Engineering – Economic Benefits

Posted on July 10, 2007  Comments (5)

The issues involved in the impact of engineering education and a strong economy are not easy to address in one short article. Impacts are delayed over time. Confusion between available skills and available skills at a certain price is often raised (people claiming there can’t be a shortfall of engineers if salaries are not rising even higher). But I continue to post about these topics because I think they are important (and I find it interesting to think about and read about…). And hopefully a good understanding can be gained through the many post (and the sources referenced in those posts – Economic Strength Through Technology Leadership, includes a listing of over 15 posts on these topics). Another article addresses some of these issues with some interesting points – Innovator fears U.S. losing edge:

Not unlike Hewlett and Packard or Harley and Davidson, Bob Kern created a company while tinkering in a rented garage in Waukesha more than five decades ago. To him, too few Americans seem capable of doing that today. “There’s a gross shortage of engineering talent in the country,” Kern says. Now 81, Kern built Generac into a company that employs some 2,000 people at three factories in Wisconsin and one in his native Iowa.

Generac makes power generators, the type that back up data centers, hospitals and homes during power failures. Equipped with a mechanical engineering degree from the University of Illinois, Kern spent his career searching for inventive folks to maintain a culture of constant innovation. More often than he cares to admit, he couldn’t find them in his home country. Since the 1970s, he has contracted with engineers in Korea, Taiwan, China, Japan and Great Britain.

What Kern represents is exactly what countries around the world are trying to duplicate. Talented businessmen creating good job. And note he started as an engineer and retired as the head of a 2,000 person company (S&P 500 CEOs – Again Engineering Graduates Lead).

The number of U.S. bachelor’s degrees awarded in engineering in 2005 was nearly 15% below the 1985 peak, yet engineering graduates have never been more in demand, according to the National Science Foundation. In a nation that needs 114,000 engineering graduates each year, according to the Department of Labor, the U.S. graduates about 65,000.

Interesting though you do get engineers in the USA that disagree saying that if more were needed the salary of engineers should raise dramatically. I think that there are good reasons salaries don’t raise dramatically. First, engineers are paid well. Second, if you would like to hire engineers in the USA but the option is none are available but you can go to India or UK or Korea and get the talent you need then you can do that (you have options besides just offering the engineers in the USA 20% raises to lure them to your company). Third, if you have projects you would like to have engineers work on but the cost benefit analysis is such that it is worth doing at $90,000 per engineer but not at $110,000 that means you want more but not more at any price.

Another point I would like to make is it seems pretty consist that there is a shortage of the most skilled, experience, knowledgeable engineers. It seems to me this is true and not something that will go away anytime soon. The areas, if any areas of engineering experience an excess of available workers to demand for workers it is likely to be in the less demanding jobs that are possible to fill. But I think this worry of excess supply should not be overstated. While I understand the worry of engineers that companies are just looking for cheap engineers not just engineers I think the evidence shows overall companies in the USA really do have trouble finding the engineers they desire (not just trouble finding those they desire who will work for too little). But this is a judgement call and something honestly I haven’t studied to the level I would need to in order to offer a definitive judgement – it is just how it seems to me.

The most critical issue to remember from an economic perspective is having entrepreneurial engineers can drive economic growth and pave the way for many others to have great job and great investing returns in their company. If your county has the engineers working and creating related jobs you benefit greatly. The USA has benefited greatly as engineers from elsewhere worked in the USA (a significant number were also entrepreneurship creating companies with great jobs). This is changing and those engineers that would have come to the USA in 1980 are now much more frequently working in China, India, Korea… My strong belief in the benefits of creating a society that generates many more engineers is for this positive impact on the economy overall. So the argument that we don’t need more engineers because the salaries of engineers are not raising even higher does not impact my desire to create a system that promotes science and engineering excellence and entrepreneurship to benefit the economy.

And many other countries have seen this and are making the types of commitments the USA made in the 1960’s. Those efforts are already baring fruit and will continue to do so at an ever increasing rate I believe. The biggest impediment those countries face are the entrepreneurial spirit and infrastructure. But they are dealing with that issue also, it will just take longer I believe but likely a couple of nations will break through. Countries like Singapore and Finland are doing some pretty amazing things but the small size of the countries does seem to impose some restrictions on how large an impact they will be able to have. There are many others (China, India, Brazil, UK, France, Korea, Mexico, Sweden, Israel, Germany…) that want to gain these advantages and some are likely to succeed much more quickly than most anticipate.

Kern’s signature program has become Project Lead The Way, a highly regarded hands-on, pre-engineering curriculum that extends from sixth grade through high school. Students in the program assemble magnetic hover cars, marble sorters and accurate ping-pong ball launchers. When Kern became involved with Project Lead The Way in 2004, only two schools in Wisconsin had implemented it. This fall, it will be in 113 schools serving 7,500 students, not counting Lead The Way programs that the Kerns fund in Iowa, Minnesota and Illinois.

Chinese education officials have expressed interest in importing the model.

State officials in New York, Indiana and South Carolina promote the curriculum as an economic-development priority. But Deborah Mahaffey, assistant state superintendent in the Department of Public Instruction, said Wisconsin has left it up to the Kerns.

China would be smart to import it, Project Lead the Way is a great program.

Related: USA Under-counting Engineering GraduatesMexico is Graduating Large Numbers of EngineersEngineering Education WorldwideChina’s Economic Science ExperimentK-12 Engineering Education

5 Responses to “Engineering – Economic Benefits”

  1. xm carreira
    July 11th, 2007 @ 12:46 pm

    Years ago engineering was a well paid job that attracted the best and brightest minds. But now it is different, most of my old friends moved to finance, business, sailing and such. Only the low cost fresh graduates remained in the companies without anyone to use as a mentor. In the end, you get what you pay for.

  2. CuriousCat: Science Serving Society - Speech Austalian Minister for Innovation
    March 24th, 2008 @ 12:20 pm

    “When societies invest in science, they are investing in their own future. They are entitled to expect a fair return on that investment…”

  3. Curious Cat Science and Engineering Blog » Science, Engineering and National Development in Nigeria
    October 25th, 2008 @ 9:17 am

    […] I have said numerous times the development and application of science, engineering and technology solutions is an important factor to economic […]

  4. Residence Pass for Talented Expats | Living in Malaysia
    September 14th, 2011 @ 9:47 am

    One part of the plan for long term economic growth is to focus on workers with highly valued talents globally: technology, engineering (oil production, construction, manufacturing…), higher education, health care…

  5. The USA Doesn’t Understand that the 1950s and 1960s are Not a Reasonable Basis for Setting Expectations at Curious Cat Economics Blog
    October 26th, 2011 @ 10:27 am

    After World War II essentially the only significantly large industrial base was in the USA. The USA was emerging as a national power in the early 1900”²s. The wake of World War I and World War II left a very odd situation. You had many formerly very rich countries that were devastated and one rich country that wasn’t…

Leave a Reply