The Offshoring of Engineering Facts, Unknowns, and Potential Implications (2008) / Chapter Skim
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3 Effects of Offshoring on Specific Industries
3 Effects of Offshoring on Specific Industries
Pages 20-32
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From page 20... ...
From this base, multinational companies and suggestions for revisions, which the authors incorporated operating in India and Indian domestic firms have moved into the final papers. Table 3-2 provides a summary of an- into other areas, such as product software and embedded swers based on the commissioned papers mapped onto the software.
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c 10.7 10.1d 3 76.5 193.9 ($ billions) R&D scientists 90,800 80,800 73,000 83,200 n/a 51,800 15,100 394,700 1,066,100 and engineerse aThesoftware industry is represented by two NAICS codes, 5414 and 51112, which clearly do not map exactly onto the industry sectors covered in the commissioned papers, particularly for software (figures here understate the revenue, employment, and R&D of interest)
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global optimization global teams in the clinical trials and engineering work of high-value job of platform large project sector. is moving up the remains in the United losses uncertain.
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Has engineering work followed production? Are engineering workforces growing, and if so how fast?
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In the first half of the twentieth century, for example, Ford growing very rapidly, whereas large developing economies TABLE 3-5a BLS Data Showing Automotive Engineers in the United Statesa NAICS 3361: Motor Vehicle NAICS: Motor Vehicle Body and NAICS 3363: Motor Vehicle Parts Total of All Three Occupational Code Manufacturing Trailer Manufacturing Manufacturing NAICS Codes Engineering managers 610 570 3,960 5,140 Industrial engineers 3,390 1,240 14,460 19,090 Mechanical engineers 1,920 1,360 9,300 12,580 Electrical engineers 150 110 910 1,170 Engineers, all other n/a 180 7,200 7,380 Total 6,070 3,460 35,830 45,360 All Occupations 256,700 168,840 693,120 1,118,600 aDoes not include most product engineers.
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Chinese economy grows and automobiles become more Because China has attracted so much attention from common, however, we can expect Chinese engineers to the global auto industry as a growth market and source of become more competitive and more productive. components, we now look more closely at the current state Even with the current productivity gap, a number of en- of China's engineering capability and the potential effect of gineering tasks can be offshored fairly easy.
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, and it will prob- States remains a leading auto market, OEMs, regardless of ably take years for China to assimilate the management of nationality, will maintain engineering capability here. automotive-development processes.
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For example, major government research support, and tax incentives. In addition, European pharmaceutical companies such as Novartis and they have large numbers of treatment-naïve patients, which is GlaxoSmithKline have shifted much of their R&D and an advantage for conducting clinical trials.
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From page 28... ...
which significant aspects of engineering are offshored, has As in the auto industry, PC firms based in different counenabled Dell, Hewlett-Packard, and other leading companies tries have adopted different approaches to offshoring. For to hold down costs and remain competitive in an industry example, Japanese PC makers, whose efforts are focused that has rapid product cycles.
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TABLE 3-9 Survey Results for Jobs in PC and Related Industries Major Activity Where Demand for Availability Availability in Other Locations Cost and Quality Engineering Job Category This Skill Is Used Engineers in U.S. Where Activity Takes Placea Relative to U.S.a Engineering managers R&D, design, development Stable or Tight Tight or enough Lower cost, lower quality growing Engineering product managers Design, development Stable Tight or enough Tight or enough Lower cost, same quality Hardware engineers Design, development Stable Tight or enough Enough Lower cost, same or lower quality Electrical engineers R&D, design, development Falling or Tight or enough Enough Lower cost, same or growing lower quality Electronic engineers Development Falling Tight or enough Enough Lower cost, same or lower quality Mechanical engineers R&D, design, development Stable or Tight or enough Enough Lower cost, same or growing lower quality Software engineers R&D, design, development Growing Tight Tight or enough Lower cost, same or lower quality Industrial engineers Manufacturing n/ab n/ab Enough Lower cost, same quality Industrial designers Design Stable Enough Enough Lower cost, lower quality Note: Names of firms are confidential.
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. The current demand for Impact on: Responses Opinion engineers and architects in the United States is high because Engineering cost 48 More than 10% reduction the civil engineering workforce is aging, many engineers Construction cost 75 No impact are retiring, and, until recently, the construction market was Engineering time 48 No impact growing rapidly.
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. Overall, we can say that the and assembly/packaging to "foundries," such as Taiwan availability of offshore design and manufacturing capability Semiconductor Manufacturing Company (TSMC)
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2005. A Dual Networks Perspective on Inter-Organizational Transfer of R&D Capabilities: International Joint Ventures in the Chinese Automotive Industry.
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