Category Archives: Economics

Posts exploring the economic impacts of science and engineering. The value of strong science and engineering practice has many benefits to the economy – directly and indirectly. Many countries are focusing their future economic plans on advancing their scientific, engineering and technology communities and creating environments that support scientists and engineers.

Indian Institute of Technology Thoughts

An interesting interview of an IIT graduate and CEO that really discusses how IIT graduates can help the Indian economy more than the title indicates – 5 things entrepreneurs must do to succeed:

First and foremost what is required is empathy and a genuine concern to improve the lot of the people. Next, there has to be a coordinated effort between the government and other agencies. Four focussed initiatives in each district around education, agriculture, industry and social equality could be identified and on an experimental basis ten districts could be identified and handed over to IIT-ians who have the zeal to bring about the transformation with a time bound agenda, with the commitment to support them through various agencies.

Electricity Savings

Surprise: Not-so-glamorous conservation works best

When high school science teacher Ray Janke bought a home in Chicopee, Mass., he decided to see how much he could save on his electric bill.

He exchanged incandescent bulbs for compact fluorescents, put switches and surge protectors on his electronic equipment to reduce the “phantom load” – the trickle consumption even when electronic equipment is off – and bought energy-efficient appliances.

Two things happened: He saw a two-thirds reduction in his electric bill, and he found himself under audit by Mass Electric. The company thought he’d tampered with his meter. “They couldn’t believe I was using so little,” he says.
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Cutting back on electricity used for lighting (9 percent of residential usage nationwide) presents the quickest savings-to-effort ratio. The EPA estimates that changing only 25 percent of your home’s bulbs can cut a lighting bill in half. Incandescent bulbs waste 90 percent of their energy as heat, and compact fluorescents, which can be up to five times more efficient, last years longer as well.

I am far from doing everything I could, but at least I have installed compact fluorescent light bulbs as old ones burned out. Actually I don’t think I have changed a light bulb in several years (another benefit of these energy efficient lights is they last a long time).

China’s Science and Technology Plan

Interesting article – China’s 15-year science and technology plan by Cong Cao, Richard P. Suttmeier, and Denis Fred Simon:

China initiated a 15-year “Medium- to Long-Term Plan for the Development of Science and Technology.” The MLP calls for China to become an “innovation-oriented society” by the year 2020, and a world leader in science and technology (S&T) by 2050
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China will invest 2.5% of its increasing gross domestic product in R&D by 2020, up from 1.34% in 2005; raise the contributions to economic growth from technological advance to more than 60%

Engineering Outsourcing Effects

A Business Week article discusses two Duke studies of Engineering jobs in the USA and world: Outsourcing: Job Killer or Innovation Boost?

One finds that companies are going offshore because they are desperate for talent and are shifting more complex work to nations such as India and China for strategic reasons. The other Duke study concludes that the offshoring phenomenon is all about cost and that there is no shortage of engineers in the U.S. Therefore, the labor shift is coming at the expense of U.S. jobs.

The Silent Aircraft Initiative

Conceptual aircraft image

Silent Aircraft gives young engineers a flight of fancy:

these students are not undergraduates. They are budding young engineers, aged 13 to 18, taking part in a three-month design challenge with Cambridge’s Engineering Department to tackle aircraft noise. Working in teams, the students – from schools and colleges across the country, from Bristol to Sheffield – are doing a project related to the Cambridge-MIT Institute’s Silent Aircraft Initiative. This initiative links researchers at Cambridge and MIT with industrial partners to design a radically quieter passenger plane, and includes research into ways to reduce the noise from the undercarriage – one of the major noise sources on a landing aircraft. So this challenge has tasked these young students to design, and make a model of, a quieter undercarriage.

The Silent Aircraft Initiative (SAI) team has succeeded in coming up with a radically quieter plane. Crucially, the SAX-40 is also 35% more fuel-efficient than any airliner currently flying.

Fishy Future?

Will seafood nets be empty? Grim outlook draws skeptics:

The researchers found that harvests of nearly 30 percent of commercial seafood species already have collapsed. Without major changes in fisheries management, they say, the trend will accelerate.

“It looks grim, and the projections into the future are even grimmer,” said Boris Worm, a marine biologist and a lead author in the peer-reviewed study, which was published today in the journal Science.

But other scientists question that forecast. “It’s just mind-boggling stupid,” said Ray Hilborn, a University of Washington professor of aquatic and fishery sciences.

The evidence seems pretty convincing overfishing has created serious problems and if unchecked those problems threaten to become even more serious. It also seems a stretch to claim those problems will be unchecked (that the checks will be less than they should be I think is a reasonable position). It seems to me the original stories talking about the end of fishing stocks in the next 40 years are alarmist to the point of being counterproductive.
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The Next Generation Internet

Experts say U.S. must act on Internet. The results of a survey by Juniper Networks:

86 percent of a group of more than 1,000 experts on the next-generation Internet say they worry that the head start of other nations will hurt the United States.

They fear that China, India, and many European and Asian countries are moving faster to implement the addressing scheme known as Internet Protocol version 6, or IPv6.

Vint Cerf – Spotlight on IPv6 Challenges

Related: China Builds a Better Internet

How Many Engineers?

Brian Hollar comments on the comments of MIT President, Charles Vest in Wither the Engineers?:

I fully agree with all of this. Some of the best counsel I got when I was co-oping at DuPont during my junior year of college was when one of the other engineers told me: “Every engineer is good at math. What will set you apart is your ability to communicate — both written and spoken.” This has indeed been absolutely true in my own career.
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My guess is that there are a roughly optimal number of Americans entering the engineering profession to meet industry demand. Unfortunately, that number is not as high as deans of engineering schools or university presidents would like it to be.

A good read. I believe there is a difference between equilibrium for the individuals who choose to be engineers (or something else) and the equilibrium that is best for the economy of the country. The many advantages that having a strong engineering workforce is a huge part of why China, Singapore, Korea, India, USA, China, Mexico and many others are investing in that area.

This is how I want those investing in our economy to think: if we want a strong economy with good jobs we need to invest in a strong engineering workforce, a supporting legal system and effective capital markets. All of us living in America benefit from this now.

Educating Scientists and Engineers

Business Week has an articles discussing what business would like to see from graduates, Biotech’s Beef:

The problem is a disconnect between what universities are teaching and what biotech wants. “The focus of academia is getting basic and theoretical knowledge in place,”
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There are several weaknesses. First, recent grads lack the technical knowledge to carry out applied research in areas that straddle engineering, math, and computers. Second, job candidates have little awareness of what the Food & Drug Administration is looking for when it considers whether or not to approve a drug. Recent grads simply aren’t familiar with issues such as quality control and regulatory affairs.

This general idea is not new. But, as always (and probably more so if the nature of what is needed is changing faster today than in the past) the changing environment does require universities (and students, at least those that want to work in industry) to adapt.

But with H-1B quotas filling up earlier every year, Invitrogen has chosen to do more drug development in Japan, China, and India. It may also open facilities in Korea and Singapore, says Rodney Moses, Invitrogen’s vice-president of talent acquisition. Compensation in China and India is lower than in the U.S., but that’s not what motivates the move offshore, says Moses. “If the talent is located in Singapore, it’s just easier for us to go there.”

U.S. colleges take the problem seriously. State university systems in California, Wisconsin, and elsewhere are adding more industry-oriented classes.

China’s Gene Therapy Investment

We have recently added a new blog to our offerings: the Curious Cat Investing and Economics Blog. For those of you interested in those topics I hope you will give it a try.

Our favorite economics radio (pre-podcast technology) show is Marketplace from National Public Radio. Today they have a story on China’s commitment to gene therapy as a economic strategy to get in on a potentially huge market: China bounds ahead in gene therapy.

This is happening at a time of conservatism toward gene therapy in the United States. Investment in the U.S. slowed after an 18-year-old Pennsylvania boy died in a gene therapy trial seven years ago. His parents filed a lawsuit. The Food and Drug Administration put other trials on hold.
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Patients in China are less likely to file lawsuits, and Chermak says Chinese regulators are more open-minded to new treatments. They see the slowdown in the United States as an opportunity to get ahead.

At the same time, a lot of Chinese researchers who studied in the U.S. are returning home because in China, you can get much more bang for your research buck.

This is an example of the future we discuss in: Diplomacy and Science Research