2020 Issue

36 Convergence Daniel N. Donahoe — IEEE INTRODUCTION A round 1950, common career and business inter- ests caused several professional societies to form the Utah Engineers Council (UEC). UEC currently consists of 18 member societies. This article focuses on the consequences of today’s driving forces. Engineering has undergone a transformation caused by “technological convergence” (or convergence). Conver- gence is a phenomenon in which professional practice, as defined at the beginning of the 1900s as disparate techni - cal fields, has grown to be more similar. This convergence has implications for leaders because of an increasing congruence of technical skills among members in different industries. Managers may find that some technical employ - ees are role-substitutable in a manner that was rarely possible in 1950. How convergence occurred over the last 70 years is not obvious and is the subject of ongoing analysis by top economists. Although economists and engineers do not view changes in the same way, this article will outline what drove these changes via recent, primarily economic publi- cations. Since UEC members may not be familiar with these economists, I included a short introduction about them to provide a sense of the gravitas of these people and ideas. The following paragraphs outline (1) a decline in U.S. productivity due to diminishing innovation, (2) leading to growth of the financial sector of the economy as a policy alternative, (3) resulting in reduced economic reliance on science and engineering, and (4) causing career impacts to UEC members. ECONOMICS AND THE MOTIVATION OF CAREER CHANGES OVER MANY DECADES The United States had 40 million automobiles on the road in 1950 [1], and the U.S. population was 150 million [2]. Simple division yields 0.27 cars per capita. Today, the pop- ulation has grown to 330 million [4], and there are 0.83 cars per capita [3]. The question is, why isn’t the number of cars per capita number higher now? Many other similar observa- tions can be raised about expected progress over 70 years. Robert Gordon provides his own answers to those ques- tions in his recent book [5]. Gordon is a professor of eco- nomics at Northwestern University. He earned a Ph.D. at MIT under the direction of the distinguished economist Robert Solow. Solow was himself awarded the Nobel Prize, the National Medal of Science, and the Presidential Medal of Freedom. Gordon says that U.S. economic productivity (known as Total Factor Productivity) was its greatest around 1950, and has dropped by 80%. To summarize, current inno- vations (such as Information Technology) don’t provide the economic utility of other inventions in the 1900s that drove America’s Golden Age (1950-1970). Brown and Linden provided a more classical economic viewpoint than Gordon in their narrative of technologically driven economic changes specific to the semiconductor industry [6]. Tassey follows the same traditional arguments but with an opposing thesis [7]. I have only mentioned these books to provide a balanced and complete narrative for readers who are motivated to learn more than what this article covers. If Gordon’s sacrilege is correct, then what is driving our economy now? According to a sociologist named Gretta Krippner, the answer is “financialization” (also loosely called either “services” or” outsourcing”). Krippner says that the financial sector of the U.S. economy was around 10% to 15% of U.S. profits in 1950 or 1960 and climbed to at least 40% by 2001 [8]. Krippner’s book, from the viewpoint of a sociologist, is primarily a view on the origin of this unin- tended economic transformation (that is, policymakers working to keep the economy growing by any means) and should interest readers who want to learn about the origins of public policy. Consequences of the growth of financialization, in turn, are described by a husband and wife, Abhijit Banerjee and Esther Duflo, who are two of three laureates granted the 2019 Nobel Prize in Economics. Both are economics profes- sors at MIT. Banerjee and Duflo claim that financial sector workers are now paid 50 to 60% more than other workers with similar skills, but that differential was not true in 1950 or for two decades after. This added income originates by way of what economists term “rents” (a second economics term, in this instance referring to pay not originating from labor skills). In this fashion, the explosion of the financial sector has distorted labor markets for engineers. Christo- phe Lècuyer is a historian who wrote about the early origins of the growth of Silicon Valley [10]. His primary thesis is that innovation is driven through manufacturing, a skill set that financialization sends offshore. Scott Patterson, a financial journalist and staff reporter at The Wall Street Journal, wrote a book that continues the discussion about the disruption of science and engineering careers raised by Banerjee and Duflo. His book outlines how new technical graduates were wooed into finance and the 2008 economic collapse [11].