Montroll lectures

1
Creating Economic Value from Research Knowledge
The Future of Industrial Physics and Physicists
Charles B. Duke Professor of Physics, University
of Rochester VP and Senior Fellow Xerox-retired
Montroll lectures April 10-12, 2007 University of
Rochester
2
The Big Picture

• The Global Economy of the 21st Century
• What it is
• What it means for the U.S. and for physics
• Value Creation The Value Delivery Process
• The Future of Industrial Physics and Physicists

3
Todays Talk Why Should You Care?

• Point of View The pursuit of industrial
  research is fundamentally different in the 21st
  century than in the 1970s 1990s because the
  global communications infrastructure and
  geopolitical environment have changed. This
  difference profoundly affects the future of
  physics and that of every emerging physics Ph.D.
• In this presentation I consider how industrial
  RD and the role of physicists have changed in
  the global economy and the effect of these
  changes on industrial physicists, e.g., as
  reflected in the results of an APS survey of its
  industrial physicist members. I also discuss what
  it takes for you personally to be successful in
  this highly-competitive and rapidly changing
  environment.

4
Agenda

• Industrial research in a networked global economy
• Implications for physical scientists, physics and
  The American Physical Society
• Industrial physicists Who they are how they
  work
• Physics careers in the 21st century

5
Networked, Global Economy

• The Internet renders the world a global village
• In this environment, businesses pursue
  international outsourcing and pricing
• Globally available, mobile technical manpower
• Abundant technical knowledge
• Inexpensive, instantaneous global communications
• Accessible venture capital.
• Manufactured products become complex systems
  (airplanes, autos, consumer electronics,) built
  from standardized components
• Manufacturing industries consolidate around
  dominant, often modular, designs and a few large
  suppliers (e.g. PCs Dell, HP, IBM which source
  components from common suppliers, usually in Asia
  Pacific)
• Industry structures change from vertical to
  horizontal (PCs, consumer electronics, autos,
  ....)

6
Implications for Industrial Research

• Global
• Fast
• Collaborative

7
Global

• RD is built on the global communications/collabor
  ation platform.
• Because of this platform, everyone can play (The
  World is Flat)
• Asia-Pacific has the largest talent pool and
  largest markets (billions vs. hundreds of
  millions), soon will have the most engineers and
  many of the best scientists.
• The situation is qualitatively different from
  that during the cold war era. National economies
  rise or fall together.

8
Fast

• Competition is brutal All industrial RD is
  schedule driven
• Industries consolidate around modular, dominant
  designs and architectures. Work on modules can
  be independent, outsourced.
• Interfaces become standardized, enabling rapid
  module and component upgrades.
• Global design via the internet enables 24/7 RD
  progress.
• Note Physical sciences RD tends to be relegated
  to components which are increasingly mass
  manufactured by a few dominant (often Asian)
  suppliers.

9
Collaborative

• The new global communications/collaboration
  platform makes all nations, institutions players.
  Technical talent becomes globally abundant.
• Global RD teams become the norm for low cost,
  high speed, and getting close to customers.
• Open innovation allows universities to play a
  larger role in industrial RD, provide
  specialized services like continuing education
  (e.g., for skills upgrading), collaborative
  creation of intellectual property.
• But Asia Pacific aspires to university
  leadership in science and engineering. There is
  no rest for US Academics.

10
Implications for Physicists

• Plentiful technical talent globally holds down
  the salaries, generation of U.S. talent.
• The expertise of physicists is less in demand.
  Research in industry increasingly concentrates on
  conceiving and designing new products and/or new
  value chains, rather than on new phenomena. Other
  disciplines (especially EE) are increasingly
  regarded as acceptable sources of skills that
  used to be unique to physicists.
• Being an effective team player is a critical
  skill for physicists in industry The primary
  role of physical scientists in industrial
  research is that of a subject matter expert
  solving problems on a cross-functional definition
  or design team.
• The high-value competence is the ability to
  integrate intellectual property from different
  sources into products that source components (or
  even assembly and service) from globally
  dispersed suppliers.

11
Total Value of a Physics Education

• Education is valued to individuals as a a
  sequence of nested options Doing well at one
  level gives the option to proceed to the next.
• Key point Investment in education is a proven
  value creator for society but is risky for
  individuals. This is why governments sponsor
  education.
• The option to abandon is alive and well E.g.,
  Ph.D theoretical physicists going into finance or
  biological modeling.
• The global economy has increased the market risk
  of the value of any specific education, hence
  generally increased the value of pursing
  education as long as possible, making course
  corrections along the way.
• Rapid technical change has reduced the longevity
  of skills learned in college or graduate school,
  thereby reducing the discounted cash value of the
  (initial) jobs gained on the basis of formal
  education.
• Global technical talent competition, movement of
  research operations abroad, and declining
  importance of physics as a key component of
  systems value creation all reduce the option
  value of graduate education in physics for
  employment as a professional physicist, per se.

12
Implications for Physics

• In a global economy, increasing support of
  physics RD and education is motivated primarily
  by economic impact.
• Industrial physicists are the primary agents who
  generate this economic impact.
• Stable or declining government funding for basic
  research in physics requires that new physics
  Ph.Ds primarily work for industry, not academia
  or government.
• The global economy has changed profoundly the
  nature of physicists jobs in industry.
• Create products not new knowledge
• Perform mostly engineering tasks, not fundamental
  research
• Work under intense time, performance pressure
  little time for extracurricular activities
• These changes have made the new industrial
  physicists much less interested in active
  participation in scientific societies, including
  the American Physical Society (APS).

13
Implications for the APS

• Industrial research in the physical sciences has
  changed from knowledge creation to option
  creation -- with implications for APS meetings
  and publications.
• Industrial research has become dispersed Many
  small players are replacing a few dominant
  players with implications on the delivery of
  physics content to industry and physicists
  careers in industry.
• APS and other professional societies have lost a
  large cadre of industrial physicists who used to
  perform basic research at large firms.
• The nature of most industrial physicists in APS
  has changed They solve problems rather than
  create new knowledge.
• If the APS wants to maintain its service to the
  entire physics community and preserve its
  (rapidly declining) industrial membership, it
  must expand its horizons to serve the new kinds
  of industrial physicists who are emerging.

14
Who are Industrial Physicists?

• Physicists at large firms
• Used to perform basic research much like academic
  physicists
• Increasingly perform engineering functions on
  cross functional teams
• Have institutional access to the technical
  literature
• Declining in number, rapidly
• Physicists at small firms, consultants
• Perform applied research, development
• Similar to engineers rather than academic
  physicists
• Solve problems or create products , not knowledge
• Do not usually have institutional access to the
  technical literature
• Increasing in number
• Reference C. B. Duke et al., Report of the APS
  Task Force for Industrial Physicists (American
  Physical Society, College Park, MD 2006)
  http//www.aps.org/publications/apsnews/200611/ind
  ustry.cfm

15
Survey of Industrial Physicists in APS

• Use physics on the job
• Collect information via email and the web
• Rarely publish in APS journals or attend APS
  meetings
• Use APS journals once a year or less
• Need physics information beyond APS journals
• Usually belong to other professional societies
  besides APS
• Connected to APS primarily via Physics Today and
  APS News
• Reference Chu, R. Y. and Guo, S., 2006 APS
  Industrial Membership Survey Preliminary Report
  (American Physical Society, College Park MD,
  2006).

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Physics Careers in the 21st Century

• The academic/teaching career track persists but
  becomes more selective and funding becomes more
  bureaucratic.
• An industrial/business career track becomes the
  norm.
• A wide range of activities is accessible solve
  problems in physics, engineering, finance,
  biotech,..
• Career paths become much more complex Diverse
  jobs with multiple employers are likely.
• Pensions are history Retirement planning begins
  with your first job.
• Individual contributor careers become insecure
  Individuals have severe problems changing jobs
  after 50
• One success path is to become an entrepreneur
  Start your own business.
• To remain an individual contributor become a
  consultant.
• Industrial physics individual contributor careers
  become like todays industrial engineering
  careers, look to them for models.

17
Can You Compete?

• U.S. physicists now compete with the best of
  China, India and the Former Soviet Union as well
  as Europe and Latin America. These nations
  combined have many times more gifted students
  than the U. S. has students.
• Are you hungry? How does your ambition and work
  ethic compare?
• Are you connected? Can you readily acquire new
  information outside your specialty from your
  network?
• Do you share and collaborate? A diverse group
  almost always outperforms even an exceptional
  individual.
• What is your unique value proposition? Are you
  special (Warren Buffet), specialized (brain
  surgeon), anchored (local plumber) or adaptable
  (successful industrial physicist)?

18
Tips for Success in Industrial RD

• Most assignments are on cross functional teams
  Commit and deliver.
• Progress is scheduled Get results fast,
  reliably.
• Be generous Get and give help say thanks and
  share credit.
• Assignments are task oriented Continuing
  education is a necessity being connected and
  quick learning are rewarded.
• Career planning is essential Where will you be
  when you are 55?
• A total career as an individual contributor
  becomes rare
• How will your career evolve? From individual
  contributor to what? When?
• How will your finances evolve? What is your
  financial plan for the latter stages of your
  career? retirement?

19
Synopsis

• Firms are utilizing the new global
  communication/collaboration platform to do RD
  globally, at lower cost, higher productivity and
  speed.
• Industrial research is forever changed it is
  focused on business performance, globally
  dispersed, and expanding where the talent is
  increasingly in Asia-Pacific.
• U.S. firms, scientists and technologists now
  compete frontally with the best in the world.
  Physics and U.S. physicists have lost their
  center-stage standing of the Cold War era.
  Fortunes and careers will be different in the
  21st century.
• Because of budget constraints, globally available
  technical manpower and the trend from devices to
  systems, the support for basic research in
  physics in the U.S. has been stagnant. One
  consequence is that most new physics Ph.Ds must
  find employment in industry.
• Industrial RD careers become fragmented, and
  retirement benefits are disappearing. Career and
  financial planning become essential.
• Todays industrial physicists solve problems and
  create products. They do not create knowledge
  like their academic brethren. They do not have
  job security. They have different values and work
  in different environments. Be prepared.

20
Back to the Top

• The rise of a global economy based on a global
  internet communication infrastructure has
  transformed fundamentally both the nature of
  industrial RD and the careers of industrial
  physicists.
• Economic value is created via structured product
  or service design and delivery processes that
  link RD with customers, are global in scope, and
  are focused on rapid delivery.
• The future for industrial physics is that it
  occupies an ever smaller part of the total value
  chain and becomes global in scope.
• The future for industrial physicists is that
  competition for individual contributor jobs
  intensifies while the security and remuneration
  of these jobs stagnates or declines.
• The basic consequence for individual industrial
  physicists is that responsibility for your career
  has devolved from your employer(s) to yourself.
  Be prepared to increase the value that you
  deliver throughout your career and to plan
  carefully for your financial future.