The Industrial Perspective



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Preparing Chemists and Chemical Engineers for a Globally Oriented Workforce: A Workshop Report to the Chemical Sciences Roundtable The Industrial Perspective

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Preparing Chemists and Chemical Engineers for a Globally Oriented Workforce: A Workshop Report to the Chemical Sciences Roundtable 2 Major Trends Shaping the Future Workplace Miles Drake Air Products and Chemicals, Inc. INTRODUCTION Change is dramatic in the chemical industry at the moment. One major factor is the globalization of industry—the ability to manufacture and distribute across the world very easily and in a well-controlled manner through enterprise software and enabled systems. This interconnectivity is also changing the ability to access, communicate with, and work with talented people around the world. It seems that the old competitive advantage of inventing and keeping technologies in-house and then using them around the world has become an outdated model. Now, the types of systems in place in a company have more importance. These systems include both the business and the processes, such as trying to create a culture and excitement within a company that stimulates production. In the leading companies, there is an ingrained culture and a belief in the company. To remain competitive, this culture and belief have to be distributed globally. AIR PRODUCTS AND CHEMICALS, INC., COMPANY STRATEGY Key roles for chemists and chemical engineers are embedded in Air Products and Chemicals, Inc. (APC), company strategy. There are three ways in which they help the company to grow its products. One is expanding leadership in performance-based materials solutions. This goes beyond selling a product. It involves going out to customers; adapting, developing, and changing a product to suit customer’s needs; and then showing how the product is used. This activity requires sensitivity to the commercial needs of customers and detailed knowledge about the company and its products. The second involves leveraging APC excellence in process engineering, systems integration, and operations. This includes installing utilities for oxygen, nitrogen, and argon for large-scale use of industrial gases in the steel, electronics, and chemical industries around the world and then running and operating these utilities at very high efficiency and reliability. The third involves driving service offerings on the basis of unique positions. If performance-based materials cannot be found, then efforts must be made to provide appropriately defined services. One direction in which APC is going, driven by demographic trends, is getting involved in such things as home medical services for people on respiratory therapy, a fast-growing business for APC. The company also provides services for NOx abatement and other activities for the chemical industry. APC has $5.5 billion in sales in more than 30 countries now and about 17,000 employees. APC’s business is more than 50 percent outside the United States, with the fastest-growing area being the Asian region. GLOBAL CHANGES Global trends are very strong drivers for business growth opportunities. Sustainable development and information technology are two examples of these macro trends. People are needed who understand the trends and can help to translate company capabilities into a product or a continuous stream of products that helps customers achieve improved manufacturing efficiency (energy, materials, and environmental footprint) and reliability. For example, one of APC’s largest growth areas has been the semiconductor manufacturing process, to which high-purity, high-integrity gases, This is an edited transcript of speaker and discussion remarks at the workshop. The discussions were edited and organized around major themes to provide a more readable summary.

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Preparing Chemists and Chemical Engineers for a Globally Oriented Workforce: A Workshop Report to the Chemical Sciences Roundtable FIGURE 2.1 Generic value chain. chemicals, and other products are supplied. Such services have been supplied in the United States, to Motorola and Intel, and now this business model has been taken around the world to follow previous and new customers. Figure 2.1 shows a generic value chain that is changing as businesses become more global. In the past, the chain typically involved a single company in one region. Now, discovery for the most part is still centered in the United States and Europe, but this and the other segments of the chain are increasingly global, particularly in electronics. Today, the world is being supplied with materials for electronics, such as computers and television sets, from just a couple of small sites in Taiwan and Korea. Changes at AT&T serve as a good example of the changes taking place in this value chain. That company provides communications systems, which require that someone design and assemble the components and systems. Previously, the company had to make a discovery, manufacture the raw materials, provide the materials, and manufacture devices and components. AT&T now has split into pieces and no longer does it all. Similar things are happening to other large companies in communications. IBM now outsources (and off-shores) more of its chain. Because of the ability to manufacture around the world and to design and communicate well enough to do it, the supply chain is becoming more fragmented. Movement of manufacturing devices and components offshore has dominated in Asia as a result of cost, fast-growing markets, and existing plants in China. Overall, the new model for designing and assembling systems is that manufacturing goes to a region where there are growth markets. India has also had strong growth in IT systems. Most software is being designed in India. In fact, GE started a huge laboratory there to provide software services, but now that entity is becoming fully functional and is going to be developing, designing, and discovering new science and technology and providing them to GE worldwide. Anyone entering a global company in the United States has to be aware that designing is done in partnership with people all over the world and that developed products are likely to be used somewhere other than the United States or Europe. Although new discoveries have largely been centered in the United States and Europe for a couple of decades, the paradigm is changing. It is directly related to the numbers of graduates in the United States and those who return to their home countries. This is particularly true for high-technology companies in Taiwan. Most people have been educated in the United States, they have perhaps worked at companies in the United States, and now they are returning to Taiwan because they want to be with their families and live in a more familiar culture. This seems to be happening more and more. Thus, the quality of people being hired and put into place around the world makes it increasingly probable that discovery is going to occur in China, India, and elsewhere. AIR PRODUCTS AND CHEMICALS, INC., TECHNOLOGY DIMENSIONS APC technology is distributed as shown in Figure 2.2, but 20 years ago, technology development was almost exclusively in Allentown, Pennsylvania, with a little bit in the United Kingdom for engineering for the European market. Through acquisitions, APC is carrying out R&D all over the world. There has been a shift to being closer to customers, as in Silicon Valley and Arizona for the electronics explosions there. There has been growth in the United Kingdom with the Basingstoke Laboratory, and APC now has laboratories and facilities in a couple of places in Germany and engineering activities in Shanghai. The rate of new plant building and the cost of building plants have led the company to Shanghai. Soon there will be highly competent designers there, and eventually many more activities will migrate there. There are also some small laboratories and facilities in Korea and Japan. The challenge now is to know where customers will be and where the predominance of new scientists and engineers will be. There is a huge draw to put resources and capabilities in the Asian region. APC is starting to do that now, and it is certainly going to happen more and more in the future. The question is going to be what this means for people back in Allentown and whether it presents a threat or an opportunity. There have been some interesting experiments FIGURE 2.2 Air Product and Chemical, Inc., technology R&D dimensions.

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Preparing Chemists and Chemical Engineers for a Globally Oriented Workforce: A Workshop Report to the Chemical Sciences Roundtable in this respect. One group has had more than a decade of collaboration with a group of scientists in one of the republics of the former Soviet Union—a government-funded research center in Novosibirsk. When it started, there was concern that with the lower cost of labor, U.S. jobs would go away. In fact, what happened is what Matt Slaughter discussed earlier. People in Novosibirsk are strong in physics and have extraordinarily good mathematics abilities. The U.S. engineers and scientists, however, have a much better connection to the market needs of the company. Thus, there is a complementary relationship in the jobs being done in the two different geographic locations. Direct meetings and travel between the two regions took place and helped to foster warm relationships between the two groups of people. People saw that U.S. engineers and scientists brought their own specific creative value to the company and that people in Novosibirsk are complementary because it was difficult to find their skills locally. More and more, this is how work is being done. One challenge faced by U.S. companies is how they are going to differentiate themselves, other than by just being global companies that hire U.S. graduates. Being able to understand the full breadth of commercial and technical interactions and then being able to think and act globally at the same time are very important. With this sensitivity, they might have an advantage. However, one has to ask, Does the United States have an educational competitive advantage because of the cosmopolitan nature of its universities? There is a long tradition of training people from overseas, many of whom have stayed in the United States. Now many are returning home; as an open system, this might be better than some of the other systems. It is an important question to think about in trying to design the ideal competitive university environment. APC is thus heading off on a journey of becoming global. The primary rationale for development of most of the laboratories and facilities outside Allentown is to be closer to customers. There will continue to be unique skills to bring into the company globally, but there is also much to be learned from customers and from the different places to which the company is moving. Some centers now feed technology into the United States and Asian regions with high efficiency. It is important for a global company to foster the attitude in which people in other regions think of themselves as part of the company. They should want to make a contribution and have a full seat at the table. APC continues to strive to build this kind of environment in the company. As APC expands its capabilities in Asia, the vision is of a future in which a number of centers provide technology, ideas, and new products to the rest of the world. They will serve the whole global knowledge community, as well as providing for special regional needs. This is how APC sees global activity working. What, then, is the successful way of innovating globally and across national boundaries? Multiple functions of understanding must be embraced in a large company, beyond providing some technology solution. John Irven, for example, is global head of the package-gas technology group based in Basingstoke, U.K. John has to launch products globally, while maintaining the only center there for Air Products and Chemicals, Inc. That is the global center, based in the United Kingdom. He says these are challenges to developing trust and interpersonal relationships across boundaries. The factors become an important differentiator because it is easy to have good technology but more difficult to get value out of it. MAJOR GLOBAL TRENDS Information technology (IT) is dramatically changing knowledge work through activities such as networking for solutions, reuse of stored data, automation of design, and supply-chain operations. Networking for solutions or, as Proctor and Gamble calls it, “connect and develop,” is using the ability to connect around the world to find an answer to a problem. Far fewer problems now intrinsically require going to the laboratory to invent something. Much more effort is instead being put into defining problems better and then seeking solutions. Reuse of stored data is being employed to enable the design of complex engineering plants. For example, swaths of data that the plant has stored are used and are easily adaptable. This has dramatically changed and simplified design engineering. The ability to automate design, experiment, and analysis has helped make design programs much easier. Much more information is now available to run more optimizations around the design process, and this again is changing engineering. Automation of supplychain operations is also being affected by IT advances; this does not have such a direct impact on the engineer’s work, but it is certainly changing the way companies think, behave, and connect. Another major global trend, discussed earlier, is the shift of businesses to the Asian region. This is partially due to the growth of highly trained and motivated people in India and China as the United States continues to provide higher education for foreign-born talent. At the same time, there is a lack of U.S.-born science and engineering talent.1 Very few people in the United States with unique vision, capability, and knowledge are choosing to go into engineering and chemistry. Many who do say that they would really rather do something else. The movement of chemists and chemical engineers into other fields is powerful for continuing and sustaining the United States as an engine of entrepreneurship, but it is not good for science and engineering. In the 1   For current data and discussion of this topic see: National Science Board. (2004). Science and Engineering Indicators 2004 (NSB 04-01). Arlington, VA: National Science Foundation.

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Preparing Chemists and Chemical Engineers for a Globally Oriented Workforce: A Workshop Report to the Chemical Sciences Roundtable future, however, big technical innovations may emerge more in other countries where chemistry and engineering are seen more as ways to personal success. As mentioned earlier, while the United States continues to provide higher education to a large percentage of foreign-born talent including chemists and engineers, the trend now is that a number of people are going back to their own countries as those countries become more attractive places in which to work. These are big changes and they drastically affect where and how a company hires employees. This suggests big concerns for the educational system. The Changing Work Environment For people who want to be involved in innovation, the emerging trend is toward open innovation: solutions to problems are externalized more, instead of having all the people inside a company available to work on every problem. There is more effort to reach out to the world to get answers. Companies are emerging around this idea, such as Nine-Sigma and Intercentive. These are places where problems can be posted for a bounty. Some 20 or 30 years ago, this might have been impossible to manage or handle. Now it is very easy. A web page can be accessible to almost everyone who might be interested in providing a solution. Computer modeling in chemistry is changing how chemistry and experimentation are thought about. In fact, some chemists use high-end computational modeling but actually have little wet-chemistry experience. They can quickly pinpoint how something is going to react, where it is going to react, and what issues the reaction presents. It is remarkable how this is changing. High-throughput experimentation is also changing how chemists and chemical engineers work. Together with design tools and computer modeling, these high-throughput methods make it possible to obtain data to analyze and find answers more quickly than ever before. The creation of value, as John Irven has discussed, is all about putting together a productive, integrated team of people. These are teams that function across multiple boundaries and time zones, and this becomes a way for the company to differentiate itself from others. People who can operate in this mode are needed. Success Levers for Innovation The idea-value chain is the path from ideas to commercialization. People play an extremely important role in developing strategic knowledge. The key is to solicit many good ideas and, once commercialization happens, to apply the best resources and create value. With respect to globalization and global aspects, the pieces of the knowledge pipeline have different issues and factors. With knowledge creation, there is the example of the scientists in Novosibirsk who create engineering design criteria and fundamental knowledge. The issue now is to access global capabilities with global strategic coordination. Part of externalizing research will be finding people that can perform various kinds of work and putting them together to build high-value teams. The challenge is to obtain value while maintaining enough openness to redefine things. It is not possible to keep looking at everything. There must be focus and balance. With regard to training and perspective, people entering the workforce have to think from a truly global perspective about where they can get answers. Fortunately, the nature of science tends to support such thinking. It is important to overcome company issues of parochialism, to keep thinking that ideas and products can be found anywhere in the world. It is highly probable that in the future most ideas are going to come from outside companies. For example, the Chief Executive Officer of Proctor and Gamble (P&G) has set a target. He wants 50 percent of new products or new technologies to come from outside the company. P&G also has an aggressive process for finding half-baked or fully baked products that it can bring into the P&G system to sell around the world. Innovation in product development—developing new things and getting them out to customers or getting new plants designed and built—is all about a lot of people coming together with a common culture, understanding, perspective, and teamwork. To be successful in commercialization with only a U.S., national, or company perspective is no longer possible. All of the voices out there must be listened to, and companies need people who are going to be open to input from the outside. Global Sourcing of New Ideas Ideas should be accessed and evaluated globally and ideally from inside and outside the company. Picking up on ideas from the outside includes taking advantage of the centers APC has around the world that are responsible for all the technology and leadership of an area. These might be people reporting to that center who are in the United States or somewhere else, but they are the lead group for that particular area for the world. People are needed who are not just thinking about inventing everything themselves, but who are also open to getting ideas from the outside. Product development and commercialization should be managed from a global perspective with an effectively designed hierarchy. New products, new ideas, and new technologies are generated by centers of excellence; distributed technology service teams and their customers; and then a system of external partners—universities, institutes, governments, and venture capitalists. Bounty hunting is also used. Internally, a whole set of emerging technology identification approaches is used.

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Preparing Chemists and Chemical Engineers for a Globally Oriented Workforce: A Workshop Report to the Chemical Sciences Roundtable APC is forced, for everything being done, to think from this global perspective. Otherwise, any effort is barely worth doing. The company has to reach big markets and broad areas to be successful. As discussed earlier, there are often winners and losers in globalization as capital and people are shifted around the world. The challenge in a global enterprise is to make all involved feel that they are doing something of value for the world and not just replacing one area with another. IMPACTS ON CHEMISTS AND CHEMICAL ENGINEERS What will be the qualities of the future workforce for those operating in this increasingly global environment who are now occupied in the United States? This has to do with know-who and know-how. To be a good engineer or a good chemist in the future will mean competing with an extraordinary number of good engineers and good chemists around the world. To be differentiated from the rest, it will be important to have expertise, of course, but it will also be necessary to have the ability to go out and find things and to connect with others. Willingness to be a team player is essential. There are only a few jobs and a few opportunities for people who are lone experts. In most industrial companies, value is created by multifunctional teams. The ability to perform and provide knowledge and expertise to such teams is critical. Flexibility is another important quality for success as a chemist or engineer of the future. One must be able to adapt to new areas and learn to integrate knowledge from other fields. That is manifested in terms of a low-growth environment. APC for example continues to hire through its Career Development Program (CDP). People are hired into the company and get 3-year rotational assignments. The CDP has been retained even while some fields have been downsizing, particularly in the United States. At the end of three assignments, those who come in and are flexible are readily taken in by the research group or someplace else within the company. The narrow people, however, are not as fortunate. As markets change swiftly and as many other fields also move quickly, people who cannot go from one field to another become stranded in the company. They are experts, with expertise that is no longer needed. To perform well in the commercial process in a global environment, people have to understand how they fit into the whole value-creation process and how they connect to people around the world. Obviously, for top talent, international people skills and being able to lead diverse teams are going to be essential for personal growth and success. Broader language skills are also desirable but not requisite. When chemists and chemical engineers need all these high-value skills to perform well in a company, however, a lot is asked from them. Most at the top of the company now cannot provide this sort of capability, but it will be expected of the next generation. They will have to be better. CHALLENGES FOR NEW GRADUATES What role can or should the university play in selecting and developing students, or is it solely the role of industry to find the right people? Are chemists and engineers being prepared to use teams and external resources to supplement what they can do and what they are doing? Does the entire graduate-school process take students down a slightly different path that must be unlearned once they go into industry? Is industry making full use of the new skills and capabilities that new graduates have, and how well are chemists and chemical engineers being trained to understand how their craft will be practiced when they get into industry? DISCUSSION The discussion of Drake’s presentation began with a question about APC’s program in the United Kingdom. Characteristics of the ideal student were also discussed, including high-order skills. Air Products and Chemicals, Inc., Global Committee in the United Kingdom Karin Bartels, of Degussa, began the discussion with a question about how well APC’s global committee outside the company’s headquarters in the United Kingdom is working. Drake responded that one of the chief executives for that group resides in Belgium, and the team is doing well at operating in a global way. He thinks the committee has been quite successful. At the next level down, a group in the United Kingdom provides all of the cryogenic innovative applications technology, and the group is centered around the person who built the group up over the last 10 years. There have been some difficulties because some U.S. businesses operate with an older style of thinking. They traditionally thought of APC as a U.S. company and thought that company ideas should come from the United States and then be deployed around the world. The global committee has been successful in changing this thinking so that the products of that group are being deployed rapidly in the United States. A lot of the issues have been overcome. The challenge now is whether the company has to go way beyond this with its capability in Asia. APC has learned from some of the barriers of the other projects and is thinking about how it can jump-start the work in Asia. The Ideal Student Wyn Jennings, of the National Science Foundation (NSF), asked whether Drake would comment on the distinction between the characteristics of students at the doctorate and bachelor’s levels and how good the fit is at both levels.

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Preparing Chemists and Chemical Engineers for a Globally Oriented Workforce: A Workshop Report to the Chemical Sciences Roundtable Drake said he does not see much difference between the two levels. There are general characteristics of being able to work across boundaries and teams, and these do not vary much between having a bachelor’s or a doctorate degree. He mentioned that one of APC’s most creative producers has no degree at all. Drake is always astounded at how technically capable the people who come into the company are. He said that APC is doing a good job of selecting for good all-around people skills as well. However, he does not know whether the company is choosing only the good ones or whether everyone is being trained to think and be this way. He acknowledged that mistakes are sometimes made, and some people end up being too narrow and unable to understand what is expected of them. Douglas Selman, of ExxonMobil, commented that people at all degree levels must have global skills in R&D commercialization. Looking at his own company, he thinks the best and brightest from a strictly science and technology standpoint do not have these higher-order skills that have been talked about. As a result, a lot of time is spent with them over their first 5 or 10 years in the company, teaching them the processes consistent with doing that kind of work. If they had more training and experience in these skills, he felt that there would be less inefficiency and more productivity. Higher-Order Skills Marshall Lih, of NSF, commented that higher-order skills is better terminology than soft skills. Technical people assume that if skills are soft, they are not hard and not challenging and, therefore, not worth learning. If these kinds of skills are referred to as higher-order skills, people may be willing to pay more attention. Higher-order skills require sophistication for people to understand other people and other cultures and to build trust. Drake replied that someone is needed who understands the sophisticated things but can also interact with other people. It comes down to the concept of what knowledge is. To him, knowledge is in people’s heads and between people and not in a database. Therefore, higher-order skills are essential. James Martin, of North Carolina State University, expressed frustration with the national education debate that has kept pushing toward accountability. In pushing for accountability, he said, it is the technical skills and not the higher-order skills that are being accounted for. He said higher-order skills must be included in accountability, but it is not an easy thing to assess and is not possible with “No Child Left Behind”2 standards. 2   With passage of No Child Left Behind of 2001, Congress reauthorized the Elementary and Secondary Education Act (ESEA)—the principal federal law affecting education from kindergarten through high school. The amended legislation builds upon four pillars: accountability for results; an emphasis on doing what works based on scientific research; expanded parental options; and expanded local control and flexibility.