Engineering Globalization

1. Engineering Globalization Engineers Week February 21, 2006 Dr. Timothy Greene

2. Tonight’s Topics: • Engineering Globalization – What is it and it’s impact on Southwest Michigan • Highlights of what the College of Engineering and Applied Sciences has accomplished and the college’s direction

3. Engineering Globalization • Thesis: • Engineering design has become a global commodity • Impact: • Michigan engineering work can be sent anywhere in the world to be done • Engineering work from anywhere in the world can be sent to Michigan to be done

4. Value of Technology • 85% of measured growth in U.S. income per capita is due to technology change -Rising Above The Gathering Storm

5. Some Worrisome Indicators • When asked in spring 2005 what is the most attractive place in the world in which to “lead a good life,” respondents in only one of the 16 countries polled (India) indicated the U.S. • For the cost of one chemist or one engineer in the U.S., a company can hire about five chemists in China or 11 engineers on India • For the first time, this most capable high-energy particles accelerator on Earth will, beginning in 2007, reside outside the U.S. -Rising Above The Gathering Storm

6. Some Worrisome Indicators (cont.) • The U.S. is today a net importer of high-technology products. Its share of global high-technology exports has fallen in the last 2 decades form 30% to 17% and its trades balance in high-technology manufactured goods shifted from plus $33 billion in 1990 to negative $24 billion in 2004. • Chemical companies closed 70 facilities in the U.S. in 2004 and have tagged 40 more for shutdown. Of 120 chemical plants being built around the world with price tags of $1 billion or more, one is in the U.S. and 50 in China -Rising Above The Gathering Storm

7. Some Worrisome Indicators (cont.) • Fewer than one-third of US 4th grade and 8th grad students performed at or above a level called “proficient” in mathematics; “proficiency” was considered the ability to exhibit competence with challenging subject matter. Alarmingly, about one-third of the 4th graders and one-fifth of the 8th graders lacked the competence to perform basic mathematical computations. • US 12th graders recently performed below the international average for 21 countries on a test of general knowledge in mathematics and science -Rising Above The Gathering Storm

8. Some Worrisome Indicators (cont.) • In 1999, only 41% of US 8th grade students received instruction from a mathematics teachers who specialized in mathematics, considerably lower than the international average of 71% • In one recent period, low-wage employers, such as Wal-Mart (now the nation’s largest employer) and McDonald’s, created 44% of the new jobs, while high-wage employers created only 29% of the new jobs. • In 2003, only three American companies ranked among the top 10 recipients of patents granted by the United States Patent and Trademark Office. -Rising Above The Gathering Storm

9. Some Worrisome Indicators (cont.) • In Germany, 36% of undergraduates receive their degrees in science and engineering, In China, the figure is 59% and in Japan 66%. In the U.S. , the corresponding figure is 32%. • The U.S. is said to have 10.5 million illegal immigrants, but under the law the number of visas set aside for “highly qualified foreign workers” dropped to 65,000 a year from its 195,000 peak. • In 2004, China graduated about 500,000 engineers, India 200,000 and America 70,000 • In 2001(the most recent year for which data are available), US industry spent more on tort litigation than on R&D. -Rising Above The Gathering Storm

10. Off-shoring Issues • Is it simply moving work to where these are: • Cheaper hourly costs • Cheaper benefit costs • Fewer safety requirements • Fewer union problems • Fewer taxes • Or is it moving work to where: • Customer growth is • Diversification • 24/7 service • Highly motivated workers Highly trained work force

11. Off-shoring Truths • Companies have long ago dropped national loyalties • Board of Directors have become truly internationalized • Growth markets are in developing countries • The new “best” universities are not in the U.S. • Companies that offshore are growing in both revenues and profits faster than those who have not

12. Off-shoring Truths (cont.) • Companies that offshore have seen • Increased customer responsiveness (closer to the customers) • Increased quality • Decreased material costs(closer to the suppliers) • Nearly every process can be bought offshore

13. Areas Where Companies Are Looking to Outsource Work Processes Human Resources $13 Billion Engineering $27 Billion Logistics & Procurement $179 Billion Info Tech $90 Billion Analytics $12 Billion Finance & Accounting $14 Billion Manufacturing $170 Billion Customer Care $41 Billion -Business Week 1/30/06

14. Proctor & Gamble • CEO Alan Lafley wants 50% of all new Proctor & Gamble products to come from outside U.S. by 2010 versus 20% now. -Business Week 1/30/06

15. General Electric • 19,000 back office process workers spun off into GenPact in 2004 saved 30 to 40% in back office process labor costs after the first year. -Business Week 1/30/06

16. DuPont • 60,000 employees in 70 nations need HR services (records, payroll, benefits, etc.) • Outsourced services to Convergys Corp. and expect to save 20% in processing costs in year one and 30% in year two -Business Week 1/30/06

17. To Where Are Companies Outsourcing? -Business Week 1/30/06

18. What Can Not Be Off-shored • Face to face customer service • Face to face supplier relationships • On site design and engineering • Construction engineering • Consulting on site • Sales engineering • (on site problem solving)

19. How Do You Slow Off-shoring? • Innovation! • Those entities lead in innovation control • the market

20. Engineering Research and America’s Future: Meeting the Challenges of a Global Economy (2005) • http://www.nap.edu/books/0309096421/html/index.html

21. Engineering Research: The Engine of Innovation • American success has been based on the creativity, ingenuity, and courage of innovators, and innovation will continue to be critical to U.S. success in the twenty-first century. -Engineering Research and America’s Future

22. Examples of Recent Innovation • Transistors Integrated Circuits • Computerization Mass communication • Cell Phones & Internet • Electromagnetic Radiation Radios & X-rays, • Fiber Optics, Cell Phones, MRI, Micro Waves, etc.

23. U.S. Status in Innovation • The United States must be an innovation-driven nation that can capitalize on advances in life sciences, physical sciences, and engineering • The United States risks becoming a consumer of innovations developed elsewhere rather than a leader. -Engineering Research and America’s Future

24. Trends in Innovation • A large and growing imbalance in federal research funding between the engineering and physical sciences on the one hand and biomedical and life sciences on the other • Increased emphasis on applied R&D in industry and government-funded research at the expense of fundamental long-term research • Erosion of the engineering research infrastructure due to inadequate investment over many years -Engineering Research and America’s Future

25. Trends in Innovation (cont.) • 4. Declining interest of American students in science, engineering, and other technical fields • 5. Growing uncertainty about the ability of the United States to attract and retain gifted science and engineering students from abroad at a time when foreign nationals account for a large, and productive, component of the U.S. R&D workforce. -Engineering Research and America’s Future

26. Imbalance in the Research – Innovation Portfolio

27. Recommendations • The federal R&D portfolio be enhanced by increasing funding for research in engineering and physical science • Long-tern basic engineering research should be reestablished as a priority for American industry. The federal government should design and implement tax incentives and other policies to stimulate industry investment in long-term engineering research -Engineering Research and America’s Future

28. Recommendations (cont.) • 3. Federal and state government and industry should invest in upgrading and expanding laboratories, equipment, and information technologies and meeting other infrastructural needs of research universities ad schools of engineering to ensure that the national capacity to conduct world-class engineering research is sufficient to address the technical challenges that lie ahead. • 4. Considering the importance of technological innovation to the nation, a major effort should be made to increase the participation of American students in engineering. -Engineering Research and America’s Future

29. National Academy of Engineering & Institute of Medicine Committee on Prosperity in the Global Economy of the 21st Century National Academy of Science • Change: • What are the top 10 actions, in priority order, that federal policy-makers could take to enhance the science and technology enterprise so that the United States can successfully compete, prosper, and be secure in the global community of the 21st Century? What strategy, with several concrete steps, could be used to implement each of those actions? -Rising Above The Gathering Storm

30. Committee Findings • Report: Rising Above the Gathering Storm – Energizing and Employing America for a Brighter Economic Future • Having reviewed trends in the United States and abroad, the committee is deeply concerned that the scientific and technical building blocks of our economic leadership are eroding at a time when many other nations are gathering strength -Rising Above The Gathering Storm

31. Committee Findings (cont.) • 3. This nation must prepare with great urgency to preserve its strategic and economic security. Because other nations have, and probably will continue to have, the competitive advantage of a low-wage structure, the United States must compete by optimizing its knowledge-based resources, particularly in science and technology, and by sustaining the most fertile environment for new and revitalized industries and the well-paying jobs they bring. -Rising Above The Gathering Storm

32. Committee Recommendations and Actions • 10,000 Teachers. 10 Million Minds and K-12 Science and Mathematics Education • Recommendation A: Increase America’s talent pool by vastly improving K-12 science and mathematics education -Rising Above The Gathering Storm

33. Committee Recommendations and Actions (cont.) • Best and Brightest in Science and Engineering Higher Education • Recommendation C: Make the U.S. the most attractive setting in which to study and perform research so that we can develop, recruit, and retain the best and brightest students, scientists, and engineers from within the U.S. and throughout the world. -Rising Above The Gathering Storm

34. Committee Recommendations and Actions (cont.) • Incentives for Innovation and the Investment Environment • Recommendation D: Ensure that the U.S. is the premier place in the world to innovate; invest in downstream activities such as manufacturing and marketing; and create high-paying jobs that are based on innovation by modernizing the patent system, realigning tax policies to encourage innovation, and ensuring affordable broadband access -Rising Above The Gathering Storm

35. The Final Solution • In a global, knowledge-driven economy, technological innovation – the transformation of knowledge into products, processes, and services – is critical to competitiveness, long-term productivity growth, and the generation of wealth. -Engineering Research and America’s Future

36. Highlights of what the College of Engineering has accomplished and the college’s direction

37. CEAS Vision • A scholarly community dedicated to excellence through student-centered education and research emphasizing professional practice in engineering and applied science

38. Number of Bachelor Graduates

39. Research Award Dollars

40. CEAS Cornerstones Engagement Innovation Globalization Leadership

41. Engagement • Definition • Experience based learning • Involving students with their profession as they learn • Faculty members and staff who are active in their professions • Purpose • Produce job ready graduates with the ability to grow in their profession and are life long learners • Attract outstanding students to CEAS • Increase the number who graduate • Enrich their learning • Graduate life long learners • Faculty members and staff who are technically current

42. Examples of Engagement • Senior Design Conference • Real world examples and applied problems used in classes • Student design-build competitions • Sunseeker – 6th in the Nation • SAE Formula One Race Car • ASCE Concrete Canoe • AIChE Chemical Car

43. Examples of Engagement(continued)

44. Innovation • Definition • The discovery, application, and dissemination of new knowledge • Purpose • Move the profession and society forward by providing engineers, scientists and technologists with new capabilities • Opportunity to add resources to the college. • Faculty development assuring we are technically current

45. Technology Curve Basic Research Applied Research Technology Transfer (Application of New Technology) Use (Deployment, Training, & Service) Technology Maturity Level CEAS Time to Technology Maturity

46. Research Foci • Advanced Vehicle and Development Simulation • Product Design and Manufacturing • Life Sciences and Biotechnical • Engineering Education

47. Globalization • Definition • If engineering knowledge can be digitized, it can be moved and performed anywhere in the world. • Companies now look for engineering and technology solutions world wide. • Purpose • Our graduates must be prepared to work in a global engineering and applied sciences industry. • Our faculty work in global disciplines.

48. Leadership • Definition • Excellent communication skills • Excellent teamwork skills • Ability to lead others and be led by others • Ability to lead at work, in the profession and in the community • Excellent professional ethics and morals • Understand the issues including: environmental, economic, social, political, safety, and diversity

49. Leadership • Purpose • To graduate engineers, technologists, and applied scientists who are and will continue to be leaders in their profession and community. • To ensure our faculty continue to be leaders in their profession and community.

50. CEAS Katrina Fund Raiser