of the Massachusetts Institute of Technology, said in an interview at the Alpine resort. “If all of a sudden we don’t have the MITs because no talent comes, America will hurt, and the world will hurt.”

Reif, who was born in Venezuela and first came to the U.S. as a graduate student, knows the importance of global talent better than most. About 40 percent of MIT’s faculty has international origins, making the university one of the country’s most diverse. Their work has helped MIT earn a reputation as a powerhouse in advancements in AI and other computer and life sciences.

More Difficult

But the shifting tide of U.S. influence is perceptible in Davos, an annual gathering that for decades has regarded America as the unquestioned superpower. U.S. executives, academics, and policymakers represent, by far, the largest delegation. At times, the event has taken on the air of a celebration of American accomplishment, from Google’s latest advances in artificial intelligence to world-changing medical discoveries at universities like Harvard and Stanford.

“We’re seeing a geometric expansion in the number of people being told they may have to leave the country.”

The feeling on the sidelines of the meeting this year is noticeably different. Many officials interviewed by Bloomberg News -- from both inside and outside the U.S. -- weren’t as confident about the future. They expressed concerns about Trump’s ardent attacks on immigration and what they will mean for the expertise in industry and science that’s made his country an economic dynamo.

“It’s definitely getting more difficult” to hire foreign citizens, even when all the elements of an application are in order, said Gary Pinkus, the managing partner for North America at McKinsey & Co. “We’re seeing a geometric expansion in the number of people being told they may have to leave the country.”

The Trump administration is striking at immigration on many fronts. The president declared an end to the Deferred Action for Childhood Arrivals program, which allowed undocumented immigrants brought to the U.S. as minors to regularize their status. He’s making efforts to ban the issuance of visas to the citizens of countries including Iran. Trump even offended many by referring to some African nations in a meeting with lawmakers as "shithole countries" this month.

So what does this all mean for science?

While Trump and other U.S. officials have said they want the country to continue to attract the brightest global stars, such an approach to immigration has significant drawbacks, academics say. For one thing, it’s rarely clear in advance who will make the most important discoveries; today’s middle-of-the-pack researcher might be tomorrow’s Nobel laureate.

There’s also the question of the second generation: the children of immigrants, whatever the skill level of the parents, tend to excel in academic attainment, particularly in the so-called STEM -- science, technology, engineering and mathematics -- fields.

It’s hard to exaggerate the scale of America’s historic edge in science. Four of the top five institutions in the QS ranking of world universities, one of the most prominent indexes of global higher education providers, are American, led by MIT and Stanford. Of the five most valuable technology companies in the world, four are based on the U.S. west coast. Apart from China, which has nurtured the growth of tech giants like AliBaba Group Holding Ltd. and Tencent Holdings Ltd. by largely closing off its markets to outside firms, no country has been able to create tech companies that can compete with the scale and pace of innovation afforded by the U.S. ecosystem.

“Why is the U.S. the world leader today?” asks Jeremy Farrar, director of the Wellcome Trust, which funds global scientific research. “Because it has had, independent of political persuasion, sustained investment in the basic science and translational science base for 100 years.”

That dominance may be more fragile than it appears. A huge proportion of so-called basic research, which has no immediate industrial applications but can lead to transformative discoveries down the road, depends on billions of dollars in annual federal-government funding.

“To give up that competitive position, that comparative advantage, would be tragic for the country”

The Trump administration’s initial 2018 budget proposal envisioned a cut of almost $5.8 billion in support for the National Institutes of Health, representing 18 percent of the grant-making agency’s budget. Trump also proposed slashing another $841 million from the budget of the National Science Foundation. Lawmakers have so far rejected deep cuts to science programs in their draft budget legislation.

Global Competition

Yet even before the Trump-era, science funding was failing to keep pace with economic growth. Excluding defense, U.S. federal funding for research and development declined from 0.6 percent of GDP in the 1970s to less than 0.4 percent today, according to the American Association for the Advancement of Science.

The more Trump touts his “America First” rhetoric, the more room international universities have to attract talent that would otherwise head to the U.S.

"The access to talent is important for organizations and countries alike,” said Jonas Prising, chairman and chief executive officer of Manpowergroup Inc. “When you send a message that ‘we will be more selective,’ it can also send a message talent is not welcome.”

Canadian universities, which have received large boosts in funding for AI research from Prime Minister Justin Trudeau’s government, have reported soaring applications since Trump’s election. The number of international students studying in Canada rose 11 percent in the year to November, to 192,000.

China is also making strides, emerging as a far more realistic alternative source of discoveries than it might have been a few years ago. In classic centrally planned style, China’s State Council last year unveiled a plan to create an AI industry worth $150 billion by 2030. Similar efforts are under way in life sciences and green energy – a burgeoning sector in which the U.S. is lagging Europe and Asia.

Such top-down approaches to innovation will inevitably create inefficiencies as resources are allocated according to dictates other than market forces. But it can’t be denied that a technological awakening is underway in China, said Kai-Fu Lee, a former head of Google’s operations in the world’s second-largest economy.

Between a rapidly advancing China and would-be rivals like India, to say nothing of smaller technology hubs like Israel and Singapore, aspiring innovators have more options than ever before. It’s a reality that weighs heavily on the mind of the people trying to keep the U.S. as the destination of choice for the world’s cleverest people.

“For so many years, U.S. higher education was the envy of the world. Everybody wanted to come. And to give up that competitive position, that comparative advantage, would be tragic for the country,” Peter Salovey, the president of Yale University, said in an interview in Davos. “It would be so far from the national interest.”

--With assistance from Erik Wasson and Jacqueline Simmons

Bloomberg News