!!! "It's not a BUG, 
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\ - / INDUSTRY GADFLY: "The Future Ain't What It Used To Be"
_] [_
by John Cooley
Holliston Poor Farm, P.O. Box 6222, Holliston, MA 01746-6222
It all started when I got a letter last week from a long time reader.
Hi, John,
After hearing how President Bush supports outsourcing to India, I'm at
a loss as to whether or not I should encourage my teenage son to study
engineering in college like I did. What would you tell him?
- An American Dad
Things got interesting when I tried to answer this email.
---- ---- ---- ---- ---- ---- ----
First the negative data.
In October 2005, the U.S. National Academies reported: "Last year more than
600,000 engineers graduated from institutions of higher education in China.
In India, the figure was 350,000. In America, it was about 70,000."
So given 20 years as your teenager's design career, he'll see:
12 million China 7 million India 1.4 million U.S.
engineers. That means in his world, the U.S. will have less than 7% of all
the engineers on the planet. Not good. Factor in Europe and Japan and
that projected percentage will drop to probably only 3%. Double not good.
---- ---- ---- ---- ---- ---- ----
The other factor is simple, brute force economics. From the mess of studies
I've found googling, the best comparable pay data I could find boiled down
to for $1 million per year you can get
10 U.S. engineers == 59 Indian engineers == 91 Chinese engineers
So there's lots of them and they're cheaper. This means boatloads of design
work will be shipped out of the U.S. -- triple not good news for any American
teenager looking towards a future in engineering (assuming junior doesn't
want to permanently move to China or India.)
---- ---- ---- ---- ---- ---- ----
Then on a personal level, something Aart de Geus had recently said came to
mind. Aart, while on the recent EDAC CEO panel, complained about the U.S.
clamping down on H1-B visas as a reaction to 9/11, thus stopping many foreign
engineers coming to the U.S. "From a policy point of view, obviously what's
happened has been pathetic. When a country closes its doors to intellect,
that is a stupid thing to do."
So even Aart is trying to get cheap foreign engineers into the U.S. Damn.
---- ---- ---- ---- ---- ---- ----
Then the positive data came in.
I googled Aart to see what else he had said on this. I discovered back in
1998, Aart and T.J. Rodgers, the CEO of Cypress, had lobbied Congress to
expand the H1-B visa program. I thought to myself, "oh, crap, Aart was
hustling for cheap workers even back then. I didn't know that. Damn...."
Until I read further.
T.J. Rodgers had written in the Wall Street Journal that he had 20 projects
backlogged due to U.S. engineering shortages. And that it wasn't because
he was holding out for cheap foreign designers either. "Cypress's average
San Jose employee - excluding me and our vice presidents - earns $81,860 a
year, including 19 percent benefits."
T.J. also noted that "Engineers create jobs. Cypress employs 470 engineers
out of 2,771 employees. Each engineer thus creates 5 additional jobs to
make, administer and sell the products he develops. A disproportionate
number of our R&D engineers, 37%, are immigrants, typical for Silicon Valley.
Had we been prevented from hiring those 172 immigrant engineers, we couldn't
have created about 860 other jobs, 70% of which are in the U.S."
Aart had told a similar story to the Mercury News complaining that he had
329 U.S. engineering jobs vacant and: "We need Congress to increase the
number of H-1B visas, not to help foreign workers, but to help ourselves."
Basically both their arguments were that if we want world class chip design
to stay in the U.S., we will have to allow the best engineers to work here
in the U.S. -- otherwise they'll stay home back in India or China and make
their economic impact there.
It's the immigrant engineers who make it so U.S. engineers still have design
jobs in the U.S. I hadn't seen this until Aart and T.J. had the balls to
make a politically unpopular stand on how Silicon Valley really worked.
---- ---- ---- ---- ---- ---- ----
Then some more positive data came in from an unexpected source.
In January, as a favor to a friend (and as an experiment) I ran a job ad
for IC Manage, Inc. for 2 software developers on DeepChip. Suddenly within
24 hours of that job ad going up, the guys at Intel contacted me. They had
a mess of jobs that they wanted to advertise immediately on DeepChip. I
said they could run one job at a time because I didn't want ESNUG to become
known as "that Intel site" and asked them why they were so interested in
my nothing little DeepChip. "We're just a bunch of chip nerds kvetching
about EDA tools. It's not a big league job site," I said.
Long story short, they replied they could get plenty of resumes from running
ads on dice.com, monster.com, etc., but all it got them was "300 resumes
of new grads and lots of laid off people". What they wanted was to hire the
really good engineers who weren't looking for a job. They knew DeepChip
would be a natural meeting place for them. I laughed. "Oh, so you're just
trying to poach experienced engineers from other companies?" The Intel guy
danced around my question and instead told me his sad, sad tale of recruiting
woe. "You have no idea how difficult it is to find good technical people."
Blaze DFM, Ponte, Jasper DA, Zenasis, and Atheros all jumped in with their
own job ads. It wasn't until after the Ponte ad got 600 pageviews that they
discovered that their "reply to" address was broken. "Yes, it was a problem
on our side and it's now fixed. No way to get back those 600 pageviews but
could you put the ad back up now? Dammit, now we're going to need to find a
new IT guy, too..."
As an accidental tourist, I was on the road to learning about this strange
and expensive business of hiring engineers in the U.S.
The Jasper CAE job ad got 903 pageviews in the first 20 days that it was up
on DeepChip. I was excited until I called and found out they had received
only 12 resumes. Then I was bummed. But they were ecstatic. (!) "We're
happy with 12 mostly qualified resumes instead of 200 definitely unqualified
resumes. Finding people who know verification plus formal plus a strong
apps background is like pulling teeth."
I also learned about backdoors. As in "we got 6 directs and 4 backdoors";
where the candidate doesn't respond to the job ad directly, but upon seeing
the ad sends his resume to a friend he knows at the hiring company. The
idea being to bypass the hiring company's HR department. Some recruiters
detest backdoors while other recruiters like them. It all depends on if the
recruiter is given "credit" for bagging a backdoor candidate or not.
The Zenasis HR lady reported in. "I guess you're read in China, John. One
of the resumes sent to us was in Chinese. We can't read it. We wrote the
guy back asking for it in English. He resent it again in Chinese. That was
a first. We've never received a resume in Chinese before."
Then Mentor, Denali, and Lightspeed joined in with their job ads.
"In ballpark numbers, every year we get 500 qualified unsolicited resumes
sent to us," reported Mark Gogolewski, CTO of Denali. "We spend about $120K
to get an additional 500 qualified resumes in house. Out of those 1,000
yearly resumes, we'll offer 26 engineers a job. Either 23 or 24 will accept
the offer. We are dying for good engineers in our U.S. offices."
"We budget $15K hiring cost per engineer. Where we can have an employee
referral, the cost is lower and a lower risk of being a bad hire," said
Dave Holt, CEO of Lightspeed. "Thus, I'd say the true cost of hiring a
non-referral is closer to $20K per engineer because it has a higher risk
of a being bad hire."
"I know you're a fanatic about hard data, John," wrote Simon Bloch, general
manager of Mentor synthesis. "Here's the stats on one technical marketing
engineer we recently hired needing ASIC, FPGA and DSP experience.
80 interested technical candidates
59 were either new college grads, verification engineers, or product
marketing candidates with little to no EE or design background.
21 phone screens
5 on-site interviews
2 offers made
1 accepted...
Searches within career portals like dice.com, monster.com, hotjobs.com,
and edacafe.com yielded fewer than 5 hits for people having both FPGA and
DSP background for this job role. Resumes were from 1 - 90 days old."
"For a new technology like our Catapult C technical marketing engineer,"
added Simon. "I'll need someone who knows HW, systems design, DSP, and
C/C++ plus he or she has to be a people person, too. Not easy to find."
---- ---- ---- ---- ---- ---- ----
Rather than dance around the topic, I emailed these last 3 to see what they'd
say to the U.S. teenager wondering about a future career in engineering:
Mark -- "I don't buy into this malaise about outsourcing. I have a 2 year
old son and I'd tell him to study engineering. Silicon Valley will always
have its sinusoidal wave of engineering supply and demand, but I absolutely
believe there will always be a need for great engineering talent in the U.S."
Simon -- "It's funny that you ask this. I have a daughter who's 17 and is
just now applying for colleges. Wally did a study and found the salary of
all U.S. graduating engineers has been rising faster than salaries of the
average of all other U.S. graduates. Despite outsourcing, this says the
demand for U.S. engineers is still very strong and Wally thinks it'll stay
that way for the next 20 years. My daughter applied to M.I.T. for a degree
in engineering management."
Dave -- "My oldest son is 17. He and I have discussed career options as he
is very interested in mathematics and applied science. My advice to him is
to strongly consider bio-engineering as it is the growth market for the next
century. Certainly there will be many jobs for newly minted BSEEs and MSEEs,
but they will be entering an increasingly commodity market where small
companies will find it harder and harder to differentiate. Most of my
electronics products do most of what I want them to do today (short of a
natural language interface). Yet the medical community is just emerging
from the dark ages. We are far from the situation where a real individual
chemical, biological and micro-biology physics-based analysis on patients is
performed to diagnose specific problems and treatment. That is a huge market
opportunity. As a society, we will spend the next century working on it."
And since Cadence is the world's largest EDA company, I thought it would be
wise to get Mike Fister's thoughts on this -- after all he sees engineering
daily on a global scale.
Mike -- "Tell the kid not to worry about the money. If he's going into
engineering for the money, he'll be both disappointed and a bad engineer.
You have to go into engineering with a passion for physics and programming
to solve real world problems. It's a way of life, not a paycheck. If he
becomes a good engineer, the world will beat a path to his door. Job
security won't be an issue. It's what I did, and I'm quite happy."
---- ---- ---- ---- ---- ---- ----
Oh, and about that first job ad on DeepChip.com? I called up Dean Drako, the
CEO of IC Manage, Inc. I warned Dean up front it was a long shot that he'd
find people to work on his data management product because EDA developers
wanted buzzwords like "synthesis", "placer", "RLC extraction", and "router"
on their resumes -- not a snoozefest word like plain olde "data management".
As I feared, in the 6 weeks it was up, Dean's job ad got 1,142 pageviews,
but only 4 people sent in resumes. "Yes, data management isn't sexy. Not
sexy at all. It makes money, though. We even got a sales lead from that
job ad on DeepChip. Now my problem is I need to hire yet *another* engineer
to service that sale!"
"Do you know of any other web sites, John, where one can *successfully* find
more engineers?" Dean added laughing. (Ouch!)
-----
John Cooley runs the E-mail Synopsys Users Group (ESNUG), is a
contract ASIC designer, and loves hearing from engineers at
or (508) 429-4357.
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