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Talent in the Engineering Enterprise

In the first half of the forum on engineering talent and its importance to the prosperity and security of the United States, the six speakers presented their perspectives on the importance of talent in engineering. Their conclusion? The competition for engineering talent will become increasingly fierce, since without talent, success is unattainable.

GLOBAL SHIFTS AFFECTING ENGINEERING TALENT

Four major trends on a worldwide stage have been shaping the generation and use of engineering talent in recent years, said Subra Suresh, president of Carnegie Mellon University and former director of the National Science Foundation.

First, investments in research and education, which both create and support talent, have grown substantially, especially in Asia. In 2012 the total worldwide investment in research and development was an estimated $1.4 trillion, split in roughly equal portions among the Americas, Europe, and Asia. However, as R&D investments in Asia—and especially in China—continue to rise rapidly, Asian R&D will soon represent a larger investment than is being made in either the Americas or Europe. In fact, the R&D investments of the top ten Asian countries have already surpassed those of the United States for the first time in history.

Second, shifting demographics are transforming the hunt for talent. Between 2002 and 2009, enrollment of first-year undergraduates in the European Union, Japan, and United States remained relatively flat. But in China, such enrollment nearly doubled and is now about equal to that of the European Union, Japan, and United States combined. Furthermore, in Asia, 19.2 percent of all college graduates are engineers;



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I Talent in the Engineering Enterprise I n the first half of the forum on engineering talent and its importance to the prosperity and security of the United States, the six speakers presented their perspectives on the importance of talent in engi- neering. Their conclusion? The competition for engineering talent will become increasingly fierce, since without talent, success is unattainable. Global Shifts AFFECTING Engineering Talent Four major trends on a worldwide stage have been shaping the genera- tion and use of engineering talent in recent years, said Subra Suresh, president of Carnegie Mellon University and former director of the National Science Foundation. First, investments in research and education, which both create and support talent, have grown substantially, especially in Asia. In 2012 the total worldwide investment in research and development was an esti- mated $1.4 trillion, split in roughly equal portions among the Americas, Europe, and Asia. However, as R&D investments in Asia—and espe- cially in China—continue to rise rapidly, Asian R&D will soon represent a larger investment than is being made in either the Americas or Europe. In fact, the R&D investments of the top ten Asian countries have already surpassed those of the United States for the first time in history. Second, shifting demographics are transforming the hunt for talent. Between 2002 and 2009, enrollment of first-year undergraduates in the European Union, Japan, and United States remained relatively flat. But in China, such enrollment nearly doubled and is now about equal to that of the European Union, Japan, and United States combined. Fur- thermore, in Asia, 19.2 percent of all college graduates are engineers; 1

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2 THE IMPORTANCE OF ENGINEERING TALENT Subra Suresh, president of Carnegie Mellon University and former director of the Na- tional Science Foundation in the European Union, 12.1 percent are engineers; and in the United States, just 4.4 percent are engineers, down from about 7 percent two decades ago, with women engineers making up just 1.4 percent of all US college graduates. Third, grand challenges on a global scale, such as those articulated by the National Academy of Engineering in 2008, require global solu- tions.1 Societies will need to recruit talent not only from within their own borders but worldwide if they hope to solve these problems. The United States has Fourth, the policies that cre- benefited greatly from foreign- educated engineers for the ate talent are local or national, but past 60 years. “I know. I was the output of that talent has no one of them.” borders. Today’s borderless knowl- Subra Suresh, edge enterprise creates questions Carnegie Mellon University for which answers do not yet exist, Suresh observed: 1 Information about the NAE’s Grand Challenges for Engineering is available at www.engineer- ingchallenges.org.

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TALENT IN THE ENGINEERING ENTERPRISE 3 • Who will develop policies and ensure compliance for the shared and collaborative global scientific enterprise? • Who will organize, distribute, and store scientific information, including the big data generated by information technologies? • Who will pay to archive and curate scientific information across rapidly changing platforms? • Who will create policies that protect privacy, confidentiality, and intellectual property? • Who will develop validation for a massive online educational enterprise and ensure that it has the right quality on a global scale? • How will institutions and individuals participate in a global enterprise through open access to publication and data while addressing national and local needs, and who will pay for that access? Some organizations are starting to think about these questions. Two years ago, the major research funding agencies from around the world gathered at the National Science Foundation and formed the Global Research Council, which represents about 98 percent of science and engineering funding in the world. The group is examining how to coor- dinate and pay for initiatives addressing these issues. “This is going to be a critical part of the global talent enterprise,” Suresh said. The United States was the unquestioned innovation leader in the second half of the 20th century, Suresh acknowledged, but it did so partly by attracting and retaining talent from around the world. A quar- ter of all the American recipients of the Nobel Prize received their first degree abroad, as did a quarter of all the members of the National Acad- emy of Sciences. The education of foreign scientists and engineers in other countries who subsequently work in the United States represents a tremendous subsidy to US innovation. “That is what we have benefited from for the last 60 years,” said Suresh. “I know. I was one of them.” ACCESSING TALENT IN THE US MILITARY Military systems must be state of the art and therefore require world- class scientists and engineers who can generate knowledge, harvest knowledge from elsewhere, and collaborate worldwide. Ensuring access to this scientific and engineering talent in turn requires interesting work,

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4 THE IMPORTANCE OF ENGINEERING TALENT good facilities, and competitive pay, observed John Montgomery, direc- tor of research for the Naval Research Laboratory. Each military service has a separate laboratory research system, such as the Army Research Laboratory headquartered in Adelphi, Maryland; the Naval Research Laboratory in Washington, DC; and the Air Force Research Laboratory in Dayton, Ohio. Each service also has numerous engineering and medical research centers, representing more than 200 sites with technical capabilities in the Department of Defense. These research organizations work on everything from basic science to the essential tools of current military art. They seek to maintain the DOD’s technological base and build on knowledge from around the world. They also provide advice to senior leadership and the managers of acqui- sition and operational programs where technological resources have to be brought to bear quickly to deal with crises or military issues, such as the use of improvised explosive devices in Iraq and Afghanistan. DOD laboratories have approximately 61,000 employees, including 35,000 scientists and engineers, and account for about $20 billion in funding per year. About three-quarters of the technical workforce are engineers and about one-quarter scientists. Of the scientists, 10 percent are PhDs and 27 percent have master’s degrees, though in a facility like the Naval Research Laboratory more than half have PhDs. The Depart- ment of Defense as a whole employs about 150,000 scientists and engi- “In my 45 years in the neers, representing about 2 percent business, I have never been of the national STEM workforce. bored for an instant. I cannot imagine a better life that The military would seem to somebody could have.” have access to a wealth of scien- John Montgomery, tific and technological expertise, Naval Research Laboratory but the availability of talent is in fact a major concern, Montgomery observed. Only US citizens with security clearances can work in DOD laboratories and centers. Also, to harvest knowledge worldwide, the Department of Defense needs more collaborations with international scientists and engineers, and US science and technology needs to remain at the cutting edge to interest potential collaborators. R&D in the United States is becoming a smaller part of a larger whole as technology becomes increasingly global. In particular, the center of gravity of global research is shifting eastward as R&D expen- ditures in Asia expand. Today, the Naval Research Laboratory has about

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TALENT IN THE ENGINEERING ENTERPRISE 5 John Montgomery, director of research for the Naval Research Laboratory 1,200 collaborations with colleges and universities, but only about 200 of those are with colleges and universities in other countries. “We need to do more of that,” said Montgomery. The Defense Department, Office of Science and Technology Pol- icy, State Department, and Immigration and Naturalization Service are working on an initiative to provide a fast track to citizenship for highly qualified foreign graduates of colleges and universities who might wish to remain permanently in the United States. Such a program would be a way to retain the best and the brightest young engineers for work in US laboratories. In an increasingly technical world, existing disciplines will grow and new disciplines will emerge, which will require more diverse skills. Engineers will need not only mathematics and computer skills but the abilities to design, build, innovate, and communicate. These skills are not easy to nurture, and the engineering curriculum is already densely packed. Other professions compete for talent. As Montgomery pointed out, the average scientist or engineer at the Naval Research Laboratory may

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6 THE IMPORTANCE OF ENGINEERING TALENT earn just under $100,000 a year, which is substantially less than might be earned in other jobs. Scientists and engineers also need the flexibility to do the science they want to do to build their careers. In addition, many entry-level engineering jobs are moving offshore. “How are we going to get them [back]?” Montgomery asked. A valuable tool for the Department of Defense has been to invite students into laboratories to do research early in their education with highly skilled scientists and engineers. The Naval Research Labora- tory brings in about 500 students every year from high school through graduate school and about 140 postdoctoral fellows and embeds them with scientists and engineers, after which many come to work at the laboratory. “That is a model that can be very useful,” said Montgomery. “Nothing is more exciting than to be a young scientist or engineer… embedded with a large cadre of those folks who are really excited about what they do.” The level of appreciation for engineers is high, Montgomery con- cluded, and the work is interesting and challenging. “In my 45 years in the business, I have never been bored for an instant,” he said. “I cannot imagine a better life that somebody could have.” RAISING THE PROFILE OF ENGINEERING IN THE UNITED KINGDOM Alec Broers, a member of the House of Lords in the United Kingdom and past president of the Royal Academy of Engineering, reminded the forum attendees that the United States remains dominant interna- The Queen Elizabeth Prize tionally in high technology. But the for Engineering is designed world is changing and faces serious to recognize work “where problems that can be resolved only engineers have changed the world for the better in a big by engineers, so “we need very tal- way.” ented people,” he said. Alec Broers, The United Kingdom offers a past president of the telling contrast to the United States. Royal Academy of Engineering It spends only 1.7 percent of its gross domestic product on R&D, which is lower than most other western countries. It does not produce enough UK-born engineers to meet the needs projected for the next decade. According to Broers, the

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TALENT IN THE ENGINEERING ENTERPRISE 7 Alec Broers, member of the House of Lords in the United Kingdom and past president of the Royal Academy of Engineering United Kingdom needs to increase its output of engineers by 50 percent, “[and] I do not know quite how we are going to do that.” The top universities in the United Kingdom are getting well-quali- fied students, but others have trouble attracting students with adequate skills, especially in mathematics. “We are not going to create modern engineers if they do not have mathematical competence,” Broers said. Furthermore, among the students who receive engineering degrees, about a quarter go into professions that are not based on science and technology. And many overseas students educated in the United King- dom are returning to their home countries once they graduate, in part because visa policies do not encourage them to stay. Young people in the United Kingdom do not know much about engineering. A survey of 12- to 16-year-olds found that less than 20 percent knew what a modern engineer does, and only 38 percent consid- ered engineering a respectable career. In part because of overly cavalier use of the term “engineering,” students and their parents tend to con- fuse engineering with jobs for technicians such as mechanics, service- men, and linemen. “There is immense ignorance out there,” said Broers. The outlook is not entirely negative, Broers added. The United Kingdom has managed to maintain a flat governmental budget for sci- ence, engineering, and technology despite cuts in most other areas. And

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8 THE IMPORTANCE OF ENGINEERING TALENT engineers in the United Kingdom receive a significant salary premium— amounting to about 15 percent compared with other graduates. But engineering companies still tend to be conservative in creating incentives for engineers, causing them to lose potential employees to other sectors. The UK government is trying to improve the situation by attracting engineers and tying engineering more strongly to the global commu- nity of science and technology. In particular, Broers described the new international Queen Elizabeth Prize for Engineering, which has joined the Draper Prize and the Finnish Millennium Technology Prize among the top international prizes for engineering. Administered by the Royal Academy of Engineering, it is overseen by an independent board of trustees, has strong backing from the royal family, and has succeeded in raising $40 million. The winners of the first Queen Elizabeth Prize were announced in March 2013: Louis Pouzin, Robert Kahn, Vint Cerf, Marc Andrees- sen, and Tim Berners-Lee for their contributions to the creation of the Internet and the World Wide Web. The queen presented trophies and checks on June 25 at an event attended by the prime minister and many political leaders. The winners of the prize, both by example and by promoting engineering, are expected to increase the visibility and profile of engineering in the United Kingdom and elsewhere and attract more talented students to the field. The goal, said Broers, is to recognize work “where engineers have changed the world for the better in a big way.” ENGINEERS AS CONNECTION MAKERS The number of engineering degrees awarded in the United States has actually risen over the past decade—by 40 percent at the undergradu- ate level, 24 percent at the master’s level, and 71 percent at the PhD Combining both breadth and level, noted Marie Thursby, Regents’ rigor in engineering education Professor and Hal and John Smith is “no mean task.” Marie Thursby, Georgia Tech Chair in Entrepreneurship at the Georgia Institute of Technology’s Scheller College of Business. Fur- thermore, the number of US PhDs granted in engineering is much higher than for any scientific field other than the biological sciences, and has increased dramatically over the past century. Although the United States will never match China in the produc-

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TALENT IN THE ENGINEERING ENTERPRISE 9 Marie Thursby, Regents’ Professor and Hal and John Smith Chair in Entrepreneurship at the Georgia Institute of Technology’s Scheller College of Business tion of engineers, Thursby pointed out that the competitive advantage of engineering in the United States is the ability of US-educated engineers to make connections. She went on to explain that, while much of the economic growth in the United States for the past 60 years has come from technological change and innovation, innovation is the adoption of inventions, not the invention itself, and engineers have been pivotal in enabling this adoption. On the other hand, the demand for engineers is currently not as strong as some might suppose. Definite commitments for engineer- ing PhDs—meaning either job offers or postdoctoral positions—have declined since 2001, and a growing number of engineering PhDs have been going into postdoctoral fellowships rather than into jobs. Projec- tions from the Bureau of Labor Statistics for growth in engineering jobs from 2008 to 2018 are only slightly higher than for growth in all occu- pations. Furthermore, real wages for engineering graduates have been more or less constant during the last 20 years, which does not indicate a rosy job outlook. But engineers contribute to the economy even when they are not

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10 THE IMPORTANCE OF ENGINEERING TALENT working directly in engineering. Of the 12.6 million people in the United States in 2008 whose highest degree was in science or engineering, only 3.9 million were in science and engineering occupations, and for another million working in those occupations their highest degree was in a field other than science or engineering. However, many of the other 8.7 mil- lion people with science and engineering degrees were in jobs closely related to those fields, suggesting to Thursby that they are working on problems at the intersections of fields. Indeed, surveys of engineering jobs have revealed that engineers increasingly are working on cross-functional and often globally distrib- uted teams. Universities have responded to this trend by developing pro- grams that broaden engineering. Undergraduate programs with an addi- tional year of specialized study—so-called four plus one programs—are one approach, as is the creation of a minor in entrepreneurship, partly in response to the number of engineers who are starting their own com- panies. Joint degree programs at the graduate level combine engineer- ing with degrees in law or business. An innovative two-year program at Georgia Tech teams PhD candidates in science and engineering with business and law students to focus on issues in commercializing funda- mental research. Engineers still need to be technically superior, Thursby noted, so a broader education cannot lose its rigor, which “is no mean trick.” But innovative approaches to engineering education can help produce not just chief technology officers but chief executive officers. RETAINING ENGINEERING’S PLACE IN SOCIETY Discovery is often celebrated as the realization of human dreams, said William Banholzer, chief technology officer and executive vice president at the Dow Chemical Company. But innovation occurs when discover- ies are applied and put to work doing something useful. Edison, Ford, and Bell did not invent the devices with which they are associated, but they were the first to make them practical and cheap enough to afford. In contrast, the invention of buckyballs won a Nobel Prize but has not resulted in commercial products. Engineers are experienced at making new discoveries practical and affordable, said Banholzer, but to retain their unique place in society they need to do a better job of explaining the value they create for society. Similarly, the United States may be preeminent in technology now, but it has no guarantees of remaining on top, and no charter or law

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TALENT IN THE ENGINEERING ENTERPRISE 11 requires corporations to do research. Companies need to create value for their customers in order to have the resources to pay for research. Asian companies have figured this out and are trying to overcome the United States’ lead. “We have to be very jealous and guard the unique position we have right now, and talent is first and foremost.” At the same time, an English-speaking jet-lagged engineer cannot go to China to solve a problem. Trained engineers are needed there to solve the problem. “Brains are globally distributed, and we have to “Strategy is good, but talent maximize the assessment of talent is what allows you to execute, across the globe.” and there is nothing more An engineering education is important than talent.” superb background for a job in the William Banholzer, private sector, government, or aca- Dow Chemical demia, Banholzer concluded. It is a great background for marketing, manufacturing, and business leadership—many highly successful CEOs started in engineering. When the leaders of companies are engineers, they understand the technology as well as the needs of the broader enterprise. Leaders know that the cultivation of talent is the single most William Banholzer, chief technology officer and executive vice president at the Dow Chemical Company

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12 THE IMPORTANCE OF ENGINEERING TALENT important thing they do. “Strategy is good, but talent is what allows you to execute, and there is nothing more important than talent,” said Banholzer. FINDING AND NURTURING THE TEN-X PROGRAMMER David Baggett has been involved in building three companies, one of which was sold to Sony and a second to Google. His current company, Arcode, is working to revolutionize the email user experience. Compa- nies like his rely on a particular kind of engineering talent, he said. Some programmers can write ten times as much high-quality, documented, and maintainable code as a typical programmer at a large software com- pany, and sometimes much more. Even large companies like Google, Facebook, and Twitter rely extensively on such programmers. The reason some programmers can be so much more productive is that software does not rely on physical inputs but on ideas that do not have mass or take up physical space. “A single person can manipulate a conceptually vast object in this mental space just by typing on a key- board,” he said. Most of the big name software companies had at least one or a handful of these people early in their histories, which is “one of the reasons, if not the reason, why they are big software companies now.” The challenge for companies is that not many ten-x programmers exist, and they can be hard to recruit and retain. Baggett, who said that he has hired just a handful of such people in his career, uses four tech- niques to attract them. First, he gives them interesting and hard prob- lems to work on. Second, he gives them a tremendous amount of free- dom, though that freedom is guided toward a commercial goal. Third, he protects them from bureaucracy. “It is a combination of depth Fourth, he provides them with and breadth. It is a little bit a share of the profits, despite the of quirkiness. This is really reluctance among business people what leads to innovation in to pay engineers high salaries. “You my experience. These people are the golden geese of our have to keep fighting the perception economy.” that nobody is worth that.” David Baggett, Arcode Such individuals are hard to identify, partly because they know “a lot about a lot.” They may not have had the highest GPA or SAT scores and may have failed a class or two, but they may have mastered both the foundations of modern

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TALENT IN THE ENGINEERING ENTERPRISE 13 David Baggett, founder, Arcode cryptography and the biology of cephalopods. “It is a combination of depth and breadth,” he said. “It is a little bit of quirkiness. This is really what leads to innovation in my experience. These people are the golden geese of our economy.” Ten-x’ers are more like artists than engineers, spending their lives learning technical things rather than learning how to paint. They may not have attended an Ivy League school or have grown up in an affluent household, and some may seem weird. But they tend to see connections across disciplines that others would not see. “These are the ones we need to attract and build our companies around.” The ten-x’er needs space in an organization “in which to run around freely and break stuff,” said Baggett. Their ideas may seem crazy, but they should not be overmanaged. “What you have to say to them is not, ‘Wow, that sounds really insane. That is never going to work. No one is ever going to buy that.’ You have to say things like, ‘Yes, I like the way you’re thinking. Can we make this practical for a million people?’” Of course, some engineering systems, such as avionic systems, need above all to work. But engineers should keep an open mind when con- fronted with strange ideas from otherwise accomplished and brilliant people. These individuals come from everywhere, not just the United States—a 19-year-old Sri Lankan girl who has been selling iPad games since she was 15 may be a ten-x’er. They are partly born that way and

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14 THE IMPORTANCE OF ENGINEERING TALENT partly the product of their experiences, especially their experiences with computers. The United States needs more people to come through the science and engineering educational pipeline, but it also needs to think about the small handful of ten-x people, “because they are the core of these small companies that become the great companies,” said Baggett. Com- panies need to learn how to identify these people and deal with them in ways that do not destroy their motivations. Finally, the United States needs to hang a sign on its borders that says, “We are open for busi- ness,” Baggett said.