Friday, September 14, 2018

Shortage of STEM graduates a myth in Europe and US

STEM is an acronym for science, technology, engineering, and mathematics and because of the importance of innovation for growth in a modern economy the term that was coined by the US National Science Foundation, has become a buzzword in many countries.

The high tech sector has been crying wolf for many years about the shortage of STEM graduates but there is no shortage and the motivation is to have a big pool that would enable it to select the cream.

In 2015, according to the US Department of Commerce last year, there were 9.0m US workers in STEM jobs, or 6.1% of the workforce. The STEM occupations are in four categories: computer and maths, engineering and surveying, physical and life sciences, and STEM managerial occupations.

The Department says there are many more workers with a STEM degree (11.9m) than there are workers in STEM occupations. About two-thirds of the workers with a STEM undergraduate degree work in a non-STEM job while life and physical science majors are the STEM degree holders most likely to work in non-STEM jobs; 83% of these graduates are employed outside of STEM fields.

A report for the European Commission in 2015 said that at an aggregate level, data from Cedefop (European Centre for the Development of Vocational Training) show that STEM employees constituted 6.6% of the total European workforce in 2013, up from 6.1% in 2003, with close to 15m STEM employees. Around 3m (21%) of the estimated 15m STEM professionals were employed in high-tech industries while 12m (79%) were employed in non-high-tech industries.

UK STEM study

A new study published in 2018 by the University of Leicester and the University of Warwick, has debunked the argument that there is a shortage of science graduates.

The study has found that most science graduates choose not to – or are unable to – work in highly skilled STEM occupations at any time in their career.

The research by Prof Emma Smith of the University of Warwick and Dr Patrick White of the University of Leicester, showed that only a minority of science graduates ever work in STEM occupations at any time in their careers.

Dr Patrick White said: “The findings of our new research suggests that, despite frequent and regular reports of a shortage of science graduates, there is little evidence to support these claims.

“We found STEM graduates were more likely to work in teaching and management than in key ‘shortage areas’ such as science, engineering and ICT (Information and Communication Technologies). Unlike in areas such as education and health, many workers in the science sector moved out of highly skilled STEM jobs as their careers progressed and there was no evidence of older workers moving into STEM careers later in life.”

Prof Emma Smith said: “We identified large differences in the proportion of different groups of STEM graduates entering highly skilled STEM jobs.

“While the majority of engineering graduates worked in these kinds of occupations, a relatively small number of biological science graduates were employed in these roles. Female graduates were also less likely to work in these types of jobs than their male counterparts. And graduates from post-1992 institutions were much less likely to work in highly skilled STEM jobs compared to those graduating from high status, research-intensive universities.

The study shows that the vast majority (87%) of STEM graduates are employed in graduate-level jobs. However, only just over half that ratio (46%) work in high status (HS) STEM positions. STEM graduates were employed in many different (often non-STEM) occupational groups but only a minority (about 17%) worked in the key STEM ‘shortage’ occupational areas such as science, ICT or engineering professionals 

The study says the majority of HS STEM positions are held by non-graduates. Annual Population Survey (APS) data showed that, overall, 53% of HS STEM positions were held by non-graduates. Even among younger workers aged 25-29, more than one-third (37%) of HS STEM jobs were filled by employees without undergraduate degrees.

Finding 1:
Only a minority of STEM graduates enter HS STEM occupations, even in shortage areas;

Finding 2:
The three key STEM shortage occupations (science, engineering and ICT professionals) attract only a minority of STEM graduates. The highest recruiting occupational groups are teaching and functional management;

Finding 3:
A substantial proportion of STEM graduates move out of HS STEM roles as their careers progress but few older workers move into HS STEM positions;

Finding 4:
The majority of HS STEM workers are nongraduates;

Finding 5:
There are large differences in the proportion of different groups of STEM graduates entering HS STEM jobs. Much smaller proportions of graduates in some STEM subjects, from some types of university, and from different social groups, enter HS STEM occupations than others;

Finding 6:
There is little variation between the immediate and longer-term occupational destinations of STEM and non-STEM graduates in terms of graduate-level employment.

US and Europe

According to the National Foundation for American Policy, an advocacy group, in 2015 at US universities there were only 7,783 full-time US graduate students in electrical engineering, compared to 32,736 full-time international students. Similarly, in computer science, in 2015, there were only 12,539 full-time US graduate students compared to 45,790 international graduate students at US universities.

This disparity gives America a big advantage in boosting its talent reserves, despite the anti-immigrant position of Trump.

In ICT in the EU28 in 2016, there were over 45,000 international students pursuing a masters degree or PhD  in ICT.

The US Department of Commerce says that only 34% of college-educated computer and maths workers have a degree in computer science or maths while 27% majored in the physical or life sciences or engineering. 

Of course, not all jobs in high tech firms require a tech background.

Glassdoor, a US recruitment firm,  in a survey on tech companies with at least 100 job postings on its website on a day in June, found that while 57%, or almost 71,000 open jobs at tech companies, were for technical positions, about 43%, or 53,000 current open jobs in the tech industry, didn't require a technical background. 

Some companies such as Google, hire people without a degree for tech positions.  

“There is a huge divide between the computing technology roles and the traditional sciences,” said Andrew Chamberlain, Glassdoor’s chief economist, to The New York Times (see chart above).

The newspaper said that at LinkedIn, researchers identified the skills most in demand. The top 10 in 2016 were all computer skills, including expertise in cloud computing, data mining and statistical analysis, and writing smartphone applications.

In an analysis by Edward Lazowska, a professor of computer science at the University of Washington, on the Bureau of Labor Statistics employment forecasts in STEM categories to 2024, 73% of STEM job growth will be in computer occupations, but only 3% will be in the physical sciences and 3% in the life sciences.

In 2017 US software jobs had the highest staff turnover rate. There is also a problem with freezing out older staff.

The New York Times reported in 1998:

“According to a survey conducted by the National Science Foundation and the Census Bureau, six years after finishing college, 57% of computer science graduates are working as programmers; at 15 years the figure drops to 34%, and at 20 years — when most are still only in their early 40's -- it is down to 19%. In contrast, the figures for civil engineering are 61%, 52% and 52%.”

 “I want to stress the importance of being young and technical,” Mark Zuckerberg, Facebook CEO, said at Stanford University in 2007. "Young people are just smarter. Why are most chess masters under 30? I don’t know. Young people just have simpler lives.”

Stack Overflow is a global online community for developers around the world and it produces an annual survey covering many issues — about 75% of the 55,000 to 64,000 responses in 2016 and 2017 were from the US and Europe.

The first chart below is from the 2016 survey and the second one is from the 2017 survey.

In July 2018, the Harvard Business Review reported that the average age of a successful startup founder is 45 while the average age of high-tech founders falls in the early forties.

"These averages, however, hide a large amount of variation across industries. In software startups, the average age is 40, and younger founders aren’t uncommon. However, young people are less common in other industries such as oil and gas or biotechnology, where the average age is closer to 47. The preeminent place of young founders in the popular imagination may therefore reflect disproportionate exposure to a handful of consumer-facing IT industries, such as social media, rather than equally consequential pursuits in heavy industry or business-to-business sectors...Among the top 0.1% of startups based on growth in their first five years, we find that the founders started their companies, on average, when they were 45 years old. These highest-performing firms were identified based on employment growth. The age finding is similar using firms with the fastest sales growth instead, and founder age is similarly high for those startups that successfully exit through an IPO or acquisition. In other words, when you look at most successful firms, the average founder age goes up, not down. Overall, the empirical evidence shows that successful entrepreneurs tend to be middle-aged, not young."

Then there is the lack of women in the high tech sector and in the US the low employment of minority groups.

12 statistics about women in US tech:

1.  Women own only 5% of startups.

2. They earn only 28% of computer science degrees.

3. Only 7% of partners at top 100 venture capital firms are women.

4. After peaking in 1991 at 36%, the rate of women in computing roles has been in steady decline.

5. Now, they hold only 25% of computing jobs.

6. Women hold only 11% of executive positions at Silicon Valley companies.

Read also: Mark Cuban Has a Plan to Make Silicon Valley Better for Women

7. In the high tech industry, the quit rate is more than twice as high for women (41%) than it is for men (17%).

8. Last year, venture capitalists invested just $1.46bn in women-led companies. Male-led companies earned $58.2 billion in investments.

9. While 82% of men in startups believed their companies spent the “right amount of time” addressing diversity, nearly half of women—40 percent—disagreed, saying “not enough time was devoted.”

10. For women in the tech industry under age 25, earnings on average are 29% less than their male counterparts.

11. Women receive lower salary offers than men for the same job at the same company 63% of the time.

12. About 74% of young girls express interest in STEM fields and computer science. Looking at the above statistics, it’s obvious these girls are deterred.

European Skills Index across Member States in 2016

Ireland's rating of 36 is exactly half the level of both Sweden and Finland.

European Skills IndexEuropean Skills Index  across Member States in 2016