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The Offshoring of Engineering: Facts, Unknowns, and Potential Implications
Keynote Talk on the Globalization of Engineering
Robert Galvin
I have with me Mayflower: A Story of Courage, Community, and War, a book by Nathaniel Philbrick that takes us back 350 years. It’s a pleasant book if you like reading light history. In it, Philbrick tells a story about our predecessors that was almost prescient about the reason for this meeting. Here are the three sentences most relevant to our subject:
Governor Bradford was disheartened when he learned that Brewster, Winslow, Myles Standish, and John Alden had left Plymouth and moved further north. He was particularly disheartened because the new towns being established there were doing better than Plymouth, which had fallen on hard times. Bradford noted that the problem was mainly the shallow anchorage in Plymouth harbor, which doomed it to eventually becoming the poorest of the New England colonies.
New England has been at the center of our industrial history. Historically, it was the center of great development, and it still is. People like Chuck Vest and others have continually renewed that community and will probably do so for the next 100 years. But look what’s happened in the country over the last 75 to 100 years. Industry that was centered in New England moved, first a little bit, to the Midwest, then farther west, some to the Southwest, some to the South. With each move, there were dislocations—disruptions to our comfort zone—and many people were terribly upset. Why couldn’t everyone just stay where they were and things remain as they used to be?
In effect, the Pilgrims began “onshoring” by moving north and inland from Plymouth. Offshoring—a fascinating new term—is a significant word, for it represents opportunity and movement. But it does not spell “inevitability.” My message is, among other things, that we can still do things of great significance in the 50 states of the United States. Chuck, in effect, challenged us to do so at the end of his excellent talk. Change is an old story in the United States that will surely continue. But our mobility alone still offers expansive possibilities and will continue to be a vitalizing phenomenon.
We can do things to affect the offshoring situation. I started in business in 1940 and worked for exactly 50 years in our company. During that time, in an honorable way, we changed the rules of the game we played, its governance and industry affairs, in all kinds of ways, thereby influencing our neighbors. My message today is that we can do many things, if we are courageous enough, if our backbone is strong enough, to change the rules as we go along. In particular, we can establish rules for the new things we should do, which I will illustrate in just a moment. We can influence policy on foreign trade—what goes out and what comes in. I spent a lot of time on that in the past, and we showed that we could increase our sales of U.S.-made products in overseas markets. One of the largest producers of cell phones is our plant in Arlington Heights, Illinois, which is as competitive as any plant in the world.
We can, and should, invest integratively. All the things Chuck talked about had a component of significant investment. If we put something in Scotland, it should be in harmony with what we have in Austin. It is very satisfying for me to observe that, when the brilliant people at SEMATECH encountered problems, they could find a solution in one of our laboratories—in Scotland or Toulouse or Angers or Germany or China.
People who are multinational in their living are coopera-
Robert Galvin is Chairman Emeritus of Motorola Inc.
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The Offshoring of Engineering: Facts, Unknowns, and Potential Implications
Keynote Talk on the Globalization of Engineering
Robert Galvin
I have with me Mayflower: A Story of Courage, Community, and War, a book by Nathaniel Philbrick that takes us back 350 years. It’s a pleasant book if you like reading light history. In it, Philbrick tells a story about our predecessors that was almost prescient about the reason for this meeting. Here are the three sentences most relevant to our subject:
Governor Bradford was disheartened when he learned that Brewster, Winslow, Myles Standish, and John Alden had left Plymouth and moved further north. He was particularly disheartened because the new towns being established there were doing better than Plymouth, which had fallen on hard times. Bradford noted that the problem was mainly the shallow anchorage in Plymouth harbor, which doomed it to eventually becoming the poorest of the New England colonies.
New England has been at the center of our industrial history. Historically, it was the center of great development, and it still is. People like Chuck Vest and others have continually renewed that community and will probably do so for the next 100 years. But look what’s happened in the country over the last 75 to 100 years. Industry that was centered in New England moved, first a little bit, to the Midwest, then farther west, some to the Southwest, some to the South. With each move, there were dislocations—disruptions to our comfort zone—and many people were terribly upset. Why couldn’t everyone just stay where they were and things remain as they used to be?
In effect, the Pilgrims began “onshoring” by moving north and inland from Plymouth. Offshoring—a fascinating new term—is a significant word, for it represents opportunity and movement. But it does not spell “inevitability.” My message is, among other things, that we can still do things of great significance in the 50 states of the United States. Chuck, in effect, challenged us to do so at the end of his excellent talk. Change is an old story in the United States that will surely continue. But our mobility alone still offers expansive possibilities and will continue to be a vitalizing phenomenon.
We can do things to affect the offshoring situation. I started in business in 1940 and worked for exactly 50 years in our company. During that time, in an honorable way, we changed the rules of the game we played, its governance and industry affairs, in all kinds of ways, thereby influencing our neighbors. My message today is that we can do many things, if we are courageous enough, if our backbone is strong enough, to change the rules as we go along. In particular, we can establish rules for the new things we should do, which I will illustrate in just a moment. We can influence policy on foreign trade—what goes out and what comes in. I spent a lot of time on that in the past, and we showed that we could increase our sales of U.S.-made products in overseas markets. One of the largest producers of cell phones is our plant in Arlington Heights, Illinois, which is as competitive as any plant in the world.
We can, and should, invest integratively. All the things Chuck talked about had a component of significant investment. If we put something in Scotland, it should be in harmony with what we have in Austin. It is very satisfying for me to observe that, when the brilliant people at SEMATECH encountered problems, they could find a solution in one of our laboratories—in Scotland or Toulouse or Angers or Germany or China.
People who are multinational in their living are coopera-
Robert Galvin is Chairman Emeritus of Motorola Inc.
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The Offshoring of Engineering: Facts, Unknowns, and Potential Implications
tive. They do things in a centralized way with family institutions. Motorola began offshoring to improve its service to customers, and most of our thinking and planning has to do with serving our customers. With that emphasis, we come up with some rather conventional but very bright observations. Our goal then becomes assembling a team of people to serve that customer. If that means we need a factory in Toulouse, France, then that’s where we go. For the factory in Toulouse, France, to be successful, we need a hometown boy (someone from Toulouse, or at least from France) to run it. There are a lot of fundamentals involved.
To ensure that we become a very significant servant to our customers, we do what we have to do anywhere in the world. There are places that are still untouched and at least two continents in this world that are virtually unsettled. There is no middle class in South America, Africa, or most of China. Nine hundred million people live way below the level of the middle class. We have an anthropological responsibility over the next 50 to 100 years to change human relations so that there will be significant middle classes in the other half of the world. When they are tuned in to the opportunities available, they will become, first, very significant customers, and then, very good servants to customers (i.e., competitors).
Here at home we can do things better, too. We shouldn’t be afraid to move around in our own country. I remember when Mark Shepherd from Texas Instruments called me and said, “I hear you’re coming to Austin. Don’t you realize all the problems are here? You don’t want to do that.” But I knew Austin was a good place to go, that it would be best for our people. It was where they wanted to live, where their families could prosper, where the team worked best together. With enough flexibility, you can move your operations around in this country—not just offshore. We must move to create change, if that’s the best way to pull our people together.
I am now going to take advantage of this distinguished audience and tell you about three things I’m doing privately that are about to become public, and I think they will have significant consequences in our country. Chuck has said we have to be bold, make changes, do things that will make a big difference. This means not just designing next year’s product line. I offer three examples where teams of experts like you might do even better than I.
The Galvin Electricity Project
The first is a project to revolutionize and “re-found” the electric power industry. We waste 40 percent of our energy just delivering electricity by wire around the country. Most of these systems break down somewhere two or three times a year. But this can be changed. I have felt for some years that there should never be an outage, that we should never be disadvantaged because things go wrong in the electric power system. Over the last couple of years I have met with hundreds of experts like you and put together a plan that will be made public sometime after the first of the year. The plan is already on the Web, but it will be publicized more effectively in the first part of next year.
The plan is essentially a distributed system that involves mostly onsite generation, thus making delivery unnecessary. I’m not going to describe it in detail, but it has already been through an extensive review and assessment process, and we are now moving to prototyping. This very significant digital system—with automation, instrumentation, self-correction, new forms of storage, et cetera—is part of the Galvin Electricity Project.
As a matter of fact, this is going to be a business of interest to those of you who are entrepreneurs. It’s not my business, and I’m not investing in it. I am investing in the ideas and then opening the business to everyone on the open-market. People can start a business in their region or their town or go national if they want. We already have quite a few active thinkers and investors ready to move ahead.
Making this kind of change will take a couple of decades to become manifest in the country. With the Galvin Electricity Project, we are well on the way to completely changing the way the electricity industry provides power. The change will require that many new engineers do many different things—in the United States. This low-cost system will bring great benefits to our citizens and increase the efficiencies of manufacturing and of services.
The Galvin Project on Eliminating Congestion
The second project, which is called the Galvin Project on Eliminating Congestion—and I do mean “eliminate”—is also moving ahead. This operation was born of my personal conviction that all cities will die by 2050 unless we make drastic changes. The project is not public yet, in the sense of having government step in and help us, but I have convinced a large number of experts in the traffic-management field—technical, business, model systems, et cetera, and some public officials—of this. It’s a cardiovascular problem. The arteries are clogging up and will be clogged up completely soon, creating total gridlock. This may sound heretical, but many experts now agree and will be publicizing this prediction.
As a consequence of congestion, property values will be severely degraded. Things being built in Chicago’s downtown or around the Chicago region will be worthless in 45 years because people won’t be able to get to them. There will be no accessibility. Every ordinary citizen knows this, although some experts say, “Oh, no, it won’t be that way.” But ask your neighbor’s wife. She knows it. And your neighbor who has trouble getting to work knows it.
We can avoid this tragedy through a surgical process. People are already thinking about and designing what I call “Lego sets,” that is, overpasses that can be installed, in just a few weeks, in very congested intersections with difficult traffic patterns, enabling traffic to pass over the congested area.
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The Offshoring of Engineering: Facts, Unknowns, and Potential Implications
This will require significant new engineering contributions from the construction industry. Our cities will be networks of tunnels. Tunnels will crisscross Chicago, New York, Los Angeles, Albuquerque, Beijing, et cetera.
We are not making a lot of public fuss about how we are going to “popularize” this concept. We are going to convince our friends in China first, because the Chinese have the authority to do this in their cities. That authority is not as readily available in our democratic society. My son will be giving a presentation in a few weeks when he goes to China for a meeting at a university where he is a trustee. So, we will be publishing our first document in Mandarin and giving it to the Chinese before Christmas. The document will explain how they can eliminate congestion in about 120 cities with large numbers of tunnels.
The business model will be a toll business, and we expect there will be tremendous competition internationally to win, in effect, the right to collect tolls in a given section or a given city. I imagine that there will also be a dramatic number of technical achievements as people learn how to build these overpasses and tunnels, much like what happened with the introduction of the cellular telephone. When we announced the cellular telephone about 25 years ago, AT&T wasn’t ready for the change. Neither were the Japanese. Almost every husband we ever talked to said, “Well, that’s a very nice thing to have. I think I might need one in my business. But I won’t let my wife have one, and I’m not going to let my children have them.” But who has cellular telephones today, at almost no cost?
The people in this room, and your engineering associates, have a great talent—the ability to take the essence of an idea and refine it. In the process, costs will go way down, and services will become remarkably reliable. By 2030, a new transportation system will be evident, a system that was formed well before that. I assure you that if it’s not done by 2035, the new Trump Building in Chicago will begin losing value. But I think we can convince the American people, and the American leadership, that they must go to a radically new system to prevent the death of cities.
Science Road Maps
Finally, I want to bring up an issue I have talked about often but have never been able to sell, although I think the concept is fundamental. About 35 or 40 years ago, after one of many days per week spent in our laboratories—I frequently spent time with our bright, young people, who were always giving me ideas that had never gotten to the top of their divisions—I said, “We will have road maps.” And I drew an XY chart and put some lines on it. Even our brightest, top people who happened to be sitting in that room that afternoon couldn’t grasp what I had in mind.
I didn’t have a clear idea of how to present my idea, but I knew what the end objective was. I told them I’d be back in six months for the first meeting on road maps and that they had better have a damn good story to tell about their plans for the future, in immense technical detail, or there would be a radical change in the organization. Three people picked up on the idea and designed engineering road maps for our company that led to dazzling results in our product-development programs for more than three decades.
We discussed the idea of industry road maps with Ian Ross, who was then heading a commission in D.C. studying the semiconductor industry. Finally, I convinced him to support the concept of engineering road maps for that industry. We worked together to develop road maps on pre-competitive ideas, all the ideas that engineers could come up with. Today, I think we are in the 9th or 10th edition of biannual technology road maps for the industry that have done a giant job, particularly at IBM, which was one of the companies that helped us develop the road maps.
Road maps for technical management are far more useful than many science and engineering people realize. I know some top science people rather intimately, which gave me insights as to what they were thinking. I told them there should be science road maps—a chemistry road map, a physics road map, and so forth. About 10 years ago I saw Dan Goldin at a party one evening, and I asked him, “What does NASA think about road maps?” He said, “We’ve got the most distinguished road map on biology you can imagine.” I asked, “Why biology?” He said, “We have to figure out where we’re going. We have to know it to the essence.” So I sent our team down to see what the NASA biology road map looked like.
But I have failed to convince laboratories, universities, this distinguished institution, and the overall National Academies, to adopt and promote science road maps. A few people have tried them, but, like many new ideas, they get lost if they are not directed by an enthusiastic head person. I was able to do it in my company, where I was at every technology road map meeting for 10 years.
This time around I’m going to succeed, and I’ll tell you how. I have discussed road maps extensively at home with one of my grandsons, a sophomore at Harvard studying physics. After he and Leon Lederman (a wonderful man, very intelligent, who looks down his nose at my ideas on science road maps) and I had spent a number of hours together talking six or eight weeks prior to this meeting, my grandson came to me and said, “Grandpa, we’ve started these conversations by you saying the first thing we must do is talk about how we think. We have to know how to think in a process way about creativity, and we must never think negatively about an idea until time for judgment comes. I have an idea, and I expect you to accept it.” I said, “I do.” He said, “How would you like me to lead the science road map parade?” I said, “William, that’s a statement of genius.” I called Leon Lederman and asked him what he thought of the idea. He said, “I’ll work with him.” Now when I talk to people who run great institutions, they say, “Oh, my God, we have to get a couple of our kids on this road map committee.”
To write a road map, you have to bring together 100 or
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The Offshoring of Engineering: Facts, Unknowns, and Potential Implications
150 people in a big room, a big ballroom someplace, and for two days, just put out ideas. One idea begets the next idea, and so forth, and off we go. So starting from his position as a “matriculator,” William is going to start recruiting a friend at Caltech. We have contacts at Texas, and I wrote to Donna Shalala at Miami a couple of days ago, because she’s strong on women scientists. We are going to recruit 40 or 50 young people at the regular college level—we are not going for postdocs yet—and let them start to write physics road maps. I think they will have a pretty good idea as to what that road map should be by the end of this year.
We are not thinking in terms of urgency. I see this as a program that will grow gradually over 10 years. About two or three years from now, the students who are active in my road map program will be learning more from their road mapping experience than their courses for general matriculation.
I have also taken the idea to Jiang Zemin in China and to top people in Israel. I said, “Why don’t you embarrass the United States? Why don’t you write the road map?” But the Israelis have been muddling around with the idea. But now, through our youth, we are going to excite a science road map program, eventually with international membership in our road map workshops.
Conclusion
We are going to accomplish all three of my blockbuster changes. We are on the cusp of taking on the first two, changes in energy distribution and the elimination of congestion. In three or four years, someone like a Chuck Vest will be saying, “Let me tell you about that program with the college kids writing road maps. They’re actually making some progress.”
We will draw the geniuses back in. I talked to Jim Cronin, a Nobel scientist working in Argentina, eventually in Utah, on the Pierre Auger Project, cosmic rays, et cetera. He said, “I don’t understand what that’s all about, but I wish I was under 75. I’d like to be a part of that team.” So I think we are going to excite people about science road maps also.
As I said before, these are things we can do in America. You don’t have to go offshore, but the things you do will have a tremendous impact offshore. Great things can be done with your next project. I just have three ideas, and I’m pursuing them on my own, recruiting people to meet for extended periods of time to come up with practical ways to make them happen. Where are your ideas, the fourth or the fifth or the ninth? They would be so welcome! You have the technical talent to lead the way. I respectfully suggest that tremendous things could be done here.
Let me end with one odd comment that’s not obviously related to this agenda. Bill Spencer and a few marvelous academics were on a committee that put together the Galvin Report, at the invitation of the federal government, on how the U.S. Department of Energy laboratories could be more effective. I came up with a heretical idea that government laboratories should be privatized (none of the other members was too keen on it, but I had the authorship, so I got it into the report).
The details are simple and not worthy of comment here, but that’s the kind of thing that has to happen to bring America back to greatness. We have to privatize the laboratories. IBM can’t afford a total laboratory. Nor can AT&T. But we could figure out a way to privatize those 10 government laboratories. The idea is still being talked about in Washington, but the current Congress hasn’t got the stomach for those kinds of things.
Nevertheless, these are the kinds of things I have been changing for over 50 years. I changed the constitution of Ireland and the economy of Israel and moved them away from socialism. I gave Jiang Zemin an idea that had to be implemented in China to keep it from failing. He bought it, and brought my company in as a private-sector investor. For a long time, we were the largest foreign investor in China. With Bob Strauss and Akio Morita, I opened the Japanese market. It takes only two or three people to do these things. The minority always has to push things through.
The people in our industries can think great things and do great things.
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