Outsourcing: Survival Guide for the

Engineering Student

Ivan Bercovich
May 14, 2007
Abstract
The initial purpose of this research was to find information regarding engineering outsourcing and
decide whether this process could be harmful to current engineering students or not. The main source
of information was a series of interviews with four professors at the University of Massachusetts
Amherst. Two of the interviewees, Sandip Kundu and Weibo Gong, are originally from China and India
respectively, a fact that made those interviews very meaningful. Professor William Leonard is a nuclear
physicist whose research field is the improvement of teaching techniques in schools and colleges. The
last interviewee was Alan Robinson, who is an engineering PhD. who has opted to go into the business
field.

All the interviews were very positive regarding the future of current engineering students. All the
professors believe that good students are not at risk. However, my personal experience at UMass has
shown me that the definition of “good student” is not applicable to the majority. Because of this reason,
I decided to write this paper for a student audience. This paper contains a mix of data and personal
advice for the student who might be at risk.

From the economics point of view, I discovered that money is not the only reason for companies to
outsource; there are actually strong political forces that persuade big corporations to open production
plants and hire engineers in foreign locations. I have also found out that academic performance in the
field of engineering is more important than what most people think. The increasing offer of human
resources from Asian countries is giving corporations a bigger sample from which to choose. Therefore,
the better your academic record, the better the job you will be able to get and the less likely you are to
get replaced through the process of outsourcing.

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Table of Contents
List of Figures ............................................................................................................................................... iv
Introduction .................................................................................................................................................. 1
Outsourcing................................................................................................................................................... 1
Background ............................................................................................................................................... 1
Why do companies outsource? ................................................................................................................ 2
Education as a solution .................................................................................. Error! Bookmark not defined.
Be aware of your background ................................................................................................................... 3
Higher Education....................................................................................................................................... 4
Change of Attitude .................................................................................................................................... 5
Study Hard ................................................................................................................................................ 5
Get Experience .......................................................................................................................................... 6
Final Thoughts ............................................................................................................................................... 7
Works Cited ................................................................................................................................................... 8

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List of Figures
Figure 1: India's IT Exports from 1999 to 2005 ............................................................................................. 2
Figure 2: Chinese math test for pre-entry students. .................................................................................... 3
Figure 3: British math test for first year students. ........................................................................................ 3
Figure 4: Engineers graduated in China vs. US.............................................................................................. 4

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Introduction
I am an electrical engineering student at the University of Massachusetts Amherst. Part of my job as an
academic tutor is to mentor the young students who seem to be academically lost. I have noticed that
there is a persistent misconception in the mind of many engineering students: They believe that because
they are engineering students they will have a guaranteed, high paying, job when they come out of
college. My usual response is a persuasive speech to encourage these individuals to aim for higher
academic goals. The main argument of such speech has to do with the fact that American companies will
aim to hire their best engineers in the US, and the low end professionals where they are cheaper.
Therefore, a student who graduates as a low end engineer might not be suited to work in an American
company at all. However, these arguments are more of a personal opinion than a fact.

I wrote this paper with objective of finding whether outsourcing presented a significant risk to
engineering students in America or not. I also wanted to find a role model for young students to look up
to. Therefore, I interviewed several professors in the department to find out their opinions on the
matter. This paper not only argues whether outsourcing is a risk or not, but also discusses some
measures students should evaluate to become better engineers. If you are a student reading this paper,
you are already in the right track. You are concerned, or at least curious, about your future, and you are
looking for advice. Hopefully, my work will help you jump into the road that leads to a successful career.

Outsourcing: What is it?

Outsourcing happens when a company decides to delegate certain core operations to a third party.
When the third party is located in a foreign country, the process is also called offshoring. We are more
concerned with the second example, since outsourcing within the boundaries of a country does not
really affect the local labor force. Companies outsource for many reasons, corporations in less
developed countries outsource to America when they are looking for high tech developments. But a
more common scenario happens when US companies outsource to Asian countries to reduce costs.
Professor Sandip Kundu talked to me in more detail about his experiences when he worked at Intel and
IBM.

Background
The process of engineering outsourcing has been present in this country for the last hundred years. One
of the big examples was the digital telephony industry. In the 1950’s and throughout the 1960’s the
world’s communication systems started to go digital; though, a lot of new hardware as digital switches
and multiplexers had to be produced. Originally, most of the design and production was made in the US,
but with time, private companies realized they could reduce costs by moving the production to offshore
locations. However, the design process was kept in America, given the higher availability of engineers at
the time. A similar example was the television industry and the television broadcasting equipment—the
television sets were initially designed in the United States, but soon the production was outsourced to
Japanese companies who took over the production of the TV industry.

Professor Sandip Kundu, from the electrical engineering department, remembers how in the early
1980’s there was a fear that the Japanese companies were going to take control over the high profit
semiconductors market. “Japanese companies started to build memory, and US companies like Texas
Instruments couldn’t compete, IBM could not compete, Intel could not compete. So they stopped
producing memories and moved their production towards the microprocessor business” [1]. As professor
Kundu says, American companies decided to let the semiconductors market slip away so they could

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concentrate in the upcoming processor market. Yet another case is the LCD screens that were
developed here in the US by IBM research labs. “Not a square inch of LCD is currently manufactured in
the US” [1]. So, the point is that these kinds of solutions have always been there. “Before we were
outsourcing to Japan and Korea, and now we are doing it to India and China, but it is basically the same
situation” [1].

Why do companies outsource?

When I asked professor Kundu why companies
outsource, I was waiting for the answer I had
already found many times while researching the
subject: ‘because it is cheaper’. However, he
approached the question from a macroeconomics
point of view. “Why is IBM doing it? When I was
working at Intel, in the early 90’s, from all the
processors sold, 50% were sold in the US. When I
left Intel, all of the Americas, from Argentina to
Canada, represented like 30% or so. China has
become 40% of the market and India has also
become a significant part of the market. So when
that happens, those countries ask for a
contribution—you are selling a product and you
don’t do any of the production there, you don’t
make any economic contributions there. So as a
result those companies are forced to hire on those
localities because if they don’t do that, they might Figure 1: India's IT Exports from 1999 to 2005
run out of business. The companies do that
because the markets are expanding in those
locations” [1]. This statement is very revealing, even if we decide to accept the paying scale offered to
Asian engineers, there would still be political forces that would “push” American industries to
outsource. China is a particularly strong element of this effect because it is a communist government.
Though, they can control the economy within the boundaries of their nation.

After Kundu’s opening statement, I asked about the money issue. This time his answer was expected,
but with an expanded perspective: “Number two is cost. But in engineering the cost issue is kind of
overplayed it is not that much of a significant issue yet. Because the cost of an engineer in the US, which
includes salary, benefits, software licenses, office space, business travels, etc. is about 150k a year. The
actual salary might be a smaller component of it. If you look at the total cost for a company in India or
China to hire an engineer it is less, but not that much less. Because in those countries real state is fairly
expensive and the cost of security is higher and the cost of the software licenses is the same, the cost of
travel is the same. So the only real difference is the actual salary. In the US, the salary might be roughly
40% of the cost of the employee. So, you reduce 40% of the cost by outsourcing, but the remainder 60%
stays about the same. If you look at the cost per employee to hire an Engineer in India or China, it is not
that small, it would be in the order of 60k to 70k minimum per employee. So I don’t think money is the
only issue” [1].

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The Main Solution: Education
To ensure we are going to have jobs when we graduate, we have to acquire a set of skills that cannot be
found in foreign engineers. In America, colleges are relatively accessible and the academic level is
between the highest in the world. Nevertheless, any of us could graduate with an engineering degree by
only taking the required courses. In such case, we would be in disadvantage with the Asian counterparts.
If we compare the rate of college admissions in

Some people go to college because they are in a quest for knowledge. But let’s face it; most people go
for higher education because this ensures them a better job environment with a higher salary. Education
is a big market, and colleges profit from it. Therefore, schools have to ensure the service they offer is
valuable, meaning that the students coming out of their school will have a job. The government is also
interested in offering education that will get people jobs. Though, public middle and high schools have
to constantly modify their programs to fit the market’s needs.

Be aware of your background

The quality of the math skills of American educated
incoming freshman is very inferior to the level
observed in countries like China. The images on the
right depict the analytical expectations for incoming
freshman in China and England. It is clear that the
Asian exam is far more complex than the occidental
counterpart.

Weibo Gong graduated from a Chinese high school

before getting his Harvard PhD. in engineering. He
believes high schools in America have to work harder
to encourage students to take more courses in math Figure 2: Chinese math test for pre-entry students.
and physics and to think about becoming engineers
and scientists. “I think the root of the problem is
probably in High School. They really need to improve
the quality of the teachers, and bring more ‘hands on
projects’ to high school education, because those are
the years when the person’s interests are formed. By
the time they [students] get into college is kind of.. a
little bit late, you know to motivate them to go into
engineering” [2].

Professor William Leonard works with local schools

and professors in Amherst to help them develop a
Figure 3: British math test for first year students.
more efficient teaching system for hard sciences such http://news.bbc.co.uk/2/hi/uk_news/education/6589301.stm
as physics. Here is what he has to say: “I work with
high school teachers. I know the constraints with high school teachers and I know how hard it is to
manage those constraints. In another countries, students focus on math sooner. But a typical American
high school student is only required to take 3 years of math, that’s it, and maybe two years of science.
And you get a lot of students who realize engineering is what they want after they leave high school, but
they don’t have the math to start an engineering program” [3].

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If you are in High School, now is time to look at the courses you are taking and making sure you are
getting the most out of them. Think about taking AP math and physics and maybe even taking a summer
class at a local university or community college. If you are already in college, don’t think you are
hopeless, just make sure you understand you weaknesses and take the right approach to solve them.
Talk to your professors and TAs and try to catch up until you feel at the same level as everyone else.
Don’t just use your background as an excuse to perform poorly in some courses.

Higher Education
China is the largest producer of
engineers in the entire world with about
600,000, closely followed by India, with
a yearly output of approximately
400,000 engineers. US and Europe all
together train 170,000 engineers a year.
It is very simple to observe that the US
simply does not have enough human
resources to produce more engineers
than the Asian counterparts. So the
question to ask is: what can American
colleges do to maintain the lead in the
engineering world? The answer is
simple: quality over quantity.

But with globalization, the same material

Figure 4: Engineers graduated in China vs. US
can be taught in any country in the http://www.instapundit.com/archives/week_2005_08_28.php
world; so how can we produce better
quality when the knowledge is free for all? “I think the developing countries are slowly catching up. But,
what is more important than the academic capabilities is the ‘understanding of the end user’. And that is
closest here, because when companies want to build a product, they needs to know exactly what the
customers need. And because the customers are more sophisticated here [America] they try to develop
the specifications of the products together with the customers inside the US” [1]. The key is in the ways
we teach it, and how those ways are going to affect the analytical skills of the students, and the
‘understanding of the end user’. One of the factors involved in the teaching process is picking the right
order of the courses that are going to be taught. “I think professors need to understand what the
curriculum is, and build up new courses of engineering and mathematics to better prepare the new
coming freshmen for the tough courses later” [2]. But it is very hard to find the perfect combination.

Remember that the schedule is more flexible in college than in high school. You can use this for your
advantage. You only can only take so many classes a semester; make sure you get the most out of them.
Explore the curricula of your school and talk to your advisors; there are classes that might fill several of
your requirements, giving you more time to concentrate in what you are interested in. Don’t just take
that easy class your buddy told you about; when you are not interested in a subject, it might decrease
your performance as a student, even if the class is “easy”. Another good strategy is to find well
recognize professors: for example, Maximo Fischetti is a world famous researcher in the solid state
semi-conductors field, who teaches at UMass. Taking worthwhile classes might require some extra
effort but you will be able to capitalize on it.

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Change of Attitude
The economies of different industries are going to vary with the fluctuations in the world markets. The
quantity and the types of outsourced jobs are going to move along with these changes. And there is
nothing a student can do to influence these changes. “It might present a problem in the short term, but
from the economic point of view you cannot stop it. It will just happen, if it will be a political war to stop
outsourcing is not going to last very long. Is like building a dam to stop the water of a river. You can do
that temporarily, but sooner or later the dam is going to break and it will cause a disaster. So I don’t
think that is the way to handle it; I don’t think that is the way you stop it” [2]. However, there are certain
things that can be done to promote successful careers regardless of the outcome of these financial
variations.

Many professors believe there is an attitudinal problem underlying some student’s personalities. Several
decades of economic growth in the US seem to have negatively affected the academic environment.
Many students believe that having a degree is all that matters, and that once they get it, companies are
going to come to them with job offers. Professor William Leonard is concerned about the conformist
attitude of certain students. “My hope is that all students have enough basic knowledge. You are going
to be working in teams. Some CSE people think they don’t need circuits, they say things like ‘why do I
have to learn this if I won’t be working with it? I just wanna get a C’. I say, no, you are going to be
working with electrical engineers; you need to be able to judge if what an EE is saying makes sense or
not, you shouldn’t trust what someone else is telling you is right, you should have enough knowledge to
be able to ask good questions, to be able to analyze. Things are going to get more complicated, but if you
have a basic understanding-- a minimal understanding, you can actually contribute to the design of a
project. I want every student in my class to be able, not just to trust what somebody else is saying, but
know is the right thing” [3]. There are many things we can do to prevent our jobs from being drained by
a globalized economy, but getting C’s is not enough. Students have to put a lot more effort than just
passing classes.

It is true that the demand for entry level engineers is high, but low end engineers are cheaper and more
abundant in Asia. America is looking for creativity, for people who understands the market and flows
with the market. Sandip Kundu is another UMass professor who believes students can control their
destiny. “If you want to settle for one job and keep doing the same thing day after day, then yes, your job
will be in threat in the US. But if you constantly want to move to where the creativity is, then you are not
in danger” [1]. Learning is a lifelong process. If we go to college and then we become stationary
learners, the economy is going to replace us. Kundu believes the US is the place where creativity comes.
The outsourcing process gets rid of the less complicated and more monotonous tasks, but the American
economy wants to keep and reward those who pursue the future of engineering today. “The best
engineering students can do to prevail in the marketplace is to learn the basic skills here, and then move
rapidly as the marketplace evolves. That has been a particular strength of the US in the past” [1].

Study Hard
Professor Weibo Gong believes that a successful career is a matter of attitude. He is the kind of man that
puts education over everything else. He is convinced that the best course of action for an engineering
student is to learn as much as possible during the four years of college. He encourages students who are
having academic difficulties to approach to professors and ask for help. Professors are there to help
students, but the latter has to come forward to get that help. Students should also pick up their books
and try to learn the material and use as much time as they have to catch up.

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Companies look for leadership history in newcomers to the workforce. That is why we, as students, try
to get involved in extracurricular activities and to be active in clubs and groups. Some people take this so
seriously, that they are willing to do extracurricular activities no matter what it takes, even if it
generates chronic damage to their GPA. However, Gong believes leadership can also be obtained
academically by gaining the respect of classmates, professors and coworkers. Thus, knowledge is
leadership to some extent. Your GPA doesn’t have to be the victim of leadership.

Gong also thinks that students should not worry too much about management skills during the first four
years of college. ”I think management comes naturally, I don’t think one can force it. Once you are inside
the electrical engineering department you should probably focus in things like physics or math, and
management can be learned later, that is what I believe. Also, if you have a solid scientific knowledge it
is easy to win the respect from other people, from your manager, from your coworkers, team members.
And then you are likely to be promoted to be in a management position. And then you will learn how to
do it, it is impossible to learn everything in four years of college. And if you focus on management
learning, it will take a big chunk of time and you won’t be able to do ‘solid mathematics’, then you will
have a lower chance to solidify your engineering skills. On the other hand, management can be acquired
later; we need to focus in engineering in college because we need to create a solid basis” [2]. His
intention is not to discourage students from participating in social and academic organizations, but to
put those activities in a second plane, behind formal knowledge. On the other hand, School of
Management professor, Alan Robinson, says that since students have to take a series of general
education requirements either way, they have the opportunity to grasp some knowledge in other fields
such as management. “Focus on things that aren’t necessarily to do with extracurricular activities, but
you shouldn’t take only courses that are related directly with engineering, take some management
courses, so that you understand how the organizations where you work, work” [4].

Get Experience
Every professor that I interviewed agreed in a particular matter: there is no experience like real world
experience. “My sense is that some real life experience is good for all students, I would even go out and
say students should work before they even come to college. Personally I think a lot of students aren’t
ready for college yet. And they should go work for a couple of years before they start college” [3].
Professor Leonard believes most freshmen aren’t mature enough for college when they come in; he
believes students should work for a couple of years before coming to college. However, if you are
already in college, there is nothing you can do about past experience right now. But you can build up
present and future experience. You should apply for internships every summer and maximize the
experience of learning while having a high paying job. You can also leave college for a semester or a year
and do a Co-op.

If you are not sure about what you want to do after college, it is also a good idea to get a job in a field of
interest for some years before you make your next move. It doesn’t really matter is you are thinking
about graduate school or to work in certain industry; some real world experience will help you set
clearer goals and build straighter paths to complete them. “I say go work; go find out where you want to
be. It might take two years, it might take three years, it might take 5 years; but get some experience,
that will make grad school so much more efficient. You will know what you are working towards and it
will affect the projects you will work in, it will affect the research question you ask, it will affect
everything, positively. I say, wait, always wait, get some money in the bank” [3]. Leonard believes that
the only good reason to go directly into grad school is if you are 100% sure you want to be a professor.
This statement makes sense in fields like mathematics or physics. Nevertheless, most engineering

6
professors I know worked in the industry for many years before they became lecturers; they picked up
the PhD. along the way.

Never stop learning. Getting a job right out of college does not mean your finances are safe for life. Jobs
come and go like everything else. You have to keep on learning for the rest of your life if you want to
stay on top of your career. As professor Robinson told me: “50% of what you learn in class is obsolete in
five years. And I watch many of my students go out and get high paying jobs and then in five years they
get laid off because they never kept up their skills. So you need to look for interesting projects, you need
to look for mentors” [4]. When we were in middle schools, wireless networks were a fancy toy, every
computer had a floppy drive and flat screens were luxurious. Technology moves on a fast trail, we, as
engineers, have to keep track of every single change if we want to be successful professionals in the
forthcoming future.

Final Thoughts
We are engineering students—we are in college to learn engineering. This major will reward your efforts
in the future. However, there are several higher paying fields; if money is your main reason, you should
reconsider what you want to do for a living. The reason being that engineering is very hard and abstract
and if you don’t have a true interest for the field, it is going to be hard to make it through the four years
of college.

Professors say it all the time: America is not the place for systematic engineering. You have to be
original, you have to think out of the box, and you have to be creative. When you are doing a project of
any kind and you have some extra time, don’t just turn it right in. Experiment with the possibilities, think
how you could make it better, or more efficient, or even what would make it slower. Think of every
homework assignment as a real job; if you do the extra credit, you will get the bonuses at the end of the
year.

Never stop learning. Keep track of the emerging technologies and think about the possibilities. Read
books about subjects you are interested in. Talk to your professors about material that was not covered
in the class. An engineering degree won’t get you any more than any other engineering degree. You
have to get what you want by yourself. You have to keep optimizing your skills and collecting knowledge
until you are a better engineer.

Next time someone tells you that GPA is overrated and that you should invest your time in
extracurricular activities, go online and find some jobs descriptions for IBM or Intel or any company of
your interest. You will find out that the coolest and best paying jobs have GPA floors that you have to
meet. Extracurricular background will help only after you reached that floor. So my personal advice is
not to do anything that might hurt your learning process unless you meet the expectations of the
corporations in which you would like to work.

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Works Cited1
[1] Kundu, Sandip. Personal Interview. 26 April 2007.

[2] Gong, Weibo. Personal Interview. 1 May 2007.

[3] Leonard, William. Personal Interview. 24 April 2007.

[4] Robinson, Alan. Personal Interview. 24 April 2007.

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