This Week in Leadership (Nov 29 - Dec 5)
Questions—and answers—about the Omicron variant's impact on organizations. Plus, critical year-end moves to boost your career.
Mr. McGuire’s pithy career advice to “The Graduate” couldn’t have been more timely in 1967. The space race was on, and Americans were soon flipping pancakes on Teflon griddles while NASA fashioned astronaut helmets out of Lexan.
Today’s graduates could do worse than heed Mr. McGuire’s advice. Because one thing is as clear as the sightline through a Lexan visor: Science is in vogue and today’s STEM (science, technology, engineering and mathematics) graduates enjoy prospects that movie character Benjamin Braddock, played by Dustin Hoffman, could only have dreamed of.
Trends in energy, health care and digital creativity are changing the U.S. economy – and many aspects of daily life – more profoundly than the spread of plastics in the second half of the 20th century did. The revolution will require foot soldiers; the National Science Foundation projects STEM-based employment will increase 1.6 percent annually through the end of the decade, compared to 1 percent for overall employment. The health care sector alone could create more than 5 million new jobs by the end of the decade, more than one-quarter of the total needed to bring the U.S. unemployment rate back down to 5 percent by 2020, according to business consultancy McKinsey & Company.
Today’s Workplace Presents How to Fill Three Million Jobs.
For students in the new millennium, the shift toward the sciences–and away from Wall Street–happened in the aftermath of the financial and economic crises.
Amid the Great Recession, college-bound students heard the Sound of Science and its promises of job security and higher pay. Undergraduate enrollment in engineering schools rose 15 percent between 2007 and 2009, the last year for which the National Science Foundation (NSF) reported data in the 2012 edition of its biennial Science & Engineering Indicators. Engineering school enrollment provides a stable indicator of student interest in hard-to-define STEM fields because students are required to declare as engineering majors in their freshman year, while other majors are typically not declared until sophomore year. The NSF said engineering enrollment registered “particularly steep increases in 2007 (7 percent) and 2009 (6 percent),” and by 2009 full-time freshman engineering enrollment in the U.S. was the highest since 1982.
The trend continues to gather steam even as the economy recovers. “Demand for engineering education at Texas A&M has never been higher,” said A&M President R. Bowen Loftin. One of the largest such schools in the country, A&M’s Dwight Look College of Engineering already enrolls more than 11,000 undergraduate and graduate students. In January, Loftin unveiled an initiative to increase enrollment to 25,000 students by 2025. And that’s not Texas bluster: more than 10,000 hopefuls apply for just 1,600 seats in each undergraduate class.
Engineering schools are now running full tilt to accommodate what’s turning out to be a secular increase in demand for their services, steadily rolling out major innovations in policy, physical plant and pedagogy. Reflecting the run-up in enrollments since 2007, the NSF said science and engineering research space at universities nationwide increased 3.5 percent between 2009 and 2011, with biological and biomedical assets accounting for the bulk of the growth. Connecticut Gov. Dannel Malloy this year launched one of the highest-profile STEM initiatives yet – a $1.5 billion program to turbocharge STEM education at the University of Connecticut. The ambitious plan, which requires legislative approval, aims to increase enrollment at UConn’s engineering school by 70 percent, add 50 STEM doctoral fellowships and create the premier STEM honors program in the U.S. It also calls for $1.5 billion in new bonding authority to build STEM teaching facilities and labs.
Demand for STEM graduates is expanding in many sectors of the economy, particularly energy. The ability to tap vast reserves of natural gas and oil inside the U.S. is literally fueling growth and hiring across the economy, in chemical manufacturing, transportation, utilities, mining and information technology. These sectors together account for over half of all capital investment, according to the New America Foundation, which projects that capital expenditure in shale gas will increase from $33 billion in 2010 to $1.9 trillion by 2035, when the industry will support more than 1.6 million jobs. That will add nearly $1.5 trillion in federal, state and local taxes and royalties to cash-strapped governments over the same 25-year period. Lower energy costs have already swung the U.S. chemical manufacturing trade balance from a $4 billion deficit in 2006 to a $12 billion surplus in 2010 and reduced energy costs for steelmakers. The gas bonanza also offers the potential to create new industries, including gas-powered long-haul transportation, a liquefied natural gas export industry and more reliable energy for information technology centers running cloud and big data services.
Energy is not the only sector shifting its focus toward the sciences. Digital entrepreneurs are creating health care products and services that can improve living conditions, increase the efficiency of health care delivery and reduce testing and treatment costs for an aging population. Peter Orszag, vice chairman of Citibank and former director of the Office of Management and Budget, estimates health care savings could add as much as $750 billion to consumers’ budgets.
The changes afoot in health care are transformative, not only opening new vistas in digital medicine, mobile devices and organ replacement, but also subjecting the most highly trained doctors to benchmarking practices once found mostly on factory floors. Orszag cites clinical decision software that confronts radiologists with immediate challenges to their judgment, a real-time peer review that marks a significant change in the way they practice. Where the software has worked, doctors’ groups report lower costs of treatment and better health outcomes.
At the leading edge of health care research, the use of mobile phones to connect a wide array of monitoring and imaging devices has spawned a race to create “Star Trek”-style “tricorders,” while cell scientists are using additive manufacturing techniques to digitally print human tissue structures like heart valves and arteries. The new pioneers have support – Rock Health, a San Francisco nonprofit that invests in digital health startups, said more than $1.1 billion flowed into the sector in the first nine months of 2012, up more than 70 percent from 2011. And in 2012, Rock Health itself struck a deal with venture-capital firm Kleiner Perkins Caufield & Byers, expanding a sponsor list that includes General Electric and the Mayo Clinic.
RACING TO CATCH UP
The primary threat to realizing the economic opportunity the U.S. enjoys today is the potential shortage of STEM-trained graduates to do the work that’s on the horizon. Despite the anemic pace of overall job creation during the recovery, the McKinsey Global Institute, McKinsey’s research arm, found strong demand for talent in jobs requiring degrees and training in science, engineering, computer programming and information technology. These jobs are the most difficult to fill, and hiring managers’ woes aren’t going to ease soon. Despite the surge in engineering enrollment, U.S. schools today grant STEM degrees to 14 percent to 19 percent of graduates, but to fill the growing need for technical workers, McKinsey estimated 30 percent of each graduating class would need to earn a STEM degree.
To accelerate the flow of talent, schools such as Texas A&M, Penn State and UConn are taking steps to increase the effectiveness of STEM teaching, apply digital methods to foster learning and retention in these demanding disciplines, and to “prime the pump” by helping high school and community college teachers better prepare students to succeed in the nation’s most rigorous engineering and scientific colleges. The NSF, for example, awarded Penn State two grants to improve engineering teaching by exploring how engineers bring ideas from conception to implementation, and how students generate ideas. The Penn State studies will include engineering schools at Purdue, the University of Michigan and Iowa State. Texas A&M has partnered with local community colleges and high schools to help develop a pipeline of qualified, enthusiastic engineering students.
While universities are working to turn out more technology grads, companies that employ STEM-skilled work forces are feeling the pinch. Eric A. Spiegel, president and CEO of Siemens Corporation in the U.S., has a frontline perspective on the STEM recruitment challenge. With $22 billion in sales and more than 130 manufacturing sites, the U.S. is Siemens’ largest market and a platform for $6 billion in exports. Employing more than 60,000 people in its range of tech-based businesses here, Siemens needs a reliable supply of employees well-trained in technical disciplines, teamwork and problem resolution.
One way Siemens meets its U.S. personnel needs is by working with vocational schools to link education and job training. It’s a major participant in Apprenticeship 2000, a four-year program in Charlotte, N.C., that trains high school juniors and seniors for careers with eight partner companies, five of which are German or Swiss. Central Piedmont Community College acts as academic partner, -designing customized curriculums. To launch the program that trains mechatronics systems specialists for its wind turbine business, Siemens conducted exchange programs between Central Piedmont educators and Siemens executives in Germany, where the company hires 2,500 people -annually from the 10,000 working in Siemens’ German apprenticeship programs.
The price tag illustrates the importance of STEM skills to the modern economy. Spiegel estimated Siemens invests about $150,000 in each apprentice’s three-year program of study and job training. That’s on par with all but the most elite U.S. universities, but apprentices transition to employment with important advantages over typical university graduates: They’ve been paid while learning and working for three years and have no loans to repay. And the company has a loyal employee. “In Germany, we’ve seen this work for decades,” Spiegel said.
Here in the U.S., the stakes are high. Spiegel said there are 3 million unfilled STEM jobs in the nation today, vacancies that cut GDP by about 0.5 percent annually. “We’re trending down until we find a way to scale this up,” he said. Late in 2012, Siemens and Penn State took a big step toward scaling up the STEM pipeline, forming an innovative strategic alliance in research and recruiting that will encompass health care, infrastructure, energy and sustainability – the first of its kind between Siemens and an American university.
Such market-driven solutions are most likely to close the gap between qualified workers and available jobs, said Edward Lazear, Stanford University economics professor and former chairman of the White House Council of Economic Advisors. Echoing the trademark optimism of Milton Friedman, namesake of the Becker Friedman Institute, which he now chairs, Lazear predicts a just-in-time shift toward STEM disciplines. “The market is pretty good at solving this problem,” said Lazear. “When rewards in engineering become more attractive, people move quickly to engineering.”
The explosion of interest in STEM majors has colleges scrambling to build the labs needed to teach a generation of engineering students who are already more tech-savvy than their professors.
Demand for digital engineers is clear in health care, where Qualcomm’s decision to stake its future on smartphones is looking like a good call. As toll collector for the wireless superhighway, Qualcomm receives a patent royalty on nearly every smartphone or device that uses third-generation or later cell technology. As mobile activity mushroomed – up 45 percent in the first half of 2012 over 2011 – Qualcomm stockpiled nearly $27 billion in cash, and surpassed PC-chip leader Intel to become the largest semiconductor maker by market capitalization.
Mobile health is a big part of the traffic. Deloitte projects the mobile health apps industry will grow 23 percent annually for the next five years. In collaboration with WebMD, Qualcomm Life operates an open ecosystem of digital health apps and third-party devices that enable consumers and physicians to wirelessly manage, interpret and apply health data collected from a variety of health and medical devices. The unit claims more than 220 technology partners, including Happtique, which certifies mobile health apps, Healthy Citizen, which helps patients monitor chronic conditions, and Santech, a suite of behavioral-intervention tools for patients undergoing weight-loss, hypertension and other treatments.
Qualcomm’s Web site reflects the need for STEM talent: In late 2012 the company had openings for nearly 950 people in five engineering disciplines – with two-thirds of those jobs in the United States. By spring 2013, the company needed 878 engineers, including new spots in apps processes, optics, graphics and security.
HIGH-TECH PLANS, BIG TECH CITY
The migration is proceeding fast in the energy industry. Oil and gas employment is up 39 percent since 2007 while overall employment is down 3 percent, and the impact of lower-cost shale gas is widespread. Production alone is expected to contribute $154 billion to GDP by 2020, more than double the amount in 2010. Steel and drilling pipe manufacturers that supply the new technology are among the earliest beneficiaries, and the ripple effects are widespread: Cheaper energy has made the U.S. the location of choice for global steel and chemical production, and could add an average of $926 annually to U.S. disposable household income between now and 2015.
Drilling for gas in the Bakken shale field of North Dakota is driving growth in unexpected places. A. Finkl & Sons Company is the largest producer of hydraulic fracturing pump blocks – and its new plant sits amid the urban grit on the South Side of Chicago. Already a leading maker of premium forging die steels, Finkl last year began manufacturing parts that fuel the natural gas boom; made from steels engineered to withstand extreme pressures encountered miles beneath the earth’s surface, these mammoths now weigh between 250 and 300 tons each.
Like Siemens, Finkl needs a steady supply of top-notch talent. Finkl’s model is geared to the STEM workplace. It -relies on positive labor relations to enable production rather than confrontation, and shows how smaller companies can identify, attract and retain STEM talent without having the resources of a multinational like Siemens. Thanks to longstanding collaborative relations with its three unions – -machinists, blacksmiths and electricians – Finkl hasn’t fired an employee in more than 100 years, said Chairman and CEO Bruce C. Liimatainen. The company has increased employment during the past two years by 100 workers, to just over 400. Virtually all of the new positions are what Liimatainen calls “head-of-household jobs,” with full benefits.
Finkl develops talent early, and with good labor relations, the company’s union contracts allow it to hire non-union young people for summer jobs. Finkl hires 30 to 35 people – about 10 percent of its work force – from area high schools and colleges such as the Illinois Institute of Technology. In a world where petroleum engineers command starting salaries of $85,000, rulers, measurements and math are the stuff of daily life, and candidate screening starts with tests – STEM tests. Liimatainen said the system works: Finkl pays summer workers the starting union wage – a high rate for a summer job; the unions get a new member each time Finkl hires a summer worker; and the company gets robust talent. The CEO, who holds a number of patents himself, said Finkl’s best new engineer in 2012 was a woman from IIT.
TO BOLDLY GO
STEM entrepreneurs are hoping U.S. Big Science can help them revolutionize health care, too. At NASA’s Ames Research Center outside San Francisco, digital health start-up Scanadu is working on Scout, a handheld sensor that reports vital signs such as temperature, heart rate and blood oxygenation, and reports to a user’s smartphone. Scanadu, launched after its founder had a family health crisis, wants Scout in the market during 2013, and it’s aiming high – the company hopes the device becomes as common as the conventional thermometer.
While commercializing Scout would create manufacturing jobs, device production is just the tip of the iceberg in digital health care. Already, technology is driving reforms in medical exams and testing that put money in consumers’ pockets. Data gathered through digital health systems also help improve outcomes by better tracking the effectiveness of treatments and rapidly communicating best practices and new research to doctors, nurses and technicians.
Orszag estimates the savings from these changes could reach $750 billion. A big target is imaging, where Medicare spending doubled between 2001 and 2009. Orszag said Partners HealthCare System Inc. in Boston shows how decision-support software can reduce imaging costs. Doctors there order imaging tests through software that provides an appropriateness score based on evidence-based protocols for the prescribed tests, sometimes suggesting alternatives. Between 2006 and 2009, Partners HealthCare increased use of clinical decision software from two-thirds of its doctors to all of them; outpatient images per patient dropped, and the doctors who most frequently requested imaging scans reduced their use by about 30 percent as the software called attention to their relatively high usage rates. The most likely candidates for significant savings are integrated health systems, such as Brigham and Women’s Hospital and Massachusetts General Hospital, where Partners HealthCare operates, and KaiserPermanente, which expanded its exploration of digital health through a sponsorship of Rock Health last year.
Digital tools will soon bring innovation to the exam room. Life Technologies last year unveiled the Ion Proton, the high-speed version of its breakthrough gene sequencer, a device that uses a digital sensor to track voltage spikes that occur as DNA replicates. The technology could turn gene sequencing into a routine health care procedure. And now that the process is digitized, Moore’s Law projects it should get faster, and cheaper, every year.
In San Diego, Organovo Inc. integrates several technologies into three-dimensional printers that create objects made of human tissue. The company’s work is based on research by its chief scientific advisor, Gabor Forgacs, biology professor at the University of Missouri, Columbia. In a 2004 paper titled “Organ printing: Fiction or science,” Forgacs’ team demonstrated that 3D printing could be applied to cell science. Organovo’s devices are based on the same principles as other additive manufacturing processes – depositing layers of microscopic droplets, each containing thousands of human cells – to build arteries and organ structures for drug discovery and regenerative medicine products. Researchers at several universities are working to surmount the obstacles to creating replacement tissues and organs, such as the need for capillaries to supply oxygen.
While patients may have to wait a few years to receive insty-printed aortas, health care workers in remote locations can already seek advice and treatment recommendations from specialists in distant hospitals or medical centers. The MobiUS SP1 is the first mobile ultrasound device that can e-mail images through a smartphone, encrypting images for confidentiality.
While return-oriented venture capitalists are betting that something like Dr. McCoy’s tricorder will be the next big thing in digital health, maybe they should be thinking bigger. Starfleet’s edge, for example, was teleportation. Will it be long before some grad student connects a digital bioprinter to a gene sequencer – and plugs that rig into a mobile phone just in time to beam into a booth at Buck’s to pitch for another round of financing?
With that in mind, Benjamin and Brittany Braddocks who are launching careers today might not want to tarry at the corner of Broad and Wall. They’ll find better prospects in steel plants, shale fields and digitally enabled hospitals. And they’d best run, not walk, to the land of opportunity, because technological revolutions start without advance notice. The U.S. economy tends to develop in a “punctuated equilibrium,” said Lazear. “Things change – fast,” he said. “And you can’t say when.”