I was visiting Yale in the spring of 2004. As I was strolling through the central quad, near the statue of Elihu Yale, two Chinese-speaking tours came through, with Chinese tourists of all ages. Chinese have started to tour the world in large numbers, and as China continues to develop toward a more open society, it is quite likely that Chinese leisure tourists will alter the whole world-tourism industry.
But Chinese are not visiting Yale just to admire the ivy. Consider these statistics from Yale's admissions office. The fall 1985 class had 71 graduate and undergraduate students from China and 1 from the Soviet Union. The fall 2003 class had 297 Chinese graduate and undergraduate students and 23 Russians. Yale's total international student contingent went from 836 in the fall of 1985 to 1,775 in the fall of 2003. Applications from Chinese and Russian high school students to attend Yale as undergraduates have gone from a total of 40 Chinese for the class of 2001 to 276 for the class of 2008, and 18 Russians for the class of 2001 to 30 for the class of 2008. In 1999, Yiting Liu, a schoolgirl from Chengdu, China, got accepted to Harvard on a full scholarship. Her parents then wrote a build-your-own handbook about how they managed to prepare their daughter to get accepted to Harvard. The book, in Chinese, titled Harvard Girl Yiting Liu, offered “scientifically proven methods” to get your Chinese kid into Harvard. The book became a runaway best seller in China. By 2003 it had sold some 3 million copies and spawned more than a dozen copycat books about how to get your kid into Columbia, Oxford, or Cambridge.
While many Chinese aspire to go to Harvard and Yale, they aren't just waiting around to get into an American university. They are also trying to build their own at home. In 2004,1 was a speaker for the 150th anniversary of Washington University in St. Louis, a school noted for its strength in science and engineering. Mark Wrighton, the university's thoughtful chancellor, and I were chatting before the ceremony. He mentioned in passing that in the spring of 2001 he had been invited (along with many other foreign and American academic leaders) to Tsinghua University in Beijing, one of the finest in China, to participate in the celebration of its ninetieth anniversary. He said the invitation left him scratching his head at first: Why would any university celebrate its ninetieth anniversary-not its hundredth?
“Perhaps a Chinese tradition?” Wrighton asked himself. When he arrived at Tsinghua, though, he learned the answer. The Chinese had brought academics from all over the world to Tsinghua-more than ten thousand people attended the ceremony-in order to make the declaration “that at the one hundredth anniversary Tsinghua University would be among the world's premier universities,” Wrighton later explained to me in an e-mail. “The event involved all of the leaders of the Chinese government, from the Mayor of Beijing to the head of state. Each expressed the conviction that an investment in the university to support its development as one of the world's great universities within ten years would be a rewarding one. With Tsinghua University already regarded as one of the leading universities in China, focused on science and technology, it was evident that there is a seriousness of purpose in striving for a world leadership position in [all the areas involved] in spawning technological innovation.”
And as a result of China's drive to succeed, Microsoft chairman Bill Gates argued to me, the “ovarian lottery” has changed-as has the whole relationship between geography and talent. Thirty years ago, he said, if you had a choice between being born a genius on the outskirts of Bombay or Shanghai or being born an average person in Poughkeepsie, you would take Poughkeepsie, because your chances of thriving and living a decent life there, even with average talent, were much greater. But as the world has gone flat, Gates said, and so many people can now plug and play from anywhere, natural talent has started to trump geography.
“Now,” he said, “I would rather be a genius born in China than an average guy born in Poughkeepsie.”
That's what happens when the Berlin Wall turns into the Berlin mall and 3 billion people converge with all these new tools for collaboration. “We're going to tap into the energy and talent of five times as many people as we did before,” said Gates.
From Russia with Love
I didn't get a chance to visit Russia and interview Russian zippies for this book, but I did the next best thing. I asked my friend Thomas R. Pickering, the former U.S. ambassador to Moscow and now a top international relations executive with Boeing, to explain a new development I had heard about: that Boeing was using Russian engineers and scientists, who once worked on MiGs, to help design its next generation of passenger planes.
Pickering unraveled the story for me. Beginning in 1991, Boeing started assigning out work to Russian scientists to take advantage of their expertise in aerodynamic problems and new aviation alloys. In 1998, Boeing decided to take this a step further and open an aeronautical engineering design office in Moscow. Boeing located the office in the twelve-story Moscow tower that McDonald's built with all the rubles it made from selling Big Macs in Moscow before the end of communism– money that McDonald's had pledged not to take out of the country.
Seven years later, said Pickering, “we now have eight hundred Russian engineers and scientists working for us and we're going up to at least one thousand and maybe, over time, to fifteen hundred.” The way it works, he explained, is that Boeing contracts with different Russian aircraft companies-companies that were famous in the Cold War for making warplanes, companies with names like Ilyushin, Tupolev, and Sukhoi-and they provide the engineers-to-order for Boeing's different projects. Using French-made airplane design software, the Russian engineers collaborate with their colleagues at Boeing America -in both Seattle and Wichita, Kansas-in computer-aided airplane designs. Boeing has set up a twenty-four-hour workday. It consists of two shifts in Moscow and one shift in America. Using fiber-optic cables, advanced compression technologies, and aeronautical work flow software, “they just pass their designs back and forth from Moscow to America,” Pickering said. There are videoconferencing facilities on every floor of Boeing's Moscow office, so the engineers don't have to rely on e-mail when they have a problem to solve with their American counterparts. They can have a face-to-face conversation.
Boeing started outsourcing airplane design work to Moscow as an experiment, a sideline; but today, with a shortage of aeronautical engineers in America, it is a necessity. Boeing's ability to blend these lower-cost Russian engineers with higher-cost, more advanced American design teams is enabling Boeing to compete head-to-head with its archrival, Airbus Industries, which is subsidized by a consortium of European governments and is using Russian talent as well. A U.S. aeronautical engineer costs $120 per design hour; a Russian costs about one-third of that.
But the outsourcees are also outsourcers. The Russian engineers have outsourced elements of their work for Boeing to Hindustan Aeronautics in Bangalore, which specializes in digitizing airplane designs so as to make them easier to manufacture. But this isn't the half of it. In the old days, explained Pickering, Boeing would say to its Japanese subcontractors, “We will send you the plans for the wings of the 777. We will let you make some of them and then we will count on you buying the whole airplanes from us. It's a win-win.”
Today Boeing says to the giant Japanese industrial company Mitsubishi, “Here are the general parameters for the wings of the new 7E7. You design the finished product and build it.” But Japanese engineers are very expensive. So what happens? Mitsubishi outsources elements of the outsourced 7E7 wing to the same Russian engineers Boeing is using for other parts of the plane. Meanwhile, some of these Russian engineers and scientists are leaving the big Russian airplane companies, setting up their own firms, and Boeing is considering buying shares in some of these start-ups to have reserve engineering capacity.
