Although this article may appear to be discussing some completely unrelated topics at first, they are all interconnected which I will try to explain. Most of you know that engineers design products, or analyze systems, such as finite-element analysis (FEA), computation fluid dynamics (CFD), etc. What you may not be aware of it that we frequently use 3-D CAD/CAE tools for our work with the possible exception of some architects who seem to be still relying on 2-D AutoCAD. And yes, engineers that use 3-D CAD tend to think of themselves as more sophisticated than their 2-D CAD counterparts. Oddly enough, it seems as though more job openings are available using 2-D than 3-D CAD at the moment.

The recent news of Sequoia Etc (http://www.sequoiaetc.com/), a PTC reseller, closing its doors prompted me to write this article about the 3-D CAD/CAE industry, and the current situation regarding engineering / industrial design jobs. For those of you who do not work in this industry, you may not be aware of the conditions and I had recently received this information (edited for confidentiality) from a knowledgeable person of the CAD industry:

“The recession is definitely hitting the CAD vendors hard.

The Autodesk resellers have been hit fairly hard because of the cheap upgrades they offer in every sale.  There is no profit in that business.  If each seat sale is an upgrade and the cost is $0-$1000, you are barely making $100 on each seat.

PTC dealers will get thinned out.  Much of what was said at PTC World was all about PLM.  Not much was said about CAD.  This is going to leave the smaller less equipped VARs not faring very well.  Pro/E is not being sold as much, except to its larger installations (CAT, Mettler Toledo, etc.).  If you cannot sell and support Windchill, you will close your doors.

Solid Edge dealers are definitely hurting, and there are 2 SE VARs in Ohio. Employees from a SolidEdge VAR are currently sending their resumes to us.”

I have noticed that PTC seems to be more focused on CoCreate and PDM systems these days than Pro/Engineer. Will CoCreate eventually replace Pro/Engineer as PTC’s CAD software of choice (see here and here)? Is direct editing the future of 3-D CAD?

Although I do not have the statics on the economic downturn affecting engineering / ID jobs in the U.S. and Western Europe, anecdotally it is surprising high among professional colleges as I have received several resumes this year.  Yet, articles continue to be published indicating a future need for engineers in the United States, and continued job growth:

“By 2020, U.S. manufacturers will need as many as 10 million new skilled workers, according to a June report by the Milken Institute. Mechanical and software engineers will make up a huge portion of those workers, says Perry Wong, a senior managing economist at the Milken Institute.

Mechanical engineers are already needed in almost all manufacturing firms, including those in aerospace, aircraft and defense, shipbuilding and computer-hardware design, he says.

“One of the biggest challenges for manufacturers is they can’t find enough mechanical engineers, in part because we don’t have a lot of American students going into this major,” he says. Mechanical engineer jobs typically involve designing and creating equipment and transferring a prototype from paper to physical machinery.”… (see here)

While this article below describes a very different opinion on the future of college educated professionals in the United States:

Value of college degree in doubt in this market by Don Lee (see here)

…“After spending tens of thousands of dollars on higher education — often taking on huge debts — many graduates face a job market that doesn’t seem to need them. Not only is the American economy producing few new jobs of any kind, but the ones that are being added are overwhelmingly on the lower end of the skill and pay scale.

Government surveys indicate that the vast majority of job gains this year have gone to workers with a high-school education or less, casting some doubt on one of the nation’s most deeply held convictions: that a college education is the ticket to the American Dream.

The Bureau of Labor Statistics projects that seven of the 10 employment sectors that will post the largest gains in the next decade won’t require much more than some on-the-job training. These include home health-care aides, customer-service representatives and food preparers and servers. Meanwhile, well-paying white-collar jobs such as computer programming have become vulnerable to outsourcing to foreign countries.

“People with bachelor’s degrees will increasingly get not very highly satisfactory jobs,” said W. Norton Grubb, a professor at the University of California, Berkeley’s School of Education. “In that sense, people are getting more schooling than jobs are available.”

He noted that 77 percent of workers with a bachelor’s degree were employed in professional and managerial occupations in 1970, but by 2000, that had fallen to 60 percent.

Of the nearly 1 million new jobs created since hiring turned up in January, about half have been temporary census jobs. Most of the rest are concentrated in such industries as retail, hospitality and temporary staffing, according to the Bureau of Labor Statistics.”…

So which is correct? I would like to emphasize I am not an economist myself. However, I do believe that H.S. Dent (see here) and Peter Schiff (see here) have some good insights into the current U.S. economic conditions, and there books are worth reading to gain a better understanding. One key area they differ on in opinion is Peter Schiff predicts an economic depression by hyper-inflation (monetizing debt by printing money), and Harry S. Dent predicts a depression by deflation (money velocity: money supply not being released by banks) and from the natural economic cycles similar to the four seasons of each year. But that is currently beyond the scope of this blog posting, and for further information I suggest reviewing the SHTF Plan Blog (see here and here) for commentaries on H.S. Dent and Peter Schiff economic predictions, and The Inflation Versus Deflation Debate (see here).

These articles referencing the economy and engineering provide some useful insights:

• Service-Based Economy Is Progress? Show Me the Money by Jesse Veverka (see here)

• Economy Still the Elephant in the Room by Roopinder Tara (see here)

• Is Discontentment in Engineering Becoming Epidemic? by Todd Yuzuriha (see here)

• Looking for work? Unemployed need not apply by Chris Isidore (see here)

Why is coverage of the loss of engineering jobs not discussed more? I suspect there are several reasons, but one reason stands out the most in my opinion: Denial that the U.S. is a declining power (still reversible) much like the Western Roman Empire was in the 5^th century A.D. How so? I would suggest reading your history. Here  are some links to get you started:

• Fall of Rome vs Failure of American Politics, Economy pt 1: http://www.youtube.com/watch?v=lXGGm4GQAq4&NR=1

• Fall of Rome vs Failure of American Politics, Economy pt 2: http://www.youtube.com/watch?v=iTGNgS1toEU

• Fall of Rome – Reasons for the Fall of Rome Include the Economy and Hoarding Economic Reasons for the Fall of Rome: http://ancienthistory.about.com/cs/romefallarticles/a/fallofrome_3.htm

National Public Radio (NPR) On Point show had an interesting discussion about America’s economic staying power titled A Checkup on Global Financial Health by Niall Ferguson, Finance Historian (see here for 06/22/2010 show). In 2009, Niall Ferguson and Paul Krugman, American Economist and Columnist, debated about how the increasing US debit will effect the economic future of the United States (see here).