Day of the Living Boomers
Okay, we're not running out of all smart people. The people reading this, for instance, are wonderfully quick, blessed with access to more information and opinion than the brightest lights of the past could have ever wished, and equipped with tools that allow them to gobble down data like a skinny Japanese kid at a hot dog eating contest. So relax, you're wicked smart. It's just that you're probably not the right kind of smart.
According to Edward Gordon, author of The 2010 Meltdown, America is facing a resource shortage that's going to impact us much more quickly than peak oil. Within just three years, Gordon says we're going to start suffering from a critical shortage of engineers and scientists. By the titular date of his book, that crisis is going to be critical enough that it will wreck the economy.
Today, America's work force is divided into three parts: about 25 percent are the 'smart people' who are educated and also have special career skills; another 25 percent are the 'walking dead,' victims of mergers or technological change and need to acquire new skills in order to change jobs or even careers; and up to 50 percent are the 'techno-peasants,' poorly educated adults with few if any special career skills.
Yeah, you've heard some of this "we don't train enough scientists/engineers" moaning before. Trust me, you haven't heard it quite like this.
According to Gordon, part of the fault lies with the Baby Boomers (but hey, don't all disasters start with the Boomers?). First off, there's a lot of them, and they produced a truckload of scientific types. Following on the technological gains that came from World War II -- and spurred on by both the fear and excitement generated by Sputnik -- there was a national push toward science education. Boomers caught this wave, and the whole nation surfed into the high tech world of personal computers and the net.
But in the generations that have followed that big bulge through the population python, science and engineering... eh, not so much. Watching corporate CEO's slurp down more and more of the money, has given youngsters the sneaky suspicion that business and investment is where the cash lies. Gordon, whose background and previous books concerned education, claims that the result is a huge surplus of graduates in fields like business, marketing, and communications. We have the MBAs needed to run a million Microsofts. We just don't have the engineers it takes to design new products.
As the Boomers start to retire, they don't just represent an increasing burden on Social Security and Medicare, they also represent an immense brain drain. The phenomenon of older engineers working for younger managers is not an exception, it's the reality. Not only do these folks have a lot of technical training, they also have intimate knowledge of products and processes specific to the corporations they work for -- information that's hard to reproduce. As those engineers start to go out the door, the managers may find productivity can't keep up -- no matter which historical tyrant they adopt as an organizational role model.
Being an education guy, Gordon sees the prevention of America's zombification as an education problem.
The solution to this tech labor market meltdown must begin in the K-12 grades. All states must mandate for every student the math and science foundation skills that are essential to every academic discipline and the future of a New America.
Note that Gordon is
not embracing the No Child Left Behind Act. He's down on the whole concept of standardized tests, and points to studies that show a very poor correlation between scores on achievement tests and everything from high school graduation rates to lifetime earnings. Gordon maintains that it's not more testing that schools require, it's more teaching, specifically more science and math.
The title of the book may make you think that Gordon is as doom-and-gloomy as say... me, but the truth is this book is really rather optimistic. The overall idea is that corporations are already jonesing for more science types, and those retiring Boomers are going to create high demand, along with high prices. If we just start feeding the pipeline through more science education, we'll come out of this even better than we are now.
Not surprisingly, I think Gordon's an optimist.
Night of the Living Outsource
While Gordon focuses on education, and maintains that American corporations are soon to be starving for the tech savvy, he misses another part of the picture. Those kids who are heading off to business school are not as dumb as he makes them out to be.
While a newly minted chemical or electrical engineer can look forward to a decent starting salary, they also face more limited opportunities, both in the areas where they can find employment, and at the top end of their scale. And if the $54,000 an engineer might haul down looks good, it looks a lot worse compared to the $140,000 plus perks available to an MBA from a good school. Most engineering programs are hard, require at least five years, and are often accompanied by apprenticeship programs. Why should anyone subject themselves to that if they're not going to be rewarded?
When a smart kid sees news like the insane bonuses being handed out by Wall Street firms, where a full partner can pull in $40 million and even the lowliest first year is getting another $100,000 dropped on top of her six figure salary, where are they going to head? 99% of students who can make it through a top-notch electrical engineering program are equally capable of knocking off a respected MBA. Businesses can whine all they want about a lack of good engineers and scientists, but as long as they continue to reward the money men above all else, the brightest minds are going to go toward the light.
Other forces are at work on the science and engineering fields. As Gordon predicted, we are hearing some gnashing of teeth over the retirement of those experienced engineers, but at the same time, anyone who used to program computers for a living can tell you that computer jobs are going bye-bye -- 600,000 of them in the last year alone. Starting salaries in information science and computer engineering are actually dropping, not rising. How does this mesh with our supposed tech hunger?
The truth is, the US demand for scientists and engineers comes down to a need for specialists. If you're doing a GIS project that requires a lot of knowledge of Oracle application servers and ESRI back end products, then you're willing to shell out big bucks for experts in these areas. But computer programmers just out of school? Eh, they're just cogs in the system. You might as well buy those cogs from India, where they're nominally cheaper and often better trained.
American corporations are not only outsourcing the "line work" of coding or hardware assembly, they're also sending the mental heavy lifting overseas. Intel recently announced a billion dollar plus investment in India. This doesn't sound too unusual. Intel has billion dollar factories all over the world. Only this new site is not a chip facility -- it's where Intel plans to do their next generation of R&D. Want to know who really has an engineering shortage? India. China. They're cranking out herds of scientists and engineers, and they still can't make them fast enough.
In the words of Kevin Barnes, a software engineer who has spent significant time working in tech-heavy Bangalore:
The practical reality is that anyone in India who can spell Java already has a job. More experienced engineers do exist, especially a fairly sizable group that lived in the US and has returned to India, but the demand curve for the best of these is such that they may get paid as much as ten times what a fresh graduate gets paid. The problem is purely economic. The demand has outstripped the supply for good engineers and as a result people who have no love for code (or even any like for it) have rushed in to fill the gap.
Hmm, that sounds like Gordon's prediction, all right. Only it's the wrong country. Engineers who have lived in the United States for decades are heading for India, because that's where the jobs are.
According to Tom Friedman's The World is Flat India, China, and Mexico are all cranking out new engineers and scientists at a higher rate than the United States. India alone producing 360,000 engineers a year, four times what the US produces. Of all Bachelor degrees awarded in the United States, just 11% are in science or engineering, compared to a worldwide average of 23%. In China and India, that number is 50%
Why are schools in those other nations cranking out so many scientists and engineers? Because companies in those countries are hiring them and paying them more than they can get in other fields. The smartest, most ambitious kids in those countries go into science, because companies in those countries -- unlike the US -- demonstrate how they value science by putting that value on a pay check. Meanwhile, US companies pay lip service to their desire for more graduates in these areas, but continue to reward the members of management.
All of this contributes to the hugely imbalanced pay scale in the United States in which executives recieve outsized compensation for gutting their own companies. Listen to the words of Jack "The Knife" Welch:
Some people say CEO pay should be limited to some multiple of what other employees make, 200 or 300 times other employees. I'm telling you, don't let them put a limit on what you can make!
Actually, Jack, worldwide that number is more like 15-30x the lowest employee, but US executives are unwilling to be bound to a number even ten times what's being seen elsewhere in the world.
Quick review:
- Other countries (in particular India and China) are rewarding engineers and scientists, offering many positions and pay that's very high relative to other jobs in their country.
- As a result, these countries are attracting many more of their brightest students to these areas, turning out a much greater number of scientific graduates than the United States.
- The United States instead rewards executives at a much higher rate than in other nations.
The result of this is a major factor in what we've all experienced: all the economic growth in the United States is being absorbed by a very small number of people. Meanwhile, the "science friendly" nations are not only growing more quickly, the results of that growth are visible at all levels of the economy.
When I see companies in the US basing their engineers here and outsourcing their frickin' management overseas, then I'll believe that the US has some respect for these fields. For right now, I see no evidence that American corporations place any real value on scientific knowledge.
Return of the Living Doom
If a scientific brain drain doesn't sound bad enough to you, allow me to pile on the darkness by dragging in a few of my older bits.
In a diary called The End of Everything, I talked about the idea that ideas themselves are getting harder to come by. We've already mined the shallow end of the information ore reserve, and now we're having to go deep. It now takes much more time, money, and brainpower to make headway on new discoveries and new practical applications than it did a few decades ago.
In another diary called Playing Chicken with the Apocalypse, I argued that the window in which we could develop technological solutions to free us from the oncoming failure of cheap oil was closing.
Combine those two with this piece and what have you got?
- We're facing a crisis that needs immense scientific brainpower to solve.
- Each problem requires more brainpower than the last.
- We're producing fewer and fewer people to meet these needs.
If we're going to find some "out" from the cheap energy trap before resource shortages close in and push us all
way back down the ladder of progress, it looks like we may be depending on Indian and Chinese scientists to discover that escape hatch.
But buck up, things aren't all bad. In twenty years or so, those Indian and Chinese companies are going to need people to work the assembly lines building their next generation gadgets. American workers may need training, but I'm sure we can compete on prices against Bangladesh.
originally posted at
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