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TABLE 3-2 Comparison of the Industry Sectors Covered by the Commissioned Papers

 

Software

Semiconductors

Automobiles

Construction Engineering/ Services

Pharmaceuticals

PC Manufacturing

1. Nature of engineering work

Scope of work that can be spatially disaggregated is growing.

Disaggregated business models, functional integration in products.

Increasing pressure to increase efficiency, more open innovation process.

Supply of workers in the industry is a problem.

Increasingly difficult environment for business models based on blockbuster drugs.

Disaggregated business mode grew up in the 1990s.

2. Current status regarding globalization

Strong capabilities in several countries, distributed development increasingly common.

Globalization has complemented U.S. innovation/market leadership.

Successive waves of globalization, “build where you sell,” emergence of global suppliers.

Large project sector more globalized than building/ residential sector.

Increasing consolidation, globalization of companies and markets.

Engineering and manufacturing increasingly concentrated in China.

3. U.S. engineering workforce

Increasing, expected to grow over the next decade.

Sustained growth over time, less opportunity for older and less-skilled, increase in foreign-born.

Total employment down over the long-term, same is true for engineers.

Aging—low starting salaries discourage U.S. civil engineering grads.

Appears to be growing, though life sciences may be growing faster than engineering.

Fairly small

4. Countries where work is expanding

India in particular, evidence of growth in other countries.

India

China, India, wherever the automotive market is expanding.

Large range of offshoring destinations, in addition to India and China, Eastern Europe is attracting work.

China, India, United States still attracts innovation investment.

China, Taiwan

5. Offshoring occurring

Yes, driven by cost reduction, extent of high-value job losses uncertain.

Yes, cost reduction a primary motivator.

Yes, both through global optimization of platform development and through offshoring of routine tasks; also onshoring.

Yes, growth of global teams in the large project sector.

Yes, began with clinical trials and is moving up the value chain, but limits on end-to-end; also significant onshoring.

Yes, only limited engineering work remains in the United States.

6. Work that is more or less vulnerable

More vulnerable: standardized service and maintenance; Less vulnerable: Interface with final customer.

Product definition is less vulnerable.

Less vulnerable: Work on vehicle types where the United States is the leading market (e.g. large pick-ups); work where high degree of domain knowledge is needed.

Less vulnerable: Work where high degree of interaction with the customer is necessary.

More vulnerable: clinical trials; Less vulnerable: the most sophisticated R&D.

Less vulnerable; high level definition of product characteristics; most other engineering work is gone already.

7. Future outlook

Diversification of destination countries, increase in value-added of offshored work.

Continued globalization of engineering work.

Fortunes of leading global OEMs diverging, U.S. engineering fortunes have more to do with competitive success of companies than offshoring per se.

Will increase, although there are limitations on offshoring due to licensing, government procurement regulations, national/homeland security concerns.

U.S. engineering employment not likely to be impacted by offshoring.

Companies that can innovate will need at least some U.S. engineers; Taiwanese engineering will be offshored to China.



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