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'[OT] The brawn drain ? US manufacturing moving abr'
2006\12\24@161315 by Peter P.

picon face
NYT article (requires subscription but it's free - or use http://www.bugmenot.com/)

http://www.nytimes.com/2006/12/24/business/yourmoney/24view.html?_r=1&th&emc=th&oref=slogin

Maybe this deserves a discussion, the US is not the only industrialized country
affected by this, by far.

Peter P.


2006\12\27@090646 by Peter P.

picon face
Peter P. <plpeter2006 <at> yahoo.com> writes:

>
> NYT article (requires subscription but it's free - or use
http://www.bugmenot.com/)
>
>
www.nytimes.com/2006/12/24/business/yourmoney/24view.html?_r=1&th&emc=th&oref=slogin
>
> Maybe this deserves a discussion, the US is not the only industrialized country
> affected by this, by far.

I know that the subject is unpleasant but it is real. I wonder why it is hard to
start a simple discussion on this theme. Engineering jobs are moving out of
industrialized countries. Many people on this list are engineers.

The article raises the question at what point a, say US (can be German, French,
British, Israeli etc) company stops being that excepting by name ? When 51% of
the work force and/or assets are outside the country ? 80% ? 95% ? And if so,
does it still deserve the tax, origin (as in quotas and import duty class for
example) and protection privileges of the origin country ? The relevant
organizations in the US seem to have no objection to this brawn drain (as the
article observes).

Peter P.


2006\12\27@150122 by Bill Clawson

picon face
I work in hard disk drives.  The vast majority of the
hard disk drive industry (if not all of it) has
engineered drives in the US or Japan while the
manufacturing has taken place in countries like
Singapore, Malaysia, Thailand, Korea and now China.
Of course, it doesn't take a genius to figure out that
eventually the people who build the drives will
acquire the skills to engineer the drives as well.
Certainly this must eventually happen since most of
the test equipment for drive manufacturing is now made
overseas as well.  

As a consequence, some companies are in the process of
shifting their engineering staff over to their cheap
manufacturing countries.  It seems to be a natural
evolution that began with the relocation of
manufacturing overseas in the first place.

The theory that the US can function just as a service
economy distresses me greatly.  People overseas are
not so stupid as to become dependent upon US
expertise.  Instead, places like India focus their
educational system on engineering and high tech and
thus provide their own manufacturing with their own
expertise.  

We, meaning the US, are rapidly becoming like ancient
Rome before the fall, we lounge about expecting our
barbarian mercenaries (overseas manufacturers) to do
our bidding, while we go around believing that we rule
the world.  Now to achieve complete degeneration, we
merely need to drink lead-tainted water and wine.

Bill

--- "Peter P." <spam_OUTplpeter2006TakeThisOuTspamyahoo.com> wrote:

> Peter P. <plpeter2006 <at> yahoo.com> writes:
>
> >
> > NYT article (requires subscription but it's free -
> or use
> http://www.bugmenot.com/)
> >
> >
>
www.nytimes.com/2006/12/24/business/yourmoney/24view.html?_r=1&th&emc=th&oref=slogin
{Quote hidden}

> --

2006\12\27@184910 by Xiaofan Chen

face picon face
On 12/25/06, Peter P. <.....plpeter2006KILLspamspam@spam@yahoo.com> wrote:
> NYT article (requires subscription but it's free - or use
> http://www.bugmenot.com/)
>
> http://www.nytimes.com/2006/12/24/business/yourmoney/24view.html?_r=1&th&emc=th&oref=slogin
>
> Maybe this deserves a discussion, the US is not the only industrialized country
> affected by this, by far.
>

http://www.usatoday.com/money/economy/employment/2006-12-05-skilled-workers-shortage_x.htm

I believe this is not that bad.

I've just come back from US. I think the working environment there
is really very good.  I also think US is a country blessed with natural
resources and many talented people. In my opinion, no country can
catch up with US in terms of technology any time soon (at least not in
this century). China and India have a long way to go. And the cost
in the better-off areas in China/India are increasing in a rate that
they may soon lose the competitiveness.
http://www.businessweek.com/magazine/content/06_13/b3977049.htm

In fact, quite some business in Southern China are moving to
cheaper places like Vietnam and Bangladesh. And for those
exporters in China/India, I believe most of the profits go
to companies in US/EU since the value chain is like this:
The factory workers earn very little. The boss of the
factory earns a bit. The exporter earns more and the
importer/retailer in EU/US earn even more...

And I also see there is a "reverse brain drain". A lot of the top
talented people in poor countries are migrating to developed countries.
I got quite some friends in US and they all like life in US quite a lot
and they will stay in US. I am the only one who quit study in US
and left US among many Chinese students I know of.

Countries like Singapore are actually very vulnerable. The manufacturing
cost here is much higher than in China/India but the R&D is much
weaker than US/Europe/Japan. Luckily the government here is
top-notch and manages to carve a niche.

Yes there will be always some lower end jobs moving out of
US/EU. However the manufacturing sector will always be an
important sector and there will always a balance by ecnomical
prinicples and even policy intereference. The strong R&D
will always keep US/EU in the business of manufacturing.

Regards,
Xiaofan

2006\12\27@223059 by John Colonias

picon face
Xiaofan

I think you are looking only at one side of the problem. The most serious
one, is the fact that the US enrollment of students in the STEM (Science,
Technology,
Engineering, Mathematics) fields has decreased SUBSTANTIALLY in the past few
years because (IMHO) outsourcing has created a vacuum and students are
not interested anymore to pursue STEM studies. Graduate schools are worst.
Of course this is simplified picture of the problem however it is true.

John
{Original Message removed}

2006\12\28@001919 by Xiaofan Chen

face picon face
On 12/28/06, John Colonias <jcoloniasspamKILLspamjam.rr.com> wrote:
>
> I think you are looking only at one side of the problem. The most serious
> one, is the fact that the US enrollment of students in the STEM (Science,
> Technology,
> Engineering, Mathematics) fields has decreased SUBSTANTIALLY in the past few
> years because (IMHO) outsourcing has created a vacuum and students are
> not interested anymore to pursue STEM studies. Graduate schools are worst.
> Of course this is simplified picture of the problem however it is true.
>

I believe the market will adjust itself. When the payback is good, the
students will start to study Engineering again. At the same time, there
are so many talent Chinese/Inidan students who will stay in US
after studying in Graduate schools to work in Engineering.

I think the US university system especially the graduate education is
the best in the world. Even though I quit my study in US because of
some unlucky situations, I still believe the graduate programs are the
best there. Moreover, I find out many best graduate students are still
native US citizens. They may not have the strong theory background but
they have the passion and the creativity that Chinese/Indian students
often lack. Take note I am originally from China.

And the university education in EU countries are very good as well.
Often they have the solid theory background as well as practical
stills. Actually I was very impressed with the high quality of
the university education based on my experiences with quite
some Germany and Italian students

The point I want to make is that the situation is really not that
bad in US/EU. The outsourcing may affect some people but
the great picture is not that bad.

Just did a fast query from the World Bank. Even with the
exchange rate adjustment, China/India are both still quite poor...

COUNTRY_NAME        IND1_DESC        
2000        2001        2002        2003        2004        2005        

1) China        GNI per capita, Atlas method (current US$)        
930        1000        1100        1270        1500        1740        

2) India        GNI per capita, Atlas method (current US$)        
450        460        470        530        630        720        

3) Singapore        GNI per capita, Atlas method (current US$)        
23030        21260        20820        21890        24740        27490        

4) United States        GNI per capita, Atlas method (current US$)        
34400        34800        35230        37780        41440        43740


Regards,
Xiaofan

2006\12\28@090019 by Gerhard Fiedler

picon face
Xiaofan Chen wrote:

> The point I want to make is that the situation is really not that bad in
> US/EU. The outsourcing may affect some people but the great picture is
> not that bad.

It is not bad. Not at all, IMO. But people there have become used to a lot
of "perks".

It's more like looking at the world and starting to think "wow, I might
actually have to work hard some day; isn't there something that can be
done?" Then they borrow some more money, buy some new toys and continue
business as usual.

It's not that there is no work. There's plenty of work. The thing is that
there is less and less work where you can live comfortably, buy all these
thousands of gadgets, don't have to give too much of yourself and still
have a lot of time off.

These complaints really sound odd if you're in or in close contact with
some poorer areas of the planet.

Look at e.g. Czech Republic. I haven't been there lately, but from what I
hear, in this time of general complaints about the economy, they have made
quite some advances. And they're a neighbor of Germany, so from a
geopolitical viewpoint they are similarly located as the traditional
European rich countries. But one crucial difference is that they are not
(yet) "lazy", don't (yet) look at things from a "not losing perks" POV but
from a "bring it on" POV.

And while we're at it (comparing countries), I think the biggest issue is
that we have to get to a new understanding of what ideas like "nation",
"borders" or "sovereignty" mean. These ideas need a serious overhaul to
continue to be useful. The times where armed forces were enough or even
useful to guarantee sovereignty are gone; the traditional concept of
sovereignty is gone. We are in a situation similar to the one the Brazilian
land owners were 200 years ago, and I hope we don't make the same mistake
they made. They didn't realize that giving up some of their wealth
("investing it") to help the whole country develop would have brought them
more (much more) return than keeping it to themselves, trying to become
even more rich, by keeping the poor even more poor. In the long run, a not
quite so rich in a rich country lives better than a very rich in a poor
country -- this is what they failed to see. Now they live in ghettos, and
can't really enjoy their heaps of money the way I could what little I had
in Germany. You can easily transfer this to the worldwide situation now.
Thinking in terms of "we vs them" isn't going to work for much longer.

Gerhard

2006\12\28@113358 by John Chung

picon face
US university varies widely. The quality of teaching
and the standard that they keep. As I see more of the
situation, I believe US has some really good engineers
/ programmers that keep on doing what they love to do
regardless of the dollar sign(as oppose to managerial
position). Some of the technical staff are above 40+
which I can't seem to find that many in the Asian
world. Most of them HOP on to sales or support in the
Asian world. It is sad that Asian businesses DOES not
value older engineers which is a REAL issue. US does
provide the opportunity for those that love their job
which I must say that it is an ADDED value. Another
major hurdle is that NOT many youth in the Asian world
like to tinker with science stuff which is another
hurdle.....

John

{Quote hidden}

> --

2006\12\28@163416 by Peter P.

picon face
Ok, I found the link to the ITAA report I wanted to post originally. This is
imho required reading for anyone who aims for the US from abroad. It is neither
good, nor bad, just facts said by people who are in the best position to know
and who have the knife and the bread in their hands. Just things that anyone
responsible should know imho.

http://heather.cs.ucdavis.edu/itaa.real.html

Peter P.

2006\12\28@182153 by Xiaofan Chen

face picon face
On 12/29/06, Peter P. <.....plpeter2006KILLspamspam.....yahoo.com> wrote:
{Quote hidden}

Let's count taxes, assume the tax rate in US is 40% and China/India 0% and
Singapore 10%. You can still see the huge differences.

Year 2005 GNI per capita, Atlas method (current US$), minus tax
China           1740
India             720
Singapore     24741
USA             26244

And why is it not worth working with chips?

For many poor people in the third-world countries, they are still
struggling with basic necessities. So they will be very happy to
work with chips if they can earn even US$1000 a year...

2006\12\28@191507 by Peter P.

picon face
Xiaofan Chen <xiaofanc <at> gmail.com> writes:

> Let's count taxes, assume the tax rate in US is 40% and China/India 0% and
> Singapore 10%. You can still see the huge differences.
>
> Year 2005 GNI per capita, Atlas method (current US$), minus tax
> China           1740
> India             720
> Singapore     24741
> USA             26244

Ah, so suddenly Singapore is only 6% below the US ? I don't think that China and
India as a whole can be compared like this. If you would compare for a highly
developed region of each it would probably compare on par (say less than 20%
below US). And the US tax rate is much higher than that, you forgot to put in
sales tax and other goodies. Then there is income disparity. The ratio between
the highest and lowest incomes varies a lot. Others have VAT and crazy excises
and local taxes and artificially expensive gasoline and insurances. In
industrialized countries the money left 'to spend' is between 20% and 40% of
earnings at most. Americans seem to take more of it home than most others.

> And why is it not worth working with chips?

That was an un-delicate joke about Casino chips. Luxemburg is famous among other
things for its Casino.

> For many poor people in the third-world countries, they are still
> struggling with basic necessities. So they will be very happy to
> work with chips if they can earn even US$1000 a year...

You mean a minute ... Never mind, it was a stupid joke.

Peter


2006\12\28@215403 by Xiaofan Chen

face picon face
On 12/29/06, Peter P. <EraseMEplpeter2006spam_OUTspamTakeThisOuTyahoo.com> wrote:
> > Let's count taxes, assume the tax rate in US is 40% and China/India 0% and
> > Singapore 10%. You can still see the huge differences.
> >
> > Year 2005 GNI per capita, Atlas method (current US$), minus tax
> > China           1740
> > India             720
> > Singapore     24741
> > USA             26244
>
> Ah, so suddenly Singapore is only 6% below the US ?

Singapore belongs to first world, at least in terms of ecnomy. It is
a tiny city state with a highly efficient government. I list it there since
I am in Singapore now. And that is average GNI. If we compare
average household income, Singapore data will be even lower.

And even in Singapore, an average engineer earns much less
than US counterpart (even without consider the exchange rate and
assume 1US$=1S$ in terms of purchasing power) and enjoy much
less benefit. The only category of people in Singapore who earn
more than their US counterparts may be the top government officials
but I believe they deserve it.

2006\12\28@231942 by Rich

picon face
Talent follows opportunity.  The opportunity for engineers in the US is
decreasing.  This is especially true in the software engineering community,
although it applies as well to manufacturing and research as well.  As it
was mentioned already, the reason for the decline is due to globalization.
In my humble opinion the way that globalization is presently structured is
seriously flawed and needs to be fixed.

   In General, engineering salaries have also decreased rather than
increased over the past two decades, (relatively).  This further limits
attraction to the STEM programs.  But in any case increasing the supply of
engineers without a demand will only drive salaries lower.

In major cities, moreover, fewer high school students are studying math and
physics to a degree that has created great concern.  In colleges and
universities across the nation, moreover, female students are outnumbering
male students by a significant margin.  These trends also reflect a decline
in the promise of opportunity, domestically. The law of supply and demand
seems to apply here.



Also, in the US people tend to put engineers all in one box.  But that is
not the case.  Research engineers are very heavy in math and theory, while
only a fraction of manufacturing engineers can solve a first order ordinary
differential equation.  The highly theoretical engineers have always been
the smallest group but this group is also shrinking.



However, with the overall decrease in opportunity the market will shrink.
It will not be displaced, it will simply shrink.  The equilibration which
you mention is still decades ahead and the resurgence of opportunity for
engineers will occur on a global basis rather than on a localized basis.
NAFTA and GATT apply as well to services as to products.  Engineering in the
final analysis is a service.



   The fact that the US has more capital and that it is distributed more
evenly relative to other nations has little to do with opportunity in a
diminishing technological based nation.  Even the US Defense has become
dependent on outsourcing.  It was during the first Clinton administration
that the specifications for military apparatus were required to conform to
industrial specifications.  The supposed rationale was to avoid toilet seats
and hammers costing hundreds of dollars.  It was the wrong solution to the
right problem which essentially threw the proverbial baby out with the bath
water.  The military used to keep all of its R&D and manufacturing
domestically and it was a significant market for engineering services.  It
too has diminished.  Just my humble opinion.

Respectfully,

Rich





{Original Message removed}


'[OT] The brawn drain ? US manufacturing moving abr'
2007\01\01@110022 by Juan Pablo
flavicon
face
Hi!,

The problem itself is more complex than this..
One of the strengths of America is the "free enterprise spirit", and
that is what IMHO has driven much of the current boom that compensate
for the lost manufacturing jobs.
But to keep that fire burning, a constant flow of well trained workers
immigrated to the country each year.
America was perceived as the final destination for  many talented people
that could not find a job according to their expectations.
But much of that is quickly vanishing, as companies create factories and
higher paid jobs in their home countries, there is much less motivation
to emigrate, and many of them are even considering returning to their
home countries to apply what they have learned at home, and have the
chance to participate on the expansion of their local economy.
Combine that with the change of feelings towards immigration after the
9/11 attacks, and I can see that the needed influx of Brain Power is at
risk.

The US has moved production abroad, thinking that they could keep the
innovation as the source of revenues.
But innovation is not a easy to control. It does not respect borders,
and it follow people.

Where will the  next silicon valley located?

Juan Pablo

2007\01\02@000813 by Rich

picon face
Very well said, Juan.

----- Original Message -----
From: "Juan Pablo" <jpspamspam_OUTrobotmaniacs.com>
To: "Microcontroller discussion list - Public." <@spam@piclistKILLspamspammit.edu>
Sent: Monday, January 01, 2007 11:00 AM
Subject: Re: [OT] The brawn drain ? US manufacturing moving abroad


{Quote hidden}

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