KCBS Radio reported this morning that Sunnyvale, CA has successfully reinvented itself over the years- from agriculture to engineering and semiconductors to (the new) high tech. What exactly is that? Yahoo and other web software companies were cited as examples of “high tech.”
What I found so strange about this KCBS comment, was that engineering and seminconductors were no longer considered as “high tech.” Yet, there is justification for that notion.
Venture capitalists are NOT investing in semiconductor start-ups (save for a few mixed signal companies), because they claim the risk to reward ratio is unfavorable. The VCs are concerned about the high captial costs (mostly design tools, engineering workstations, etc) to get a semiconductor start-up going. And the payoff, in terms of market share, revenues and profits, is highly uncertain.
This same argument is made to justify avoiding almost all IT hardware companies- computing, storage, enterprise network, wireless network infrastructure, wireline (mostly fiber optic based) telecom equipment, etc. Instead, the VCs see a major opportunity in web software companies. That includes social networking, e-commerce, location based advertising, mobile payments, on line gaming, and cloud computing (for both enterprise and consumers).
This author has lived in Santa Clara, CA for over 41 years and has NEVER seen such an extended period where all forms of IT hardware were out of favor. While the balance of tech work has steadily shifted from hardware to software, it never resulted in a “hardware wipeout” as has been the case for the last few years. This is especially true in telecommunications and networking technology where only the largest revenue companies – Ericsson, Alcatel-Lucent, Huawei, Cisco – are big enough to fund research projects and pursue innovative new things. The second and third tier communications companies have become almost invisible or have disappeared completely.
Is a college education needed to be successful in the new world of high tech? Apparently not! The Financial Times (FT) reports that there is an increase in the number of students dropping out of US universities to follow their dreams and launch start-up companies in Silicon Valley. “Professors at MIT, Stanford and the University of California at Berkeley, three universities with a strong tradition as IT powerhouses, confirm an uptick in entrepreneurial dropouts as students seek to emulate the examples of famously successful non-graduates such as Bill Gates at Microsoft, Steve Jobs at Apple and Mark Zuckerberg at Facebook,” according to the FT.
About a dozen college dropouts interviewed by the Financial Times said that they knew others who had made a similar choice. All confirmed investor willingness to fund them. “They want to see that you believe your story enough to risk everything for it,” said Julia Hu, who left MIT when she got funding to build her sleeping device company, Lark. “They don’t like to fund non-committed entrepreneurs. In that sense, it’s in their interest not to deter you when you say you are dropping out of school.”
Harj Taggar, a partner with Y Combinator, an incubator founded in 2005 that funds young entrepreneurs, said applications from students were rising. He noted that there was strong interest from angel investors who were “willing to fund these 18 and 19-year-old kids.”
With the total collapse of the communications eco-system, many talented and experienced EEs find they are no longer needed. Once out of work, they have had a very difficult time finding a new job. Many have had to change careers due to prolonged unemployment after being laid off. Others (like this author) were forced into early retirement when technical consulting jobs dried up. IEEE ComSocSCV had to cancel this year’s social event, because very few of our members could afford the $35 price of the dinner (which included wine and beer).
So if communications engineering skills are no longer needed today, what’s the role of IEEE ComSoc? Should it re-invent itself to better cater to the current web software fad (or mania)? That is, focus on middleware or the higher layers of the communication protocol stack, which are implemented in software? Or is that really Computer Science, which is within the scope of IEEE Computer Society and NOT IEEE ComSoc? We submit that most, if not all of the hot “high tech” areas today are based on web (plaftorm or applications) software, which is not the purview of IEEE ComSoc.
Network infrastructure has become almost a dirty word, since it is eschewed by VCs and neglected by end users. For example, it seems that almost no one cares about the network infrastructure, UNI and NNI’s for cloud computing. It is just assumed to be there (which in many cases is an invalid asumption, especially if the public Internet is used for Cloud access and service delivery).
Yet the (wireless and wireline) communications infrastructure MUST be in place for cloud computing, mobile apps, social networking and e-commerce to function. It must also grow with network traffic which is predicted to continue it’s steep upward trajectory. How will that network infrastructure evolve if only a few (large) companies are involved in progressing it?
Should ComSoc play some role in trying to re-create a communications eco-system focused on network infrastructure? If not, what should ComSoc’s role be in this new environment that places no value on EE or math/science education or hardware design skill/ experience?
Note: This author is working with Steve Weinstein (and hopefully other members of the ComSoc Strategic Planning committee) on a Strategic Plan for IEEE ComSoc. We welcome your inputs, but please recognize that IEEE USA is responsible for lobbying to create or maintain jobs.