What should really alarm us is that our capacity to so adapt is being eroded by a different kind of competition--the other pincer of the claw--as cities in other developed countries transform themselves into magnets for higher value-added industries. Cities from Sydney to Brussels to Dublin to Vancouver are fast becoming creative-class centers to rival Boston, Seattle, and Austin. They're doing it through a variety of means--from government-subsidized labs to partnerships between top local universities and industry. Most of all, they're luring foreign creative talent, including our own. The result is that the sort of high-end, high-margin creative industries that used to be the United States' province and a crucial source of our prosperity have begun to move overseas. The most advanced cell phones are being made in Salo, Finland, not Chicago. The world's leading airplanes are being designed and built in Toulouse and Hamburg, not Seattle.
As other nations become more attractive to mobile immigrant talent, America is becoming less so. A recent study by the National Science Board found that the U.S. government issued 74,000 visas for immigrants to work in science and technology in 2002, down from 166,000 in 2001--an astonishing drop of 55 percent. This is matched by similar, though smaller-scale, declines in other categories of talented immigrants, from finance experts to entertainers. Part of this contraction is derived from what we hope are short-term security concerns--as federal agencies have restricted visas from certain countries after September 11. More disturbingly, we find indications that fewer educated foreigners are choosing to come to the United States. For instance, most of the decline in science and technology immigrants in the National Science Board study was due to a drop in applications.
Why would talented foreigners avoid us? In part, because other countries are simply doing a better, more aggressive job of recruiting them. The technology bust also plays a role. There are fewer jobs for computer engineers, and even top foreign scientists who might still have their pick of great cutting-edge research positions are less likely than they were a few years ago to make millions through tech-industry partnerships.
But having talked to hundreds of talented professionals in a half dozen countries over the past year, I'm convinced that the biggest reason has to do with the changed political and policy landscape in Washington. In the 1990s, the federal government focused on expanding America's human capital and interconnectedness to the world--crafting international trade agreements, investing in cutting edge R&D, subsidizing higher education and public access to the Internet, and encouraging immigration. But in the last three years, the government's attention and resources have shifted to older sectors of the economy, with tariff protection and subsidies to extractive industries. Meanwhile, Washington has stunned scientists across the world with its disregard for consensus scientific views when those views conflict with the interests of favored sectors (as has been the case with the issue of global climate change). Most of all, in the wake of 9/11, Washington has inspired the fury of the world, especially of its educated classes, with its my-way-or-the-highway foreign policy. In effect, for the first time in our history, we're saying to highly mobile and very finicky global talent, "You don't belong here."