Securing the U.S.-India Innovation Alliance: The Role of Skilled Workforce Initiatives | Perspectives on Innovation | CSIS

This week’s state visit by Prime Minister Narendra Modi celebrates a new and promising phase in the relationship between the United States and India. One element of this effort is to build on shared innovation-driven strategic and commercial interests. Both nations look to innovation as the path to economic growth, competitiveness, and greater security. And each looks to the other to complement its own advantages as an innovator. The circulation of highly skilled educators and workforce represents a key ingredient of this symbiotic relationship and encouraging this circulation is essential for a mutually beneficial and sustainable relationship.

For the United States, access to a high skilled workforce is essential if its strategy to renew its high-tech manufacturing base is to succeed. The CHIPS and Science Act, the Inflation Reduction Act, and the Infrastructure Investment and Jobs Act collectively represent an unparalleled national investment in its science and innovation networks and capabilities. But for these investments to bear fruit, we will need a robust skilled workforce, one that is significantly larger than we currently have.

Industry requirements are already substantial. Workforce estimates related to CHIPS alone call for some 350,000 professionals over the next decade. Relatedly, a report by CSIS notes that although semiconductor manufacturing is a highly automated process, U.S. semiconductor manufacturers are already suffering from a shortage of human resources. Some estimates indicate that an additional 70,000 to 90,000 workers will be needed once the new semiconductor fabs currently being planned become operational.

Moreover, these workforce requirements are expected to grow rapidly. U.S. strategy to advance research, development, manufacturing, and commercialization across a series of emerging technologies has generated a surging need for skilled workers. In addition to encouraging more U.S. born students to pursue STEM careers—a generational strategy but a vitally necessary one—the United States must continue to attract the “best and brightest” from around the world and retain more of these U.S. trained students and researchers to meet the growing needs of the U.S. innovation system.

The advantages of international high-skill recruitment are well documented and have major national security implications. Foreign-born STEM PhDs make major contributions to the U.S. economy. According to a report by the Institute for Defense Analyses (IDA), foreign-born PhDs in the U.S. currently account for 44 percent of all STEM PhDs-level workers in the United States and they have long been a source of innovation and growth. The contributions are, in fact, remarkable. The IDA notes that, as of 2018, 100 companies in the S&P 500 were founded by individuals born outside the United States. Further, IDA reports that foreign-born STEM workers currently make up 28-30 percent of the U.S. STEM workforce. It calculates that these foreign-born STEM workers significantly increased U.S. productivity through their innovations, contributing between 1.7 percent and 1.9 percent of U.S. GDP in 2019, or $367 billion to $409 billion in labor value-added overall.

India is a significant and growing source of this STEM talent. The number of students from India studying in the U.S. increased by nearly 19 percent to nearly 200,000 in the 2021-2022 academic year compared to the 2020-2021 academic year, in part reflecting a recovery from the pandemic but also underscoring the underlying demand. Most Indian graduate students pursue studies in STEM fields, such as mathematics, computer science, and engineering, making India one of the most important sources of foreign-born STEM workers in the U.S.

Indian STEM graduates also make up a significant percentage of high-tech entrepreneurs in the United States. Many Silicon Valley companies and startups are led by successful Indian-American business leaders, as are major firms like Microsoft, IBM, and Google. According to some estimates, roughly 20 percent of immigrant-founded, billion-dollar startups were founded by individuals of Indian origin, the most of any immigrant group.

To reinforce this advantage, President Biden and Prime Minister Modi announced the U.S.-India initiative on Critical and Emerging Technology (iCET) in May 2022. This initiative is expected to serve as a “bridge for innovation” between the U.S. and India, creating a more active exchange in “human capital” trained in advanced technology.

The iCET initiative builds on the recent growth in Indian STEM talent in the U.S. innovation system and is being promoted through a variety of efforts by public agencies, private firms, and academic organizations both in the United States and in India. Many of these initiatives will contribute to U.S. needs for its rapid growth in semiconductor manufacturing.

U.S. and Indian Research Awards: Over the past five years, the National Science Foundation (NSF) has invested more than $146 million in collaborative research activities with scientists, engineers, and educators across India. In addition, in August 2022, the NSF decided to invest $2.8 million to encourage collaborations between researchers at U.S. universities and Indian scientists and engineers participating in joint projects. This cooperation is also being supported by nearly $430 million over five years from the Indian Ministry of Science and Technology. Together, research awards from the U.S. and Indian governments help students and faculty build their reputations enhancing their ability to draw additional future funding from the private sector.

U.S.-India Private Sector Task Force: These public sector initiatives are complemented by those in the private sector. The Semiconductor Industry Association of America (SIA) and the Indian Electronics and Semiconductor Association (IESA) have announced plans to form a private sector task force to strengthen collaboration between India and the U.S. in the global semiconductor ecosystem. The task force is expected to analyze challenges associated with building a skilled semiconductor industry workforce from a corporate perspective, create recommendations to accelerate the availability of skilled labor in private semiconductor companies in both countries, and accelerate the commercialization of new semiconductor-based technologies.

Task Force on Expanding U.S.-India University Partnerships: To promote the scientific, educational, and economic development of scholars and students, the Association of American Universities and outstanding Indian educational institutions such as the Indian Institutes of Technology (IIT) have formed a new joint task force to make recommendations for university and research partnerships between the U.S. and India. Co-chairs of this new task force include Indian American educators: the President of Pennsylvania State University, Neeli Bendapudi, and the incoming President of Tufts University, Sunil Kumar, alongside the Chancellor of the University of Illinois at Urbana-Champaign, Robert J. Jones.

Among other activities, the taskforce is to establish a discipline to develop the human resources required by an expanding semiconductor industry. This includes exploring ways to strengthen educational pathways for careers in semiconductors through dual degrees, exchange programs for professors from India and the U.S., and new curriculum. Under India’s new National Education Policy, which was updated for the first time in about 30 years in 2020, India is now creating more flexible master’s programs (one-year master’s programs for graduates of four-year research-oriented bachelor’s programs), seeking to attract top-level foreign universities to India, and expanding the presence of India’s top universities overseas.

U.S.-India Academic Initiatives: A number of leading U.S. universities have set up collaborations with selected Indian Institutes of Technology and other institutions to advance research and training opportunities for Indian students.

U.S. Private Sector in India’s Semiconductor Initiatives: Many U.S. semiconductor companies are participating in efforts to develop advanced semiconductor talent in India.

As these initiatives suggest, with the pace of innovation continuing to increase, India has become a key partner in human capital development with the United States. Academic institutions and private companies are implementing promising initiatives focused on human resource development, with a particular emphasis on the semiconductor industry. In this regard, the U.S.-India Private Sector Task Force, and the U.S.-India University Partnership, established as part of the recently announced U.S.-India Initiative on Critical and Emerging Technologies, offer an opportunity to improve the quality of human resources available in India and the U.S. by building a cooperative talent pipeline that spans and benefits both countries. These efforts complement emerging geopolitical collaboration and serve the educational and industrial needs of both countries in an increasingly competitive world. Every effort should be made to facilitate, expand, and fund these initiatives as one important means of advancing our mutual interests.

Sujai Shivakumar is director and senior fellow of the Renewing American Innovation (RAI) Project at the Center for Strategic and International Studies (CSIS). Hideki Tomoshige is a research associate with the Renewing American Innovation project at the Center for Strategic and International Studies in Washington, D.C.