TEXAS INSTRUMENTS INCORPORATED
ON BEHALF OF
THE AMERICAN ELECTRONICS ASSOCIATION
BEFORE THE
COMMITTEE ON THE JUDICIARY
UNITED STATES SENATE
FEBRUARY 25, 1998
I am testifying today as a representative of Texas Instruments and on behalf of the 3000 large and small companies that make up the American Electronics Association (AEA). Founded in 1943, AEA is dedicated to "strengthening the U.S. electronics and information technology industry's global competitive position."
Thank you for giving me this opportunity to speak to you today about our industry. Its growth has been incredible. The high technology industry added some 290,000 new jobs to the U.S. economy in the 1990s. Unfortunately, the future growth of our industry is being threatened by a limited supply of skilled workers.
Although it has become a cliché to say "our people are our strength," in the electronics industry it is a profound truth. Think about a semiconductor chip for a minute. It is made from silicon, which comes from sand, yet a completed chip can sell for as much as $400. Its value comes not from sand, but from the inspiration of the design engineer who conceives it, the ingenuity of the process engineer who develops a cost effective production process and the skill of the technician who makes the product a reality. The lifeblood of our industry really is the inspiration, ingenuity and skill of our people.
One of the questions I frequently hear is whether there really is a shortage of high tech workers? There are many job classifications that fall under the heading "high tech," but one figure says it all to me. According to a 1996 study by the Engineering Workforce Commission of the American Association of Engineering Societies, National Center for Education Statistics, fewer than 20,000 Bachelor of Science Electrical Engineering degrees are awarded each year. This is about 10,000 fewer than in the 1980s.
Yet the needs of the high technology industry are growing. A 1996 Forbes Magazine survey found that the top 10 semiconductor companies had more than 12,000 open positions. In a 1997 study, the Information Technology Association of America estimated that about 10 percent of U.S. technical jobs stand vacant because they can't be filled and recently, the U.S. Department of Commerce projected that one million new computer scientists, engineers, systems analysts and programmers will be needed between 1994 and 2005. At Texas Instruments alone, we typically have more than 500 job requisitions for skilled talent outstanding at any one time, over 80 percent of which require a technical background.
Is the problem low wages? No. When you have more than 500 job openings and competitors at your door luring your people away, it makes no sense to "save" money this way. In fact, recently one of our competitors erected a billboard across the freeway from TI's headquarters. It read "Why Did the Engineer Cross the Road?…To Get the Better Job."
One of the ways we have dealt with the shortage of trained U.S. people has been to look to foreign nationals, many of whom come from U.S. universities. According to a 1994 report of the American Association of Engineering Societies, 33 percent of all Master of Science and 52 percent of all Ph.D. degrees conferred by U.S. institutions in the 1993/94 school year went to foreign nationals. Specific to the engineering field, this same report found that 824 of 1597 or 52 percent of Ph.D. degrees in electrical engineering went to foreign nationals. This raises the issue of education, which I will touch on in a moment.
But rather than quoting data about the applicant pool, I would like to talk to you about who these people are and why we hire them. Last week I asked TI managers in our Semiconductor business to tell me about the contributions of their foreign national employees. From Raj Talluri, Branch Manager in our Media Technologies Group, I learned about Jie Liang. TI obtained an H-1B visa for him and in the two years he has been with the company, he has developed complex integrated circuits for use in applications such as, digital still cameras, wireless video and HDTV. A native of the People's Republic of China and a Cornell graduate, he has already applied for four patents since coming to TI.
Alan Gatherer, Branch Manager of Wireless Communications, sent me his own biography. Alan came to the United States from Scotland on a student visa to attend Stanford. Fortunately for TI and the U.S., from the standpoint of the visa process, Alan became a permanent resident through marriage to an American citizen while at Stanford. If he had not, an H-1B visa would have been the visa path for him to stay and work in this country. Since coming to TI, he has presented numerous papers at conferences and to technical journals, but his most notable achievement to date has been the patent he received for his work on the integrated circuits that are the brains of the ADSL modem. This special purpose modem will allow PC users to transmit data at speeds up to 30 times the speed of conventional modems. This will facilitate faster Internet access, enhance video on your PC screen and a host of other applications.
It will be increasingly difficult to entice talented people like Jie Liang and Alan Gatherer to work for American companies if the availability of the H-1B visa remains in jeopardy. As you know, current U.S. law places a cap of 65,000 on the number of H-1B visas granted each year. In August 1996, the Immigration and Naturalization Service (INS) reported for the first time that the cap had been reached. As a result, TI was forced to terminate the employment of some 16 people whose F-1 practical training period had expired before their H-1B visas could be obtained. Fortunately the INS revised its count and when visas for the 16 were granted, TI rehired them. Had H-1B visas not become quickly available, these highly trained, extraordinarily qualified individuals would have been forced to leave the U.S. And, most likely, their talents would have been permanently lost to American enterprise, but not to our foreign competitors
We hire foreign nationals not because they are a source of cheap labor -- they are not -- but because we need engineers to continue to grow in a fast paced industry. TI needs more engineers than the supply of engineering graduates who are U.S. citizens. We understand that unless Congress acts to eliminate the cap on the H-1B visa, it could be reached this year as early as May. Terminating engineers and sending them home is a very grave matter, because they are key members of our development teams.
As critical as foreign nationals are to our success, we recognize the vital need to encourage American children to go on in math and science. For some time, TI has been addressing this need through a number of initiatives ranging from Head Start through the university level. Here are just a few examples:
TI has worked with hundreds of math and science teachers across the country to develop a wide range of educational and graphing calculators. To extend the impact of this teaching method, TI has become the primary corporate sponsor for T3-Teachers Teaching with Technology - a nationwide initiative to revitalize the way math and science are taught in elementary, middle, high schools and colleges.
TI is a national sponsor of MATHCOUNTS, an exciting competition that gives thousand of 7th and 8th grade students a chance to race against the clock to solve challenging math problems. TI provides major funding and supplies over 900 calculators annually for local, state and national competitions.
Since 1993, TI engineers have been helping students put their competitive spirit to work in a robotics competition called Texas BEST (Boosting Engineering, Science & Technology). Each year, this high profile statewide event attracts entries from more than 80 high schools. More than 1300 students took part in the 1995 event.
TI provides work-study co-op programs, internships and summer development programs in communities where we have offices and plants. Each year, more than 500 junior college, undergraduate and graduate students from 95 educational institutions use these programs to gain work experience and needed financial support.
These are but a few examples of TI's efforts. Additional programs have been implemented by many of the AEA's 3000 members. And more are being initiated each year to address this critical issue.
I frequently hear the concern that American companies bring in foreign nationals at the expense of our own employees, who with some specialized training, could step into better positions and fill our needs. At TI, we are committed to equipping our employees to meet the higher demands of the global marketplace. TI asks each employee to spend a minimum of 40 hours per year of their working time in training, but many of our employees pursue training far in excess of this minimum requirement. In fact in 1997, the average training hours per worker was 82.6, more than double the minimum requirement. This policy represents an investment of $100 million per year in training for our U.S.-based employees.
This commitment to workforce development includes basic skills instruction for our hourly employees, who work in our manufacturing plants. Those who need remedial work receive classroom training to improve their math and reading skills. Between now and the turn of the century, TI will invest many millions in basic skills testing and remedial instruction.
It also includes more advanced training and support for university education. TI is sponsoring a joint program with Southern Methodist University to train hardware engineers and technicians in the software and data processing fields. More than 200 TI employees have taken part in the courses.
Electronics is a growing field, with exciting work and high pay. In the Dallas area, an electrical engineer fresh out of college can expect to earn $45,000 in his or her first year in the workplace. An engineer graduating with a Ph.D. will receive offers closer to $70,000. The solution to the shortage is not, as some have suggested, to cut access to foreign talent and wait while the promise of high wages pulls U.S. students through the pipeline. In an industry in which new and different products are developed every 18 months, we cannot afford to wait for a long-term solution and still remain competitive.
In the near-term, we simply must have access to foreign nationals. Many of them have been educated in the United States. By sending them home, we are at best sending them to our own foreign plant sites, and at worst to our competitors. In the future, we will still want to hire the best and the brightest, whatever their nationality. We must, however, find better ways to coordinate the millions of dollars our industry is currently investing in education. We must also work closely as an industry to support federal, state and local efforts to enhance the U.S. education system. On behalf of Texas Instruments, I can assure you that we will continue our support for literally hundreds of education initiatives, because our future demands nothing less.
Recently I was shown a series of drawings by children asked to envision someone in the high technology industry. Their images of the folks who work in our companies are generally unflattering, but provide a wake-up call to our companies. Pictures of men with pocket protectors, crooked glasses and rumpled clothing were the norm. I have known a lot of engineers at TI, both men and women. They may not make the pages of Gentleman's Quarterly or Vogue, but they are the people making the magic that is technology. The electronics industry is working to help our kids see the possibilities. I would hope the children's drawings of the future would reflect a new appreciation for the people who power the electronics industry. And I would hope that you eliminate the H-1B cap, so that our industry and our country, to borrow a phrase, can be all it can be.
Thank you.