Before Ray Ozzie took the stage at the Technology Alliance's lunch today, the group presented its annual benchmark study comparing Washington with 10 states it considers peers for centers of technology. The alliance is a statewide group of business and academic leaders working to promote a strong technology economy.

Jeremy Jaech, the incoming chair of the alliance, said the state ranked last among peers in strong graduate programs for science and technology. Peers include Massachusetts, Maryland, New Jersey, Connecticut, Virginia, California, New York, Colorado and Utah. In 2005, 7.4 science and engineering doctorate degrees were awarded per 1,000 Ph.D.s in Washington, compared with 26.8 per 1,000 in Massachusetts. That puts Washington at 46th out of 50 states.

The state is also not producing enough bachelor's degrees to keep up with the science and engineering workforce, according to the alliance report. The state is 36th in the nation for overall bachelor's degree production, based on the number of degrees awarded as a percentage of the state's college-age population.

"We're most concerned about what benchmarking tells us about higher education," said Jaech. "While we have qualitatively strong programs they are too small."

The good news that came out of the report is that the state has a strong engineering workforce, active venture-capital community and strong federally and privately funded research. Washington ranks third in the nation for engineering employment, moving up from ninth place six years ago. The state also ranks third in the nation for the amount venture capital invested per $1,000 of gross domestic product, after California and Massachusetts.

Craig Mundie, Microsoft chief research and strategy officer, said Americans seeking to update their technology skills should look to the nation's community colleges for training.

Mundie took a break from the company's Government Leaders Forum -- Americas on Wednesday to talk with me about global competitiveness, the government IT spending environment, prospects for cloud computing in government IT portfolios and more.

Earlier in the day, Mundie talked to the gathering of Latin American governors and ministerial-level leaders about using technology to improve health care and education. Microsoft Chairman Bill Gates is scheduled to address the group, meeting in Leesburg, Va., on Thursday.

Here are edited excerpts from my talk with Mundie:

Q: You remarked on the idea that technology has been a great global leveler, contributing to developing nations' transition from industrial and agricultural economies to knowledge-based economies. What's available for people in this country who are facing layoffs now and want to compete on that global playing field that technology creates?

New research sheds light on the reasons high-skilled Chinese and Indian workers are returning to their home countries. The researchers cite anecdotal evidence that suggests immigrants are returning home in greater numbers.

Microsoft is teaming with Cisco and Intel to back the creation of a 21st century curriculum. The companies are funding a project to explore better ways of teaching and evaluating students in critical thinking, collaboration, problem solving, communication and other broad areas -- skills that they demand from their employees, said Anoop Gupta, who heads Microsoft's Unlimited Potential program.

Microsoft has been recognized by a survey of major corporations as doing the best job of investing in its community. The survey was part of a study published by the U.S. Chamber of Commerce and the Center on Philanthropy at Indiana University.

The study was presented with a broader report on the relationship between business and their communities. Seattle was one of eight cities where the report held forums with business leaders, providing a not-too-surprising list of threats to innovation: education, "the Seattle process," and transportation. Read on for more details.

Microsoft, New York University and several other New York-area schools are launching an initiative to study how video games can be applied to education. The Games For Learning Institute will "focus on evaluating computer games as potential learning tools for science, technology, engineering and mathematics (STEM) subjects at the middle-school years (grades 6-8)."