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Implications of Offshoring for Engineering Management and Engineering Education

Anne Stevens


An initial hypothesis of the study group was that offshoring is a huge risk and a major issue for all of us in engineering in the United States. But, from another point of view, it is not as big a risk as all the hype makes it out to be. Which is it?

In terms of engineering, how much is actually being offshored? If we look back at history, we have been offshoring engineering, distribution, marketing, and selling of products all over the world since the early 1900s. Ford Motor Company has been operating in Argentina, Brazil, and Mexico for more than 90 years. General Motors, too, has been participating in business, including offshoring engineering, for just as long.

But what are the facts? One problem in understanding the issue is some confusion about both the binning of the data and the accuracy of the data. But what is important is what we do with what we know. What are the implications for engineering management? What are the issues? the opportunities? What should we do as an academy, as leaders in academia and industry and government?

What is the role of engineering managers? Does that role have to change? Should engineering managers be spending their time differently? Do they require new skills? If so, what are they? What is our plan to give engineering managers, in their 20s, 30s, 40s, 50s, or 60s, those skills?

The first issue is that in some countries, such as India, there is a “hire-ability” measure for one-year engineers, three-year engineers, and 10-year engineers. It was noted that 10-year engineers really wouldn’t be considered for hiring because they would be too hierarchical. I do believe that in some of our industries—such as Ford and General Motors and some others—in some academic areas, and in the government, we do have an issue with hierarchical structure. To be competitive in the new world, we must know what is going on in the global economy. Old hierarchies cost money. They cost the morale of young employees. And they are inefficient in terms of bringing products or services to the marketplace or education to students. What is really important is how we transition these hierarchies into more nimble structures. There are already many nimble structures in existence today. Just look at firms like Google.

The second issue is workforce transition and adaptability. A 50-year-old engineer who is in or out of the market today for various reasons needs reentry plans. Another issue is the middle class. Companies like Ford Motor Company and General Motors are displacing tens of thousands of hourly workers, who were the foundation of the middle class in the United States. Their ancestors were farmers who came off the land and into the factory. Companies started paying $5.00 a day, which grew the domestic automotive market. The issue is about transitioning people in the prime of their lives who have amassed much education and experience. How can they—as well as other segments of the population—be mainstreamed back and contribute value to our economy or our educational system?

The third issue is allocating the right level of resources to the right areas of R&D. Where, what, when, who, how much? Bob Galvin, a keynote speaker for this workshop and retired Motorola CEO, is still very active and is working to realize important engineering activities. There are

Anne Stevens is chairman, president, and CEO of Carpenter Technology.



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