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The Offshoring of Engineering: Facts, Unknowns, and Potential Implications
tive. They do things in a centralized way with family institutions. Motorola began offshoring to improve its service to customers, and most of our thinking and planning has to do with serving our customers. With that emphasis, we come up with some rather conventional but very bright observations. Our goal then becomes assembling a team of people to serve that customer. If that means we need a factory in Toulouse, France, then that’s where we go. For the factory in Toulouse, France, to be successful, we need a hometown boy (someone from Toulouse, or at least from France) to run it. There are a lot of fundamentals involved.
To ensure that we become a very significant servant to our customers, we do what we have to do anywhere in the world. There are places that are still untouched and at least two continents in this world that are virtually unsettled. There is no middle class in South America, Africa, or most of China. Nine hundred million people live way below the level of the middle class. We have an anthropological responsibility over the next 50 to 100 years to change human relations so that there will be significant middle classes in the other half of the world. When they are tuned in to the opportunities available, they will become, first, very significant customers, and then, very good servants to customers (i.e., competitors).
Here at home we can do things better, too. We shouldn’t be afraid to move around in our own country. I remember when Mark Shepherd from Texas Instruments called me and said, “I hear you’re coming to Austin. Don’t you realize all the problems are here? You don’t want to do that.” But I knew Austin was a good place to go, that it would be best for our people. It was where they wanted to live, where their families could prosper, where the team worked best together. With enough flexibility, you can move your operations around in this country—not just offshore. We must move to create change, if that’s the best way to pull our people together.
I am now going to take advantage of this distinguished audience and tell you about three things I’m doing privately that are about to become public, and I think they will have significant consequences in our country. Chuck has said we have to be bold, make changes, do things that will make a big difference. This means not just designing next year’s product line. I offer three examples where teams of experts like you might do even better than I.
The Galvin Electricity Project
The first is a project to revolutionize and “re-found” the electric power industry. We waste 40 percent of our energy just delivering electricity by wire around the country. Most of these systems break down somewhere two or three times a year. But this can be changed. I have felt for some years that there should never be an outage, that we should never be disadvantaged because things go wrong in the electric power system. Over the last couple of years I have met with hundreds of experts like you and put together a plan that will be made public sometime after the first of the year. The plan is already on the Web, but it will be publicized more effectively in the first part of next year.
The plan is essentially a distributed system that involves mostly onsite generation, thus making delivery unnecessary. I’m not going to describe it in detail, but it has already been through an extensive review and assessment process, and we are now moving to prototyping. This very significant digital system—with automation, instrumentation, self-correction, new forms of storage, et cetera—is part of the Galvin Electricity Project.
As a matter of fact, this is going to be a business of interest to those of you who are entrepreneurs. It’s not my business, and I’m not investing in it. I am investing in the ideas and then opening the business to everyone on the open-market. People can start a business in their region or their town or go national if they want. We already have quite a few active thinkers and investors ready to move ahead.
Making this kind of change will take a couple of decades to become manifest in the country. With the Galvin Electricity Project, we are well on the way to completely changing the way the electricity industry provides power. The change will require that many new engineers do many different things—in the United States. This low-cost system will bring great benefits to our citizens and increase the efficiencies of manufacturing and of services.
The Galvin Project on Eliminating Congestion
The second project, which is called the Galvin Project on Eliminating Congestion—and I do mean “eliminate”—is also moving ahead. This operation was born of my personal conviction that all cities will die by 2050 unless we make drastic changes. The project is not public yet, in the sense of having government step in and help us, but I have convinced a large number of experts in the traffic-management field—technical, business, model systems, et cetera, and some public officials—of this. It’s a cardiovascular problem. The arteries are clogging up and will be clogged up completely soon, creating total gridlock. This may sound heretical, but many experts now agree and will be publicizing this prediction.
As a consequence of congestion, property values will be severely degraded. Things being built in Chicago’s downtown or around the Chicago region will be worthless in 45 years because people won’t be able to get to them. There will be no accessibility. Every ordinary citizen knows this, although some experts say, “Oh, no, it won’t be that way.” But ask your neighbor’s wife. She knows it. And your neighbor who has trouble getting to work knows it.
We can avoid this tragedy through a surgical process. People are already thinking about and designing what I call “Lego sets,” that is, overpasses that can be installed, in just a few weeks, in very congested intersections with difficult traffic patterns, enabling traffic to pass over the congested area.