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By Jack Ganssle
The End of Days?
Published in Embedded Systems Design June, 2009
I enjoy writing. But the best part about crafting articles is the email from readers. Some signal agreement, others berate, all make me think. Readers send lots of email- lots - and the most common query has been about becoming an embedded developer.
Those inquiries have completely ceased.
The favorite subject now is layoffs. Several to dozens of emails from newly-displaced engineers arrive every day, looking for ideas, for contacts, or just to air despair.
At the April Boston Deep Agile conference, which was focused on using agile in the embedded arena, fully one-third of the attendees reported they had lost their jobs.
Waves of layoffs are sweeping across the country and the world like an economic swine flu. Till the end of 2008 it seemed engineering, or at least embedded engineering, was pretty immune. After the dot-com implosion businesses learned the peril of dumping developers: once that recession ended companies who had shredded engineering had no new products for market.
As of 2009 engineers are no longer part of companies' survival strategy; they're cost centers that are getting trimmed along with everything else.
Every decade or so we have a recession. Apollo's demise in the early 70s was a disaster for engineering since those people were tossed on the street in the middle of a downturn. The early 80s saw a deep recession, as did the 90s when Bill Clinton won at least partially with his refrain: "It's the economy, stupid." And of course the dot-com problems at the beginning of this decade spread far beyond high tech.
So maybe today's woes shouldn't be unexpected.
I know nothing about economics, but this recession feels different than the previous ones I've experienced. We always recover. But this time I wonder if the recovery will be into a financial climate that leaves too many chronically underemployed with sagging salaries for those with jobs.
Many forces are squeezing what we've learned is a precarious global economy. Some, like the rise of radical Islam, which will surely be nuclear-armed in the not-distant future, will leave the world rocking as it struggles to find solutions. Businesses will therefore have a hard time making decisions; the worst enemy of business is uncertainty. Popular unhappiness about executives, or at least executive pay, will feed that uncertainty. It's unreasonable to assume that we will have learned anything from this crisis, and even more unlikely that Ponzi schemes and other criminal activities will disappear from Wall Street, so the corruption will fuel unrest.
Then there's capitalism, the best system yet devised for creating wealth. But as Lenin said: "The Capitalists will sell us the rope with which we will hang them." Capitalism may become its own worst enemy.
Capitalism worked spectacularly well when poor communications put a sort of friction into the system. It was costly to move work from one state to another, and impossible to consider the idea of teams distributed in both geography and time. But that friction is gone. Whether you like Friedman or not, he is right: the world is getting flat, and will continue to flatten. Yeah, I know your group sent some work to India and it was a disaster. But the stakes are so high for the developing world that they will surely improve. In fact, success is far more important to these folks than it is to us. A couple of billion people live in grinding poverty and will do anything for a wage of a thousand or two a year. Here in the US we're pretty content and don't have the stress of not being able to feed our kids for days at a time.
Instant communications, a world desperate to learn English (you should see all of the signs advertising English classes in Bangalore), growing educational systems in the most important developing nations (India and China, which taken together represent nearly half the world's population), mean companies will offshore everything that can be offshored. There are always markets for boutique products, and smaller nations (Romania, Bulgaria, etc.) who also have skilled engineers will be centers of boutique development offerings.
Like it or not, the system demands efficiency from public companies. The CEO who does not maximize profits will be fired. Eventually, at least. Jeez, that Nardelli guy trashed Home Depot, was rewarded with a cushy job at Chrysler, and is now presiding over their bankruptcy. The fault doesn't lie with the fat cats. It's us. We the stockholders who dump shares when there's a bad couple of quarters mean that CEOs are rewarded for short-term decisions.
It's unreasonable to expect that offshoring won't accelerate. And so, I worry that when we do come out of the current exigency that we in the West will be diminished. Just as World War II caused Britain to abandon its empire and become a small island nation, will we in the US in particular, and the first world in general be a much humbler country? One where salaries start to float down towards global norms and the goodies we expect become too expensive? If the answer is yes, that creates a self-sustaining feedback loop leading to less of everything, since our economy is predicated on consumerism.
Then there's unemployment. Look at Michigan, which has been devastated by years of failing automotive companies. Is that a model for the rest of the country? Every politician loves to talk about retraining these displaced people, but that's absurd. For retraining to work, there must be a big demand for the people with skills. There isn't, and hasn't been such demand for many years.
In the US we largely gave up on manufacturing. Offshoring means we give up, first, on service jobs, and second, on highly-skilled work. With manufacturing gone, science and engineering going, what special place will this amazing nation hold?
Then there's the debt. With continued huge deficits lenders will eventually pocket their wallets as the perceived risk becomes too large. There are only three solutions: a massive increase in taxes, which seems unlikely if employment and salaries are off. Or we could enact huge spending cuts. But when was the last time we saw Congress tackle any serious problem? Or balance the budget? I think we can remain quite sure that they will exacerbate every problem they are dealt.
Finally, there's inflation, which would drive the value of the debt down. We owe so much, however, that for inflation to work it will have to be staggering, which will further depress wages and jobs. I'm reminded of a Saturday Night Live skit in which Dan Akroyd, posing as Jimmy Carter, attempts to deal with spiraling prices by claiming: "Inflation is our friend," and goes on to show that left unchecked, it meant that by 2000 blue-collar workers would earn an amazing $568,000/year. Doesn't everyone want to be a millionaire?
Lenin also said: "The way to crush the bourgeoisie is to grind them between the millstones of taxation and inflation."
How about the external problems? Take global warming. There's little doubt we will enact some legislation to curb this threat. But it won't work. If the US went carbon-neutral CO2 will continued to be spewed at dangerous rates. Growing economies in the developing world will need lots of energy. No one seems to think alterative approaches will cost less than coal and oil. If the first world adopts Earth-friendly energy the resulting drop in demand for oil will cause its price to be even more attractive. The developing nations, poor, will seize the lowest-cost ways of generating power: fossil fuels. Though I continue to be excited at the prospects for embedded engineers to invent technological solutions, I fear simple economics insures the problem will get worse. A warming Earth will create problems that will further destimulate the economy.
Of course, I could be wrong about all of this.
Surviving the Crash
There is an upside, if one can call it that. I do think engineering in the first world will continue to be viable. Since the dot-com bust students have eschewed engineering programs, and every year enrollment statistics go lower. Many of those who do join EE and CS programs switch majors before graduating. The IEEE reports that even after graduating, engineers often abandon the field and go into other careers. There will always be an in-country demand for engineers, and globalization means the companies need local people who understand technology to develop equipment, and to communicate with and manage engineers in other locations. Fewer engineers means more demand for us.
The successful Western engineer of the future will be he that knows the technology, and who can communicate with all of a company's stakeholders. The CEO needs someone who can speak P&L as well as ones and zeroes, as well as features and benefits when talking to customers.
That means, of course, we need additional skill sets. We invented the communications age, yet too many of us cannot communicate. Successful engineers in the near future will be adept at writing. Technical writing is not hard and is a skill anyone can master. The adage is: "write like you talk. Avoid being fancy."
Engineers will be increasingly called on to do short presentations. Ten minutes of Powerpointing isn't hard but will be an essential survival tool.
Prepare to adapt to changing circumstances. Even if none of the grim scenarios portrayed above pan out, even if by some miracle the clouds lift and the Dow goes to 30,000, things will change, as they always have in this field.
The most important thing a young engineer can do is save money. Having money in some reasonably liquid form gives one options. A layoff with nothing in the bank is a disaster; given some savings it's surely painful but one can survive.
Alas, traditional investments have tanked. I asked my accountant for advice. He suggested buying seeds and guns. That seems a bit extreme, but he's convinced that, at least for now, losing 2% on investments is the new win. If inflation does assault the economy, traditional savings will disappear. He has suggested putting money into Treasury Inflation-Protected Securities (http://www.treasurydirect.gov/indiv/products/prod_tips_glance.htm) which protects the principal (assuming the government doesn't default).
If you're unemployed, perfect your resume. If you still feel secure in your job, perfect your resume. Stuff happens, and stuff seems to happen at a breakneck speed.
"Perfect" is the only acceptable standard for resumes. The purpose of a resume, in the eyes of the hiring company, is to reject candidates. Typos, grammatical mistakes, and poor organization will insure the CV goes into the burn bin.
Do see my comments about resumes here: http://www.ganssle.com/sellyourself.pdf. Joel Spolsky has some brilliant suggestions as well: http://www.joelonsoftware.com/articles/ResumeRead.html.
Start networking. Today, even if you have a job. It's the most effective strategy known for getting work. In one of my Embedded Systems Conference classes I advise attendees to meet others and exchange business cards. It always amazes me to see how many scurry out of the classroom with no new contacts, no prospects to mine if a layoff were to happen.
Kids These Days
In view of the current turmoil, readers have been asking me if they should promote engineering as a career to their college-bound kids. The turmoil is not confined to this sphere; it's pretty much everywhere. My advice is to encourage the young to pursue their passion, whatever it may be.
My daughter will start college in the Fall, majoring in dance. We've talked about this a lot, and for a while I was channeling my dad. Make sure you can get a job! But I was wrong; she has been wild about dance since age 4. I don't want her to diminish her life by only being practical. Passion matters.
But I'm trying to get her to minor in Chinese.