I would like to comment on the maxim “the principal function of a business is to make money for its owners and stockholders, and the people who find this objectionable are against capitalism.”
I fully agree with this maxim, but a clarification is in order: the purpose should be to make the most amount of money in the next ten years (or depending on the product type you can substitute 10 years by X years, where X is larger than 3.) The sad fact is that most CEOs and CFOs are not at all interested in maximizing the total delivered value to the stockholders in a period of 10 years or so. They are interested in maximizing the profits in the next six months, or maybe a year. They are happy to do that even if they know they are running the business to the ground in the long term. In the short term, they collect huge stock awards and bonuses. In the long term, when things get sour, they blame our government and all other governments, they blame cheap foreign competition, and so on, and move on to another position. Then the vicious cycle repeats.
I sincerely believe that the fundamental problem is not the globalization. The detrimental problem is the very narrow short term focus in terms of results. Today, many CEOs prefer to acquire successful small start-up companies by spending hundreds of millions of Dollars, instead of having taken the long term view several years back and having done the work in house for a tenth of the price. The financial markets reward this behavior.
Great idea. But note that there is a mechanism already available: create stock options which don't vest until 5 years is up.
If the vesting price is correctly chosen, the stock has to rise in order to make the option worth taking. No rise, no value.
Just make sure the options don't vest for 5 years and then in tranches of 20% every six months.
I tend to agree with "fundamentals" about myopic CEOs focusing only on short-term gain at the expense of long-term stability. While interviewing a semiconductor CEO several years ago, he checked his company's stock price at least twice in an hour. I quickly realized he was more interested in tracking the value of his stock options than discussing his company's strategies for growth and innovation. This is no way to run a railroad.
Thanks for your article. Baseon the information in this article, and talking to engineers in my area, this report is about right…(take or give a few points). The job market is improving and many businesses will start hiring engineers. That is good news for everyone.
Andy Grove almost said it last month. The US economy was big enough during the past 50 years to permit Japan, Korea, Taiwan, and Singapore to develop huge balance of trade in their favor. NAFTA was basically an extension of the same thing apparently. The US is no longer big enough to survive in tech if we continue doing business the same old way.
The demize of US high tech actually was clear during the past 10 years, but the free wheeling easy money of the past decade blindfolded us as to the problem.
As Intel and others can now see, if we are going to compete directly against the Chinese government party PLA, the US Congress must wake up to the fact that some clearcut national high policies are not only important, but indeed critical for the survival of the US as a first world nation.
Somehow it was ok to let the Pacific rim nations under strong government leadership develop the huge trade surpluses existing today. But not with China playing the same game except even more overtly and covertly, our government cannot continue to simply sit by and say "let IBM and Texas Instruments fight it out with the Pacific Rim". We are failing miserably and will continue to do so unless the US government gets into the act with some clear high tech policies that are based on wisdom and concern for tomorrow.
"We often hear from readers who are engineers that they try to dissuade sons and daughters from entering the profession."
I agree and feel the same. If I could do it again I would stay far away from this field. Engineering is hard, thankless work. The pay scale is just not worth the burden of long nights, personal responsibility, stress and meeting demanding expectations from management. I've met personal trainers and strippers who make more than I do, and they're not designing components for the latest greatest jet engines. Problem solving is fun and challenges the mind - but in this field, it means dealing with problems every minute of every workday.
I take issue with the statement "The emergence of the nomadic engineer is a likely consequence of accelerating globalization, rising interconnectedness and the diffusion of advanced technologies." In fact the nomadic engineer is the consequence of the severely diminished mutual respect and value between the middle to upper management of companies and the engineering staff. A large portion of this change has occurred during the last 50 years, accelerated since the mid 1990's. A portion of engineers' readiness to move on is due to the elimination of the lifetime career expectation at a single company, that has been caused by severe layoffs of skilled technical personnel done comparably to layoffs of non-skilled and non-technical personnel. Time was when the people who were retained at all costs were the engineers, even to the point of temporarily using engineers as secretaries and non-technical staff in needed positions during economic down-turns. The change to equality in layoffs has cost short-sighted businesses, who even now "off-shore" their design projects only to get poor quality results that damage corporate bottom lines and quality reputations.