Lectures/Events (BMW) Brookings Mountain West
9-18-2013
The Hidden STEM Economy: The Surprising Diversity of Jobs The Hidden STEM Economy: The Surprising Diversity of Jobs
Requiring Science, Technology, Engineering, and Math Knowledge Requiring Science, Technology, Engineering, and Math Knowledge
Jonathan Rothwell Brookings Mountain West
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The Hidden STEM Economy The Surprising Diversity of Jobs Requiring Science, Technology, Engineering, and Math Knowledge
Jonathan Rothwell, PhD Associate Fellow Metropolitan Policy Program The Brookings Institution Washington DC
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Outline
1. STEM: The Conventional View 2. Redefining the STEM Workforce 3. The “hidden” STEM economy 4. The Las Vegas STEM Economy 5. Policies to boost STEM Demand and Supply
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1. STEM: The Conventional View
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“There must be a stream of new scientific knowledge to turn the wheels of private and public enterprise. There must be plenty of men and women trained in science and technology for upon them depend both the creation of new knowledge and its application to practical purposes.” -Vannevar Bush, 1945 From “Science, the Endless Frontier: A Report to the President” (Washington: U.S. Government Printing Office, 1945).
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0%
0%
6% 6%
7% 7% 8%
9% 9%
11%
15%
-2%
0%
2%
4%
6%
8%
10%
12%
14%
16%
Share of US GDP Growth by Sector, 1980-2012
Innovative High-Patenting Industries are Driving even Measured GDP Growth
Source: Moody’s Analytics/BEA
Tech share of GDP 1980 = 4% 2012 =10%
STEM-knowledge drives innovation
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Source: Brookings analysis of Georgia Tech Inventor Survey, Kauffman Foundation survey, and 2011 American Community Survey
88%
51%
10% 0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Share of inventors Share of tech companyfounders
Share of population25+
Bachelor’s of Science Holders as Share of Inventors and Tech-Founders
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The Returns to Skill Are Increasing Salary Premium for Bachelor’s Degree vs. High School Diploma compared to Premium for Working in STEM Occupation, 1950-2010
Source: U.S. Census microdata from IPUMS. Regression of ln income on dummy variable for bachelor’s degree (or STEM occupation) controlling for cubic in age and sex for employed workers. Bachelor’s premium compares only BA earners to high school graduates.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1950 1960 1970 1980 1990 2000 2010
STEM Occupation Premium
Bachelors degree premium
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There are many more job openings than graduates for computer, math, and engineering occupations
157,338 108,152
599,295 784,800
2,803,680
1,483,680
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
Engineers Computer Science andMath
Business and Finance
2012 Graduates with Bachelor's or higher 2013 Advertised Job Openings
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3%
2%
0%
4%
1%
-2%
1%
0%
-3% -3%
-2%
-1%
0%
1%
2%
3%
4%
5%
Bachelor's Degree Some College High School or Less
Annualized Growth Rates in Net Employment by Education for U.S. Economy, Tech and
Manufacturing Sectors, 1980-2011
U.S. Economy
Tech Sector
Manufacturing
2. Redefining the STEM Workforce
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Problems with conventional STEM definitions • No agreement among federal agencies
▫ The NSF uses “Science and Engineering” labor force which roughly corresponds to occupations common to workers with a bachelor’s degree in science or engineering fields.
▫ 2012 BLS task force adopted very similar approach ▫ Dept of Commerce used only part of the NSF definition and added a few
occupations to it • Arbitrary standards.
▫ Not based on knowledge or skill requirements, otherwise doctors would be included
▫ Not based on research and development activity, otherwise most computer workers would be excluded, as would social scientists
• Class bias? ▫ Computer machine programmers and all blue collar occupations are excluded, but
any computer worker in an office settings is counted. ▫ Science lab technicians are often included, but not electricians
• What about STEM community college programs, industry certifications, etc?
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The cure is O*NET
• Occupational Information Network Data Collection Program
• Department of Labor funded data collection program
• Provides the most comprehensive database of job attributes by occupation including education, training, experience, skill, knowledge, tools and technologies, interests, and activities
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The Six Core STEM Domains in O*NET Knowledge Survey and Their Survey Anchors
Highest Knowledge = 7 Least Knowledge =1
Computers and Electronics
1 3 6
Operate a VCR to watch a pre-recorded training tape
Use a word processor
Create a program to scan computer disks for viruses
Scales for Science (Physics, Chemistry, Bio), Computers, Engineering, and Math
New Brookings definition of STEM A STEM occupation is one that requires an extraordinary level of knowledge in one or more core STEM fields.
Extraordinary, here, is defined as at least 1.5 standard deviations above the mean knowledge score for that field (just over 90th percentile), where science fields are grouped together as one
Advantages over standard approach Non-arbitrary and non-biased Non-binary Self-correcting Comparability to other skills
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-15
-10
-5
0
5
10
15
20
25
1 16 31 46 61 76 91 106
121
136
151
166
181
196
211
226
241
256
271
286
301
316
331
346
361
376
391
406
421
436
451
466
481
496
511
526
541
556
571
586
601
616
631
646
661
676
691
706
721
736
751
766
781
796
STEM Score by Occupation
STEM Score = Sum(Knowledge Score – Mean Knowledge Score)
1.5 standard deviations above mean qualified for any field of STEM for binary definition
Results: More jobs, more career pathways to STEM
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Source: 2011 BLS OES and O*NET
20%
50%
5%
19%
0%
10%
20%
30%
40%
50%
60%
Share of U.S. Jobs Less than Bachelor's degreerequired
Brookings STEM definition vs NSF
BrookingsNSF
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$10,220
$8,104
$4,649
$841 $822
-$7,729 -$10,000
-$8,000
-$6,000
-$4,000
-$2,000
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
STEM Management Law Economics English All other domains
STEM knowledge is rewarded more than other types of knowledge
Marginal Effect of regression of median wages on standard deviation in STEM Knowledge for 719 detailed Occupations, controlling for Mode Education. Source: Brookings analysis of 2011 BLS OES and O*NET
3. The “hidden” STEM economy
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Literature on Sub-bachelor’s STEM contribution to innovation • During industrial revolution:
▫ Ross Thomson, Structures of Change in the Mechanical Age: Technological Innovation in the United States, 1790 to 1865 (Johns Hopkins University Press, 2009);
▫ Kenneth L. Sokoloff and B. Zorina Khan, “The Democratization of Invention during Early Industrialization: Evidence from the United States, 1790-1846,” Journal of Economic History 50(2) (1990): 363-378;
▫ Jacob Schmookler, “Inventors Past and Present,” Review of Economics and Statistics 39(3) (1957): 321-333.
• Presently in terms of lower product defects, higher capacity utilization and efficiency, and R&D quality: ▫ Philip Toner, “Workforce Skills and Innovation: An Overview Of Major Themes
In The Literature” (Paris: OECD, 2011)
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Selected Major Occupational Categories Sorted by STEM Score, with Share of Jobs that are STEM, and Share of U.S. STEM Jobs, 2011
High-STEM,
Percentage of Jobs
Share of U.S. High-STEM Jobs
Architecture and engineering 100% 9% Life, physical, and social science 87% 4% Healthcare practitioner and technical 76% 22%
Computer and mathematical science 100% 13% Installation, maintenance, and repair 53% 10%
Management 27% 6% Construction and extraction 40% 8%
. . . Production 23% 7%
. . . Food preparation and serving related 0% 0%
Healthcare support 5% 1%
Usually considered 0% STEM
Large source of STEM jobs
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10%
14%
-1%
-10%
-15%
-10%
-5%
0%
5%
10%
15%
20%
Less than a Bachelor's Degree Bachelor's Degree or Higher
Education-adjusted premium by STEM and Educational Requirements
High-STEM, any field
Not high-STEM in any field
Both STEM Groups Enjoy a Substantial Skill Premium Beyond Education
Note: Mean Sub-BA STEM Wage is $53,000, vs. $33,000 for those non-STEM sub-BA workers
Source: Brookings analysis of 2011 BLS OES and O*NET
Sub-BA STEM jobs are hard-to-fill UNLV | September 18, 2013
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30%
33%
36% 38%
39% 42%
43%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Non-STEMSub-BA
Non-STEM All Jobs Non-STEM BA STEM Sub-BA STEM STEM BA
Non-STEM Sub-BA
Non-STEM
All Jobs
Non-STEM BA
STEM Sub-BA
STEM
STEM BA
Brookings analysis of Conference Board Help Wanted On-Line and O*NET
Share of 2011 job openings re-posted after 30 days in 100 largest metropolitan areas
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1% 1%
23%
10% 11%
15%
30%
13%
5%
0%
5%
10%
15%
20%
25%
30%
35%
Bachelor's or Higher Some College High School or Less
Industry Up-Skilling: STEM Share of Occupations in High-Tech Industries by
Education of Workers, 1950-2011
195019802011
As it happens, STEM metros are:
• Richer • More innovative • More export-oriented • More resilient to economic downturn • Employ a larger share of their workers
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5. Where Does Las Vegas Fit In?
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Las Vegas MSA’s Ranking on Key STEM Metrics
Rank out of 356-358
Metro Areas
Patents per worker, 2007-2011 215
Growth rate in productivity, 1980-2010 237
STEM Bachelor's degree attainment rate, 2011 247
Average unemployment rate, 1990-2010 244
STEM knowledge of average occupation 355
STEM Share of Employment 328 Change in STEM Share of Employment, 2007-
2011 333
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Profile on Brookings website: http://www.brookings.edu/research/reports/2013/06/10-stem-economy-rothwell/profiles
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21%
15%
10% 9%
0%
5%
10%
15%
20%
25%
Sub-BA BA or higher
Education-adjusted Wage Premium for STEM Knowledge, Las Vegas vs
MSA, by Education, 2012
Las VegasAverage MSA
Las Vegas STEM Premium = 5th highest in largest 100 metros; 22nd of 348
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0%2%4%6%8%
10%12%14%16%18%
2011 Employment by Major Occupational Group in Las Vegas Compared to USA for
Select Occupations
Vegas Share ofEmploymentUS Share ofEmployment
Very high employment in lowest STEM occupations
Low employment in highest STEM occupations
Source: BLS OES. Groups are sorted by LQ (MSA Share/USA Share). Only occupations with location quotient greater than 1.2 or less than 0.8 are shown.
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Industries in Las Vegas with Highest Number of STEM Jobs in 2011
Industry Jobs
Percentage of Workers in
STEM Occupation
Average Salary
Share of STEM Workers with
Less than Bachelor's
Degree
Construction 81,220 42% $27,072 90%
Hospitals 27,198 62% $55,355 33%
Professional, Scientific, and Technical Services 56,867 29% $44,893 44%
Ambulatory Health Care Services 39,015 27% $40,233 30%
Repair and Maintenance 16,326 54% $22,304 95%
Las Vegas Metropolitan Area 1,135,137 15% $30,422 65%
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Industries with at least 500 Jobs in Las Vegas with Highest STEM Knowledge per Worker in 2011
Industry Jobs
Percentage of Workers in
STEM Occupation
Average Salary
Share of STEM Workers with
Less than Bachelor's
Degree Data Processing, Hosting and Related
Services 701 73% $75,000 76%
Mining (except Oil and Gas) 2,116 33% $67,100 67%
Utilities 6,573 37% $76,155 52%
Transportation Equipment Manufacturing 2,559 52% $63,470 72%
Repair and Maintenance 16,326 54% $22,304 95%
Construction 81,220 42% $27,072 90%
Las Vegas Metropolitan Area 1,135,137 15% $30,422 65%
Source: O*NET and American Community Survey, 2011 via IPUMS
5. Policies to boost STEM knowledge
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How to boost demand for STEM • Adopt cluster focus on growing STEM industries ▫ Skills, finance, infrastructure
• Foster entrepreneurship ▫ E.g. non-profit incubators
• Attract FDI ▫ Tax policy, marketing
• Research Universities ▫ R&D budget, SBIR, partnerships with industry
• State Fiscal Incentives ▫ R&D tax credits, investment funds
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How to boost the Supply of STEM • Improve K-12 Quality ▫ STEM targeted magnet schools (NYC, Chicago) or high
school curriculum (Virginia Beach) or non-profit programs (MESA in California)
• Expand capacity of universities and community colleges ▫ Adopt best practices in recruitment & retention
• Attract STEM-oriented establishments and their workers
• Improve workforce development ▫ Intermediation ▫ Public (WIBs) or private training (apprenticeships)
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More for information Email:
Jonathan Rothwell [email protected]
Tweet:
@jtrothwell Visit:
Brookings homepage: www.brookings.edu
Hidden STEM Economy report page: http://www.brookings.edu/research/reports/2013/06/10-stem-
economy-rothwell
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Federal Government funding for STEM Education-related Programs by Primary Objective
Millions of Dollars,
approximate Share of Total
Bachelor's degree or higher STEM Education $1,942 45%
Training or sub-bachelor's level degree education (upper limit*) $940 22%
Education Research and Development $519 12%
Pre- and In-Service Educators $312 7%
Public Learning $296 7%
Engagement of Children $162 4%
Institutional Capacity $137 3%
Total federal funding for STEM training or education $4,308
Data is for fiscal year 2010, except the training and sub-bachelor's level degree funded, which is for 2012.Sources: National Science and Technology Council, Department of Labor's Trade Adjustment
Assistance Community College and Career Training Grant and H1B Technical Skills Training Grants. *These funds are not exclusively dedicated to STEM degrees or careers.
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Manufacturing Industries Ranked by STEM Score, by STEM Share of Jobs and Share of STEM Jobs held by those with bachelor's degree or higher
STEM Share of Jobs
Share of STEM workers with BA
or higher Computer and Electronic Product 46% 60%
Petroleum and Coal Products 46% 34% Chemical 35% 54%
Transportation Equipment 41% 41% Machinery 40% 26%
Fabricated Metal Product 41% 12% Electrical Equipment, Appliance, and Component 31% 39%
Primary Metal 31% 20% ALL 35% 9%
Plastics and Rubber Products 21% 23% Miscellaneous 24% 37%
Paper 24% 29% Beverage and Tobacco Product 20% 36% Nonmetallic Mineral Product 22% 24%
Wood Product 19% 12% Food 15% 24%
Printing and Related Support Activities 16% 27% Furniture and Related Product 18% 19%
Leather and Allied Product 13% 30% Textile Mills 18% 19%
Textile Product Mills 12% 18% Apparel 8% 27%
Brookings analysis of O*NET and American Community Survey via IPUMS.
STEM degree holders are the most likely to be working in jobs related to their field of study
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Source: Brookings analysis of 2010 National Survey of College Graduates
88% 83% 83%
75% 74% 72% 63%
0%10%20%30%40%50%60%70%80%90%
100%
STEM-related (e.g. Health) Computer and math
Engineering Physical science
Non-STEM Biological and related
Social sciences
STEM occupations earn high and growing wages
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0.94
0.96
0.98
1.00
1.02
1.04
1.06
1.08
1.10
Wag
e G
row
th I
nd
ex
Growth in Inflation-Adjusted Median Wages for All U.S. Workers 16 and Over in STEM Occupations
All Full-time Workers 16and over
Computer andmathematicaloccupations
Architecture andengineering occupations
Life, physical, and socialscience occupations
Source: Bureau of Labor Statistics Current Population Survey and Consumer Price Index
8% growth for Computer/Math Occupations
Students drop out of STEM majors at higher rates A. National longitudinal survey data show 36% of
students who start as STEM majors switch to other fields
B. Data from Ohio Board of Regents show 57% of students who select a STEM major when taking the ACT do not finish as STEM majors
C. One explanation is that grades are lower than expected
• References: Xianglei Chen and Thomas Weko, “Students Who Study Science, Technology, Engineering,
and Mathematics (STEM) in Postsecondary Education” (National Center for Education Statistics, 2009); Eric Bettinger, “To Be or Not to Be: Major Choices in Budding Scientists” In Charles T. Clotfelter, ed., American Universities in a Global Market, Chapter 2 (Chicago: University of Chicago Press, 2010); Todd Stinebrickner and Ralph Stinebrickner, “Math or Science? Using Longitudinal Expectations Data to Examine the Process of Choosing a College Major,” Working Paper (The University of Western Ontario, 2012).
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9,960,832
4,344,353
-3,939,473
-6,000,000
-4,000,000
-2,000,000
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
Bachelors orhigher
Some college High school orless
Change in STEM Jobs, 1980-2011
Change in STEM Jobs, 1980-2011