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Engineering Globalization

Engineering Globalization. Engineer’s Week Dinner 2006 Dr. Timothy Greene. Tonight’s Topics:. Impact of Engineering Globalization on Southwest Michigan College of Engineering & Applied Sciences accomplishments and direction. Engineering Globalization. Thesis:

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Engineering Globalization

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  1. Engineering Globalization Engineer’s Week Dinner 2006 Dr. Timothy Greene

  2. Tonight’s Topics: • Impact of Engineering Globalization on Southwest Michigan • College of Engineering & Applied Sciences accomplishments and direction

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

  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 • Only 1 of 16 countries polled listed the US as the most attractive place in the world to “lead a good life” • Cost: • 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. Worrisome Indicators: High Technology • The U.S. is a net importer of high-technology products. • US global high-technology exports have fallen from 30% to 17% over 20 years • US trade balance in high-technology manufactured goods shifted from $33 billion (1990) to -$24 billion (2004). -Rising Above The Gathering Storm

  7. China = 50 All Others = 69 Worrisome Indicators: Chemical Companies • Chemical companies closed 70 facilities in 2004 and have tagged 40 more for shutdown. US = 1 -Rising Above The Gathering Storm

  8. Worrisome Indicators: Math & Science Skills • About 1/3 of 4th graders and 1/5 of 8th graders lacked the competence to perform basic math computations. • US 12th graders recently performed below the international average for 21 countries on a general test of mathematics and science • In 1999, only 41% of US 8th graders received instruction from a teacher who specialized in mathematics; lower than the international average of 71% -Rising Above The Gathering Storm

  9. Worrisome Indicators:Low-wage vs. High-wage employers Low wage High wage 44% of new Jobs 29% of new Jobs -Rising Above The Gathering Storm

  10. Worrisome Indicators: World-wide Undergraduate Degrees in Science and Engineering Japan 66% China 59% Germany 36% US 32% -Rising Above The Gathering Storm

  11. Worrisome Indicators: 2004 Graduates of Engineering China India US -Rising Above The Gathering Storm

  12. National Academy of Engineering & Institute of Medicine Committee on Prosperity in the Global Economy of the 21st Century National Academy of Science • Change: • 10 actions federal policy makers could take • Enhance science & technology in the US • Compete, prosper, and be secure in “Global Community” • Strategy for implementation -Rising Above The Gathering Storm

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

  14. Committee Findings (cont.) • 3. The US must prepare to preserve its strategic and economic security. Because other nations have the competitive advantage of a low-wage structure, the US must compete by optimizing its knowledge-based resources, particularly in science and technology, and sustain the most fertile environment for new and revitalized industries and the well-paying jobs they bring. -Rising Above The Gathering Storm

  15. Committee Recommendations • 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

  16. Committee Recommendations • Sowing the Seeds • Through Science and • Engineering Research • Recommendation B: Sustain and strengthen the nation’s traditional commitment to long-term basic research that has the potential to be transformational to maintain the flow of new ideas that fuel the economy, provide security, and enhance the quality of life. -Rising Above The Gathering Storm

  17. Committee Recommendations • 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

  18. Committee Recommendations • 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

  19. 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 & trained work force

  20. 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

  21. 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

  22. 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)

  23. A New Approval to Off-shoring • Off-shore companies are buying U.S. companies to get the face to face relationships • Tata Technologies (2,000 Indian engineers – automotive design) recently bought Incat International (700 U.S. engineers – Novi, Michigan) currently having 100 engineers for U.S. office -Business Week 1/30/06

  24. 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

  25. 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

  26. 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

  27. Areas where companies are looking to outsource work process 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

  28. Five Offshore Practices That Pay Off: • Go offshore for the right reasons • Choose your model carefully • Get your people on board • Be prepared to invest time and effort • Treat your partners as equals -Business Week 1/30/06

  29. Leading Companies in the Off-shoring – Outsourcing World Call Centers Software Development Business Services -Business Week 1/30/06

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

  31. Outsourcing to Africa • South Africa has over 500 call centers • Lufthansa • General Electric • Cairo-based Xceed Contact Center • Microsoft • General Motors • Oracle • Carretour -Business Week 1/30/06

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

  33. 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

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

  35. 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.

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

  37. Trends in Innovation • A large and growing imbalance in federal research funding engineering & physical science vs. biomedical & life science • Increased emphasis on applied R&D in industry and government-funded research at the expense of fundamental long-term research -Engineering Research and America’s Future

  38. Trends in Innovation (cont.) • 3. Growing uncertainty about the ability of the US to attract and retain gifted science and engineering students from abroad • 4. Erosion of the engineering research infrastructure due to inadequate investment over many years -Engineering Research and America’s Future

  39. Imbalance in the Research – Innovation Portfolio

  40. Recommendations • The federal R&D portfolio be enhanced by increasing funding for research in engineering & physical science • Long-term basic engineering research should be reestablished as a priority for US 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

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

  42. Recommendations (cont.) • 5. All participants and stakeholders in the engineering community should place higher priority on encouraging women & underrepresented minorities to pursue careers in engineering. • 6. A major federal fellowship-traineeship program in strategic areas (e.g. energy; info-, nano-, and biotechnology; knowledge services, etc.) should be established to ensure that the supply of next generation scientists and engineers is adequate. -Engineering Research and America’s Future

  43. Recommendations (cont.) • 7. Immigration policies and practices should be streamlined to restore the flow of talented students, engineers, and scientists worldwide into US universities and industry. • 8. Links between industry and research universities should be expanded and strengthened. • 9. Multidisciplinary discovery-innovation institutes should be established on the campuses of research universities to link fundamental scientific discoveries with technological innovations to create products, processes, and services. -Engineering Research and America’s Future

  44. 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

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

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

  47. Number of Bachelor Graduates

  48. Master’s Enrollment *CS Moved to CEAS

  49. Ph.D. Enrollment *CS Moved to CEAS

  50. Research Award Dollars

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