<p>Oh yeah? Show me a source that supports this assertion.</p>
<p>Pick up any issue of Chemical and Engineering News</p>
<p>OK here is one. </p>
<p><a href=“http://www.rediff.com/money/2005/nov/11pharma.htm[/url]”>http://www.rediff.com/money/2005/nov/11pharma.htm</a></p>
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<p>Regarding pharmaceuticals, chemE outsourcing is not a problem at the moment but in the future, it may be. Also, the article doesn’t take into account the oil industry - a major recruiter of chemical engineers.</p>
<p>Based on my professional experience the “may” is a “will”. Ignore at your own peril.</p>
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<p>Actually, here nightfly, I would have to disagree. First off, the US and European chemical industries are NOT offshoring their production as fast as they can, at least not if you define the chemical industry in a broad manner to include all the industries that hire chemical engineers. For example, I believe that the total value of chemicals produced within the US is actually higher than it was 10 years ago. </p>
<p>Like you said, it’s all a manner of how you choose to distribute your supply chain. If the raw materials are located in the US, as many are, then it makes sense to also put the plant near those raw materials. This is why the US Gulf Coast has one of the greatest concentrations of oil refineries and petrochemical plants in the world - because it is near the large Gulf Coast oil reserves. It makes no economic sense to ship crude oil from the Gulf Coast to China or India to refine or produce petrochemicals and then have it shipped back to the US. </p>
<p>The other aspect is just how much capital intensity there is in an industry. The truth is, many large-scale manufacturing industries are extremely capital intensive, which means that labor costs are just a tiny fraction of the costs of production. In these industries, it makes little sense to offshore production to take advantage of cheap labor, as that represents very little savings. Take microprocessors. Microprocessors are extremely valuable relative to their weight. So why doesn’t Intel simply relocate all its fab plants to China or India? Simple - the labor costs of chip manufacturing are infinitesimal compared to the capital intensity. These plants cost over $3 billion just to build and outfit, never mind the ongoing capital expenditures just to keep them running in constantly upgrading and maintaining all the wafer fab machinery inside. Cheap labor alone is not a compelling reason to put a fab in China or India. </p>
<p>I agree that environmental and legal issues are factors in determining where production is located. But let’s be honest. At least from a legal aspect, China and India are far far less developed and less reliable than is the US. Both countries are riddled with corruption and, in the case of China, highly undependable laws and court systems and highly uncertain intellectual property rights. The first rule of making any legal system economically efficient is that it has to be dependable and predictable. This extends even to environmental rules and regulations which, in China and India, are often times used simply as tools by corrupt politicians to extract bribes and payola. The point is that, at least from a legal and environmental aspect, the US, for all its problems, is still more reliable and predictable than are China and India. </p>
<p>I would say that, if anything, those particular jobs that you mentioned in finding faster/clearer routes are actually far more subject to outsourcing than production-oriented jobs. Let’s face it. A job of optimizing routes can be done anywhere - an office in New York, or an office in Bangalore, or an office in Shanghai. All it requires is a sharp brain and the right education. However, production facility jobs obviously require tha you actually be located nearby.</p>
<p>Sakky</p>
<p>China and India themselves have vast amounts of capital. Where do you think this money is going? Guess what. They are investing it in the infrastructure to compete in key industries like pharmaceuticals and microprocessors.</p>
<p>The pinhead managers who think that they can keep China and India in a little box and farm out whichever little job they want are mistaken. </p>
<p>We have (and continue to) train our competition.</p>
<p>eternity:</p>
<p>I work for a pharmaceutical company in NJ and see first hand this “great Leap Forward” to offshoring R&D and increasingly, production.</p>
<p>I do not wish to be an alarmist, but I entered this thread to point out that your premise – that Chem Es are safe from offshoring/outsourcing – is already debatable and in 5-10 years will be total invalid. </p>
<p>Looking ahead for the duration of an entire 40 year career is becoming increasingly difficult, but it is necessary if you wish to avoid being blindsided.</p>
<p><< faster/clearer routes are actually far more subject to outsourcing >></p>
<p>Sakky
This is one currently one of the hardest challenges in the industry. So, no, it is not likely to be outsourced soon. My point was that if safer ground is to be found, it will lie with the hardest parts of the process.</p>
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<p>Do China and India have vast amounts of capital? Nothing compared to what the US has.</p>
<p>And I think you understand what I meant when I said ‘capital’. I don’t mean capital in the sense of liquid funds. I mean capital in the sense of what you need to effect a particular production process.</p>
<p>The question at hand is why should a particular company invest in China or India. What China and India offer, first and foremost,is low labor costs. But that is only an advantage for companies for which labor costs are actually a signficant portion of their costs. For some industries, notably textiles and low-end manufacturing, this is true. But for others, notably petrochemicals and microprocessors fabrication, this is not true. Labor costs involved in running a fab plant represent barely 1% of the costs of running the plant. So building a fab in China or India, as opposed to the US, might save you money on that 1%. That is not a compelling reason to move your production overseas. </p>
<p>Economically speaking, China and India allow you to trade capital for labor. Hence, you can take a highly capital-intensive production process and instead transform it into a labor-intensive process. But this sort of tradeoff is useless in a fab plant or a petrochemical plant. Having lots and lots of cheap workers will not obviate the need for you to have top-line wafer steppers and ionizers to create microchips. Having lots and lots of cheap workers does not help you transform crude oil into gasoline. You still need a distiller, you still need a catalytic cracker, you still need a hydrogenator. Hence, China and India offer no special advantage in this respect.</p>
<p>Now, I do agree that China and India will build fabs and petrochemical plants in order to service their own internal markets. Locating production facilities within those nations will cut down on transportation and distribution costs. But when you’re talking about servicing export markets, you want to locate your production facilities where they make the most economic sense, given the nature of your production technology. It makes sense for textile manufacturers to locate all their facilities in Asia and take advantage of cheap labor to create export goods. It makes little sense for Intel to locate all their facilities in Asia for export, because cheap production labor is not much of a factor for them.</p>
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<p>Again, I disagree, because the safest ground is to be found in proximity. Jobs that actually require you to be in a particular physical location are highly safe from outsourcing, relative to jobs that require you to just think of ideas. Let’s face it. China and India have a surfeit of brains. In fact, if you go to any top US engineering program, you will notice how many of the top students are of Chinese or Indian ethnicity. Hence, I would argue that anything that is ‘hard’, but does not require physical proximity to anything, can move overseas.</p>
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<p>Look, nothing is totally safe from outsourcing. Obviously every job will be affected by outsourcing to some degree.</p>
<p>However, the constant drumbeat against outsourcing ignores all the positive aspects of outsourcing, which are many. I could sit here and enumerate them all day and all night, but I would first point out that millions of people in China and India are being uplifted from brutal poverty because of the free trade of services. Secondly, everybody in the world benefits from the lower prices and greater availability of goods and services effected by outsourcing. Moreover, Americans benefit from the economic growth of Asia which spurs greater demand for American goods and services. Furthermore, the fact that the US economy continues to grow steadily (and far stronger than the economies of Europe or Japan) indicate that the US as a whole is benefitting strongly from economic change. Certain Americans are getting hurt by outsourcing, no doubt. But more Americans are actually getting helped by outsourcing.</p>
<p>hahahaha. What makes you think you are capable of completing medical school if you can’t even do an undergrad in engineering? Honestly, after engineering undergrad, med school shouldn’t be too hard. I will dare to go as far and say that a PhD in engineering is harder than med school. Have you ever came up with a thesis? Have you ever defended a thesis? Plus the classes are harder by far than med school. Point is, you do well in undergrad engineering, then you are better off than other people that enter med school. But, the other question is, are you capable of being better than those other people? It’s okay to admit that you can only do biology or something easy, then go to med school and be average. So many people whine in med school about how hard it is, my undergrad engineering was harder…</p>