Valve Technology Blog

I was gonna say.....................someone go find me a CEO of a company that off shored manufacturing because there aren't enough engineers in the US.

Please!!!

This is a shoe looking for a foot to fit it!

I don't buy into the idea that manufacturing is going overseas because of a lack of domestic engineering students.

It is going overseas because companies find manufacturing cheaper overseas than domestically.

Overseas manufacturing has cheaper labor, lower operational costs, and in countries like China they enjoy a decoupling of their currency from the rest of the world. This gives China an advantage when compared to other manufacturing countries.

Educating more engineers domestically will not shift the origin of manufacturing, but dream on.

Educating more engineers domestically WILL give us more AMERICAN engineers, which should help "us" out a bit.

By the way- China is having problems now because ITS new middle-class doesn't want to do "cheap" jobs, so some of THEIR work is going elsewhere.

Also- several companies are moving manufacturing back to the US because the infrastructure in those "cheap labor" foreign lands causes massive loss of manufacturing due to power outages or poor quality power and they have major problems with roads, shipping, etc. I know of a company that moved it manufacturing to Mexico and lost so much production time that they have moved the plant back the the US.

While I realize the outsource flow is ebbing, the premise that simply putting more students through engineering school will reverse or improve the outsource problem is naive and myopic.

The driving factor for manufacturing overseas is cost. That is the bottom line. Having more high paid (by other country's standards) domestic engineers does nothing to lower the cost of manufacturing in the US to a level that is competitive with countries like India and China. It is a total fallacy of logic.

I agree with USBPORT's comments, and also that jobs have gone overseas for cheaper labor- NOT because there is an engineering shortage.

BUT- there IS an engineering shortage coming. Rosie the Riveter will NOT get more girls to sign up for engineering studies. Joe the Riveter will NOT get more boys to sign up for engineering studies.

When engineers can make anywhere CLOSE to the same money that the business school grads are making on Wall Street (or anything like it around the country), THEN students will think about engineering. OR-

If some engineers would go out to the schools- especially MIDDLE schools, and put on programs about some of the COOL stuff you get to do as an engineer- like alternate energy, or environmental remediation, "green" cars, hell- even making a better mouse trap, then you will get those kids interested in engineering.

Way back in the "good old days", when I wasn't walking three miles to school, up-hill both ways, in the snow that was up to my knees, there used to be a great show on called "Mr. Wizard". Don Herbert was a GE Engineer (only the advertising told you that) who used to get kids really excited about physics doing some very interesting stuff like collapsing 5-gallon cans after you boiled a bit of water in it, took away the heat and put on the lid, then poured water over it (to condense the steam and create a high internal vacuum from the collapsing steam). GE also sent teams out to schools to put on a show in the gym by spinning a bike tire really fast on a hand-held axle and showing you what happened when you stood on a pivot base and turned the tire (you could control which way you spun or stop spinning) or watched a ping-pong ball go fly across the room after being shot out of a tube where a piece of nichrome wire was exploded from the short circuit electric discharge of a charged capacitor or saw three of your teachers be pushed across the floor by the smallest kid in the room after they stood on a platform "powered" by the discharge of a hand-held vacuum.

THAT got my interest way up- and a lot of other classmates as well. WE need a similar program to start again to let kids know just how things get to be the way they are and what can be done to improve their lives- IF they learn what to do.

One issue here is that the average Wall Street salary is about $141,000. That is not bad, except that in NYC it does not go nearly as far as it does in the average suburban town. Ever live in NYC?

In addition to that a significant number of these employees are PhD grads in physics and math. It is understandable that they would command a higher salary.

Finally, you can't outsource (at least not easily) this type of work, so you pay higher salaries to get the best brokers and analysts you can to maximize return on investment. There are other factors, but it gets more complex.

"If some engineers would go out to the schools- especially MIDDLE schools, and put on programs about some of the COOL stuff you get to do as an engineer- like alternate energy, or environmental remediation, "green" cars, hell- even making a better mouse trap, then you will get those kids interested in engineering."

Building your own device as a personal project is a good advertisement for engineering. I've built an electric bicycle drive assist from scratch. Kids love that kind of thing, especially if you get on it and it goes.

From an aavid lurker:

They say that the best way to help a child is 100 years before he is born.

The way we encourage engineering studies HAS to start in elementary schools. Kids have got to see engineering as a valid career choice and something cool to do. Volunteer in your local schools. (Direct, Junior Achievement, Skills USA) They will love you. (it is the most rewarding thing I do) Look into FIRST Robotics (www.usfirst.org) It is over 50% girls. It is the best thing happening in K-12 in America for engineering. (It is also the most fun I have). Be the anti-MTV choice. Share your story with young people and embrace your inner Nerd and make it ok for kids to be different and to consider technology, manufacturing or engineering. Engineering was good enough for you - why not share it with others?

Responding to one comment, I go offshore because of a lack of engineers in our supply chain. For us, its capability, NOT price! It kills me that my industry (aluminum extrusion) is dying from complacency while Asia suppliers figure out how to do the cutting edge stuff.

American manufacturing is seeing a resurgence of 'can do' but we have to figure it out before we all retire. In the Northwest, we formed an alliance called Center for Advanced Manufacturing where we bring together manufacturing people committed to bringing back innovation and drive to American manufacturing.

We are also engineering solutions that beat Chinese fabrication pricing in a program that draws industry back from the China shores which pulls engineering interns to want to work with us.

I was no sure how many companies are going "to the world" for their adequately skilled engineers- for the skill, not the price.

My company is doing that- for that reason- but we will hire as much "home grown" talent as we can.

We are doing our manufacturing in abandoned auto plants, hiring the displaced workers who used to build gas-guzzlers for international companies who did not have a clue of what the customer wanted. They will work building our products that save energy AND cut environmental releases. We plan to always export- as we grow and have international plants, they will be for products sold in that region.

Who in their right mind would spend four years in an academic program easily as rigorous as medicine to end up being paid 1/2 to 1/4 what an MD makes. Where I live state cops easily top 100K a year with OT and have free use of a vehicle to commute in. Gee whiz, engineering, yeah that's the job for me, where you get to work for morons whose only motivation is the stock price and their yearly bonus depending on how much they can hold down salaries. Yeah, that's the job I want.

Gee, if that is really your attitude you are doing the engineering community a big favor by passing that career.

The problem, as I see it, is that you are more motivated by salary and return on investment than doing something you love. If that is true you will never reach your potential nor will you really ever be satisfied.

The number one thing that is most important is doing what you are passionate about.

The second flaw in your argument is that earning a M.D. takes more than 4 years. You have 4 years of undergraduate study (which I completed before returning to engineering myself) and another 4 years of medical school followed by internship before you are free to work as a doctor. It's a rigorous road.

Then, a general pediatrician earns an average salary of about $95,000, the average for family practice is about $165,000, and surgeons earn $225,000 and up. That is before you pay for malpractice insurance and after 10 years of education to get there - not 4 years.

I personally know many doctors and my business partner is also a surgeon and I can tell you reliably that a doctor is not the panacea of wealth for everyone that you imply.

1) In K-12, more math and science, less athletics, band and such useless distracting "studies".

2) And the teachers must have a technical background. My physics "teacher" was the football coach; football was god, but physics didn't warrant a real teacher.

3) Colleges need a hardcore engineering degree path free of the humanities crap. Get the engineer out in 2 years instead of 4.

4) Industry must implement a true career path for engineers that includes the perks that management gets; more money, better facilities, etc. I worked at 10 companies, and engineers had no way to advance unless they gave up the calling and went into management. No bonuses, no recognition for good design, for working nights and weekends while the managers were playing golf. We were just the "help." My boss could take a "seminar" cruise to the Bahamas, but I needed a written justification and 6 signatures to buy a power supply so I could design and test the products that paid to keep the doors open.

I think that people must again ditch consumerism. People buy stuff and when the switch doesn´t turn on the damm thing, they throw it away. Where is the curiosity of seeing how things work? Is dad too occupied in front of the tv to explain to the kid how to pick up a screwdriver and summerge themselves into the world of how things work? It is not the government´s job to guide people. It is ourselves who must guide others into seeing the wonders nature has. Engineering is obviously taught in schools, but what about home? Didn´t most of you guys and gals learn to take apart and to rebuild at home? I´m just asking. The answer lies in each of us to help our kids learn about stuff and get them interested. Once they get started some will still want to be athletes and brokers but others will want to build the world.

An interest in engineering has to begin at an early age; starting at around the 5th grade and into high school. There has to be more emphasis on science. Kids are curious and science strengthens their curiosity which is an important factor for engineering careers. Along with that, more scholarships are needed. Companies need to be re-educated to think jobs for Americans, not more profit at the expense of jobs.

lt's not a matter of the number of trained engineers. There is nothing for engineers to do because American industry is not interested in breakthrough product development. The problem is with management and the conventional method of evaluation of new ideas vs. business as usual.

Vinod Khosla is a prominent Silicon Valley venture capitalist who recently posted a penetrating analysis of why big companies can't produce breakthrough innovations and why the US is faltering in the worldwide cleantech race: http://www.khoslaventures.com/presentations/Innovation_9_8_11.pdf

Tail risk -- the rare but high impact technologies that might disrupt business as usual -- is systematically ignored, although disruptive Black Swan technologies happen all the time. For a big company trying to stay at the crest of emerging technology in its sector, the analytical apparatus from business school education effectively ties decision-makers' shoelaces together. The use of discounted cash flows and rosy scenario business-as-usual plans to estimate present value is founded on the false assumption that there will be linearity and predictability to future income streams. Black Swan technologies have a nonlinear payoff, which is as incalculable as the weather, so the development of a Black Swan in a big company is unlikely because the calculation of present value for money spent in getting it developed is impossible and therefore not even attempted. The false assumption of a linear future for business as usual and the treatment of sunk costs for technology development "disadvantages every capital-intensive platform investment and supports anything that prolongs the life of aging assets." (p. 13). And then there is the earnings per share pressure on management each quarter, which discourages any investment in breakthrough (nonincremental) technology that will only bear fruit some years in the future. It incentivizes cutting down the orchard for firewood. The business schools that have given America a gutted industrial base, a casino economy, and a hostile climate for engineering and innovation have a lot to answer for.

Amen. I remember the quarterly push to "meet the numbers." This, remember, is an engineering group, not marketing or some such. We were pressured to get projects out the door, regardless of quality or completeness, so our boss, and his boss, and his boss, etc could show good numbers. And innovation took time and money, so it was not only discouraged, you would get a black mark for not being a team player.

For starters, I would recommend an accelerated math and science program in the public school system. Speaking as a Mathematics and Civil Engineering graduate and a practicing Professional Engineer, math and science were enjoyable and challenging. My experience with students today shows a lack of interest in math and science. Is it the need for instant gratification that we have instilled in them? Probably so as an engineering career does take a fair amount of work. Showing younger people that math, science, and engineering can be enjoyable and rewarding is the first step in rebuilding the engineering base in the US.

In terms of foreign students taking advantage of our higher education system, why not place requirements on student visas that require these students to reside and work in the US for 5-10 years after graduation. The technology that they learn would then be used here instead of there. Of course tracking this and enforcing may be difficult, but it would certainly be a start.

I have to echo the sentiments of some others here. We've been hearing about this "shortage" for most of our lives, now (and in more than just the field of engineering). With the current unemployment rate, is anyone seriously going to believe there aren't qualified candidates out there? And if the lament is for future projections, does this mean, mfgrs. who outsourced, have had a sudden epiphany that they plan to move all operations back to the U.S. and are shocked at the environment they have helped create?? S-U-R-E.

Maybe there is someone here who can shed some light on the counter-view, of management that "had" to succumb to outsourcing. There's almost always 2 sides. But how does any country with a cheap labor pool develop the industry and technology required for moving operations there, without the help of the "mover?"