The Necessity of Human Capital

Our discussion of energy has thus far examined problems from the perspective of technology and governmental policies, but I think another equally important factor is human capital.

Roger Duncan cited our nation’s workforce as one of the seven factors contributing to the crisis, and I completely agree. He noted that a significant portion of his workforce could retire tomorrow, leaving the company with little experienced personnel to maintain current infrastructure while planning for future growth. In the oil industry, Shell claims that 50% of their workforce will retire in 10 years. In my own experience with a major oil company, out of a group of 40 people, about 20 people were well into their 50s, ten were between 25-50 and ten were 1-3 years out of college.

The industrial sector of America is at a crossroads. My own experience with my high school graduating class suggests that business is a far more popular major than engineering, and as such we are steadily outsourcing our engineering and manufacturing aboard. The nature of our corporations has changed to reflect our obsession with profit; GE not only manufactures a variety of high-tech equipment but also owns NBC and operates a financial arm, GE Capital. Traditional engineering and manufacturing outfits such as GM are fading fast while those companies that have survived are cutting R&D budgets.

Solutions to future energy challenges will start with scientists and engineers. Our current engineering curriculum was structured after WWII to help the US emerge as a manufacturing powerhouse. Since then, our curriculum has been copied and implemented around the world, and emerging countries have built manufacturing complexes superior to that of our own. Though highly cost-effective, these countries have little incentive to innovate; the disposable nature of consumer goods will keep us coming back to them for more of the same inexpensive shoes and ever-larger TV’s.

These various observations: the impending retirement of experienced technical professionals, the changing nature of corporations, and the growth of manufacturing around the world are different strands of the new fabric that will define our engineering education in the future. For the US to remain competitive in the global marketplace, we must be the ones providing solutions to future energy challenges.

As recent grads replace retiring people, more creativity will emerge through fresh ideas and new approaches to old problems. I am fascinated by the global oil industry, but I am all for conservation and producing new sources in the most environmentally and socially responsible manner to reduce GHG emissions. The employees of American corporations, from the welders on the shop floor to CEOs such as recently ousted Rick Wagoner, will also be dependant on these fresh ideas in the face foreign competition that can manufacture the same products better for less.

Dean Fenves of the Cockrell School of Engineering hopes to revolutionize engineering education here at UT-Austin. Engineers can and will find solutions to our energy challenges, but only if we allow our creativity to flourish. We must also be engaged with our world and its problems so that our discoveries can be turned into solutions. As politicians get caught up in debating subsidies and investors wonder which clean technology will “win,” I think a more fundamental question to ask ourselves is how are we developing our human capital? I have a lot of reason to be optimistic because of my education and the knowledge that there are many more engineers such as myself to come.

This blog was inspired by:

http://robertreich.blogspot.com/2008/12/of-financial-capital-and-human-capital.html

Other Sources:

http://www.engr.utexas.edu/spotlights/2008/deanfenves/

http://business.timesonline.co.uk/tol/business/career_and_jobs/careers_in/article1917003.ece