Despite the increasing importance of technology in any society, growing unemployment among engineering graduates in less developed countries is a concern. The scarcity of jobs for engineering graduates has been a significant issue. On the other hand, advanced countries are suffering from unfilled engineering jobs. Why does such a disparity exist? The answer could hinge on the supply and demand gap and the quality of education. But despite having one-sixth engineering graduate density compared to the UK, why has India been experiencing worthless degrees and jobless graduates’ reality? If the quality issue is addressed, will India experience the opposite scenario?
What are jobs for engineering graduates? What kind of roles do they need to play in creating economic value from their competence in science, technology, engineering, and mathematics (STEM)? Job security and reward of jobs for Engineering graduates are also issues. Although there has been growing unemployment among engineering graduates in less developed countries, why is there a growing scarcity in advanced counterparts? Is not the competence of knowing technology and designing and making products out of cost-effective use of technology good enough for getting jobs for engineering graduates? To get answers to these questions, let’s look into primary types of jobs for engineering graduates to apply their STEM competence in creating economic value.
Jobs for Engineering Graduates as in-house Employees
Historically, engineers started working as in-house employees of extensive technology using companies or government departments, including the military. Their role as in-house employees has been to (i) design and fabricate customized technological solutions, (ii) source technological solutions from the outside, (iii) install, configure, and operate devices and systems, and (iv) repair and retrofit existing technology systems.
For example, engineers design, build, operate, and maintain corporate-wide computer networks as in-house employees. They also design and build software or hardware solutions that different units of their employers want. Similarly, as in-house employees, they lead the procurement of technical solutions like computers, software applications, power plants, manufacturing equipment, or aircraft from outside suppliers.
To qualify for such jobs, engineering graduates should have good knowledge of technology and hands-on experience in designing and fabricating. Upon getting the jobs, their salary, benefits, and promotions keep flowing as long as they maintain office time in performing assignments. Hence, jobs as in-house employees have security. However, in-house employee jobs for engineers belong to support services. Such jobs do not offer a ladder to reach the organization’s top.
Due to the growing trend of sourcing technology solutions from outside contractors or innovators, the prospect of jobs for engineering graduates as in-house employees has been shrinking. On the other hand, higher-level automation has also been reducing the demand for engineers to operate and maintain technology systems. As in less developed countries, in-house employee jobs for engineers dominate the employment market for engineering graduates, the unfolding trend has been reducing the demand for engineering graduates in these countries.
Work as Contractors
The next category of jobs for engineering graduates is to work as contractors. Their jobs include (i) ideating and preparing bid documents, (ii) negotiating and winning bids, (iii) designing and fabricating technology solutions as per specification, (v) meeting budgets and delivery deadlines, and (vi) managing communication, risks, and projects.
To get paid as contractors, the challenge is winning bids and offering contracted solutions within an estimated budget, generating profit. Due to competition, errors in estimation, unpredictable productivity, inherent risks, and weak project management, contractors suffer from loss even after winning the bid and delivering customized solutions. Thus, working as a contractor does not offer certainty of getting a salary. Despite the uncertainty of getting paid, the prospect of jobs for engineering graduates to work as contractors has expanded recently. Notably, in less developed countries, most of the jobs for computer science and engineering graduates have been to work for software and IT firms. These firms are primarily contractors. As they report to in-house engineering employees of clients, engineering graduates working for contractors often find it demotivating.
Jobs for Engineering Graduates as Innovators
In the recent past, the rise of technology Startups from embryonic beginning to high-performing firms has exponentially scaled up the scope of jobs for engineering graduates to work as innovators. Instead of getting work orders, they figure out the work for developing next-generation technology solutions to help target customers get their jobs done better. Hence, they risk their time and money to innovate solutions without having any guarantee that customers will ever buy them—let alone ensure profit. However, despite the high risk, jobs as innovators have the potential of offering exceptionally high rewards, far more significant than the other two job prospects.
To profit from Innovation, knowledge about technology and the ability to engineer solutions through cost-effective technology use are insufficient. In addition to creating the willingness to pay among target customers, the competition must be won to profit from technology, engineering, creativity, and risk management excellence.
Creating willingness to pay, innovators must focus on finding resonance between evolving consumer preferences and latent technology possibilities. Hence, in addition to sharpening technology and engineering skills, engineering graduates must focus on empathy and Passion for Perfection to succeed as innovators. Furthermore, they must predict competitors’ responses and outperform them. Besides, irrespective of the greatness of ideas and engineering excellence, innovations will emerge in generating loss. Hence, they should have the capacity to keep leveraging (i) technology possibility, (ii) insights about consumer preferences, and (iii) externalities for increasing willingness to pay and outperform competition through releasing successive better versions.
Managing uncertainty for turning latent technology possibility into profit
To succeed as innovators, in addition to showing excellence in design and fabrication, engineering graduates must focus on developing the capability of making rational decisions in leveraging technology possibilities in the midst of uncertainty. For justifying investment in nurturing latent potential, some of the questions they should answer are (i) profitability prediction, (ii) timing of cashflows, (iii) degree of financial risk, (iv) impact on financial statement, and (v) stock price or firm’s market value.
Underlying Dynamics in Changing Prospects of Jobs for Engineering Graduates
The underlying reason for changing the prospects of jobs for engineering graduates has been the economics—quality and cost. For better access to expertise and sharing of resources, customers have been preferring outside contractors to in-house employees to build and even operate customized solutions. On the other hand, due to the growing role of ideas in technology solutions, buying off-the-shelf innovations has been gaining popularity. Sharing exponentially increasing R&D costs with the growing number of customers has been vital to increasing economic value from technology possibilities.
For example, Apple’s R&D investment for releasing the next version of the iPhone has been more than $10 billion. As more than 100 million customers buy the same iPhone, sharing this staggering R&D cost results in paying $100 or so for each customer. For this reason, customers are getting high-quality iPhones at a small fraction of the R&D cost. On the other hand, Apple has been making a hefty profit. Hence, innovation has been gaining growing importance for increasing both consumer and producer surpluses through a Flow of Ideas stemming from R&D. For this reason, there has been exponentially growing opportunity for jobs for engineering graduates to work as innovators.
Students, parents, academics, development professionals, and policymakers must consider these unfolding dynamics in the job market of engineering graduates. Academic programs need updating to succeed in innovation as technology knowledge, design, and fabrication capabilities are not good enough. The focus should be on nurturing empathy and passion for perfection and understanding Wealth creation dynamics out of technology possibilities in a competitive market. Such capability development is vital for creating the demand for conventional technology and design competence of engineering graduates. On the other hand, development professionals and policymakers must build economic capacity to leverage engineering graduates’ innovation roles to drive economic growth.
This article is part of a book, Engineering Economics and Management–Modern Day Perspective.