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Sector Profiles

Engineering Industry

Major Industry Trends

The engineering sector encompasses a bewildering array of functions and professions, and it impacts almost all other sectors of industry. Traditionally, the discipline of engineering has been subdivided into the three broad fields of mechanical, electrical, and chemical engineering. However, with its connotations of pragmatic manipulation—as in using a body of skill and techniques to achieve a particular outcome in the real world—engineering as a term is now readily applied to fields as diverse as software, genetics, and finance.

On this last point, the College of Engineering at the University of Michigan, for example, offers a financial engineering degree course, in which students are taught how to use applied mathematics to analyze financial derivatives. In fact, the original financial engineers—whom many blame for devising some of the complex derivatives that played such a big role in the 2008 global financial crisis—were drawn from the fields of process and operations engineering, as well as from applied mathematics backgrounds.

Understanding the behavior of complex systems, such as near-turbulent water flows, is, after all, an engineering specialty and is an essential part of design in fluid mechanics. There are also numerous other classic engineering problems that involve near-chaotic systems. Moving from this to spotting short-duration, predictable trends in complex data flows, such as trades on millions of stocks, is not that big a jump.

For those concerned with educating the next generation of engineers, the way in which new fields, such as nanotechnology or genetics, are opening up rich new seams for engineering is not surprising. For example, the US National Academy of Engineering (NAE) devotes the Fall 2013 issue of its journal The Bridge to the convergence between engineering and the life sciences. This was the first ever edition of The Bridge dedicated to this theme, and a sign of the progress made in the direction of convergence is that all the papers were coauthored by engineering specialists and life sciences specialists. Two of the five authors of a paper in this edition entitled “Nanotechnology: An enduring bridge between engineering and medicine” exemplify the kind of cross-linking that is taking place between engineering and the biosciences. Joseph M. DeSimone is a professor in the Department of Chemical and Biomolecular Engineering at North Carolina State University, while Chad A. Mirkin is director of the International Institute for Nanotechnology and professor of chemical and biological engineering, biomedical engineering, materials science and engineering, and medicine at Northwestern University.

With drug delivery systems, advances in new materials have opened up new ways of administering drugs to patients using, for example, engineered particles that provide sustained release of therapies over an extended time frame. With nanoelectronic devices, the search is on to find circuit concepts and sensor functionalities, such as new switches, that will enable the development of new technologies for information processing to create wholly new kinds of computers. It is the realization that “function follows form” at the molecular level in cell interactions, with molecules fitting like keys into biological structures, that encourages an engineering perspective on these issues.

In a book, The Engineer of 2020: Visions of Engineering in the New Century, published by the NAE in 2004, the Academy points out that, in the past, “changes in the engineering profession and engineering education have followed changes in technology and society. Disciplines were added and curricula were created to meet the critical challenges in society and to provide the workforce required to integrate new developments into our economy.” Today, this excerpt from the book’s executive summary continues, technological change is occurring at a faster and faster pace. Engineering needs to apply some of its skills to anticipating future needed advances and adapting the education of future generations of engineers to be there ahead of the curve.

In fact, this is likely to be where the real locus of competition between nations and, indeed, between multinational and multidisciplinary engineering companies will lie in a few years time. Firms and nations that are best placed with innovative answers to emerging global challenges, be these to do with food crises, aberrant weather patterns, or power or water shortages, will become the leaders in the field.

Simultaneously with all this, of course, established international engineering companies specializing in a huge array of disciplines are essential generators of GDP growth in almost all of the developed, and in many developing, economies. This leads directly to the topic of outsourcing, which is one of the major themes in manufacturing, engineering, and design today.

Writing in the January 2012 edition of Oracle’s Profit magazine, Scott Bartlett argued that the three dominant trends emerging in engineering in 2012 were: that construction projects would continue to increase in complexity; increased globalization, with increased competition for the same projects; and increased reporting as the owner-operators of major projects seek to cut costs by demanding better documentation on the construction phase. On the first point in particular Bartlett pointed out that major projects are now the rule rather than the exception, citing as examples the 2,700 ft (828 m) tall Burj Khalifa in Dubai and China’s massive South–North water diversion project. Today, he pointed out, most of the really complex large infrastructure projects are happening outside North America, with only three of the current crop of 20 mega-infrastructure projects located in the United States.

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Market Analysis

A few years ago it was fashionable for governments in Europe and the United States, and particularly in the United Kingdom, to urge manufacturers to “go up the value chain” to avoid competition from low-wage economies. The point followed logically enough from the fact that volume manufacturing—of the “pile ’em high, sell ’em cheap” variety—is essentially about price, and the lower the wages paid, the cheaper the end-product.

It followed that manufacturers based in China or India, where wages were a lot lower than in advanced economies, would drive their counterparts based in high-wage economies out of business.

To counter this, the argument went, Western manufacturers should use their engineering and design know-how to focus on high-value, complex products. The problem with this argument, many people noticed, is that it presupposes that employees in low-wage economies are trapped forever doing “grunt,” low-wage jobs, and will not be able to do high-quality engineering and design work to innovate and compete on complex, high value-added projects.

This argument began to fall apart when people realized just how many engineers and scientists low-wage economy countries such as India and China were producing. It vanished entirely when Western companies began to outsource design and innovation to offshore centers, as Indian and Chinese engineers are also lower-waged than their colleagues in developed economies, at least for the present.

A Comparative Study of Engineering Graduates in India, China, and the United States

A team at the Pratt School of Engineering, Duke University, United States, has specialized in studying the quality and quantity of engineering graduates who are being produced by Indian and Chinese institutions and the impact of globalization on the engineering profession (Wadhwa 2008–2009). Their aim was to explore the factors driving the US trend to outsourcing engineering, and to look at what could be done to enable the United States to retain any edge it still has in this field.

The comparative annual numbers most frequently cited for engineering graduates in the United States, India, and China, they point out, are 70,000 graduate engineers in the United States, 350,000 in India, and 700,000 in China. However, when the Duke University team checked the numbers, they found huge difficulties around semantics.

Chinese makes no particular distinction, as far as terms go, between a motor mechanic and a nuclear engineer—both are “engineers.” The team checked 200 universities in China and 100 in India. Their analysis showed that, while a realistic figure for China in 2004 was probably more like 360,000 conventionally trained engineering graduates, and for India 139,000, versus almost 138,000 in the United States, there was nevertheless a very real and obvious ramping-up in the number of engineers China is now producing.

This increase stems from initiatives taken by the Chinese government in 1999, and those initiatives are now bearing fruit. What has really worked for the Chinese the Duke team found—at least as far as numbers are concerned—has been to transform science and engineering education from “elite education” to “mass education” by increasing enrollment in engineering programs. The downside of this is that an increase of 140% in numbers of students has taken place at the expense of dramatic increases in class sizes, creating some serious quality problems for qualification standards.

In other words, outside some 10 to 15 top Chinese engineering institutions the quality of engineering dropped off dramatically even as the numbers went up. The Duke team, therefore, argues that China is likely to find it at least as difficult as the United States to generate a large number of extremely well skilled engineers over time.

India, by way of contrast, has benefited from engineering courses being offered by a number of private colleges and training institutions. Most of these face quality issues, the Duke team says, but a few are recognized as producing high-quality graduates. Indian companies told the team that they felt comfortable hiring the top graduates from a wide range of Indian institutions—a reverse of the situation in China.

A key fact that emerged from a survey of US companies carried out by the Duke University team was that the vast majority said that they would move at least part of their R&D to emerging markets in order to respond to the big opportunities in these growing markets. They also said that their units there would increasingly be catering for worldwide needs.

On the positive side, by staying open to the brightest and the best, the United States—and, by implication, Europe—continues to benefit from its ability to attract very high caliber students from both China and India. Many stay after completing their studies, often making very substantial contributions in their own right to innovation and progress, and ultimately to the GDP of the host country.

The question of who will “out-innovate” whom may quite possibly prove to be irrelevant in the longer term, itself becoming a victim of the increasingly global and multinational nature of engineering operations.

Regulatory Issues

Engineering is a prime example of a discipline bounded on all sides by political and social “rules.” The European Union’s Waste Electrical and Electronic Equipment directives, known as WEEE, on the disposal of end-of-life electronic and electrical equipment is one obvious example. One of the goals of WEEE is to force manufacturers to think much more carefully about the way they engineer products.

By getting manufacturers to think of the waste that results at the end of a product’s life cycle, and by making them pay for the ultimate disposal of those products at expensive, special-purpose hazardous waste sites, the idea is that manufacturers will improve the recyclable content of their products. Less going to landfill or hazardous waste disposal sites equals less cost per product.

In other words, the goal being set for engineers is no longer just “Does this product do the job well?” Two further dimensions have been added. These are, first, the issue of end-of-life disposal, where the question concerns cost-effective disposal; and second, the environmental impact of a product through the manufacturing process and its life cycle, and whether this can be reduced down toward zero. From an engineer’s standpoint, these are simply further design challenges, and ones that give their company additional opportunities to craft something better than its competitors have yet managed.

Equally relevant are the various moral limits on what may and may not be “engineered.” The debates over the genetic manipulation of crop plants are now familiar ground. Engineers and scientists face similar emotive debates over the topic of cloning, a subject that emerges very readily from the breakthrough research into DNA, the “blueprint” of life.

Today, and for the foreseeable future, plant cloning is “in,” human cloning is “out”—and the “in” and the “out” here have nothing to do with natural limits on engineering, and everything to do with the moral limits that society places on engineers.

The NAE points out that the biotechnology “revolution,” for example, holds great potential but that it is a field in which political and societal implications intervene to set limits on what is acceptable. (See the NAE on the emergence of bio-engineering). In other words, there are very clear issues that have an impact on technological change that are beyond the scope of engineering.

Finally, there is much to be hoped for from the fact that engineering has a tremendous role to play in facilitating international cooperation. As the NAE notes, engineering itself “speaks through an international language of mathematics, science, and technology,” and, as such, bodies of professionals across the globe very quickly find themselves on common ground when dealing with engineering concepts. It looks at least possible that the real future of engineering lies on a global, rather than on any particular merely national, stage—particularly as the challenges facing engineering are themselves increasingly global in nature.

3D Printing and “Additive Manufacturing”

2013 was undoubtedly the year that 3D printing (also called “additive manufacturing”) took off as a mainstream manufacturing process. The engineering implications of 3D printing are enormous. Companies such as Rolls-Royce are already using metal oxide powders and laser fusing (called sintering) to lay down layer after layer of a complex part, printing it into existence one layer at a time. The transformation which this process is already bringing about in manufacturing is bound to create fundamental changes in engineering approaches to design in the coming decade. Cheap home 3D printers are already forecast to make major inroads into the mass marketing of a range of consumer products.

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Further reading on the Engineering industry


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