Wednesday, May 17, 2006
A new manufacturing mantra
By Peter Marsh
Published: May 15 2006 18:56 | Last updated: May 15 2006 18:56
imageThe world’s carmakers are to be given a novel way of keeping ahead of rivals: sending their competitors’ vehicles to a $125m (£66.1m) engineering centre in India where they will be dismantled to reveal their technical secrets.
Mahindra & Mahindra, an Indian industrial conglomerate, is building the “tear-down” in Chennai as part of a larger complex that, when finished early next year, will employ 1,000 engineers.
The initiative underlines the mix of ideas – a “service” approach to production, backed by a willingness to think globally – that sets India-based manufacturers apart from their rivals across Asia, and particularly China.
India’s manufacturing prowess – and its impact on relations with customers and competitors around the world – will be explored in the next three days in a Financial Times series.
Part 2 - Feast of a moveable workforce
Philippe Joubert, head of the power equipment division of Alstom, a French engineering company that has operations in both India and China, says the two countries’ models for manufacturing are clearly distinct. “China is geared to mass production. India focuses on manufacturing backed up by software and high-level engineering.”
Both countries have the advantage of low labour costs – which is invaluable in reducing the price of making standard goods – plus the potential of huge domestic markets over the next 20 years provided by their countries’ 1bn-plus populations. But China is a long way ahead in the world’s league table of manufacturing output, lying in third place behind the US and Japan, while India is 14th.
Yet India has an edge in the service aspects of manufacturing, say some observers. Once regarded as peripheral to the “core” task of production, these areas include design, development, links with suppliers and the ability to customise output to meet changes in demand patterns.
Now, though, the services elements are becoming more important as manufacturers seek more sophisticated links with suppliers and customers demand greater customisation in the finished product.
In many manufacturing companies, no more than one-fifth of employees are defined as manufacturing workers. The majority are doing jobs more properly categorised as service occupations. Sometimes – as in the case of pure “product originators” such as Nike, the clothing company, which outsources virtually all of its production – the proportion falls close to zero.
One reason for this is that manufacturers often turn to service as a defensive strategy to protect themselves from rivals muscling in on their territory.
Anita Woülfl of the Centre d’Etudes Prospectives et d’Informations Internationales, a Paris-based economics institute, says: “Manufacturers all over the world are increasingly interested in services as a way to make themselves more competitive and also to find new sources of growth.”
The service activities in manufacturing span a range of tasks, from maintenance contracts to design work. Some of the costs of these are bundled inside the price of goods, while others are paid for separately.
India’s recent history puts it in a good position to exploit this shift, says Anand Sharma, president of TBM Consulting, a US-based manufacturing advisory group. The seeds of the country’s prowess in manufacturing services were sown back in the 1990s, he says, when it became a world centre in software development and business process outsourcing (BPO), in which providers take over jobs such as payroll administration on behalf of customers in other countries.
Together, software development and BPO provide fast-expanding revenues for India-based companies of about $23bn a year, and account for 1.3m jobs. India’s growth in this field – as in the service side of manufacturing generally – is boosted by its proficiency in English, the world’s business language. Another attraction is the fact that the cost of employing engineers – essential to manufacturing services – is one-third to one-fifth lower in India than in industrialised nations such as the UK and the US.
“The BPO boom in India provided a core of expertise in software and a service-based approach to customers based around the world,” says Mr Sharma. “It has led to an interest by manufacturers [in India] to add value to basic manufacturing through offering services.”
Arvind Subramanian, an economist at the Washington-based International Monetary Fund, says India’s ability to compete in this field is based on its focus on fairly small-scale manufacturing operations, aimed at turning out goods in small batches and with close consultation with customers – a prerequisite for a service-based approach. He adds that there is “no doubt” that India has a global competitive advantage when it comes to service-based manufacturing.
Some of the India-based companies pioneering the service model for manufacturing are foreign businesses whose products require complex software and vary greatly depending on customers’ needs. Pradipta Sen, president of the India arm of Emerson, the US engineering company, says a “customer-facing” capability is a hallmark of Emerson’s India-based operations.
Ravi Uppal, managing director for India at ABB, the Swiss-Swedish engineering group, says India has an advantage in products such as automation equipment for factories and electricity transmission systems – in other words, products that are defined by software variations.
“India is good at the softer skills involved with manufacturing. We can use these to integrate production with [software] engineering and move in the direction of tailored products,” says Mr Uppal.
This move up the value chain is reflected in the make-up of the workforce. Only about 1,200 of ABB’s 4,000 India-based employees work in factories. The rest hold positions in design, engineering, marketing and sales – roles that address the design and production of customer-specific products.
In making new kinds of control systems for electricity transmission, for instance, ABB’s India arm is geared around answering the individual needs of its power company customers. Sigma Electric, a US company that has based most of its production in India, has also adopted a manufacturing approach based on swift changes in design, allowing it to respond more quickly to fluctuations in demand. The company – set up by India-born engineer Sajjan Agarwal – makes all its products in five low-cost India plants. It sells its goods predominantly to large US industrial groups such as General Electric and Delphi.
Mr Agarwal says: “We have 8,000 products in our catalogue and are flexible enough to make them in batches of as few as 100 at a time.” Out of 1,200 employees, 200 are engineers – including a corps of 30 development staff who work on new products and whose numbers Mr Agarwal wants to double in the next five years.
If Indian manufacturers are to capitalise on the services model, links with international companies are vital. The Indian market for engineering goods remains relatively small, though it could expand considerably in the next decade if economic growth projections are met. While China’s manufacturers have made their mark on the global economy mainly through exporting, Indians are doing far more to set up production centres outside their home country, and linking these to a “service” approach.
Mahindra & Mahindra, for instance, is setting up a global network of vehicle parts factories – linked to its production operations in India – that will make specialised components to order on behalf of large western carmakers. And Bharat Forge, a large India-based components manufacturer, is establishing plants in the UK, Germany and the US to supply customers in these markets.
Elsewhere, Essel, an Indian packager, has set up plants outside India to connect with large cosmetics manufacturers such as L’Oréal. In this way, its customers have more say in the products, even specifying what they look like. Other India-based packaging rivals are following Essel’s lead: Mahika Packaging, for instance, has recently set up a plant in Cleveland.
Baba Kalyarni, chairman of Bharat Forge, says the outward-looking approach – coupled with a way of looking at manufacturing as a combination of production and services – is critical for India’s manufacturers. “What will give companies [in India] an edge is a combination of technology and service,” he says.
India is acting as a laboratory for these ideas and is now starting to show how they operate in practice. The lessons that emerge will not be confined to its borders, however. The experience of manufacturers in formulating the right blend of production and service, and linking these to their far-flung customers’ requirements, will be studied by manufacturers the world over.
GOOD SERVICES HELP MAKE GOOD PRODUCTS
How big is the service side of manufacturing? The combined global sales of all manufacturing companies involved in making goods such as cars, computers and clothing are put at about $15,000bn (£7,975bn) a year.
Of this, 10 to 20 per cent comes from some kind of service function, whether it is charged for separately by the company or included in the price customers pay.
An example of the former is the service contracts agreed by customers with producers of, for instance, jet engines to ensure the latter are maintained while in service.
An included service might be a consultancy fee, which a customer is effectively paying for when it specifies a complex piece of manufacturing or medical equipment from a goods producer, even if the arrangement is not made explicit. The customer expects the item to be more or less made to order. The consultancy part of
the interaction is included in the price agreed by the two parties for the equipment.
A study by McKinsey, the strategy consultancy, says that more than one-fifth of all revenues of the durable goods industry in the US – encompassing manufacturing fields that include machinery, appliances and vehicles – comes from services associated with the products.
Byron Auguste, a McKinsey director, says no one has estimated an equivalent figure for the whole of global industry, but it could easily be a similar proportion.
A service approach, he says, links in with the increased interest from many manufacturers in product customisation – in which items are made in small volumes and geared to the needs of users. It can be regarded as part of the general move for manufacturers to get to know their customers better.
“If companies have a good service relationship with their customers, they are more likely to be in a position to know enough about them to configure products to suit their needs,” says Mr Auguste.
Manufacturers’ service activities vary considerably. They can range from the customisation or configuration of products in order to meet requirements of users, to jobs such as testing, development, market research, equipment installation and maintenance, for which an explicit charge may be made.
Estimates of how much of the vast manufacturing service market may be outsourceable to countries such as India – to take advantage of lower labour costs and new skills – vary from 5 per cent to 30 per cent. If India establishes a foothold in this area it will be well placed to play a substantial role in world industry, whatever the figure is.
Saturday, April 29, 2006
The Engineering 'Shortage' Mystery -- Solved
May 11, 2005
In reaction to the May 4 editorial-page commentary "Our Ph.D. Deficit1" by Norman R. Augustine and Burton Richter: The authors are just restating the obvious Wall Street mantra of risk vs. reward. A similar lament was expressed in these pages by the tech executives from firms such as Intel who were upset that their children were not becoming engineers. Given the time and effort of becoming an engineer, who wants to be unemployed every few years? Too, because engineering salaries barely keep track with inflation, why choose your lifetime salary the day you graduate from college? One college classmate of mine with a master's degree was featured in a New York Times article as making just $45,000 after 20 years. (By the way, he was being laid off.)
When it comes time to reward creativity, most firms behave like the Recording Industry Association disbursing royalties: Engineers are expected to be creative and grateful just to keep a job. Ironically, only the "garage band" firms pay for creativity. Still, this group includes Hewlett-Packard, Texas Instruments, Apple and of course Microsoft. But outside these few firms, most corporations view engineering as just a job that can be eliminated when the bottom line gets tight.
The net result is that "engineering creativity" gets rechanneled into activities that do not yield a revenue stream, such as accounting. The U.S. seems to have forgotten that you make money making things. Yes, selling does generate a revenue stream, but you have to sell something. Companies seem to have forgotten that you should reward the people who make the somethings that get sold.
B.E. Wallace Products
I notice this essay wasn't about "Our Humanities Ph.D. Deficit." Interestingly, though there's not much money in the various fields in the humanities, U.S. universities seem to have no problem finding American graduate students to fill doctoral programs in, say, Critical Feminist Theory or whatever is being taught nowadays. Getting a doctorate in said fields most often will not translate into big bucks, and all but the most senior professors will not get paid very much. And yet . . . there is no crisis there.
So why is there a crisis in science and engineering?
It is true that research in science and engineering is generally more expensive, requiring money for space (labs) and equipment (machines that go ping) that the study of humanities does not require. But that's not part of the equation when a student is deciding to go for a Ph.D. in engineering vs. an M.B.A. That decision has usually been made long before graduate school.
We don't have enough American Ph.D. students in science and engineering because we don't have enough undergraduate students in science and engineering. And the lack of science and engineering majors can be traced back further to substandard math education in primary school. Students know that those with math and science knowledge and skills can get much-higher-paying jobs; a person with a degree in applied math will likely be able to snag a cushy job compared with a person with a degree in education, for example. Yet you'll find many more students in education -- not just because of interest, but also because they would not be able to hack it in a math program.
Mary Pat Campbell
The gloomy essay from Messrs. Augustine and Richter ignores facts that suggest a considerably brighter picture of the nation's science enterprise. Far from a "flat-lined" research budget, the Bush administration has increased federal R&D spending 45% since 2001 to a record $132 billion. In that same time, funding for basic research increased 26% to $26.6 billion. The U.S. spends one and a half times more on R&D than all the nations in the European Union and three times more than Japan.
The authors point to patents and graduate education in engineering and science, among other things, as competitiveness indicators, but present only part of the story. It is true that patent applications from China, South Korea and other Asian countries have increased, but not at the expense of the U.S. According to recent NSF studies, U.S. patent applications in 2003 were at an all-time high of 188,941, or 55% of the total -- the same on average for the past 20 years.
According to the National Science Foundation, total S&E graduate enrollments in the U.S. reached a high in 1993 of 435,700, followed by a five-year decline. Since then enrollments have increased, reaching a new peak at 455,355 in 2002. Science and engineering graduate enrollments of U.S. citizens or permanent residents likewise declined steadily since a peak of 330,037 in 1993, reaching a low in 2000 of 290,711. In the two years since 2000, U.S. enrollments have increased 7% to 310,243, indicating a renewed trend toward greater interest in S&E fields.
John H. Marburger III
(The author is science adviser to President George W. Bush and director, Office of Science and Technology Policy in the Executive Office of the President.)
URL for this article:
Our Ph.D. Deficit
By NORMAN R. AUGUSTINE and BURTON RICHTER
May 4, 2005
The unprecedented opportunities for American workers in the latter half of the 20th century came from creating new jobs, not from protecting old ones. A major component of job creation is investment in science research. Our rivals in Asia and Europe have clearly figured this out.
Research, particularly in the physical sciences and engineering, is the foundation of our innovative economy. It has spawned the transistor, fiber optics, integrated circuits, wireless communication, liquid crystal displays, lasers, the Web, the GPS, hybrid automobiles and medical technologies far too numerous to list. With these new technologies have come new, high-wage jobs. MIT alone -- faculty, alumni and staff -- has created 5,000 companies in the last 50 years.
When an innovation is found, the U.S. entrepreneurial spirit is quick to develop, produce and market it, creating new jobs and revenue. We must be prepared to develop the next innovation rapidly to ensure that the jobs it spawns reside in the U.S. Such a nimble economy requires venture capital, a level international playing field, technological infrastructure, a well-educated work force and a healthy budget for research.
To keep feeding America's great innovation machine, robust investments in research are a must. Unfortunately, federal funding for research in the physical sciences and engineering has been stagnant for two decades in inflation-adjusted dollars. As a percentage of GDP, federal investment in physical science research is half of what it was in 1970.
The technologies listed above came from decades-old research. A flatlined research budget won't produce the same economic growth for tomorrow. Nor will it keep us ahead of the competition much longer. Through investment in research and education, our competitors have increased their numbers of science and engineering Ph.D.s. It's no wonder that foreign applications for U.S. patents are growing remarkably and that the foreign high-tech labor force is drawing jobs away from America.
In China, R&D expenditures rose 350% between 1991 and 2001, and the number of science and engineering Ph.D.s soared 535%. In South Korea, R&D expenditures increased more modestly -- by 220% -- and Ph.D.s by 150%. In that same period, the number of applications for U.S. patents from each country grew by 400%. Publications in scientific journals provide another indicator of the global challenge to our scientific primacy. In 1986, the U.S. share of articles in such journals world-wide was 39%. By 2001 it had slipped to 31%, and it is still declining.
There is another disturbing trend. Fewer Americans are pursuing physical science and engineering careers. At the graduate level, enrollments are down more than 20% since 1993. And with abundant opportunities in their own countries, foreigners are not flocking to study in our universities in the same numbers they did a decade ago. To make science and engineering careers more attractive to our youth, we must make a stronger commitment to funding research. In the 21st century, that in part must be a federal responsibility. In today's world of global competition and Wall Street demands for quarterly growth, the time-frame for discovery is too long, and the risks of failure too great, for a company -- even a group of companies -- to shoulder alone.
Mr. Augustine is retired chairman and CEO of Lockheed Martin Corp. Mr. Richter, former director of the Stanford Linear Accelerator Center, won the Nobel Prize in physics in 1976.
By ROBERT J. STEVENS
April 19, 2006; Page A12
Americans are focused on China's rise and the implications for U.S. preeminence -- especially in technology. The revving of China's science and engineering engine is too loud to ignore: 50% of its undergraduates receive degrees in natural science or engineering, compared to 15% in the U.S. Between 1999 and 2003, China doubled production of engineering grads; U.S. numbers are stagnant. Meanwhile, China's global high-tech exports approached $220 billion in 2005 -- more than 100 times 1989 levels.
Some observers view these trends with alarm, fearing the erosion of scientific and technological leadership and the loss of high-skilled jobs to educated, motivated foreign competitors. Others claim the hype is overblown, arguing that the caliber of Chinese graduates is significantly less impressive than their numbers, and recalling how earlier fears of a Japanese juggernaut never materialized. As the CEO of a major advanced technology company, I welcome this debate. For Lockheed Martin, where almost half of our 135,000 employees are scientists and engineers, questions of technological competitiveness go to the heart of our ability to innovate and thrive. Given the security constraints surrounding our work, outsourcing and offshoring aren't feasible options for companies in our sector. For the aerospace and defense industry, the front lines of the brainpower battle aren't in China, they're here at home.
One in every three of Lockheed's employees is over 50. To sustain our talent base, we're hiring 14,000 people a year. In two years, we're going to need 29,000 new hires; in three years, 44,000. If this trend continues, over the next decade we will need 142,000. We're not alone; industry-wide, some 19% of employees are eligible for retirement. Yet Department of Education data suggests U.S. colleges and universities are only producing about 62,000 engineering BAs a year -- fewer than the visual and performing arts graduates -- and that figure hasn't grown in a decade.
The looming tech talent shortfall will have an impact far beyond any single firm or sector. Science and engineering aren't just crucial for national security; they're critical for economic growth. High-tech industries drive development, boosting productivity and generating good jobs. If the U.S. intends to remain the world's technological leader, we have to act today, inspiring more young people to thrive in advanced-tech careers. It's achievable, as long as government, the private sector, schools and communities work together.
The classroom is the place to begin. A major study ranked us 24 out of 29 countries in terms of 15-year-olds' ability to apply math skills. The Bush administration's pledge to improve math and science education, including 70,000 newly trained high-school teachers, is encouraging. But in order to attract the best teachers, we should pay them what they're worth. Between 1993-94 and 2003-04, 15 states saw declines in teacher salaries when adjusted for inflation.
Industry also has an important role to play. At Lockheed Martin, we fund and participate in programs like Mathcounts, Space Day and National Engineers Week, when our employees go into classrooms and community centers with hands-on activities to kindle an interest in engineering. Our goal is to mentor kids, helping them see beyond the stereotype of the nerd in the lab and start thinking of math and science as compelling, rewarding, even fun. And individual business leaders must do their part. Most Americans would probably be surprised to learn that more S&P 500 CEOs got degrees in engineering than any other field. The more executives, university administrators and academics shine the spotlight on the stakes of the tech challenge, the more we can galvanize action to meet it.
There are other avenues worthy of exploration: visa extensions for international students who earn advanced math and science degrees from U.S. institutions and want to work here; or student loan forgiveness for math and science graduates who commit to work in national security fields. But just as important as revitalizing policy is reshaping attitudes. Instead of wringing hands or building walls in response to competition from China, let's summon the can-do spirit that has made America the land of innovation. The Space Race fueled my generation's ambition and imagination. We must inspire today's young to believe that if they become our future engineers, they can engineer our future.
Mr. Stevens is chairman, president and CEO of Lockheed Martin.
Monday, March 27, 2006
The Other Immigrants
March 27, 2006; Page A16
Lost in the heated debate about the future of millions of illegal laborers in the U.S. is that our system for admitting foreign-born professionals is also in tatters.
While globalization has increased the competition for international talent, U.S. businesses are frustrated by processing delays, long backlogs and especially the failure of Congress to increase the annual limits on visas for skilled immigrants. The Senate Judiciary Committee is scheduled to resume its mark-up of Arlen Specter's immigration bill today. And the good news is that it contains long-overdue provisions for hiring more of the foreign professionals who help keep our economy competitive.
Under Mr. Specter's proposal, the annual cap on H-1B guest worker visas for immigrants in specialty fields like science and engineering would rise to 115,000 from 65,000. Moreover, the new cap would not be fixed but would fluctuate automatically in response to demand for these visas. We don't think any cap is necessary. But if a Republican Congress feels it must impose one, the least it can do is let market forces have some say in the matter.
Another important reform addresses foreign students who want to work here after graduating from U.S. colleges and universities. It doesn't make a lot of sense in today's global marketplace to educate the best and brightest and then send them away to England or India or China to start businesses and develop new technologies for U.S. competitors. But that's exactly what current U.S. policy encourages by limiting the employment prospects of foreign students who would rather stay here.
Mr. Specter would let more foreign students become permanent residents by obtaining an advanced degree in math, engineering, technology or the physical sciences and then finding work in their field. It's unfortunate that the U.S. isn't producing more home-grown talent in these areas, and the fault there lies with our K-12 educators and their political backers who tolerate poor performance. The reality today is that the U.S. ranks sixth world-wide in the number of people graduating with bachelor's degrees in engineering. Jobs will leave the U.S. and our economy will suffer if bad policy limits industry's access to intellectual capital.
Anti-immigration groups and protectionists want to dismiss these market forces, arguing that U.S. employers seek foreign nationals only because they'll work for less money. But it's illegal to pay these high-skill immigrants less than the prevailing wage. And employers are required to document their adherence to the law.
According to a new study by the National Foundation for American Policy, our broken system for admitting foreign professionals also contributes to outsourcing. Since 1996 the 65,000 annual cap on H-1B visas has been reached in most years, sometimes only weeks into the new year. This leaves employers with the choice of waiting until the next fiscal year to hire workers in the U.S. or hiring people outside the country.
"Many companies concede," says the report, "that the uncertainty created by Congress' inability to provide a reliable mechanism to hire skilled professionals has encouraged placing more human resources outside the United States to avoid being subject to legislative winds." Last week computer maker Dell Inc. announced that it hopes to double its workforce in India to 20,000 within three years. There's another such announcement by some company nearly every day.
This weekend's big-city immigration demonstrations focused on the debate over the estimated 11 million illegals already in the country. But the U.S. labor market has also long been a magnet for highly skilled and educated foreigners, many of whom attend school in America at some time in their lives. In a world where these brains have more options than ever in Asia and Europe, we drive them away at our economic peril.
Sunday, March 26, 2006
U.S. missile science slumping
As the nation's veteran engineers and scientists retire, the military will lose much of its expertise in long-range missile technology, the report says. That means the Air Force and Navy, which operate most of the 1960s-vintage missiles, will be unable to cope with system failures or develop improved weapons, the report says.
Not only are fewer American engineers and scientists choosing to work on missile technology, there are fewer of them altogether, the report says. Each year, about 70,000 Americans receive undergraduate and graduate science and engineering degrees that are defense related, compared with a combined 200,000 in China and India, the report says.
The government should pay higher salaries and offer other incentives to attract more experts into the strategic missile field, the report says.
A task force of five outside missile experts spent two years preparing the report at the Pentagon's request.
Although the board lacks the power to force the Pentagon to act, Lt. Gen. Frank Klotz, acting head of the Air Force Space Command, told a Senate committee this month that the Pentagon is trying to improve its recruiting and retention of missile experts. Space Command runs the intercontinental ballistic missile system.
The report does not give specifics on the number of experts who are retiring or the numbers needed to replace them, but it says about 20,000 research and development scientists and engineers work in the aerospace industry as a whole, down from more than 140,000 in the mid-1980s.
John Steinbruner, head of the Center for International and Security Studies at the University of Maryland, says few scientists want to work on long-range missiles because "it's not too hard to figure out that American security doesn't depend on this any more."
Instead, Steinbruner says, the Pentagon's priorities have shifted toward fighting terrorism and "low-intensity conflicts," such as the insurgency in Iraq.
The report, he says, sounds like the Pentagon advisory board is "just trying to keep the money flowing" and may be biased toward Cold War-era ballistic missile systems.
The report also questions a Pentagon plan to seek more than $500 million to replace nuclear warheads on some submarine-launched Trident ballistic missiles with conventional warheads. The Pentagon says those missiles could be used to strike fortified targets such as nuclear weapons facilities in rogue nations.
Converting the warheads on these missiles will be difficult, the report says, because the Pentagon lacks the necessary engineering skills. It adds that technical requirements for non-nuclear warheads are much different for long-range missiles from those for shorter-range missiles or nuclear weapons.
Tuesday, March 14, 2006
Employment Data Paints a Disturbing Picture
by Russell Harrison
In the first quarter of 2005, electrical engineers (EE) faced an unemployment rate that by fell to 2.1 percent, just about its historic average. The rate has been declining since 2003 when electrical engineers faced an unemployment rate of 6.3 percent — the highest ever recorded for EEs.
Good news? Not really. While a falling unemployment rate is usually a sign of an improving job market, in this case it is part of a troubling trend.
The chart below gives a more comprehensive picture of the job market for electrical engineers. The two lines show the unemployment rate (blue) and total employment (red). Between 2000 and 2003, electrical engineers faced a typical, if bad, job market: unemployment went up as total employment fell.
But in 2003, the situation changed. Between 2003 and the first quarter of this year, unemployment fell along with total employment, which declined from 363,000 in 2003 to 335,000 in March of 2005, almost 8 percent. The only way the number of unemployed engineers and the number of employed engineers can both fall at the same time is if a large number of engineers are simply leaving the profession.
The Bureau of Labor Statistics (BLS), the government agency responsible for gathering employment data, uses a simple survey of households to establish employment levels and rates. The agency calls a person at random, asks what they do for a living and if they have a job. A person who considers him/herself to be an electrical engineer, but who currently does not have a job, would show up as part of the unemployment rate. However, if the next month the same person is called and they have taken a job as a clerk in a local store, they would no longer be an unemployed engineer. They would be an employed sales clerk. In this case, both the engineering unemployment rate and total employment would fall — while the employment rate and total employment for sales clerks would rise.
The actual number of practicing electrical engineers continues to decline, even as the dot.com collapse fades into memory. By 2003, most of the economic effects of the boom and bust had already run their course as the bulk of the economy recovered and moved on. But the number of self-identified electrical engineers continues to decline, even as the rest of the economy recovers.
This situation is not identical across all engineering disciplines. A few fields, including software engineers and computer and information systems managers, have seen their number rise in the past year. But overall, 2004 saw 220,000 fewer employed U.S. electrical engineers than in 2000, despite falling unemployment, according to BLS data.
Declining employment can be as worrisome as increasing unemployment. The economy can still benefit from an unemployed engineer who has taken a non-engineering job. But when an engineer leaves the profession, those high-value skills may be lost for good. IEEE-USA has many career and employment products and services to aid unemployed and employed U.S. IEEE members. For an overview of the tools, products and services that IEEE-USA has to offer, go to the IEEE-USA Career Navigator Web Site
The Poor Get Richer
Monday, March 13, 2006
The Culture of the New Capitalism
In recent years, reformers of both private and public institutions have preached that flexible, global corporations provide a model of freedom for individuals, unlike the experience of fixed and static bureaucracies Max Weber once called an “iron cage.” Sennett argues that, in banishing old ills, the new-economy model has created new social and emotional traumas. Only a certain kind of human being can prosper in unstable, fragmentary institutions: the culture of the new capitalism demands an ideal self oriented to the short term, focused on potential ability rather than accomplishment, willing to discount or abandon past experience. In a concluding section, Sennett examines a more durable form of self hood, and what practical initiatives could counter the pernicious effects of “reform.”
Today's Bosses Find Mentoring Isn't Worth The Time and Risks
March 13, 2006; Page B1
Since he became chief executive officer of Irvine, Calif.-based Freedom Communications in January, Scott Flanders has been crisscrossing the country to meet and talk with employees at dozens of locations. But Mr. Flanders has also told his managers that they can't afford to constantly offer advice and guidance to their staffs.
"In this flatter world, where most managers have a broader span of control, there aren't enough hours in the day to double-check everything employees do," he says. "We can't tolerate mediocrity, but we have to presume the competence of employees -- and then, when we're disappointed, spend time coaching and training," or weed out failures.
This new model of management -- teaching by example and offering employees intermittent feedback rather than meticulously reviewing everything they do -- is being adopted formally and informally at many companies. It's a change many managers have to make. Their staffs are larger because of restructurings that have cut layers of managers, and increasingly they are expected to produce work themselves while supervising employees' output.
Many also feel pressured to spend more time with their own bosses, reporting their progress and lobbying for resources for their staffs. And with ranks thin and chances for promotion scarce, they are wary of investing too much personal capital in a young employee for fear that person may stumble later on, tarring their own reputation with superiors.
Mr. Flanders believes that managers who spend most of their time coaching employees on how to do their jobs are wasting their talents. They would be more useful, he thinks, if they thought of ways to expand their businesses and improve productivity and work quality. In his own first job, he says, his boss, who was an engineer, "inspected everything, but that slowed the pace of where we could move. Everything we did, we did with excellence, but we also lost market share."
The emerging hands-off management model does have critics. Jeffrey Pfeffer, a professor at Stanford Business School, cautions that "it's penny wise and pound foolish" for companies not to want managers to train and mentor employees. "Everyone has more people under them and many are playing it day by day, hoping their staffs will somehow be self-reliant," he says. "Maybe the lack of time for training won't affect performance today or next week," he adds, "but it will further down the road, when you need a new generation of leaders" or employees who can handle difficult assignments.
For most managers, it's a complicated juggling act knowing when and how much to coach employees. They don't have time for the hand-holding they may have received earlier in their careers, but they have to know who is and isn't performing well so they can jump in quickly if someone is underperforming.
"Doing this is a complicated dance, since no two employees take feedback in the same way," says Carl Bass, chief operating officer at Autodesk, the San Rafael, Calif., software maker. Some employees react well to candid criticism, saying it helps them to know what to do to improve, while others think it's a sign they're being shown the door.
Mr. Bass has learned to strategize before he meets with employees rather than blurt out criticism. He and Autodesk's human-resources chief met recently to discuss how to approach one valued employee they didn't want to lose about one aspect of his performance. They decided the employee would likely improve more quickly if he received praise for his past accomplishment along with advice about what he needed to do now.
Employees learn more from the example their boss sets than from any verbal feedback they are given, Mr. Bass believes. "As an executive, you're always being watched by employees," he says, "and everything you say gets magnified -- so you teach a lot by how you conduct yourself."
He adds that he learned one of his most important management lessons when he met Autodesk CEO Carol Bartz 13 years ago. Autodesk had just bought the company Mr. Bass had founded and Ms. Bartz, dressed in a business suit, was doing due diligence on the acquisition when Mr. Bass arrived at her office. She stopped everything and gave him her complete attention. "She made me feel like I was the most important person in the world, even though I was dressed in shorts and Birkenstock sandals," says Mr. Bass, who will become CEO when Ms. Bartz becomes executive chairman in May.
Tom Mattia, senior vice president, world-wide communications, at Coca-Cola, has about 90 direct reports, and he says he's trying to "mentor on the go." Last week he traveled from Atlanta to Chicago, New York and Louisville before heading to a weekend meeting in Miami. Next week he will fly to Sydney. "I try to make every interaction I have with someone on my team a teaching experience," he says. "There are always specific work issues that need to get addressed, but then I try to explain my thinking behind an approach so people can get more experience."
Low Costs, Plentiful Talent Make China a Global Magnet for R&D
By KATHY CHEN and JASON DEAN
March 13, 2006; Page A1
BEIJING -- Multinational companies, drawn by a huge and inexpensive talent pool, are pouring money into research and development in China -- a trend that promises to broaden the country's huge role in the global economy.
The total number of foreign-invested R&D centers in the country has surged to about 750 from 200 four years ago, according to China's Ministry of Commerce. And in a survey of multinationals published in September by the United Nations Conference on Trade and Development, China was by far the most frequently cited location for R&D expansion, well ahead of the U.S. and third-place India, China's chief rival as an emerging innovator.
Still, China's growth as a global R&D hub faces some constraints. Among them is the country's weak protection of patents and other intellectual-property rights. That has encouraged some foreign companies, fearful of risking their trade secrets, to keep more cutting-edge research out of China, analysts say. But others have rushed to expand the scope of their development efforts here.
Whereas R&D investment in China initially focused on adapting existing products and technologies to the Chinese market, companies such as Procter & Gamble Co., Motorola Inc. and International Business Machines Corp., among many others, have been investing to expand their Chinese R&D operations to develop products for the global market.
P&G opened a research arm in China in 1988, consisting of two dozen employees concerned mainly with studying Chinese consumers' laundry habits and oral hygiene. Today, the U.S. consumer-products giant runs five R&D facilities in China with about 300 researchers who work on innovations for everything from Crest toothpaste to Oil of Olay face cream.
The Chinese facilities have been a lead site for developing a new grease-fighting formula of Tide laundry detergent that sells in Asia, Eastern Europe and Latin America. At one facility in Beijing's university district, researchers use computer modeling to tinker with other promising formulas that chemists in white lab coats and protective glasses then mix and test. "We are developing capabilities in China that we can use globally," says Dick Carpenter, director of P&G Technology (Beijing) Ltd.
Giving impetus to the R&D expansion in sectors from biotechnology to pharmaceuticals to semiconductors is China's government. Having enlisted foreign investment to transform China into a manufacturing powerhouse over the past few decades, Beijing now is mounting a campaign to strengthen domestic innovation that could help push the country into more advanced niches of the global economy.
In his annual report at the National People's Congress in Beijing, which ends tomorrow, Chinese Premier Wen Jiabao said the central government will increase spending on science and technology by nearly 20% this year. "China has entered a stage in its history where it must increase its reliance on scientific and technological advances and innovation to drive social and economic development," he said.
China's State Council, or cabinet, recently said the country would seek to boost R&D investment to 2% of gross domestic product in 2010 and 2.5% by 2020. At a news conference Friday, senior officials outlined tax breaks and other tools they plan to use to meet that target. Last year, total R&D spending in China -- not including foreign investment -- reached $29.4 billion, rising steadily from $11.13 billion in 2000, according to the government.
China faces numerous obstacles to joining the ranks of the world's innovation leaders -- beyond its weak intellectual-property protections. Research spending is still small compared with that of developed countries; the U.S., for example, spends about 2.7% of GDP on R&D, compared with 1.3% of GDP in China last year. And much of what is spent in China still comes from foreign companies: Less than a quarter of Chinese midsize and large enterprises had their own science and technology institutions in 2004. Of China's high-tech exports, valued at $218.3 billion last year, nearly 90% was produced by foreign-invested companies, according to the Ministry of Commerce.
Still, the R&D trend is bolstering China's position relative to other developing countries, particularly India, which is also seeking to build its innovation abilities. India's total domestic spending on R&D rose an estimated 9.7% to $4.9 billion, or 0.77% of GDP, in the fiscal year ended March 2005, according to India's Ministry of Science and Technology.
India is also trying to build R&D, "but the scale of investment [compared with China] is not much" because of budgetary constraints, says V.S. Ramamurthy, a top official at the ministry. Foreign investment in Indian R&D has also lagged behind that of China, he says. And while Mr. Ramamurthy argues that the amount of investment isn't the only way to measure R&D success, "it is a concern for us."
Zhang Jun, director of the China Center for Economic Studies at Shanghai's Fudan University, says that given time, "China's advantages in this area will become more obvious...and its attractiveness will increasingly become stronger than India's."
Among China's draws, he says: the relatively low cost of hiring engineers and researchers; a huge talent pool, including five million university graduates annually (one-fifth majoring in science or engineering); and China's own huge market of 1.3 billion consumers. China offers its students abroad incentives to return once they graduate, including generous research grants and chances to run their own R&D projects.
One early returnee is Enge Wang. Mr. Wang, who had worked as a research associate at the University of Houston, decided to return to Beijing to conduct research under a Chinese Academy of Sciences program in 1995. At the time, he says, his U.S. colleagues and friends questioned his decision, but he says he is glad he made the move. Today, Mr. Wang is director of the Institute of Physics under the academy, one of China's top research organizations, which is engaged in several R&D cooperative ventures with foreign companies.
China's "research funding is getting much better," Mr. Wang says, and as a result, overseas Chinese are flocking back from top U.S. institutions like Harvard University and Lawrence Berkeley National Laboratory. Talented returnees can secure enough backing "to build up their own lab and extend their research in one direction for 10 years," he says. "It's hard to find such conditions elsewhere."
"There's been a paradigm shift among foreign companies in China," says Chen Zhu, a Chinese Academy of Sciences vice president. "Now, more foreign companies realize China is not just a market but a country with huge amounts of talent."
Motorola, which began investing in low-level R&D in China in 1993, now has 16 R&D offices in five Chinese cities, with an accumulated investment of about $500 million. The U.S. company has more than 1,800 Chinese engineers, and the number is expected to surpass 2,000 this year. They have recently begun developing new phones and other products for sale not only in China, but also overseas, executives say.
One phone developed in China, the A780, lets users write on the screen with just a finger, rather than a stylus. It's now available in the U.S. and Europe. Another phone that can scan contact information from business cards using a built-in camera and enter it into a contact database is expected to be marketed in the U.S. "China is moving from the manufacturing center into advanced R&D," says Ching Chuang, who heads Motorola's Chinese R&D operations.
Microsoft Corp.'s basic-research lab in Beijing was only its second outside the U.S. when it opened in 1998. That China lab now employs about 200 full-time scientists, and the software giant expects its total R&D headcount in China to double in this year to about 800 researchers.
At IBM's research lab in Beijing, Chinese scientists have led the development of several technologies now being used abroad. Among them: "voice morphing" software that can convert typescript or a recorded voice into another voice. "Our R&D now has a global mission," says Thomas S. Li, director of IBM China Research Lab.
At the state-run Institute of Computing Technology, engineers are tackling one of technology's tougher challenges: designing a computer microprocessor. Though still many years behind industry leaders like Intel Corp., the institute last year unveiled its second-generation microprocessor, with about the same computing power as mainstream chips in the late 1990s. This year, it plans to finish work on a third-generation chip that could narrow the gap.
China is also emerging as an R&D force in such sectors as nanotechnology, biotech and genetically modified crops. It was the first country to establish a full rice genome database, which has helped Chinese scientists develop hardier and higher-yielding strains of the staple cereal.
Swiss pharmaceuticals companies Novartis AG and Debiopharm SA have teamed up with the Shanghai Institute of Materia Medica under the Chinese Academy of Sciences to conduct research into traditional Chinese medicines to look for treatments for malaria and Alzheimer's disease. "This last decade, the progress we have seen in China's scientific research sector is phenomenal," says Ju Li-ya, director of Debiopharm's China department.
Tuesday, December 20, 2005
Building a Better Engineer
With No Tuition or Tenure,
Olin College Aims to Produce
Grads for a Global Economy
By DAVID WESSEL
Staff Reporter of THE WALL STREET JOURNAL
December 20, 2005; Page B1
NEEDHAM, Mass. -- Olin College is the answer to an extraordinary question: If a foundation offered $460 million to start an undergraduate college of engineering from scratch, what would it be like?
And Franklin W. Olin College of Engineering is like few other schools. It has no academic departments. No tenure. No tuition. And more female students and professors, percentage-wise, than almost any other U.S. engineering school.
Then there are the classes. In an innovative course that integrates math, physics and engineering, freshmen David Gebhart and J.P. Pechan huddle over a cardboard-and-foam model they've built that looks like a seesaw with a wagon wheel rolling along it. The assignment: to design a gizmo controlled by a motor, write equations to describe its motion, simulate it on a computer, and build a working model that can be controlled from their laptop computers.
[See a Photo Slideshow]1
Michael Moody, dean of Olin's faculty and professor of mathematics, with students.
Prof. Mark Somerville -- a Rhodes scholar who majored in engineering and English as an undergrad and earned a doctorate in electrical engineering from Massachusetts Institute of Technology -- looks over their shoulders and points to a sprawling equation they've written in pencil on butcher paper. "Is this your controlling equation? What's this term?" he asks, pointing to a jumble of Greek letters. They answer. He asks something else, and moves on to another cluster. It's physics and calculus taught by the Socratic method, though the course does include weekly lectures.
"In most engineering schools, it's learn, then do," says Olin's president, Richard Miller. "We turn that around: Do, then learn. It's learning to swim in the deep end."
Olin College was spawned by the F.W. Olin Foundation (F.W. Olin being the founder of a predecessor company of today's Olin Corp). The F.W. Olin Foundation's trustees, having spent decades financing science buildings on college campuses, decided to go out of business rather than recruit a cadre of younger trustees. To the disappointment of fund-raisers at every other engineering school, the trustees decided to start a new college.
"We found out the National Science Foundation was spending a lot of tax money trying to reform engineering education," says Lawrence Milas, the foundation's president. "Although there were some areas of success, it was a very difficult thing for existing institutions to accomplish. Academia moves at a glacial speed."
The college's founding team gathered ideas being tried at other engineering colleges, and added a few of their own, attracting faculty -- despite the no-tenure rule -- by offering the excitement of building a college. Among those consulted was Michael Moody, chairman of the math department at Harvey Mudd College, a 50-year-old undergraduate engineering school in California with some similarities to Olin.
Says Mr. Moody, now dean of the Olin faculty: "In one of my first meetings with the provost, David Kerns, I said, 'Olin is a once-in-a-lifetime opportunity for you.' And he responded, 'Actually, it's much rarer than that.' "
[Michael Moody, dean of Olin's faculty and professor of mathematics, with students.]
The school, with just under 300 undergraduates, will graduate its first class this coming spring. It has the air of a start-up. David Barrett, who left iRobot Corp. to teach at Olin, says his job often is like building a bridge six inches ahead of an advancing army. When another professor talks about "the way we used to do it," he means "how we did it last year."
To a visitor, the school resembles any other small college. What's different about it is its almost messianic mission: to change the way engineers are educated in the U.S. so that they can help the U.S. compete in a global economy with lots of smart, ambitious engineers in China, India and elsewhere. "If they become another good engineering school, they will have failed," says Woodie Flowers, an MIT professor advising Olin. "The issue is to do it differently enough and to do it in way that will be exportable" to other colleges.
Olin's "founding precepts" rule out tenure and tuition, and admonish the college to avoid becoming "resistant to change." The goal of gender balance came later. Today, 13 of the 32 faculty (or 40%) and 43% of the students are female. Nationally, it's about 20% for students. "It's nice not being a novelty," says senior Mikell Taylor, who turned down MIT for Olin.
Professors occasionally intervene to make sure the women thrive: In forming groups of students, for instance, they rarely put one woman with three men. President Miller says the school's female students have just as impressive SAT scores and grades as the men. He speculates that young women may do better at Candidates' Weekend, an audition of sorts in which applicants are evaluated, in part, for how well they work in teams and communicate.
That emphasis reflects pressure from business to produce engineers who can do more than turn concepts into working prototypes but can work in interdisciplinary teams and focus, more than earlier generations, on conceiving and designing products. It's too soon to tell if Olin is delivering that, but corporate executives say early signs are encouraging.
[Olin freshmen developing prototype toy animals for a course called Design Nature.]
Olin freshmen developing prototype toy animals for a course called Design Nature.
"They've ended up with an outstanding student body," says Olin fan Wayne Johnson, Hewlett-Packard Co.'s vice president for university relations. "They're exposing them to things that it might take you 10-15 years to learn in a corporation -- the whole aspect of how to develop an approach that works in an organization. It isn't just intuitive; you've got to learn how to do it."
Still, important questions preoccupy Olin observers, both inside and outside the college: Would Olin's techniques work in a bigger school? Is Olin's main advantage its unusual wealth? Or its exceptional students? Can Olin sustain the energy of a start-up as it matures?
"Is it a model that can be scaled nationally in some way?" asks Richard Taber, who oversees the National Academy of Engineering's "Engineer of 2020" project. He's not sure. "Their students are unique. They aren't representative of the population of engineering students, and the resources of the school also are unique."
"I don't think it's an open question whether their students will do well," says Gary Gabriel, director of the National Science Foundation's division of engineering education. "Will they change engineering education? That's the open question."
For Larry Marturano, a Motorola Inc. researcher, there is no question about the abilities of Olin senior Drew Harry, who worked last summer in the company's Schaumburg, Ill., research labs. "He was probably the best intern we ever had," Mr. Marturano says. "He had a unique combination of research maturity coupled with passion coupled with entrepreneurial spirit." So when Mr. Harry asked if Motorola might be interested in being one of 13 companies paying $50,000 to engage a team of Olin seniors working on their senior project, Mr. Marturano bit.
Mr. Harry and a handful of other seniors are trying to design, build and test a service that takes advantage of the fact that modern cellphones know where they are, perhaps a service that will remind a user when he is near a store that he has bookmarked or in range of friends.
As for Messrs. Gebhart and Pechan, as of 10:30 p.m. last Thursday, they were trying to get their seesaw to work. "We have a working simulation, a working circuit, and a program to control the balance beam through our computer," Mr. Gebhart emailed from his laptop (which has red duct tape forming the word "MINE" on the cover). "We are confident, determined, and full of caffeine. It will get done."
The next morning, having pulled an all-nighter, Mr. Gebhart reported: "Basically, all portions of our project work separately, but we are having trouble getting them to all work together." But he and his partner were planning to display it at an all-school exposition today. "So that means we get another shot at having it work," he said.
San Diego Tech Jobs Sluggish
As the San Diego economy boomed in the late 1990s, technology companies supplied much of the rocket fuel, with biotech and telecommunications leading the way.
Yet over the past four years, technology employment has been stuck in neutral, according to statistics from the California Employment Development Department. Jobs at biotech, software and electronics companies are down 8 percent from January 2002 through October 2005.
While electronics manufacturing has been hardest hit – dropping 2,600 jobs – it's not alone in dragging down local tech employment. Software publishers employ 700 fewer workers. Pharmaceutical and medical manufacturing has dipped by 1,040 jobs.
For many industry experts, the statistics are surprising and, frankly, hard to believe. Technology was a savior of the region's economy after the defense and aerospace bust of the early 1990s, creating many of the county's new jobs and now accounting for 10 percent of the region's total employment.
The rise of companies such as Qualcomm led some to speculate that San Diego could emerge as a technology hub akin to Silicon Valley. The San Diego Regional Economic Development Corp. dubbed the region "Technology's Perfect Climate."
While the local economy overall has been strong over the past four years, with continued job growth and unemployment rates below the national average, most tech companies haven't been big contributors.
Instead, construction, real estate, tourism and retail have created most of the county's new jobs. [construction and real estate are tightly related, real estate and retail are related in equity has been used to increase purchasing power]
Technology could be on the verge of an awakening. Many local companies have dozens – even hundreds – of openings. Some are having a hard time filling positions. Websense, a San Diego-based Web filtering provider, hired 33 workers in the third quarter and has 40 positions open now.
"Staffing continues to be a challenge across the board, from very technical people to non-technical people," said Susan Brown, senior vice president of human resources for Websense, which has 570 employees.
Yet up until now, the recovery in the local technology landscape has been uneven. For every Qualcomm, which has 500 openings, there is a Kyocera, which cut 900 jobs in San Diego this year. For every ViaSat, which has about 60 openings in Carlsbad, there is an Intel, which moved 169 jobs from San Diego to Portland, Ore., in June. For every Invitrogen, which has more than 110 position available in California, there is a Merck, which eliminated 109 jobs at its La Jolla facility last summer.
When Josh Rabinovitz, 30, moved from Gainesville, Fla., to San Diego in October, he sent out résumés in response to hundreds of jobs listed on tech-focused job boards on the Internet. Rabinovitz has six years of experience in information technology, a master's degree in information science and an undergraduate degree in finance.
Rabinovitz has found the job market mixed. He has gotten plenty of responses. He turned down one job with a small company because the pay was too low. He has a couple of leads for other positions. But none is in information technology management, where he would like to work.
"The technology world has become kind of tricky," Rabinovitz said. "There are two types of people. There's someone like me, who is a jack-of-all-trades, or there's somebody who's very highly specialized with a particular programming language or two. What I've found is there are a lot of jobs out there for the specialized people.
"It's not that I couldn't learn it. But there's a very big premium put on experience, more so than education, in the job market right now."
While some tech industry experts say a recent hiring surge by local tech companies soon may turn around the overall employment statistics, others are skeptical. More biotech and electronics companies are outsourcing lower-level jobs that used to be done in-house.
In biotech, some upstart companies are going virtual, outsourcing much of the initial animal research and chemistry work to firms overseas.
As a result, they don't need to establish an expensive lab in San Diego and staff it with high-paid scientists. Local venture capital firm Enterprise Partners has funded two virtual biotech startups recently, Celladon Corp. and Ascenta Therapeutics, said Drew Senyei, a partner in the firm.
"In China, a chemist will make one-third of what a chemist makes here," Senyei said. [Are San Diego chemists three times better?]
Some virtual biotechs have used outsourcing firm WuXi PharmaTech of Shanghai for medical chemistry work "with excellent results," Senyei said.
In addition to outsourcing, many technology companies expect permanent programmers, engineers and scientists to do more and have higher skills than was the case during the dot-com boom years.
"Someone who is doing Web development also is expected to do a little more hard-core programming – systems programming, database programming," said Brett Humphrey of Fairway Technologies, a San Diego outsourcing firm which provides contract software programmers to clients.
Technology and biotech jobs in San Diego, including aerospace, totaled 126,140 at the end of October, according to the California Employment Development Department.
While state statistics are good at pinpointing certain categories of tech jobs, they are not perfect. They tend to under-report overall technology employment. Tech workers employed by Manpower, Robert Half and other outsourcing companies are not separated from all other, nontechnical temporary workers. Therefore, they are not included in the tech jobs estimate. Other technology jobs are buried in employment categories that include professions such as architects, so they also aren't included.
Still, job data in tech-oriented categories show a jagged job market since January 2002. This year, tech companies have laid off more than 3,000 workers, according to filings under the Worker Adjustment and Retraining Notification, or WARN, Act.
Part of the decline stems from a tech recovery that hasn't treated all technologies equally, said Matthew Kazmierczak, vice president of research for the AeA, formerly the American Electronics Association. With the exception of wireless, telecommunications remains down locally and nationally.[Everybody who wants a cell phone has one by now. The focus now is on commoditizing technology, not design.] Electronics manufacturing nationwide has added jobs recently but is nowhere near employment levels seen during the boom years.
"There has been a pickup in 2005, but it's not huge, and it's mostly confined to the services side," Kazmierczak said.[Aren't these service jobs low-paying?]
Although local technology jobs haven't increased, the county is still adding workers overall. The jobs have been most plentiful in tourism, retail and real estate, said Alan Gin, an economist with the University of San Diego. [The quoted statistic is that 40% of new jobs in the last 10 years are related to real estate. ]
"The thing that's concerning about the (tech job statistics) is those are high-paying jobs," Gin said. "If we're not getting growth there, it's a little bit worrisome given the high cost of living in San Diego."
For San Diego companies trying to recruit workers, it's still a struggle to find people with the qualifications they want. Steve Estes, vice president of human resources for satellite communications maker ViaSat, said software engineers with security clearance to work on the company's military contracts are a particular need. At Websense, Internet security programmers are in high demand.
On Monster.com, a Web site for job seekers, almost 300 information technology openings have been posted in San Diego in the past 30 days. Nearly 145 openings were available in biotech.
"There's really no shortage of jobs," said Humphrey of Fairway Technologies, the outsourcing firm. "So the problem for us has never been finding the work but finding the right people." [He means the "right people" at the RIGHT PRICE! ]
Phil Blair, a co-owner of Manpower in San Diego, said getting skilled tech workers to move to high-priced San Diego remains a challenge. More companies are paying signing bonuses and providing other incentives.
"The reason Qualcomm has 500 job openings here in San Diego is they can't get people to move here," Blair said. "It's not the quality of life. It's the cost of living."
Blair worries that tech companies in lower-cost cities will begin exploiting housing affordability to recruit local workers.[He should be making this statement in the past tense since it's already happened and is happening. ]
"The danger is a company sitting in Cincinnati needs 20 high-tech people, they come to San Diego and can say, 'Your quality of life will double. Yes, the weather is a pain. But here's the quality of the schools. This is the type of house you can buy for the same price,' " he said. "So I'm concerned about people being sucked out of San Diego [It's already happened and is happening. ]