ENGINEERING EDUCATION and PHILIPPINE COMPETITIVENESS

by
Rtn. Reynaldo B. Vea

Rotary Club Of Manila
Manila Polo Club, September 25, 2008

A framework

Michael E. Porter, in his book The Competitive Advantage of Nations, states: “Firms, not nations, compete in international markets.” Further, “The human resources most decisive in modern international competition…possess high levels of specialized skills in particular fields….

Porter also characterizes the stages of competitive development.  In the factors-driven stage, a nation derives “advantage from the basic factors of production: abundant and inexpensive semi-skilled labor pool, mineral resources, suitable climate for growing certain crops, etc…” In the investment-driven stage, “Firm invest to acquire more complex foreign product and process technology, which is typically a generation behind international leaders…Foreign technology and methods are not just applied but improved upon; passive investment in turn-key plants is insufficient…Competitive advantage widens to include more advanced factors (for example, well-trained engineers) and the presence of well-functioning mechanisms for factor creation, such as educational institutions and research institutes.”  In the innovation-driven stage, “Firms not only appropriate and improve technology and methods from other nations but create them…A  nation’s indigenous firms push the state of the art in product and process technology…”  The wealth-driven stage is a stage of decline where a nation finds little motivation to innovate.

Given this framework, it may be seen that the Philippines has a foot in the investment-driven stage and it may be deduced that the basic role of science and engineering education in advancing national competitiveness is to provide the knowledge and the human resources to be able to improve upon, an perhaps even generate new, product and process technologies.

Supplying knowledge

It is oftentimes not clear to many what the difference is between research and development and between basic research and applied research. Lester C. Thurow, in his book Building Wealth, offers some insights.  “Research is the activity of making basic breakthroughs into new areas, deepening knowledge. Applied research involves a fundamental engineering breakthrough that implements empirically what is already known scientifically (through basic science). Development is the expansion of technological knowledge in already existing areas – widening knowledge.”

Let me give a recent example of this.  Thirty seven years ago, Dr. Leon Chua, a Mapua graduate and a Professor at the University of California at Berkeley, theorized from arguments of symmetry in circuit theory that there should exist a circuit component called a memristor.  You must have read in the papers a few months ago that after years of work, HP was actually able to create the memristor using, among others, platinum and titanium.  Dr, Chua’s part is the basic research and HP’s the applied research part.  If the memristor can eventually be made out of less expensive material, the that would be the “D” in “R & D”.

In comparison with other countries the Philippines is spending very little in R & D at the moment.  See graph below.

Source: ERDT Presentation by Dean Rowena Guevara

Given the high cost of R & D, it would be well for a small country like ours to judiciously choose the areas we want to work on.  It is like making a bet.  It would also be well for us to understand the economics of R&D.  First of all, a calculus on the returns of R & D must be developed.  According to Thurow, in the US, private firms would consider an 18 % return on the risks of R&D (on top of the 6% return on the cost of capital) acceptable.  They would thus be willing to fund projects the returns from which could be realized within 5 years.  On the other hand, the social returns (or total economic returns to the whole society) from R&D is 66%.  This makes government able to support projects the returns from which would not be felt until after 10 years or more.  Thus, the period of 5 to 10 years is where there could be cooperation between the private and public sectors on R&D.  We should have such a calculus for our situation that will bring rhyme and reason to the oft-repeated call for government-industry-academe linkage in R & D activities.

To give us an idea about the possibilities associated with R & D being done in an engineering schools, we can refer to the experience of the Massachusetts Institute of Technology.  In a recent study done by the Bankboston Economics Department, the national economic impact of companies founded by MIT alumni and alumnae was evaluated.  The findings showed that they have founded 4,000 companies, creating 1.1 million jobs worldwide, generating annual world sales of $ 232 billion, which is
roughly equal to a GDP of $ 116 billion.  That study concluded that if all these companies formed an independent nation the revenues would make that nation the 24th largest in the world. 

In a conference last August on competitiveness under the Congressional Commission on Mathematics, Science and Engineering (COMSTE), established to look into Philippine competitiveness issues, a few  examples of spin-off companies in the Philippines were cited Dr. Edgardo Gomez and Dr. Mae Mendoza: Biomart Asia, Inc. – skin care products from terrestrial and marine herbal extracts (UP-Marine Science Institute); Vivotech Labs, inc. – animal testing services; recombinant vaccine design services (UP- Marine Science Institute); Stemp Biotech, inc. – transgenic papaya with delayed-ripening characteristics (UPLB – Institute of Plant Breeding).  Well, at least this is a start, in the field of biotechnology in which we have many scientists.

Do a Bangalore?

But in general we are very far from attaining a critical mass of R & D personnel.  This has led some suggestions to get Filipino scientists abroad to come home to set up the likes of a Hsinchu Science Park in Taiwan or a Bangalore in India.

Well, it looks like this cannot be done.  In a study by AnnaLee Saxenian and Jumbi Edelbehram,  entitled “Immigrant Entrepreneurs of Silicon Valley” , it is shown that in Silicon valley the percentage of population in the high-tech sector with MS & PhD degrees are as follows: Indians – 54; Chinese – 41; Whites – 18; Vietnamese – 5; and Filipinos -3.  It concluded that, “While the Vietnamese and Filipinos are …relatively well represented in the total high-tech workforce, their relatively lower educational attainment is reflected in their occupational status…In the high-tech sectors, 57 percent of both the Indians and Chinese are in professional/managerial occupational categories, compared to 52 percent of whites. Among other Asians, the Japanese are relatively well represented in professional and managerial occupations in Silicon Valley, whereas Filipinos and Vietnamese are predominantly found in the semi-skilled and administrative occupations...A lot of Filipinos are at the technician level. And that puts them in a much different position in terms of having the connections to money and to high-level technology customers, as well as the capacity to influence things in their home country.”

The lesson is that we in the Philippines have to pull ourselves up by our bootstraps. 

Supplying human resources

The table below shows the current supply of our engineers.

In the same period 128,500 of the graduates took the PRC-administered licensure examinations. (note: industrial engineering & computer engineering have no board exams.)  Of those who took the exams, 51,266 passed.  This is 39.9% of the takers and 21.9% of those who graduated from school in the same period. Roughly we get 10,000 board passers every year.

A recent study by the McKinsey Global Institute entitled “The Emerging Global Labor Market” showed the comparison in the number of young engineers suitable for global practice among countries.

It may be noted that while china’s population is 16 times that of the Philippines, its pool of suitable engineers is only about 3 times that of the Philippines.  The study concluded, “At present , India, the Philippines and China are often the top choices for locating IT and engineering-based services for companies from the UK and the US, the main sources of demand. If US and UK companies continue to concentrate their activities on these 3 countries and current rates of offshoring persists, the demand for young engineers from these two countries would fully absorb the suitable supply by year 2011.”

It is important that our engineers be regarded as being suitable for global practice..In terms of trade in goods, the presence of a pool of internationally-qualified engineers can be attractive to foreign investors.  Philippine-based companies, whether foreign or Filipino-owned, stand to improve productivity and competitiveness with such qualified engineers.  Their claim to have such engineers working for them can enhance their competitiveness.  In terms of trade in services, offshoring and/or outsourcing of engineering services to the Philippines can become more attractive. Philippine companies or individual engineers bidding for temporary engineering services work in other countries will be more competitive. Percentage-wise, engineering is the occupation most amenable to remote employment (i.e., offshoring).  It is estimated that 52% of engineering jobs may be globally resourced.  From an individual engineer’s viewpoint, eCommerce and globalization of the world’s economy presents opportunities for engineers to work on international projects.

The Washington Accord

Institutions and mechanisms are now being set up to internationalize engineering education and practice.  To facilitate mobility of individuals and jobs, agreements between and among countries are being entered into regarding the mutual recognition of professional engineering qualifications.  International registers of engineers are being created.  Individual engineers can be accepted into membership in these registers as long as they fulfill educational and experience requirements.  The International Professional Engineer (IntPE) Register requires an applicant to have been graduated from an engineering program that has been accredited under the terms of the Washington Accord.

The Washington Accord, signed in 1989, is an agreement between the bodies responsible for accrediting professional engineering degree programs in each of the signatory countries. It recognizes the substantial equivalency of academic programs accredited by those bodies, and recommends that graduates of accredited programs in any of the signatory countries be recognized by the other countries as having met the academic requirements for entry to the practice of engineering.

For the Philippines to be eligible for membership in the Washington Accord, it needs to set-up an accreditation system that is: keyed to global engineering practice; national in scope; unified in approach; outcomes-based; continuous quality improvement (CQI)- promoting; industry-linked; independent of schools; and run by professional engineering societies.

In this regard there are ISSUES faced by the stakeholders.  First,  the professional engineering societies have never done and are not doing accreditation work. Second, the existing accreditation bodies have schools are members (therefore, not independent) and are not industry-linked.  They are also only now moving into an outcomes-based approach.

There is currently an attempt to set up an accreditation body and system that will be led by the professional societies and that will build upon the existing accreditation systems. In this manner the long experience and the extensive infrastructure of accreditation of the country could be turned into an advantage.

Conclusion

At the moment the Philippines produces enough professional engineers.  However, the increasing global demand for engineers must be addressed in the years to come.  Also the need for more of our engineers to be deemed suitable for global practice must be addressed.  In particular, the effort towards membership in the Washington Accord must be pursued vigorously.   What the country does not produce enough of are graduate engineers capable of improving upon, and generating new, product and process technologies.  Graduate engineering education and R & D must be vastly scaled up.  These moves would improve Philippine global competitiveness.