Engineers are the world’s problem-solvers, but will creating more of them fix what ails some regions?
Policymakers must think so.
The pursuit of science, technology, engineering and math (STEM) degrees is no longer simply one of personal interest or professional ambition; it is now also considered an economic imperative and public priority for regions. Changes in the curricula (and even names) of local schools, as well as state and federal education spending, reflect a clear policy assumption: Local economies benefit when scientists make discoveries, engineers solve problems, and computer experts program solutions. The places that can attract or develop these professionals are seen as potential winners in today’s technology-driven economy.
The certainty of this conventional wisdom drives countless interventions targeted at growing local STEM “pipelines.” Yet, an important question remains: Does a greater supply of STEM-degreed workers actually generate economic gains for regional economies? New research suggests that (largely) imitative efforts to expand the ranks of STEM workers may not work—because they neglect important differences in regional demand for these skills, as well as the importance of other skill sets for regional competitive advantage.
Why? Because implicit in many STEM initiatives is the belief that a larger pool of workers educated in STEM will lead to the technological innovations, new products, and new processes that drive employment growth and economic well-being. Yet it’s unclear whether mastery of specific technical skills creates new products and markets, or if entrepreneurial talents—recognizing trends, envisioning opportunities, assessing risk, and persisting in the face of obstacles—are what really generate growth. Focusing solely on technical aspects of innovation minimizes the importance of other skills, such as problem-solving, critical thinking, teamwork, communication, and resilience.
Research indicates that:
Not all STEM jobs require a college degree.
STEM is more than just scientists, engineers, and software developers. Many technical and mechanical jobs, such as electro-mechanical technicians, industrial production managers and CNC machine programmers, require advanced STEM capabilities. These STEM jobs are associated with higher regional wages and other measures of regional economic well-being.
STEM investment may not bring employment growth.
Despite the benefits associated with a higher concentration of regional employment in STEM jobs, investing in STEM talent as an economic development strategy isn’t necessarily a jobs program. Why? Because occupations with higher STEM requirements tend to employ disproportionately fewer workers.
Not all high-paying jobs require STEM degrees or skills.
Occupations with higher STEM requirements tend to pay higher wages, but so do occupations demanding high-level “soft” skills (i.e., critical thinking, problem solving, teamwork and communication). The occupations that pay the highest wages are those requiring both high STEM and high soft skills. These occupations include scientists, engineers, software applications developers, and doctors, but also industrial production managers, science teachers, and certain business operations specialists. In addition, some occupations that require high-level soft skills but low-level STEM skills—chief executives, managers, lawyers, teachers, financial advisers and mental health counselors—reward workers with higher wages.
Highly skilled STEM jobs benefit regions, but so do ones requiring high levels of soft skills.
A region may see improved economic well-being from promoting STEM skill development, but regions can also benefit from focusing on soft-skill development. In my study, regions with greater concentrations of workers in high-level soft-skill, low-level STEM-skill jobs tended to enjoy higher median wages and per capita incomes. This suggests the need for greater policy focus on the development of valuable soft skills, which often cut across a large variety of occupations.
Low-skill, low-wage jobs predominate in most regions.
Economic development policy focuses largely on growing the supply of workers to fill “high-skill” jobs that benefit regional economies; not enough attention is being paid to the effects of low-skill work. More than half of all U.S. employment is relatively low-skill, and large concentrations of low-skill employment drag down regional economic well-being. Regions with a higher share of low-level STEM-skill and low-level soft-skill employment tend to have lower wages, less economic growth, lower productivity, and lower per capita incomes. These relatively low-skill occupations—which include work in food services, retail and home health care—play important roles in regional economies and provide thousands of essential jobs, but their limited pay and benefits present significant challenges not just for individual workers, but for communities as well.
Regions differ in their demand for skills.
The region in my study with the largest share of employment accounted for by engineers, scientists, software developers, and similar STEM occupations had five times more STEM employment than the region with the smallest share of these occupations. Some regions have nearly 60% of their employment in occupations requiring a bachelor’s degree, whereas other regions have 60% or more of their employment in low-skill occupations. Wide variation in skill concentrations and educational attainment reflect differences in regional industrial mixes and heritages. Despite the largely universal goal of growing the supply of high-skill workers, these differences continue to shape the demand for talent and the well-being of regions in different ways.
Imitative policies may not pay off.
Place-based initiatives that aim to grow the supply of STEM workers to spur economic development run the risk that the newly developed human capital investments (or, skilled workers) won’t stay local. Well-educated young workers tend to be highly mobile, meaning they often take their in-demand skills elsewhere without rewarding jobs, emotional attachments, or area amenities to hold them. In other words, regions may inadvertently develop talent that ultimately benefits other regions. It’s important to remember that while a failure to invest in human capital is risky, it may be even riskier to invest in skills that don’t align with the talent needs of the region’s industrial mix.
The challenge for policymakers and economic development practitioners at local and state levels is how to craft programs and strategies that support the specific talent needs of their regional economies — building on existing industrial assets while identifying new opportunities for growth. The opportunities for workers and regions with the right mix of talent and luck are extraordinary; the speed with which technology is reinventing work environments and demands for talent is equally breathtaking. But the same technologies that are disrupting the workplace can also facilitate better understanding of job demands and skill concentrations, enabling cheaper, quicker, more accessible, and better-targeted pathways to developing necessary skills and knowledge. Regions need to take stock of their own assets and invest wisely — not just imitate the STEM efforts of others.
Stewart is the author of The STEM Dilemma: Skills that Matter to Regions. This piece was originally published in the blog of management consulting firm MPI Group.
