The Fantasy Economy Strikes

I found a letter to the editor from biotech executive Mark Warner in the Wall Street Journal thought-provoking:

Your report “Boston’s Biotech Engine Is Sputtering” (U.S. News, Dec. 30) rightly notes that highly trained Ph.D.s are struggling to find work as Boston’s biotech sector contracts. But the problem isn’t an oversupply of scientists or a temporary venture-capital cycle. It’s a deeper structural failure in how the country builds industries.

The U.S. excels at funding discovery and celebrating breakthroughs, then neglects the hard work of manufacturing them at scale. When commercialization stalls, capital retreats, companies collapse and top talent is left without a place to apply its skills. We have seen this before in semiconductors, solar energy and nuclear power. Research leadership remained but manufacturing—and economic strength—moved elsewhere.

Biotechnology faces the same risk. The real bottleneck isn’t the lab; it is the lack of domestic biomanufacturing capacity to carry innovations across the “valley of death” from proof-of-concept to commercial reality. That gap is where today’s job losses are felt most acutely.

Warner correctly identifies a structural failure, but his causal chain is backwards. There is a practical, organic progression. When production moves elsewhere so does production engineering. Production engineering follows production. Design engineering follows production engineering. Research follows design engineering. What remains behind is not an innovation ecosystem but an academic one, unmoored from economic realities. There is always a lag, because engineering capability takes time to migrate. But it always migrates to where production actually occurs. As Mr. Warner himself notes, this pattern has already played out in semiconductors, solar energy, and nuclear power.

For some time we have been operating under the fantasy that the United States economy can thrive as a service economy on the basis of services, tertiary production, and retail alone, leaving the messy and energy-intensive production to other countries, preferably countries far, far away. That is a pleasant fantasy but it is a fantasy. The reality is that is the path to poverty which Mr. Warner’s letter highlights. You can export production for a while and still pretend to be an industrial power. You cannot do it indefinitely and remain one.

3 comments… add one
  • steve Link

    Meh. Chat-GPT and Google say average salary for a production engineer is about $90,000-$130,000 which is pretty much in line with other engineering salaries. . If there really was a shortage I would expect that to be higher. (Seems to vary a lot by region of the country.) Given that we have had repeated claims that we are short on engineers and/or scientists since WW 2 I would like to see this claim better supported.

    Steve

  • Using average production engineering salaries as evidence that there is no engineer shortage is misleading. “Engineer” titles today span a wide range of roles many of which are not strict professional engineers and salary aggregates mask real differences by discipline, expertise level, and industry. In addition, global labor arbitrage, offshoring, and employer wage setting can suppress domestic wages even when demand for specialized engineers exceeds local supply. A better measure of engineering capacity is the count of strict engineering occupations over time and per capita, using consistent occupational definitions and that data shows the U.S. has significantly fewer strict engineers today than in the late 1970s. That means considerably fewer per capita.

    The number, however, has risen since the trough in 2010.

  • bob sykes Link

    A substantial fraction of engineers with actual BS engineering degrees never practice engineering. Among civil engineers, as many as 50% may enter other fields.

    Engineers of all types have very good science and mathematics training. They are also much smarter than the average BA/BS graduate, and they hard working and focused. These traits translate well into other careers, and many engineering graduates go on into, medicine, law, technical sales, and management.

    The demise of US manufacturing has led to fewer engineering jobs and fewer engineers.

    PS “Production” engineers, aka “industrial” engineers are specialists in the work flow of manufacturing facilities. They are a small fraction of engineers even in factories. Most of the engineers working in factories are chemical, electrical, or mechanical, and modern factories always employ some computer programmers.

    PPS Russia’s manufacturing sector is at least as big as America’s, and more comprehensive and autarkic, and they have somewhat more engineers. China’s manufacturing sector is probably twice that of ours, maybe more, and they have almost ten times as many engineers and scientists as we do. Eight of the world’s top ten (all of the top 8) technological universities are in China. We have Cal Tech and MIT.

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