1. The Future of Scientists and Engineers in the Defense Industry A Presentation to the AIAA Michael A. Leon The Aerospace Corporation Economic and Market Analysis Center 12 January 2005 michael.a.leon@aero.org

2. Definition Science (Physical Sciences) Astronomy, chemistry, computer science, earth/atmospheric/ocean studies, mathematics, and physics Engineering Chemical, civil, electrical, industrial, and mechanical

3. “The harsh fact is that the U.S. need for the highest quality human capital in science, mathematics, and engineering is not being met... This [situation] is not merely of national pride or international image. It is an issue of the utmost importance to national security. In a knowledge-based future, only an America that remains at the cutting edge of S&T will sustain its current world leadership … Complacency with our current achievement of national wealth and international power will put all of this at risk.” U.S. Commission on National Security for the 21st Century “The harsh fact is that the U.S. need for the highest quality human capital in science, mathematics, and engineering is not being met... This [situation] is not merely of national pride or international image. It is an issue of the utmost importance to national security. In a knowledge-based future, only an America that remains at the cutting edge of S&T will sustain its current world leadership … Complacency with our current achievement of national wealth and international power will put all of this at risk.” U.S. Commission on National Security for the 21st Century “A well-educated and technically-trained workforce is essential to a nation's competitiveness in two ways. First, it enables a country to shift more of its economic activity into higher technology and more productive activities that support higher wages. Second, an educated workforce is necessary to retain domestic investment and attract multinational investment.” Council on Competitiveness “A well-educated and technically-trained workforce is essential to a nation's competitiveness in two ways. First, it enables a country to shift more of its economic activity into higher technology and more productive activities that support higher wages. Second, an educated workforce is necessary to retain domestic investment and attract multinational investment.” Council on Competitiveness Consider…

4. Overview Background Current landscape College and graduate school trends Quantitative analysis Recommendations Conclusions Questions/suggestions

5. Background Reagan era buildup Collapse of the Soviet Union and the Eastern Bloc Reduction in defense spending Economic recession followed by an improving economy Burgeoning commercial technology market Confluence of events caught the attention of the defense industry and of Wall Street Large scale mergers and acquisitions Divestitures Overall consolidation

6. The New Millennium Political Events Change in administrations World Trade Center War on Terrorism Capabilities based defense strategy Resurgence in defense spending Industry Events Mergers and acquisitions replaced by smaller strategic purchases Contractors focusing on integrating acquisitions and improving financial performance Fewer contractors competing for increasing defense dollars Renewed demand for defense scientists and engineers

7. Scientific and Engineering Employment Defense/aerospace employment has dropped nearly 50% between 1990 and 2003 Demand for scientists and engineers is improving Top 10 defense contractors have nearly 10,000 open requisitions for scientists and engineers New military missions Aging weapon systems Civil space and commercial industries competing for technical talent Baby Boomers approaching retirement 27% of employed defense/aerospace scientists & engineers will be eligible to retire by 2008 Next decade number of Americans with science and engineering degrees reaching retirement age will triple Wall Street is concerned over the lack of scientists and engineers

8. Defense Expenditures & Science and Engineering Historical relationship between defense spending and the number of engineering degrees awarded by U.S. universities 65,000 degrees in 1975 121,000 degrees in 1985 104,000 degrees in 2000

9. Undergraduate Education Greater percentage of high school graduates attend college Interest in engineering is unchanged in the past five years Long-term trend shows a declining interest in engineering Fewer than 50% of first year science and engineering students have completed a technical degree within five years 10% to 20% of first year students intending to major in science and engineering require remedial math and science course work Engineering Bachelor Degrees College Bound Seniors Areas of Interest

10. Graduate School Education Since 1995 the number of U.S. citizens earning master’s degrees in engineering has declined an average of nearly 5% per year Between 1994 and 2001 the number of U.S. citizens and permanent visa holders enrolling in graduate technical programs has decreased Mathematics/statistics 25%  Engineering 21%  Physical Sciences 17%  Foreign students earn nearly half of all engineering doctorate degrees Engineering Master’s Degrees Engineering Doctorate Degrees

11. Quantitative Analysis Developed Excel-based parametric model to forecast the supply and demand of scientists and engineers in the defense industry (2005 – 2020) Supply Inputs Percent degrees earned by U.S. citizens Percent of engineering and science graduates working in defense Percent change in engineering enrollment Industry attrition Demand Inputs Defense spending Developed supply/demand equation Applied probability distributions to inputs and performed Monte Carlo analysis

12. Quantitative Analysis Model InputsLowHighMost Likely Percent of BS Degrees Earned by U.S. Citizens0%100%92% Percent of MS Degrees Earned by U.S. Citizens0%100%57% Percent of PhD Degrees Earned by U.S. Citizens0%100%51% No. Graduates Electing Defense Careers0%10%5% Change in Engineering Enrollment-10%10%0% Industry Attrition0%10%5% Change in Annual Defense Budget-5%5%0%

13. Results Deficit each year through 2020 In 2012 the defense industry will need more than 34,000 engineers and scientists Problem may be further compounded Stagnant interest in science and engineering among high school students Poor performance in mathematics, the sciences, and general problem solving skills High attrition rates in undergraduate science and engineering programs Increased need for remedial mathematics and science courses Defense industry will continue to be challenged by the shortfall of scientists and engineers Defense industry will continue to be challenged by the shortfall of scientists and engineers

14. Recommendations Increase federally sponsored research and development Incentivize investments in science and engineering Strengthen science and mathematics curriculum Encourage teachers to study science and mathematics Public/private partnerships Attract underrepresented groups Retain experienced personnel

15. Conclusions Model forecasts the demand for defense industry scientists and engineers exceeding the supply Problem evolved over time - no simple short- term solutions Federal, state, and local governments need to partner with industry and academia International competitiveness and national security are at stake

16. Questions/Comments