Tuesday, January 31, 2017


In my last article I wrote that US GDP growth would be declining and now its becoming more prominent. US Fed will find it quite difficult to raise interest rates and the whole of US economy will be fighting to get inflation and GDP growth. Skilled manpower is going to exit and also the future propensity of the skilled worker growth and supply to US will now hardly grow. The new immigration laws and other indicative laws create a reverse affect in the long term for the US economy. Skilled manpower will now look for other countries like Australia, Canada and New Zealand. These countries will find substantial growth momentum in their economies as GDP growth will be driven by extensive supply of skilled and knowledgeable manpower. Human capital is a big asset for any economy to grow. Don’t forget the Silicon Valley growth was partially driven by many Indians who developed things like google and email. In an research it has been found that 1% increase in the population of immigrant college graduates increased overall patents per capita by 9-18%.

On the other hand Trumppolicynomics is now target towards overseas students who are getting into his country for higher education. Revoking of OPT extension by Trump will create immense opportunity for other countries and immense loss to the US economy. Optional Practical Training (OPT) for science, technology, engineering and mathematics (STEM) students could benefit immigrant-friendly nations. OPT allows foreign STEM students to extend their stay in the US after completion of studies for 6-12 months under student visa. Foreign students are found to make use of OPT to either look for jobs or apply for further education. Now  under Trumplociynomics this is going to be revoked.

International students pumped $35 billion into the country’s economy in 2015, according to the US Department of Commerce. This policy will lead to loss of this revenue to the US economy. Now coming to skilled manpower supply within US from its own citizens its being found that US don’t have much skilled manpower. A report conducted by the OECD and commissioned by the U.S. Department of Education  has found that a staggering 36 million adults in the U.S. are “low-skilled. Well the number is just 1 year old. So lack of skilled manpower and lack of skill within US economy will only drag the GDP growth. On the other hand countries like India, China Australia, Canada and New Zealand will find stupendous growth within its economy in the coming days. I wrote last time and this time also I am repeating again US is creating a opportunity for different countries to come together and rework on new trade and investment opportunities.  Indian students studying in the US which has been on the rise by about 25 per cent to over 165,000 during academic year 2015-16, as per the 2016 Open Doors Report on International Educational Exchange. This is now going to get flooded backs either to India or will enter into some different economies. Different economies should now come up with friendly education norms and quality so as to attract these $35 billion revenues from the US to their own country.

Hence US stock market might be scaling us which has always being a fool’s paradise but it seems now that US economy in the long term will face much slower growth. Getting more jobs within US is not possible and even if it’s possible Research and Development will take a massive hit for the US economy in the long term due to lack of quality manpower.

Mathematics, Science is vital things for the R&D to grow within any economy. The 2015 Program for International Student Assessment, or PISA, study is the latest to document that American students are under performing their peers in several Asian nations. In math, the U.S. average score was 470, below the international average of 490. Average scores ranged from 564 in Singapore to 328 in the Dominican Republic. In science, the U.S. average score was 496, about the same as the international average of 493. Average scores ranged from 556 in Singapore to 332 in the Dominican Republic. This reveals that in the long term with new policies of Trump will lead US economy to collapse and also its creating new opportunity for the other economies to grow.

If you talk to any Silicon Valley person you will find that they don’t get skilled manpower for Innovation. We all know that the next level of Industrial revolution is due to Innovation and the same IS ONLY DRIVEN BY SKILLED MANPOWER very well knowledgeable in Science and Mathematics. On the other hand many leave the field for other pursuits like finance and law — which sometimes pay higher wages.  More than 25% of practicing U.S. scientists are immigrants, up from 7% in 1960. Well all is well written well done if other economies gets into their respective segments to get  pie of the $35 billion US education market driven by overseas students.


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