Due to an illness, I jumped in to co-chair a session at SMTAI. In doing so, I had the pleasure of spending a little time with a longtime industry machine designer. Afterward, he asked an interesting question:

"Talking to all these [industry veterans], I’ve seen a common thread. Almost all are unhappy and hoping to make it to retirement, while continuously looking over their shoulders and waiting for the shoe to drop. Perhaps it’s a function of having been through too many downturns. Almost all say they are working harder than ever for less money than ever. Staff reductions of years ago have never been replenished.

"Griping aside, they are all keenly aware that there is no one to step in to fill their shoes, be it process engineers, quality managers, field service, you name it. They all state they’re on their own with no replacements in sight. What’s your take on this, and if they’re correct, will the industry grind to a halt?"

A great question! And I agree with the sentiment expressed – small raises (or none at all), a greater workload, no bench from which to develop new engineers. These have been problems in the US and Europe for the past 10 years.

That said, I see some underlying trends that make me more bullish than some. For starters, there have never been more entrepreneurs at the college level. I have been spending time researching tech incubators (more on that next month) and have come away stunned at the level of talent and energy. The so-called hobbyist market is booming: 140,000 attendees at the Maker Faire event in San Mateo this year, all to see innovation in action. In researching open source pick-and-place software earlier this year, I learned some 2,000 desktop placement machines are out there, and an engineer is behind every one. It’s a staggering number, and somehow I doubt that many more future Steve Jobs and Steve Wozniaks were working on PCs in the nascence of that industry.

There is an abundance of talent designing and building electronics hardware and related tools these days. They just aren’t all doing it at the once-usual places like IBM or HP. They are more under the radar, but they are there. Google, for instance, has 5,000 workers doing box build and test in the Silicon Valley. There is a lot of hiring going on at growth companies; it’s just no one talks about it.

But what of those smaller, yet still critical suppliers? During the SMTAI keynote in mid October (a really interesting, if a bit inflated, talk on the F-35 warfighter by retired US Air Force Major General Bob DuLaney), I asked whether he saw a way we could better leverage such state-of-the-art technology in order to get more engineers interested in the industry. His response was that he couldn’t see how any engineer wouldn’t be excited to work on such a project. Point, DuLaney, but if I had it over, I would have posed the question this way: How could a company like Lockheed Martin ensure product builds come in on time and on budget when the supply chain it depends on for materials, bare boards, assemblies and so on is struggling mightily to recruit and retain top engineering talent?
My bigger concern is really the lack of interest by new engineers in the smaller companies that supply the big ones. The Lockheed Martins and Raytheons will always attract talent, but they buy much of their bare boards and assemblies from companies that are considerably smaller, local and essentially anonymous. Those firms are the ones having trouble recruiting and keeping talent. For those who do it well, it’s become a strategic advantage. And as long as the Tier 1s have to outsource, their ability will always be limited by the weakest links of their supply chain.

The future of electronics design and manufacturing – be it positive or negative – is a matter of perspective. The grassroots is where the greatest innovation lies, because innovation that sticks comes from need, and that’s all an otherwise undercapitalized company has going for it. It’s incredibly difficult for those at the top of the pyramid to consider the view from the bottom. Without a solid foundation, however, pyramids will always crumble.

P.S. See us at Productronica in Munich this month!

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