TIME magazine's cover article "Is America flunking science?"

sakky
Tue, 14 Feb 2006 17:36:43 +0000

But what matters most is not the sheer NUMBER of engineers/scientists but the quality. Yes, yes I understand, quality can be fished out of any big enough tank but it’s not like the scientists/engineers of America today are going broke and hungry. I have no fears about being able to support myself upon graduation so the ‘career-path’ that I choose is one that I love. Incentives such as higher pay and more benefits could attract more workers to the field but are those the kinds of workers we WANT to be attracting? If we’re after sheer man-power, sure, but if we’re after innovation and advancement, it takes a dedication far beyond the desire for money.



It’s not the sheer number of engineers that I am worried about, it’s the quality of them. Right now, many of the best and most brilliant minds in America are not getting engineering/science degrees, and even of those that are, many of them don’t pursue careers in engineering/science, but rather are pursuing careers in business, specifically consulting and banking. I would argue that if the US wants to be the best science nation in the world, you have to do something to lure your very best human capital to science, and not to other fields.

What I am basically asking is why can’t there be a company that pays 6-figures to start, and 7 or 8 figure, or even 9-figure packages to highly experienced top scientists and engineers? Why not? That’s the sort of pay scales that the investment banks use. Is it any wonder that many of the very best science students leave science for banking? By paying that kind of money, you would ensure yourself of getting an all-star cast of engineers who I am quite certain would produce something that would be more than worth its while. After all, the top investment banks get paid millions, but they generate hundreds of millions of dollars in profits. Big movie stars may get $25 million a film, but their presence draws in hundreds of millions of dollars in ticket revenues and DVD sales. I’m quite certain that the superstar engineers who created the Internet created many billions of dollars in wealth, but they didn’t get no 8 or 9 figure salaries. Why not?



I still don’t get why the company would want to pay more for the US employee. Maybe it’s my inexperience in labor economics, but I don’t seem to completely grasp your point as to why they aren’t increasing outsourcing. Instead, you’re pointing back to the companies splurging on various other financial aspects (like consulting) and thus concluding that they aren’t really concerned with saving money. If you could elaborate on this specific point, it would be great.



My point about outsourcing is that it only works in specific instances. Specifically, it works quite poorly when you are dealing with positions that require a lot of intuitive knowledge and tight social circles, where innovation is created by interaction within various parties. This is precisely why outsourcing works quite poorly when it comes to management consulting and banking. Both of these professions derive their value-add off of large amounts of social knowledge and intuition that is not easily outsourced. That’s why McKinsey doesn’t just load up on lots and lots of low-priced Indians and send them flying around the world on consulting gigs.

Engineering, too, however, derives its value from a tremendous amount of social knowledge and personal interaction. For example, this is why companies like Google, Microsoft, and Apple haven’t simply fired all of their American engineers and relocated their entire companies to India. In fact, they are actually EXPANDING their American engineering staff. Ask yourself - why are they doing that? Are they being stupid? I don’t think so. I think, rather, that they see the value of having engineers who are deeply intertwined with American pop culture. For example, the IPod has been successful precisely because it was designed to cater to the tastes of the American teenager. Moreover, much of those companies star engineers are already well-established in their US locations and the innovation happens only when you put a bunch of star engineers together so that they can bounce ideas off each other. Those star engineers aren’t going to move to India. So if you want to continue to utilize their talents effectively, you are going to have to surround those guys with other American engineers.

Lest that sound ‘squishy’ to you, I would point out that the exact same philosophy is followed by businesses when they have to determine where they should locate their headquarters. Have you ever asked yourself why is it that so many companies have located their headquarters in some of the most expensive and glamorous cities in the world, like NYC, San Francisco, London, Paris, Hong Kong, Tokyo, Toronto, Frankfurt, Los Angeles, Singapore, Sydney, etc. Why do they do that? It’s extremely expensive to rent offices in these cities. Why don’t all these companies simply relocate their headquarters to some cheap village in the boonies? Why is it that all of the world’s investment banks have offices in super-expensive Manhattan - why don’t they simply just relocate their offices to cheap Wyoming or Missisippi instead? The answer is simple - it’s far easier to do business in a big city, rather than in some village in the middle of nowhere. You can do business deals in a big city because all of your partners and competitors are there. There are lots of highly talented people you can hire in the big city, as opposed to off in the boonies. If you need to get lawyers, accountants, advertisers, consultants, bankers - basically any business service you need, they are all right there, as opposed to if you are in the boonies, you may not have any of those services readily available.

Or forget about even the big city. Why is it that so many of the hedge funds of the world have offices around Greenwich, Connecticut? Greenwich is a small town - but it is one of the richest and most expensive towns in the world. So why don’t all of these hedge funds simply relocate themselves to the cheap boonies? Why are so many venture capital firms located around Menlo Park, another extremely expensive place to do business? Why do all of these VC’s just all move to Mississippi to save money on office space?

The point is that sheer proximity to the action is extremely valuable. People are willing to pay thousands of dollars to get courtside basketball tickets. Proximity is valuable. These companies aren’t stupid about wanting to run offices in these extremely expensive locations. They are willing to pay it because they want the benefits of proximity.

Similarly, I think that certain engineering jobs can also benefit tremendously from proximity. Sales-engineers, which are engineers who are charismatic and well-spoken who accompany a salesman to discuss the technical benefits of buying a particular product, immediately come to mind. So do technical consultants.

What I am saying is that just like there is benefit for companies to pay huge amounts of money to run a Manhattan office and pay tens of millions of dollars for a hotshot banker, there are clearly some engineering jobs that are also worth paying a lot of money for. Not all engineers, of course, but some. Yet from what I can tell, no engineers are getting paid true superstar money, unless they start their own company. I think this needs to change.