On the push for increasing interest in STEM and entrepreneurship

[slateraptor]

http://engineerblogs.org/2011/11/imaginary-stem-labor-shortage/

I've been contemplating the topic for some years now--since the first time I spotted a student-ran STEM organization at my university, to be a bit more precise. In a nutshell, industry has a hidden agenda (in so far as they'll never admit that their goal is to saturate the workforce with STEM candidates in order to force a reduction in labor costs) and those who are liable to blindly perpetuate this asinine campaign (aka students at universities across the nation) are the ones who will ultimate suffer its consequences.

Which brings me to the related topic of technology-oriented entrepreneurship and why there seems to be such a huge push in that general direction. Is it a byproduct of unemployment? I think not. My theory is this:

Large corporations have come to the conclusion that in-house R&D is nowhere near as cost-effective as buying out small tech start-ups. The game they're playing is risk management, and by buying out successful start-ups while they have no viable share of the market and aren't fully aware of their true worth, corporations are able to avert risky and expensive R&D investments whilst eliminating potential competition in one fell swoop. After all, it's much easier to predict future profits when you know the R&D was successful and the product has already tested the market waters.

It'd be interesting to hear what you non-US guys and gals have to say about the subject. Discussion is in order.

[Bored@Work]

In my country (and no Uncle Vernon, it is not the USA, hi, hi, hi :-) ) figures about STEM labor shortage are vastly inflated. Industry is very busy inflating them and politicians run with the idea.

Two common tricks how industries here inflate the imaginary engineer shortage are

1) Ultra detailed unreasonable requirements. E.g. you often see that they want someone who has worked with version 2.1.4.5 of some software and insist on exactly this version. Knowing version 2.1.4.4 or 2.1.4.6 would not do. Knowing all the ins and outs of the underlying engineering issues, but happening to have only knowledge of some other software doesn't do it at all.

Or they insist on five years of experience with technology X, but technology X is just three years old.

And when they combine multiple such requirements, e.g. knowledge of software version 2.1.4.5, knowledge of another software with version 9.1.2 and of course five years experience of technology X, they effectively reduce their chance of getting someone with that profile to zero.

2) Multiple advertisements for the same job. Typically the multiplication is done via headhunters and recruitment agencies. A company needs someone and asks ten headhunters and recruitment agencies to suggest candidates. Each of them posts adverts for that job in ten places (online job exchanges, industry websites, ...). And magically 100 more engineers are needed, although there is just one job.

All engineering labor shortage statistics I have seen are always based on job adverts, not real positions to fill.

On the other hand we have a huge number of unemployed engineers, typically 50 years and older. Industrie's argument is always that they don't know new technologies. Reality is they don't work for peanuts and have an own opinion. I mean, this is the generation who really learned their math (no pocket calculators) and their engineering (rarely such a thing as a computer simulation). But training them to use software version 2.1.4.5 is considered too expensive for the industry.

Software development is even worse than engineering. In software development you are considered to be to old when you are 30, 35 years.

The imaginary scientist shortage is also strange. There might be a shortage, but someone made a convincing argument why the problem lies elsewhere. Already now the existing scientists don't get enough funding. What on earth do they want with vastly more scientists if they can't even fund the research of the current scientists?

[ejeffrey]

Definitely the situation is exaggerated.  In the US a big part of it is also a way to get congress to approve larger quotas for H1B visas, which allows them to hire much lower cost workers that are basically at their mercy and can't easily apply for a new job if they are treated like shit.  This also depresses the overall labor market for engineers, keeping salaries lower across the board.  This is one reason why management salaries are typically higher than engineer salaries given a similar level of training and experience.

On the other hand, if you look at it from the students side, what else should you study if you want to be employable?  A lot of the alternatives are considerably worse.  From a broader economic sense, it also seems like having a lot more trained engineers wouldn't be a bad thing for economic growth, even if it reduces salaries for the people who do it.  Of course, you can couple incentives to study engineering with protections that keep workers -- foreign or not -- from being totally crapped on by their management bosses, but these days that is called socialism.

I would suggest that people lobby congress to add quotas of H1B visas for sales, marketing, and management types but we don't really need more of them.

[Balaur]

Well, there is so much bad stuff happening in the industry right now.

A few observations from own experience:

I. After completing the engineer degree, virtually all my colleagues have been indiscriminately hired by one or several (but not that many) large companies in my area. That was true for a few years. I have chosen to go with a start-up which was judged to be a bad idea by others

II. Teachers from the engineering schools reacted to this (transient) demand by increasing the number of graduates, specializations and classes. In addition, the many academic R&D laboratories are contracted by the companies to provide R&D services at a much lower cost than other companies. That increases greatly the leverage of academic units and I fear that will cause unrealistic expectations in engineering and PhD students.

Side note: Basically, you have this big company that is very interested in your PhD work and you participate in a lot of meetings and so on. Your PhD supervisor tells you that you are working in an elite laboratory and you are among the best researchers ever. You finish your PhD and suddenly learn that the big company has no current openings unfortunately.

III. A lot of people starts considering an engineering career because of the hiring opportunities right after school. I'm not judging anyone but I'm observing that while a lot of these people are perfectly good & adequately intelligent persons, they lack any kind of technical curiosity, interest or love for the profession. They basically follow all the steps to become electronic engineers, they get hired, a good salary and this is quite reasonable as a life choice. In the past, I teached some classes in the engineering schools and it's obvious. You have less than 10% of students that have a good reason to be there, but the remaining 90% are there because they have to get some kind of training for getting the degree.

IV. Now comes the economic downturn. Suddenly, there is zero hiring opportunity. Even payed student internships (which were abundant in the past) are hard to get. Older people are encouraged to leave the company: to be fair, there are a lot of programs to help you become an entrepreneur, to start your own business and so on. However, the success ratio of these programs is not perfect.

V. A lot of  temporary staffing/contracting companies popped up. The big companies that laid of people use their services to temporary hire back their own previous employees, however for a limited amount of time. Even if may cost extra, having this workforce "elasticity" and not having to deal with social benefits, etc looks to be a better deal on paper for the short-term thinking that is going on these days. Of course, you destroy the internal initiative, continuity of good quality service, R&D efforts and so on, but these are not usually visible on the balance sheet.

VI. Now comes the time of companies going out of business, massive de-localisation, workforce "optimization" and so on. Some people are still sheltered by a relatively good unemployment program, but things get rougher day by day

Cheers,
Dan

[kaz911]

I have been "self employed" for just about 20 years now and have setup and sold a few companies - and had a few go bust - or just closed them. Most of them was Internet related and a few was electronics related.

The problem I have seen with most engineers (EE or Software) is that they are too caught up in the tech stuff to see who will buy the items and at what price. To be a great EE you actually need other skills than EE. You need to manage your managers ... and learn to communicate without to much EE babble (Try to say SMD mount in a board room...) and you do not learn those skill's in most universities (And NOT doing a PHD..). The other problem is some EE's then starts Tech babbling when they have not meet their deadlines... (Just confuse the manager...)

So to be a great EE and get the cool jobs - learn a bit of communications skills (and that is NOT TCP/IP or 802.11) - learn some marketing - and not least - learn to understand your end user. And from time to time - show up to work in a suit :-) just to throw them off.

:-)

[Conrad Hoffman]

+1 on what kaz911 says. You need more than just engineering skills to be an engineer.

IMO, any shortages of technical people are just fabrications. Most of the places that claim shortages simply aren't offering a livable wage or a wage suited to the skill set and experience required. There are certain niche markets like CNC programmers where it's hard to find enough warm bodies with any kind of skill set, but there are tons of over-50 people with all the software skills on version xy.zzz that you'd ever need, not to mention every other engineering discipline. The idea that older engineers don't have up to date computer skills is just another myth.

What does seem to be an issue is finding any sort of business opportunity where a need can be filled at what people are willing or able to pay. Most companies are in a race to the bottom, quality and service be darned.

[JonnyBoats]

It is a basic tenant of Economics 101 that markets reach an equilibrium level where supply equals demand. This is true of engineers just as it is for turnips or anything else. The rub is at what price will they be sold?

Just as no farmer wants to sell his crop too cheap, no rational person wants to work for too low a wage. Similarly just as no consumer wants to pay more for food than they have to, no company wants to pay a penny more than they have to for engineering.

It is not always a question of "right" or "moral" or "safe" or "proper". If Dave's famous One Hung Low can use child labor to make a cheap product and sell it in the first world without doing any safety testing first, then why the heck would they bother to hire some engineer to do safety testing?

With respect to STEM education and Engineers, it is an acknowledged fact that one can get an excellent education at the Indian Institute of Technology (http://en.wikipedia.org/wiki/Indian_Institutes_of_Technology ) for a small fraction of what it would cost in the USA. Further upon graduation the cost of living in India is far less and there are many extremely qualified engineers there willing to work for less than what a graduate from MIT in Boston could afford to live on.

If you were a company motivated solely by greed and profit, who would you hire and where would you have the work done?

It is not that there are too many engineers in the first world, it is just that there are extremely few engineers in the first world who are willing to work for the same money and under the same conditions (hours, safety practices etc.) as what an engineer in China or India gets.

[Conrad Hoffman]

That's absolutely true but we as a country have decided we want to maintain a certain level of safety and environmental practices. No way no how should our government allow companies to side step those requirements by going overseas for design or production. We can compete with anybody, but only on a level playing field.

[JonnyBoats]

That's absolutely true but we as a country have decided we want to maintain a certain level of safety and environmental practices. No way no how should our government allow companies to side step those requirements by going overseas for design or production. We can compete with anybody, but only on a level playing field.

I assume you are referring to the USA? In any case deciding we want "a certain level of safety and environmental practices" is not the same as enforcing them. When was the last time you saw us cutting off trade with a country simply because they sent us unsafe products?

As much as we might wish things to be different, unfortunately the vast majority of people prefer to shop based upon the lowest available price rather than direct their business to firms with the highest ethical standards and practices.

There is another key point to remember though, the first world does not have a monopoly on good engineers. There are excellent engineers in countries like India and China, the vast majority of whom are willing to work for far less than what an engineer in America would expect. How many of those 50+ unemployed engineers in America do you know who would be willing to move to India or China and take a job at the local wage rates there? Or even work for those rates in America, assuming they do not wish to relocate.

One needs to remember that there are 100 million Chinese willing to work for $1 (US) per day. How many people do you know in the first world willing to work for that wage or even 10 times that amount. Even at 100 times that amount ($100 per day) you would be hard pressed to get reliable workers in most parts of the USA.

[Conrad Hoffman]

One needs to remember that there are 100 million Chinese willing to work for $1 (US) per day. How many people do you know in the first world willing to work for that wage or even 10 times that amount. Even at 100 times that amount ($100 per day) you would be hard pressed to get reliable workers in most parts of the USA.

Sure, but it's that equal playing field thing again. People in the USA aren't going to work for a dollar a day because it's impossible to live on it. Actually if there are Chinese willing to work for 1$ a day, you can bet it won't last for long. At the same time I do believe we've priced ourselves out of the market, but if we want to hold certain standards, it's the governments responsibility to insure that only those also upholding those standards can do business with us. Make no mistake, I'm not in favor of completely free trade. It's been a disaster for just the reason you say- we're not willing to cut off trade to anybody no matter what they do. I'm also not in favor of trashing the environment with no restrictions. Nor do I labor under the illusion that we have better engineers or anything else, than a lot of other countries. Sometimes I think it's just the opposite.

[Uncle Vernon]

In my country (and no Uncle Vernon, it is not the USA, hi, hi, hi :-) )

Yeah I know, but you so wish it was. Who am I to quash the dream.