One of the most devastating effects of the current economic downturn is the reduction in new-product development. One-third of the engineers responding to the "Salary & Opinion Survey" report cutbacks in product development over the past year, approximately double the number from earlier years.
"I received a 'stop-work' on four design projects last week due to a cut in funding," one reader wrote.
"The work just isn't there," another respondent said. "I spend more time doing quotations and proposals than actual design work. Spending is very tight."
"Two major development projects in my group [were cut], both having a three-year span. One project was put on hold at the end of last year, six months into the design cycle," a third engineer said. "The remaining project will finish up the last quarter of this year."
It's no surprise that the biggest impact has occurred in the communications arena. A substantial 68 percent of respondents in that sector confirm that the economic downturn has affected their design projects, mostly for the worse. They're followed by:
- Components (65 percent),
- Computers (62 percent),
- Controls and testing (57 percent).
As might be expected, the least-affected sector has been the military-aerospace arena, with 42 percent citing the current economic downturn as a factor in project development this year. The size of the company doesn't seem to make a difference, varying from 58 percent at medium-sized companies to 61 percent at large ones.
If there haven't been outright cancellations, EEs report that the downturn has at least changed the nature of their work.
One respondent said there is "No forgiveness for schedule slips. We have become risk-averse."
A designer encountered a "major specification change to simplify design and hit larger market segment. [We] went from technology leader to price-performance."
Several readers noted that engineers are being pressed into sales duties, like this manager. "[We] had one chip canceled and the other projects have been overstaffed. We spend much more time quoting jobs and trying to find customers now. Two years ago, we focused on engineering, and getting contracts was easier. Spending so much time trying to get business instead of doing engineering can be discouraging."
Not only have the budget squeezes affected people, but technology as well. "[We're] being more careful about chip specifics due to expense of masks. We are on a razor-thin budget."
But while the numbers reporting actual increases in product R&D are the survey's lowest since 1995, others put a positive spin on the curtailments.
"Our customers are still launching projects and continuing work on existing projects in anticipation of an improving economy," an optimistic engineer wrote. "With development times of 18 months to two years, the current downturn is just a momentary inconvenience. It'll pass."
One developer noted that "[this] has allowed us more time to get it right."
Indeed, some readers' workplaces have seen little or no impact, or even thrive in this environment.
"Orders for our products have quadrupled since 9/11," one manager reports. "Our business has grown immensely." Anything involving security-whether it be protecting networks, airports or people-is thriving.
EEs in some businesses are enjoying another type of security: job security. "We work in the government sector, which really hasn't seen a slowdown," according to a reader. Indeed, it is the engineers in the high-rev commercial communications and computer sectors that probably feel the pinch more than any other. Government-employed EEs traditionally have felt left behind in boom times, with lower salaries and fewer opportunities than commercial engineers, but in times like these they have the upper hand. And unlike in the early 1990s, when the defense sector helped drag down engineering unemployment to record levels, that sector is holding up in terms of product development as the nation fights terrorism and launches new military initiatives. Defense EEs, however, still have to deal with continuing mergers among the big contractors.
The story is much the same in Japan, where 70 percent of the Nikkei Electronics respondents to the survey confirmed that the current economic cycle there has affected their product development plans. Of that 70 percent, 37 percent reported decreases in product development at their companies, with a mere 20 percent seeing increases.
From a statistical viewpoint, there's been no significant shift in terms of the length of design cycles in the United States. In Japan, the typical design cycle runs 8.8 months. The mean cycle, from specification to production, remains at 9.1 months in the United States, the same as last year.
But individuals have seen their cycles both pushed up and pulled back.
Wrote one, "If anything, due to a slow start for the year at most fabs, our customers had more time to work on qualification of new products and processes. Thus we were thrust into developing products more quickly. Design times were greatly shortened."
Another engineer reported "budgetary delays and project stretch-outs" in view of "unchanged market window expectations."
An Illinois software manager expressed frustration with "pressure due to schedule and cash flow constraints, forcing early release of several products with reliability concerns."
That's the opposite of what a Midwest project engineer has seen: "With less demand, we have had more time to improve our current design."
Unsurprisingly, the longest lead times come from engineers in the military-aerospace sector, at 10.1 months. Indeed, some 62 percent of those engineers work on projects lasting one year or more. The shortest cycle, 8.7 months, arises from the controls-testing area. Large companies-probably influenced by the defense contractors-take significantly longer to get to production, at 9.9 months, vs. the small companies, which turn their products out in 8.2 months.
In Japan, where there is little in the way of long-term defense work, more of the engineers work on short projects. Up to one-quarter said their design cycles lasted six months or less. However, Japanese engineers have always been among the world's hardest workers; respondents there put in an average 54 hours a week on their jobs, vs. the mean of 47 hours in the United States.
Engineers understand technology. The survey respondents come fully equipped with the technical skills essential to carry out their jobs-as designers and developers. They are systems integrators (59 percent), C/C++ users and developers (58 percent), adapters of analog design (48 percent) and users and developers of ASICs (29 percent). Fewer (9 percent) utilize Java or deal with deep-submicron IC design (13 percent). But when it comes to business and management skills, EEs sometimes find themselves out of their element.
Here are some of the most vexing challenges:
"Coaching problem employees who have out-of-control egos and are difficult to work with," according to a senior manager.
For a software manager, the biggest problem is "dealing with problem people, trying to motivate employees through company downturns."
For a design engineer it's parts acquisition. "Technology is changing so fast that parts go obsolete quicker, especially microprocessors."
What we're seeing here is a lack of training in the nonengineering side. Engineering curriculums at many universities are so demanding technically that students don't have the time or inclination to pursue business courses. And that takes a toll when promotion time comes. This gap in engineers' experiences has led such organizations as IEEE-USA to steer their members toward pursuit of extracurricular courses in management and business skills. A number of universities now set up engineering courses where team leadership skills, writing, oral presentations and resolution of problems are part of obtaining an engineering degree. Ideally, getting an MBA, along with an MSEE, would prepare EEs better for the real world of business, but that's not always practical. So many readers develop these skills on the job. Among the skills they claim:
Roughly eight out of 10, or 77 percent, of the EEs responding to the survey have written reports for internal use, or acted as team leaders. And for 73 percent it's almost a given that a designer is confronted with resolving a technical trade-off.
Some 69 percent claim project management skills. One manager noted, "I am routinely responsible for as many as 20 different development projects, and the management of this many projects strains my ability to the max."
But one Web respondent cited "time management in an environment that is understaffed. Customer demands are forcing people to go from grass fire to grass fire."
Even team leadership frustrates the respondents. "Depending on the team," one engineer wrote, "it can be as difficult as herding kittens."
This team leader is in agreement with that statement: "Team leadership requires team selection, team building (getting buy-in), issue resolution (technical, managerial and personal), time management, interteam communication/negotiation and mentoring. There are many ways to solve technical problems, but it is very difficult to get everyone on a large team to agree on one solution."
Sorry to say, engineers sometimes turn on engineers. One hates "dealing with engineers who do not have a business degree or experience in sales and have this 'holier-than-thou' attitude that if they got their engineering degree then they can do their jobs 'even better.' "
"Rumors to the contrary," observed another Web respondent, "it is possible for engineers to be very emotional. To make it worse, they believe they are being absolutely dispassionate. When this occurs, understanding and getting others to understand the different points of view are difficult tasks."
Among the skills that EEs cite less are budgeting (36 percent) and personnel hiring (37 percent). Generally, those tasks are assigned to higher managers. In fact, while only 28 percent of staffers claim budgeting capabilities, 74 percent of managers perform this essential task. Similarly, hiring is another dividing point between managers and staffers: Three out of four managers hire and fire, while only 29 percent of staffers do that.
What technology is going to take off? The more than 5,000 engineers and developers responding to the survey are placing their bets that the following will see broad usage: system-on chip (SoC), 69 percent, streaming media (64 percent) and, interestingly, Linux (54 percent), which rose three percentage points in one year, one of the biggest advancers on the technology front.
For all the publicity about the Internet, engineers remain skeptical about the prospects for Web-based design tools. Some 20.5 percent think those tools will flop as a technology, with another one-third foreseeing success and 46 percent predicting that Web-based tools will end up as a niche technology. Respondents relegated Direct Rambus memory, which was tied to Intel technology, to a niche status (53 percent), or outright flop (27 percent). Ominously, Bluetooth technology, which is supposed to be a key network link between the home and Internet, seems to be slipping in acceptance, as only 35 percent see it enjoying broad use. Last year 42.5 percent of the respondents thought Bluetooth was headed for wide acceptance.
Improving a bit is the number of readers designing intellectual property into their designs. That figure has crept up to one-third of the respondents this year, the highest since we started asking-last year, 29 percent integrated IP cores into designs. Leading the way are logic cores (67 percent of those who employ IP cores), memory cores (58 percent), specialty cores (50 percent) and DSP (40 percent).