The Offshoring of Engineering: Facts, Unknowns, and Potential Implications (2008)

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Keynote Talk on the Globalization of Engineering Robert Galvin I have with me Mayflower: A Story of Courage, Commu- movement. But it does not spell “inevitability.” My message nity, and War, a book by Nathaniel Philbrick that takes us is, among other things, that we can still do things of great back 350 years. It’s a pleasant book if you like reading light significance in the 50 states of the United States. Chuck, in history. In it, Philbrick tells a story about our predecessors effect, challenged us to do so at the end of his excellent talk. that was almost prescient about the reason for this meeting. Change is an old story in the United States that will surely Here are the three sentences most relevant to our subject: continue. But our mobility alone still offers expansive pos- sibilities and will continue to be a vitalizing phenomenon. Governor Bradford was disheartened when he learned that Brewster, Winslow, Myles Standish, and John Alden had We can do things to affect the offshoring situation. I left Plymouth and moved further north. He was particularly started in business in 1940 and worked for exactly 50 years disheartened because the new towns being established there in our company. During that time, in an honorable way, we were doing better than Plymouth, which had fallen on hard changed the rules of the game we played, its governance and times. Bradford noted that the problem was mainly the shal- industry affairs, in all kinds of ways, thereby influencing our low anchorage in Plymouth harbor, which doomed it to even- neighbors. My message today is that we can do many things, tually becoming the poorest of the New England colonies. if we are courageous enough, if our backbone is strong enough, to change the rules as we go along. In particular, we New England has been at the center of our industrial his- can establish rules for the new things we should do, which I tory. Historically, it was the center of great development, and will illustrate in just a moment. We can influence policy on it still is. People like Chuck Vest and others have continually foreign trade—what goes out and what comes in. I spent a renewed that community and will probably do so for the next lot of time on that in the past, and we showed that we could 100 years. But look what’s happened in the country over increase our sales of U.S.-made products in overseas mar- the last 75 to 100 years. Industry that was centered in New kets. One of the largest producers of cell phones is our plant England moved, first a little bit, to the Midwest, then farther in Arlington Heights, Illinois, which is as competitive as any west, some to the Southwest, some to the South. With each plant in the world. move, there were dislocations—disruptions to our comfort We can, and should, invest integratively. All the things zone—and many people were terribly upset. Why couldn’t Chuck talked about had a component of significant invest- everyone just stay where they were and things remain as they ment. If we put something in Scotland, it should be in har- used to be? mony with what we have in Austin. It is very satisfying for In effect, the Pilgrims began “onshoring” by moving north me to observe that, when the brilliant people at SEMATECH and inland from Plymouth. Offshoring—a fascinating new encountered problems, they could find a solution in one of term—is a significant word, for it represents opportunity and our laboratories—in Scotland or Toulouse or Angers or Germany or China. People who are multinational in their living are coopera-   Robert Galvin is Chairman Emeritus of Motorola Inc. 191 

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

KEYNOTE TALK ON THE GLOBALIZATION OF ENGINEERING 193 This will require significant new engineering contributions had better have a damn good story to tell about their plans from the construction industry. Our cities will be networks for the future, in immense technical detail, or there would be of tunnels. Tunnels will crisscross Chicago, New York, Los a radical change in the organization. Three people picked up Angeles, Albuquerque, Beijing, et cetera. on the idea and designed engineering road maps for our com- We are not making a lot of public fuss about how we are pany that led to dazzling results in our product-development going to “popularize” this concept. We are going to convince programs for more than three decades. our friends in China first, because the Chinese have the au- We discussed the idea of industry road maps with Ian thority to do this in their cities. That authority is not as readily Ross, who was then heading a commission in D.C. studying available in our democratic society. My son will be giving the semiconductor industry. Finally, I convinced him to sup- a presentation in a few weeks when he goes to China for a port the concept of engineering road maps for that industry. meeting at a university where he is a trustee. So, we will be We worked together to develop road maps on pre-competitive publishing our first document in Mandarin and giving it to ideas, all the ideas that engineers could come up with. Today, the Chinese before Christmas. The document will explain I think we are in the 9th or 10th edition of biannual technol- how they can eliminate congestion in about 120 cities with ogy road maps for the industry that have done a giant job, large numbers of tunnels. particularly at IBM, which was one of the companies that The business model will be a toll business, and we expect helped us develop the road maps. there will be tremendous competition internationally to win, Road maps for technical management are far more useful in effect, the right to collect tolls in a given section or a given than many science and engineering people realize. I know city. I imagine that there will also be a dramatic number of some top science people rather intimately, which gave me in- technical achievements as people learn how to build these sights as to what they were thinking. I told them there should overpasses and tunnels, much like what happened with the be science road maps—a chemistry road map, a physics road introduction of the cellular telephone. When we announced map, and so forth. About 10 years ago I saw Dan Goldin at the cellular telephone about 25 years ago, AT&T wasn’t a party one evening, and I asked him, “What does NASA ready for the change. Neither were the Japanese. Almost think about road maps?” He said, “We’ve got the most dis- every husband we ever talked to said, “Well, that’s a very tinguished road map on biology you can imagine.” I asked, nice thing to have. I think I might need one in my business. “Why biology?” He said, “We have to figure out where we’re But I won’t let my wife have one, and I’m not going to let going. We have to know it to the essence.” So I sent our team my children have them.” But who has cellular telephones down to see what the NASA biology road map looked like. today, at almost no cost? But I have failed to convince laboratories, universities, The people in this room, and your engineering associ- this distinguished institution, and the overall National Acad- ates, have a great talent—the ability to take the essence of emies, to adopt and promote science road maps. A few people an idea and refine it. In the process, costs will go way down, have tried them, but, like many new ideas, they get lost if they and services will become remarkably reliable. By 2030, a are not directed by an enthusiastic head person. I was able to new transportation system will be evident, a system that was do it in my company, where I was at every technology road formed well before that. I assure you that if it’s not done by map meeting for 10 years. 2035, the new Trump Building in Chicago will begin losing This time around I’m going to succeed, and I’ll tell you value. But I think we can convince the American people, and how. I have discussed road maps extensively at home with the American leadership, that they must go to a radically new one of my grandsons, a sophomore at Harvard studying phys- system to prevent the death of cities. ics. After he and Leon Lederman (a wonderful man, very intelligent, who looks down his nose at my ideas on science road maps) and I had spent a number of hours together talk- Science Road Maps ing six or eight weeks prior to this meeting, my grandson Finally, I want to bring up an issue I have talked about came to me and said, “Grandpa, we’ve started these conver- often but have never been able to sell, although I think the sations by you saying the first thing we must do is talk about concept is fundamental. About 35 or 40 years ago, after how we think. We have to know how to think in a process one of many days per week spent in our laboratories—I way about creativity, and we must never think negatively frequently spent time with our bright, young people, who about an idea until time for judgment comes. I have an idea, were always giving me ideas that had never gotten to the top and I expect you to accept it.” I said, “I do.” He said, “How of their divisions—I said, “We will have road maps.” And I would you like me to lead the science road map parade?” I drew an XY chart and put some lines on it. Even our bright- said, “William, that’s a statement of genius.” I called Leon est, top people who happened to be sitting in that room that Lederman and asked him what he thought of the idea. He afternoon couldn’t grasp what I had in mind. said, “I’ll work with him.” Now when I talk to people who I didn’t have a clear idea of how to present my idea, but I run great institutions, they say, “Oh, my God, we have to get knew what the end objective was. I told them I’d be back in a couple of our kids on this road map committee.” six months for the first meeting on road maps and that they To write a road map, you have to bring together 100 or 

194 THE OFFSHORING OF ENGINEERING 150 people in a big room, a big ballroom someplace, and for As I said before, these are things we can do in America. two days, just put out ideas. One idea begets the next idea, You don’t have to go offshore, but the things you do will and so forth, and off we go. So starting from his position as have a tremendous impact offshore. Great things can be done a “matriculator,” William is going to start recruiting a friend with your next project. I just have three ideas, and I’m pursu- at Caltech. We have contacts at Texas, and I wrote to Donna ing them on my own, recruiting people to meet for extended Shalala at Miami a couple of days ago, because she’s strong periods of time to come up with practical ways to make them on women scientists. We are going to recruit 40 or 50 young happen. Where are your ideas, the fourth or the fifth or the people at the regular college level—we are not going for ninth? They would be so welcome! You have the technical postdocs yet—and let them start to write physics road maps. talent to lead the way. I respectfully suggest that tremendous I think they will have a pretty good idea as to what that road things could be done here. map should be by the end of this year. Let me end with one odd comment that’s not obviously We are not thinking in terms of urgency. I see this as a related to this agenda. Bill Spencer and a few marvelous program that will grow gradually over 10 years. About two or academics were on a committee that put together the Galvin three years from now, the students who are active in my road Report, at the invitation of the federal government, on how map program will be learning more from their road mapping the U.S. Department of Energy laboratories could be more experience than their courses for general matriculation. effective. I came up with a heretical idea that government I have also taken the idea to Jiang Zemin in China and to laboratories should be privatized (none of the other members top people in Israel. I said, “Why don’t you embarrass the was too keen on it, but I had the authorship, so I got it into United States? Why don’t you write the road map?” But the the report). Israelis have been muddling around with the idea. But now, The details are simple and not worthy of comment here, through our youth, we are going to excite a science road map but that’s the kind of thing that has to happen to bring Amer- program, eventually with international membership in our ica back to greatness. We have to privatize the laboratories. road map workshops. IBM can’t afford a total laboratory. Nor can AT&T. But we could figure out a way to privatize those 10 government labo- ratories. The idea is still being talked about in Washington, Conclusion but the current Congress hasn’t got the stomach for those We are going to accomplish all three of my blockbuster kinds of things. changes. We are on the cusp of taking on the first two, Nevertheless, these are the kinds of things I have been changes in energy distribution and the elimination of conges- changing for over 50 years. I changed the constitution of tion. In three or four years, someone like a Chuck Vest will Ireland and the economy of Israel and moved them away be saying, “Let me tell you about that program with the col- from socialism. I gave Jiang Zemin an idea that had to be lege kids writing road maps. They’re actually making some implemented in China to keep it from failing. He bought it, progress.” and brought my company in as a private-sector investor. For We will draw the geniuses back in. I talked to Jim Cronin, a long time, we were the largest foreign investor in China. a Nobel scientist working in Argentina, eventually in Utah, With Bob Strauss and Akio Morita, I opened the Japanese on the Pierre Auger Project, cosmic rays, et cetera. He said, market. It takes only two or three people to do these things. “I don’t understand what that’s all about, but I wish I was The minority always has to push things through. under 75. I’d like to be a part of that team.” So I think we are The people in our industries can think great things and do going to excite people about science road maps also. great things.