WASHINGTON The U.S. engineering
community is wrestling with the quickening pace of offshoringand what, if anything, should be done about it. As they work to document the extent of offshoring in areas such as chip design, experts are
trying to get their arms around globalization's implications for the engineering profession and, more important, for the future of U.S. innovation.
Recent examinations of the issue by some of the profession's top thinkers have found that the United States remains the world's leader in areas like
advanced chip design. But there's concern that the U.S.
lead could be shrinking and that rising costs, competitive
pressures and the global transmission of intellectual property are reshaping the engineering
profession and the nature of innovation in ways that are just beginning to be understood.
Part of the debate focuses on whether location matters in engineering. Some argue that a connected world renders a company's location irrelevant. Others say proximity to clusters of innovative startups, corporate R&D labs, universities and venture capital (think
Palo Alto's Sand Hill Road) are the pistons that drive the
engine of innovation.
Both sides have a point, Charles Vest, president emeritus of the Massachusetts Institute
of Technology, told a recent offshoring workshop here.
But however you view it, "globalization is the new reality."
That reality has translated into an estimated 60,000 manufacturing plants being built by foreign companies in China between 2000 and 2003, according to the National Academy of Engineering. During that period, an estimated 400,000 U.S. IT manufacturing jobs were lost, a presidential advisory panel estimates.
Vest told the workshop sponsored by the National Academy of Engineering that the high-tech industry along with R&D and innovation itself are "migrating and morphing." This sea change is being driven by economicsmostly by lower overseas wages, tax and trade policies and global networks.
Another driver is speed and complexity, Vest said. "Everyone is in a hurry" to rush innovative products to market, and only the nimblest will survive to reap a return on their staggering investments. The laggards will morph into something else or vanish.
New models of how innovation works are also emerging. Vest cited IBM CEO Sam Palmisano's concept of a "globally integrated enterprise" as the successor to the multinational corporation. In this model, technologies are borderless and technical standards are based on global technology.
An "open innovation" model postulated by Harry Chesbrough of Harvard Business School posits that companies must integrate the best ideas regardless of where they originate.
Vest and others insist that the U.S. remains the world's leader in technology innovation with the best research universities and R&D infrastructure. "The enemy I fear most is complacency," Vest said.
In agreement were other experts at the workshop who have focused on the impact of offshoring on specific technologies like semiconductor design.
"So far, offshore activities appear to complement design activities with expansion" in the U.S., researchers Clair Brown and Greg Linden of the University of California at Berkeley told the workshop. But the "long-run impact on U.S. leadership and jobs [remains] unclear."