Bob Lutz: "There are just too few engineers and too many MBAs"

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Again, give an operational meaning to “innovation” and questions like this might begin to make sense. I’m sure marketing people will argue that effective marketing strategies are quite difficult to come up with, and general marketing principles (which are probably being innovated today, somewhere) rely on a deep understanding of human psychology, historical and sociological trends, statistical analysis and extrapolation, etc. There’s probably more of a science than you or I care to recognize behind marketing… and advances in this could be construed as economic “innovation” which allows markets to run more efficiently (or something along those lines, if you don’t feel like prodding sheeple into buying as much as possible is “efficient”).</p>

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But I don’t see what makes “microblogging” such a key technology.</p>

<p>Anyhow, this is kind of a tangent.

The retail thing is still irrelevant, Internet companies aren’t any more innovative just because there are less innovative companies out there. If you rob banks you don’t become an awesome person just because you do it without shooting anybody.</p>

<p>If I get what you’re saying, you think that it’s bad for engineers to get MBAs and become managers because the innovations they would have produced would have been useful.</p>

<p>Yet this isn’t true of Internet companies, is it? I mean, if all these great Internet innovations are coming from people who don’t have awesome academic records then they probably wouldn’t have gotten MBAs anyway.</p>

<p>Plus, the idea that the next Einstein will become a finance guy because he can get paid more is silly. Einstein said that:
“I am absolutely convinced that no wealth in the world can help humanity forward, even in the hands of the most devoted worker in this cause. The example of great and pure characters is the only thing that can produce fine ideas and noble deeds. Money only appeals to selfishness and always tempts its owners irresistibly to abuse it.”</p>

<p>It takes a special kind of person to do what Einstein did, I don’t think money is the motivating factor lol.</p>

<p>Your whole argument would make a lot more sense if engineers were starving on the streets. But like I said earlier, most engineers (at least where I am) have very nice lifestyles. If being superrich is a bigger priority than innovating, I guess I don’t think they would’ve been great innovators anyway.</p>

<p>How did marketing ever get involved in this…I thought this was all about innovation in engineering?</p>

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<p>Haha, some would look at the amount of valuable research coming out of academia and consider cutting government funding for academic research. There is a ton of criticism right now in the business about how much crap gets published.</p>

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<p>I don’t think we need to incentivize scientific research by paying graduate students better. The guys motivated by money can go play their shell game in the finance industry.</p>

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<p>Like Sakky said, the really smart guys are the guys in charge of developing new products and technologies. But even if you don’t look at those roles, and instead look at like a design engineering role, you would be seriously underestimating how differences in ability and experience can lead to major swings in productivity. A good engineer can be worth 10 others or even more than that.</p>

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<p>Actually, I think you just let the cat right out of the bag. While I can agree that marketing innovations could be construed as a type of ‘innovation’, what I am taking innovation to be is useful innovation, that is, innovation that actually increases the overall welfare of society. As you rightly pointed out, (most) marketing ‘innovation’, particularly the behavioral marketing that take advantage of our cognitive biases, do not improve the overall welfare of society, but are indeed merely mechanisms to bamboozle consumers into buying things they don’t really need. That is the direct antithesis of efficient markets; while efficient markets are predicated upon rational actors operating with full information about the products, behavioral marketing operates on our irrational urges by deliberately serving misinformation to the market. Such marketing ‘innovations’ succeed not by actually building better products but rather by making products seem better. </p>

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<p>I never said that microblogging was a ‘key’ technology. </p>

<p>I am simply saying that microblogging is an important innovation in that it allows those with relatively simple mobile phones with Web access to blog their whereabouts and thoughts instantly. That proved to be an important tool during emergency situations. While that may not seem to be a highly innovative improvement, that’s still more of a innovation contribution than what most companies and most employees offer, which is no innovation at all. </p>

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<p>Actually, you seem to have inadvertently stumbled upon the truth. To extend your analogy, obviously being a bank robber that harms no-one is worse than the vast majority of people who don’t even robing banks at all. But in a world where everybody is a bank robber, then those robbers who harm nobody are indeed better off than the rest. </p>

<p>Similarly, in a world where most companies offer no innovation, one that offers even a little innovation is relatively better. </p>

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<p>Your premise is flawed: who ever said that the Internet innovators don’t have awesome academic records? Indeed, the founders of Google were academic stars. Mark Zuckerburg was a prize-winning polymath in sciences and ancient Greek at Philips Exeter who was also a programming child prodigy. Furthermore, Facebook and Google are infamous for enacting hiring policies that heavily weight academic success, with a great premium upon elite degrees and high GPA’s. Plenty of Google and Facebook employees, and certainly the founders themselves, could have surely obtained MBA’s if they wanted them.</p>

<p>But I’m far less concerned about the Internet and the software industry in general, for as we have pointed out, that is one realm where engineers can - if they’re willing to found or work at startups - produce a wide range of innovations while becoming tremendously rich. And indeed, plenty of top engineers from top schools are flocking to the Internet, particularly now that we seem to have inflated Dotcom Bubble, the Sequel. </p>

<p>What concerns me are the slow innovative pace of other technological fields. For example, perhaps the reason why nobody has been able to build a breakthrough lightweight battery that can hold substantial charge is because the engineers who would have designed it are instead working as consultants or bankers. The same could be said for a cheap, reliable alternative energy source such as clean nuclear fusion, high-yield photovoltaics, or artificial photosynthesis. Or a fully functioning prosthetic limb. Or an artificial eye for the blind. We’ll never know what those top engineering students - especially the PhD students - coming out of schools such as MIT or Stanford but who then chose to leave engineering would have invented had they chosen to stay in engineering. {To be clear, we’re not talking about the worst engineering students at MIT or Stanford, but rather the very best ones - that is, the ones with the best grades, who are precisely the ones who are recruited away.} </p>

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<p>Money may not have been a motivating factor for Einstein, but it surely is for others. In particular, commercial development of innovations almost always requires a tremendous potential financial payout, if for no other reason, than to convince investors to provide the capital. One need only look at the billions of dollars in annual R&D expenses incurred by the major tech firms such as IBM, Microsoft, HP, Apple, Google, Cisco, Oracle, Adobe, GE, Intel and the like. Are all these companies simply throwing all that R&D money away? These companies are not charities. Let’s face it - Apple would never have paid to design and develop the Ipod and Iphone if they never thought that they would receive an appropriate return on that investment. The desktop computer I am using to write this message right now has more computational power than did a supercomputer from the 1960’s, for a tiny fraction of the cost. That wouldn’t be possible had the computer industry not invested hundreds of billions of total dollars over the decades to improve microchip technology. </p>

<p>Let me tell you another story. The Internet, or at least its Arpanet progenitor, had existed since the 1960’s, and by the 1990’s had already incorporated many of the most popular features that make the Internet popular today, such as email, chat/IM, multi-user gaming (MazeWar in 1974 was a multi-user first-person-shooter), file-sharing (including, yes, the illicit file-sharing of copyrighted materials, which in the old days, was predominantly copyrighted software or books), and hyperlinked webpages. But for decades, the Internet remained shrouded from the public eye as practically nobody outside of academia used the Internet, or had even heard of it. It took the launch of Netscape and its eponymous commercial browser, backed by the venture capital funding of Kleiner Perkins to popularize the Internet. The founders of Netscape, along with Kleiner Perkins, became tremendously wealthy. Let’s face it - if engineers were never motivated to become wealthy, then the Internet would probably still be little more than a technological curio populated mostly by academics. </p>

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<p>Like I said, I don’t know about that. I think it’s safe to say that most engineers at startup firms would not put up with the backbreaking hours and uncertain career outcomes were it not for the opportunity to become filthy rich. That’s certainly also true for founders of startup firms. Larry Ellison, the billionaire founder of Oracle, has explicitly stated in his biography that he started the company with the specific intent of becoming wealthy.</p>

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aregularguy: The individuals who innovate are usually those in research/academia and not in engineering firms?
you: Internet innovations are produced by people without advanced degrees or research experience.
me: Most of those ideas don’t do much for society.
you: Advertising innovations are less useful.
me: Doesn’t matter…</p>

<p>See, I’m not saying that Internet companies are bad compared to everyone else. Just that they don’t do enough for society to disagree with aregularguy’s question about academia.

You said that many Internet innovators were dropouts or never went to college.</p>

<p>Hiring isn’t that important b/c even if Twitter was somewhat useful the usefulness came from the original idea, not the work being done now.

Sure, but is IBM forgoing R&D spending to launch an investment bank? Individual people are being poached, not corporations. This thread is about whether we have too few engineers, not whether tech companies earn enough profits.

But you are contradicting yourself again! If big money is in startups, we aren’t losing entrepreneurial innovators to Wall Street because of $$$.</p>

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<p>Actually, I think you just conceded my very point - which is that Internet companies do provide innovation. I never once said anything about whether they provide more or less innovation than do people in academia - although I would happily compare the massive breadth of innovation in the Internet over the last 15 years vs. any comparable sector in academia - all I said is that are an important source of innovation. If you continue to insist that academia is an even greater source of innovation, then that’s a different discussion for a different day. </p>

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<p>Sure, Zuck was a dropout. Others were too. So what? It’s not as if Zuck flunked out - indeed, Zuck was performing well at Harvard before he decided to drop out. If he had decided to stay at Harvard and graduate, and then obtained a regular job, he would surely be competitive for numerous top MBA programs right now. </p>

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<p>We’ll just have to see how Twitter evolves. You may be right that Twitter won’t produce a single new innovation from this point forward and so their post-launch hiring was irrelevant. But maybe they’ll come up with another important idea. After all, that’s what Google did. Google Android - which was developed almost exclusively by new hires - is arguably one of the most important innovations in the mobile space today. Android - calculated across the entire mobile hardware spectrum that utilizes it - actually holds a larger total market share than Iphone does. </p>

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<p>Actually, IBM may in fact have been forgoing R&D spending to launch, not an investment bank, but an internal vendor financing arm, and, even more glamorously, its own venture capital arm. Large tech firms building their own vendor financing and corporate VC divisions - and effectively becoming credit/loan/investor facilities for their customers or partners - is one of the most underreported trends in the technology industry today.</p>

<p>[IBM</a> Global Financing](<a href=“IBM Financing”>IBM Financing)</p>

<p>[IBM</a> - Venture Capital Group - United States](<a href=“http://www-304.ibm.com/businesscenter/venturedevelopment/us/en/]IBM”>http://www-304.ibm.com/businesscenter/venturedevelopment/us/en/)</p>

<p>Perhaps the most (in)famous example of this phenomenon is none other than General Electric. Pop quiz: name the industry classification of which General Electric belongs according to the Fortune 500 classification schema. Industrial Machinery? Electronics/Electrical Equipment? Wrong. General Electric is a member of the “Diversified Financials” category along with such vaunted members as…Fannie Mae and Freddie Mac. That is because until 2008 the General Electric finance division - GE Capital - was by far the most profitable division of GE, generating more profits than the rest of the company combined. And it was that very same former cash cow division that sundered GE’s balance sheet during the crash and forced the company to seek a government bailout as part of TARP. {Yes, you heard that right - we taxpayers bailed out General Electric from poor decisions made by their finance division.} But before the crash, plenty of engineers at General Electric did not really want to work as engineers at all, but instead were hankering to transfer to GE Capital where they could make far higher pay. GE spent far more money during the last decade (and almost surely lost much of it in 2008) in building GE Capital than it did in R&D expenditures. </p>

<p>That again speaks to the crux of the problem. Many engineers at large tech companies, even if they want to remain at the same company, do not really want to continue to work as engineers, but would rather transfer to the finance, corporate VC, or perhaps business development/strategy department. But the reverse migration - even for those holding engineering degrees - is rarely desired. For example, I suspect that almost nobody at Intel Capital - which employs numerous people with engineering degrees, including many with graduate engineering degrees - would rather transfer to the engineering side of Intel. </p>

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<p>No, I am not contradicting myself, for I have always said that the software and Internet industries are a special case of what I wish all technologies industries could be, in terms of offering exciting entrepreneurial opportunities to enterprising engineers. That industry is also characterized as one that doesn’t even really require college degrees at all; Larry Ellison dropped out of college. Startup costs are relatively low - practically anybody with the right skills can cobble together sufficient resources to launch a prototype application. </p>

<p>But as you’re surely well aware, not every engineer works in the software/Internet space. If you’re a chemical engineer - even with a PhD from an elite school such as MIT - you can’t just simply found a new chemical firm on your own time and dime. You need millions - perhaps billions - of dollars of capital before you can even produce a prototype technology. The chemical industry is unfriendly terrain for new companies; I would be hard-pressed to think of even a single highly successful chemical startup firm founded in the last 20 years, whereas in contrast, plenty of people have heard of Facebook, Google, Groupon, Amazon, Ebay and Youtube. The same could be said for mechanical engineering, civil engineering, and even large swaths of electrical engineering such as power engineering or heck, even computer hardware engineering. {Pop quiz - how many highly successful computer hardware startups have been founded in the recent past?}</p>

<p>But my general point is this: until the 2008 crash, corporate profits from the financial sector - that is to say, profits generated from banks and from the distinct finance divisions of conglomerates/holding-companies such as GE - represented an increasing share of the total profits of the economy: over 40% of such profits in certain years. Such growing profits persuaded numerous engineers, and surely people from other professions as well, to become financiers. Unfortunately, those financial profits proved to be fictitious, necessitating a gargantuan taxpayer bailout. Imagine a world where GE, having made gargantuan investments to build a finance division that made catastrophic choices thereby forcing the company to beg for taxpayer funds while abdicating its AAA bond rating, had instead invested those funds into far higher salaries for a ‘Dream Team’ of the very best R&D engineers in the world? GE might then have invented a lightweight, cheap, long-lasting battery. They might have invented a revolutionary solar panel. They might have invented an aircraft engine that allows planes to fly faster and farther than ever before while drastically reducing fuel usage and carbon emissions. </p>

<p>We’ll never know because GE decided to spend (and lose) that money in paying financiers. Those GE finance employees made disastrous decisions while being paid large bonuses, which they aren’t giving back. </p>

<p>The grave irony is that even if GE had assembled a dream team of researchers who then produced nothing at all, and hence GE had effectively thrown all of that funding away, that still would have been better than GE paying financiers for devising balance-sheet landmines that ended up threatening the solvency of the entire company.</p>

<p>Stanford has a tool in the career development center that allows you to see the precise placement of pretty much every PHd in engineering from their school. I’m going to assume that Stanford is pretty representative of all of the Ivy’s when it comes to career placement. The vast majority go into academic positions, so I’m not sure what you’re talking about when you say that graduates of the top PHd programs in engineering are going to the finance sector when they are being placed in academic position making 150K just to start and 300K 5 years later with very, very comfy job security due to the fact that most of them are going into tenure-track postions.</p>

<p>Inmotion12, I’m not sure what you’re talking about. Exactly which engineering academic positions are paying $150k to start right after obtaining one’s PhD? Please name some. The vast majority of engineering PhD’s who embark upon academic careers must take post-docs which only pay around $40-50k a year. Even those lucky few who are actually able to bypass the post-doc to head directly into an tenure-track engineering assistant professorship will make nowhere near the sorts of salaries that you are implying. </p>

<p>You say that you have access to a Stanford career development center tool that displays PhD salaries of those entering academia. Interesting that I can’t easily find access to this tool. But putting that issue aside, I would argue that what is far more relevant are the salaries of actual Stanford engineering faculty. According to Stanford’s officially published salary announcement, in the 2008-2009 academic year, **Stanford engineering associate professors - which is one promotion grade above the assistant level - made only about $120k for an academic year. ** Assistant Professor salaries are determined by the year that one obtained your bachelor’s degree, and if you were an assistant professor who earned your bachelor’s in 2004, you would be paid $90k for an academic year. I assume that those who earned their bachelor’s in earlier years would be paid more, but certainly not more than what the associate professors would make. Even after adding in the optional 2/9 summer salary support, which is generally unguaranteed and dependent upon one’s success in obtaining grant funding, and even after accounting for the fact that the data is a few years old and current salaries are surely slightly higher - I struggle to see how one could arrive at a $150k salary figure for a brand new PhD. </p>

<p><a href=“You've requested a page that no longer exists | Stanford News”>You've requested a page that no longer exists | Stanford News;

<p>Furthermore, let’s remember that this is Stanford we’re talking about - Stanford being one of the world’s elite engineering schools. Let’s face it - most newly minted engineering PhD students from even the top programs, including from Stanford itself, could never dream of garnering even an asst professorship job talk at Stanford, much less an actual job offer. In fact, most would surely be glad to take a low-paying postdoc at Stanford. </p>

<p>To ensure that the Stanford payscale is not an anomaly, I also looked at the faculty payscale at the University of Michigan - another highly regarded engineering school. Plugging in some names of random Michigan engineering assistant professors that you can find through the departmental websites, I rarely find a single one who in 2010 was being paid more than $100k of a full-time equivalent (FTE) equivalent salary which includes pro-rated summer support. For example, Mona Jarrahi, current assistant professor in the EECS department at Michigan, and who earned her PhD at - yes - Stanford, was paid only $90k FTE in 2010. Nor did she obtain her Michigan position right after graduating from Stanford, for she first had to serve a presumably low-paying “research associate” position, which is basically a postdoc, at Berkeley. Mina Rais-Zadeh was paid only $89k FTE as an EECS asst professor in 2010, and that was after she served a low-paying postdoc at Georgia Tech. </p>

<p>[Prof</a>. Mona Jarrahi - Terahertz Electronics Laboratory - Prof. Mona Jarrahi](<a href=“http://www.eecs.umich.edu/~mjarrahi/mjarrahi.html]Prof”>http://www.eecs.umich.edu/~mjarrahi/mjarrahi.html)</p>

<p>[Resonant</a> MEMS Group - People](<a href=“http://www.eecs.umich.edu/~minar/member.html?id=1]Resonant”>http://www.eecs.umich.edu/~minar/member.html?id=1)</p>

<p>To ensure that EECS was not an anomaly at Michigan, I also looked up salaries of some engineering assistant professors in other departments. I see that Sunita Nagrath in chemical engineering made only $92k in 2010. Vikram Gavini of mechanical engineering made only $87k. Valeriy Ivanov of Civil Engineering made only $88k. </p>

<p>[Michigan</a> Chemical Engineering | Sunitha Nagrath](<a href=“http://che.engin.umich.edu/people/nagrath.html]Michigan”>http://che.engin.umich.edu/people/nagrath.html)</p>

<p><a href=“Faculty Profiles – Mechanical Engineering”>Vikram Gavini – Mechanical Engineering;

<p><a href=“Civil and Environmental Engineering – University of Michigan”>Civil and Environmental Engineering – University of Michigan;

<p>Here is the tool for those who want to convince themselves.</p>

<p>[Salary</a> Supplement | The Michigan Daily](<a href=“http://data.michigandaily.com/tmdsal]Salary”>http://data.michigandaily.com/tmdsal)</p>

<p>How about the engineering faculty salaries at UIUC, one of the most highly ranked schools in engineering, particularly in EECS? **Not a single assistant professor in EECS was paid more than $92k in the 2008-2009 year. **</p>

<p>[University</a> of Illinois employee payroll](<a href=“http://www.stltoday.com/news/local/education/html_17d9531c-6766-11df-85bd-0017a4a78c22.html]University”>http://www.stltoday.com/news/local/education/html_17d9531c-6766-11df-85bd-0017a4a78c22.html)</p>

<p>Finally, let’s consider Berkeley, one of the most prestigious engineering schools in the world. Granted, the UC system has been suffering from recent budget problems, but Berkeley should nevertheless still be expected to pay salaries that are competitive to what UMichigan or UIUC would pay. Yet Asst Professor Pieter Abbeel made only $123k in total pay (including summer support) in 2009. Asst Professor Koushik Sen made only $123k, Danielle Tullman Ercek made only $103k. I can’t find a single engineering assistant professor, even one with years of experience, who made more than $150k</p>

<p>[Pieter</a> Abbeel | EECS at UC Berkeley](<a href=“http://www.eecs.berkeley.edu/Faculty/Homepages/abbeel.html]Pieter”>Pieter Abbeel | EECS at UC Berkeley)</p>

<p>[Koushik</a> Sen | EECS at UC Berkeley](<a href=“http://www.eecs.berkeley.edu/Faculty/Homepages/ksen.html]Koushik”>Koushik Sen | EECS at UC Berkeley)</p>

<p>[UC</a> Berkeley, Dept of Chemical and Biomolecular Engineering](<a href=“http://cheme.berkeley.edu/faculty/tullman-Ercek/]UC”>http://cheme.berkeley.edu/faculty/tullman-Ercek/)</p>

<p>[State</a> Worker Salary Search - sacbee.com](<a href=“http://www.sacbee.com/statepay/]State”>http://www.sacbee.com/statepay/)</p>

<p>So Inmotion12, I’m afraid that I don’t know what you’re talking about when you say that graduates of top engineering PhD programs who enter academia are commonly being paid $150k to start. Exactly who are these people, exactly which schools are they working at, and how were they able to all consistently skip the low-paying postdoc step? If what you are saying is really true, then apparently somebody forgot to tell all of the engineering assistant professors at UIUC, Michigan, Berkeley, and yes, even Stanford, because they’re clearly being low-balled and should be agitating for higher salaries. </p>

<p>By all means, name some actual people who are actually making $150k in new faculty positions right after graduation. I’ve named some people. I’m sure that Danielle Ercek, Mona Jarrahi, and Sunitha Nagrath would like to know more about all of these engineers in academia who are making $150k to start. </p>

<p>So let’s review. The vast majority of newly minted engineering PhD’s, even from top schools, will not have the option of a tenure-track asst prof job right after graduation, even at an average department. Rather, they are looking at 1-3 years of a low-paid postdoc, after which they might have the opportunity to place for an assistant professorship. Might. If they’re lucky, that assistant professorship will be at a top-ranked school such as Michigan or UIUC…where they will earn about $90k to start. {If they’re less lucky, they’ll place at a far lower ranked eng department that will probably pay them far less, and if they’re truly unlucky, they won’t garner any academic placements anywhere at all.} Or, if they come from a name-brand PhD program such as Stanford or MIT, they could immediately take a high-paying position in finance or consulting right after graduating. I think we can clearly understand why many of them will choose the latter.</p>

<p>Wow sakky, I hope you type fast.</p>

<p>I agree that academic hiring could use some work.</p>

<p>Regarding industry, all I can say is that my own experience doesn’t match with the idea that there aren’t enough engineers or that engineers need to make more. I know that’s not a very good reply, but what you’re describing is totally outside the norms I’m used to.</p>

<p>I’d be interested to hear your plan for how we fix this problem, if it does exist.</p>

<p>Just out of curiosity how much does the avg MBA from a well branded university make annually? An engineer?</p>

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<p>Actually, what you just said contains a hidden contradiction. You said that academic hiring could use some work. On the other hand, you say that engineers don’t really need to make more. Yet the fact is, private sector eng salaries, particularly at the PhD level, are not significantly better than are salaries in engineering academia. The average MIT PhD engineering graduate in 2008 who entered did not enter academia made an average of about $110-115k a year and that includes those PhD graduates who took high-paying finance and consulting jobs, hence artificially boosting the average salary figures. I suspect that the average figure for those PhD graduates who took actual engineering jobs was probably only ~$100k, which is not significantly higher than the average newly minted engineering asst professor who makes about $80-90k. </p>

<p>We should also factor in the fact that jobs in academia tend to offer a higher quality of life than do those in the private sector, as professors don’t truly have a day-to-day boss; one could consider journal editors and referees along with grant reviewers to be your ‘bosses’, but you also have some freedom to decide which journals to submit to and which grants to apply for. You are also largely free to set you own hours when not teaching, for if you need to take care of some personal matter and can’t do research today, you just don’t do it today. Professors also tend to enjoy greater job security - a point in which Inmotion12 and I agree - in that you have the opportunity to compete for the lifetime job security of tenure that exists nowhere in the private sector. Even the untenured junior faculty but who are in the tenure-track are often times provided with multi-year contracts which effectively operates as ‘short-term tenure’ in that only rarely will anybody lose their job while the contract is in effect. You will be terminated when your contract expires if your work is inadequate, but at least you have the security of a job while the contract is in effect. (Even if they did terminate you prior to the end of the contract, they would have to buy out the remainder of your contract.) In stark contrast, firms can and have laid off R&D staff at the drop of a hat. Your wife is having a baby soon and so you will shortly have a slew of new expenses? The firm doesn’t care; they’ll lay you off whenever they want, and your upcoming expenses are your problem. </p>

<p>The one disadvantage that an academic career does hold relative to a private sector PhD position is that academic positions usually demand that you take the aforementioned low-paying post-doc positions. But even that disadvantage is not as striking as it may seem, as an increasing number of private sector R&D jobs also demand postdoc work. </p>

<p>The upshot is that private sector PhD jobs are not clearly better than are academic jobs, especially once you account for the superior quality of life that academia offers. So if academic hiring could use some work, then by extension, private sector hiring could use some work as well. All of them should be paid more.</p>

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So what is the solution? Should is not a useful term. Employers of ANY kind, private, public, academic, only pay what they need or want to pay. Do you have an incentive to entice employers to pay more than they have to, or a punishment for those who pay too little?</p>

<p>Here you go Sakky:</p>

<p><a href=“http://cdcapps.stanford.edu/stanfordcdc/fe/survey/firstStepsBrowse.do[/url]”>http://cdcapps.stanford.edu/stanfordcdc/fe/survey/firstStepsBrowse.do&lt;/a&gt;&lt;/p&gt;

<p>Going through each engineering discipline it seems there is a healthy balance between those who go into academics and those who go into industry. Of those who go into industry, some do go into finance or consulting, many go into top research positions at places like Microsoft, Intel, and Google.</p>

<p>I’ve looked through the Texas public salaries database and have seen the range of professor salaries at my school, UT Austin. The way I understand it, and looking through the salaries confirms it, is that academics is much like the finance industry, where one’s pay depends on their productivity and results. For example, my dept. just hired Sandra Black from UCLA at a clip of about 300K per year. Jason Abreveya makes about 250K, so does Philip Corbae, both in the economics depts. They make that much because they get their research published on a consistent basis. There are those in the economics dept who don’t make over 200K, although most of them do make over 100K, and the reason is that either through choice or lack of talent/luck, some of the professors don’t publish that much. I know Daniel Slesnick prefers teaching to research and he hasn’t published much recently, but he still make 240K.</p>

<p>The new tenure-track hires at my school make 100-120K to start with the realistic promise of >200K 5 years down the line. And we are a non-ivy in a low cost of living area. I guarantee you that the ivys start their profs. at a higher clip.</p>

<p>In 2009, 1.6% of MIT Phd grads went into finance and 3.5% went into consulting. That hardly seems like a crisis worthy of despair.</p>

<p><a href=“MIT Institutional Research”>MIT Institutional Research;

<p>I don’t get the postdoc thing with engineering and hard science. Most of what I’ve researched is the top 20 econ phd programs because that’s what I’m considering as one possibility for my life.</p>

<p>Social science Phd graduates usually go straight into faculty positions if they go into academia. I don’t know why it’s so different for engineering people and why universities think they need so much additional training. </p>

<p>I totally agree with you that the low pay of postdocs in engineering is ridiculous, but that doesn’t seem to have stopped PHd grads from the ivys from going into academia or top scientific research firms.</p>

<p>Inmotion12, I hope we’re still talking about engineering academia and not economics academia, for after all, this is the engineering forum of CC. We can talk about economics academia as well, but that’s probably best left to another thread. All of my following comments were written under the presumption that we are still talking about engineering. </p>

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<p>That’s presuming that you’re actually going to garner a tenure-track job offer at an Ivy, or other top engineering school (and many of the Ivies aren’t even top engineering schools anyway). Most PhD eng graduates from even the top programs will not obtain a top tenure-track offer right after graduation, or even a top post-doc which might later lead to a top tenure-track offer. </p>

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<p>I’m glad we’ve resolved the notion that PhD graduates who enter academia are routinely obtaining $150k to start. </p>

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<p>That’s an interesting assertion considering that 5 years is roughly the time that you would be an associate professor, and, having plumbed the University of Texas public salary database, I could find not a single associate professor of engineering making $200k. The closest I could find was Steven Bryant of Petroleum Engineering, who made $182k. But he seems to be a clear outlier as the next highest paid associate professor of petroleum engineering is Mojdeh Delshad, who made only $150k, followed by Sanjay Srinivasan who made $127k. Poking around other engineering departments, I find that associate professorship salaries rarely exceed the $150-160k mark. </p>

<p>[DEPARTMENT</a> OF PETROLEUM AND GEOSYSTEMS ENGINEERING Salaries at The University of Texas at Austin | Government Employee Salaries | The Texas Tribune](<a href=“Government Salaries Explorer | The Texas Tribune”>Government Salaries Explorer | The Texas Tribune)</p>

<p>[The</a> University of Texas at Austin Departments | Government Employee Salaries | The Texas Tribune … Page 5](<a href=“Government Salaries Explorer | The Texas Tribune”>Government Salaries Explorer | The Texas Tribune)</p>

<p>Now certainly, I agree that full professors at UTAustin can make $200k, and indeed, sometimes more than that. But, frankly, how many new assistant professors at UTAustin will make it all the way to full professor in only 5 years? Heck, plenty of new assistant professors will be terminated because they didn’t even pass their tenure reviews, let alone actually make it to the full professorship level in only 5 years. And even if you do become full professor, it seems as if the majority of full engineering professors at UTAustin are not paid $200k a year. For example, in the Petroleum Engineering department, the vast majority of full professors are not being paid $200k a year. Chemical engineering seems to the department that is most skewed towards $200k+ salaries, and even so, some full professors make substantially less than that. </p>

<p>So I don’t know what you mean when you say that making $200k after 5 years is a realistic promise. Perhaps it is indeed realistic if you happen to be one of the most gifted engineering professors in the history of UTAustin. But keep in mind that UTAustin is one of the very best engineering research schools in the nation, being ranked #8 according to USNews graduate edition, and therefore hires as incoming new faculty some of the most talented engineering researchers in the world. Nevertheless almost none of them will be promoted to Full Professor and make $200k after only 5 years, although I’m sure all of them would like to (or at least, desperately trying to pass their tenure reviews). If they can’t do it, is it truly ‘realistic’ to think that somebody else could do so? </p>

<p>And of course all of that ignores the years of low-paid post-doc work that most engineering academics have to undertake. Heck, 5 years after finishing the PhD, some people are still serving in low-paid postdocs, while others have only recently begun a tenure-track position. Adding in those years only delays the payout further. </p>

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<p>Except for the major difference being that the top-end pay scales in finance are far far higher - by orders of magnitude - than are the top-end pay scales in academia. </p>

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<p>And you just happened to name some of the best economists in the country. Somebody of that caliber in the finance world would likely be a managing director, who would be making millions. Granted, a finance MD would not have the bulletproof job security of academic tenure, but frankly, when you’re making millions, how much job security do you really need? A few years of working as an MD, and assuming that you saved judiciously, you’re basically financially set for life. </p>

<p>But even Sandra Black’s career is more instructive than you may have realized. 5 years after starting her tenure track job at UCLA, and despite having 4 A-level pubs (2 AER’s, 1 JoF, and 1 QJE) at the time, Black was still a lowly, untenured assistant professor. I believe UCLA’s tenure clock is around 7 years or so. UCLA assistant professors of economics don’t really make that much. For example, according to the UC salary database, current UCLA Economics Assistant Professor Leah Boudan made only $117k in 2009. Pascaline Dupas made only $143k (which is actually surprisingly high). </p>

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<p>Well, Stanford doesn’t really seem to pay its engineering assistant professors anywhere near $150k to start. Nor does MIT. Yet MIT and Stanford are arguably the two best and wealthiest engineering schools in the world. Heck, according to the Stanford faculty salary announcement, even most engineering full professors do not make $200k. </p>

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<p>Now again, all of the above presumes that you were actually talking about engineering academia. The data that I presented pertains mostly to engineering academic pay scales and career paths, and surely speaks to why many engineering PhD students from top schools would (sadly and ironically) rather not enter engineering academia but instead are drawn to high paying careers in consulting and banking. Why serve in a low-paying postdoc if you could become an investment banker and make literally 5-10x as much? </p>

<p>Now, if you want to talk about the attractiveness of a career in economics , I am mystified as to how that pertains to the issue of engineers being tempted away from engineering careers and towards finance/consulting. If anything, the implication seems to be that engineers should become economists. But that only serves to bolster the main point, which is that engineers are drawn away from engineering.</p>

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<p>Nice, you just happened to have chosen a time period right after the crash, when especially the finance and even the consulting industries were in shambles.</p>

<p>I could be just as unfair and choose the 2008 career hiring statistics - right before the crash. Notice how plenty of graduating MIT engineering PhD’s ended up in such companies as…McKinsey, Credit Suisse, Goldman Sachs, Boston Consulting Group, and the like. Whatever the percentage is, it’s surely nowhere near to being 1.6%/3.5% </p>

<p><a href=“http://web.mit.edu/career/www/infostats/graduation08.pdf[/url]”>http://web.mit.edu/career/www/infostats/graduation08.pdf&lt;/a&gt;&lt;/p&gt;

<p>And besides, even the figures you cited do not capture the full problem. Many new engineering PhD’s will take postdocs for the hope - but certainly not the guarantee - of a later academic position. Unfortunately, many of those postdocs will be disappointed - indeed, many won’t receive even a single academic job offer that they want - and so will have to find another career…including often times to consulting or finance (especially when the economy is strong). </p>

<p>I can personally think of a number of consultants or Ibankers who used to be engineering postdocs but could never find an adequate faculty position. They either had a major life change and realized that they needed to quickly make far more money than what academia could offer - having a baby was the most commonplace spur for such a change in outlook. Sometimes the best academic job offer they could garner was located in a region where their spouse absolutely refused to move. Consider Cornell - an elite engineering school, but in a location where there really aren’t many opportunities for a spouse who doesn’t work in academia. Some people simply tire of academia entirely, and especially the life of poverty that it entails in the early years, especially while watching their friends become rich.</p>