Wednesday, July 06, 2005

The Disappearing Engineer

I’m told that there are about 210,000 Electronics Engineers employed in the U.S. today, down from about 280,000 in the year 2000, before the tech bubble burst. Sounds plausible to me. In fact my impression is that the downturn has been even more drastic

The question is whether this change is structural, or transient. Meaning, is it a permanent shift in demand, or will there be a rebound? I’m betting that, unfortunately for us EE’s (yes, I’m one too), it’s structural.

You might object and say that we’re increasingly surrounded by technology, that we’re more and more dependent on our computers and our iPods and our flat screen TV’s. But that doesn’t translate to EE employment, and here’s why:

Let’s take an analogy. Food. We certainly eat as much today as people ate 200 years ago. But whereas 200 years ago about 50% of the population was employed in the production of food (i.e., farmers), today in the U.S. it’s probably 2%. And whereas 200 years ago the average family probably spent about 50% of its income on food, today that number is around 10%. And why is that? Because we’ve become more efficient in manufacturing food.

In contrast, for example, our expenditures on music concerts, and education, and legal fees and real estate as a percentage of our income has gone up… That’s because our efficiency in those areas has not increased (on the contrary…) And that’s in large part what is meant when it’s said that we’re becoming a service economy.

What does all this mean for the technologist? Well, back to the food analogy. Most of the money in the food industry is made in its service aspects (restaurants, precooked meals, etc…). In the same way, most of the income in technology will be made in services. IBM’s Lou Gerstner understood this 15 years ago when he saved IBM by turning it from the world’s leading computer manufacturer into a “systems integrator”, i.e., technology services provider.

For technologists that means that the core work of designing new products is going to be relegated to a smaller and smaller group of people, while most of the work in technology will be in that part that is so rapidly shifting overseas. Services. Software. Support. Everything that has to do with helping people use technology, making it easy, accessible, and useful… Stuff that doesn’t really require an engineer…


Post a Comment

<< Home