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RE: License (Business)

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Timothy, and others

The world is dynamic. What ever we do, we change the environment in which we
operate. We therefore need feedback mechanisms to monitor those changes so
that we can adapt our behaviour accordingly. Like a plant, it pollutes its
environment with carbon dioxide, then before it suffocates it adapts its
behaviour and breathes in the carbon dioxide and then pollutes its
environment with oxygen. A plant can thus survive in a sealed terrarium
whilst an animal will suffocate because it cannot adapt appropriately.

Historically, when a farmer needed a barn, the village community got
together and built a barn, then got back to farming. There wasn't someone
who figured they could spend their entire lives building barns. All products
have a lifecycle: demand starts slowly, then slowly increases, then rapidly
increases, plateaus out, and then tapers off approaching zero. A supplier
needs to be in  a position of having developed a new product to bring on
line to maintain a constant plateau or growth. The clearest illustration of
this is the product lifecycles of computer memory chips: has memory has
increased in size, the sales volume has increased. Each larger memory chip
arrived just as the demand for the smaller chip dropped from the plateau.

Most products whether goods or services are some variant of a common generic
product form. Once released to the market they will transform the market,
the product will be put to use for purposes beyond the expectations of the
designers, and prove defective for many of those uses. Thus generating
demand for alternative variants of the product form. These variants are in
competition with each other, and population ecology models have been used in
attempts to model such competition.

Engineers are a product just like any other. They are an artificial creation
of the industrial system. Once something is engineered it can be made and
sold thousands of times. So clearly the demand for design engineers is low,
unless have regulations such as those for the building industry. Remove
those regulations and most engineers in the building industry would become
unemployed: they lack imagination and ingenuity. Design engineers to remain
employed have to be creative and inventive. Whilst engineers employed as
analysts and certifiers are otherwise dependent on new designs being
introduced by others.

But consider a four year degree in engineering, most irrespective of
discipline contain at least four to five major streams. Now whilst the B.Eng
may push the advanced applied mathematics side of engineering, such has very
little demand in the real world. Such studies have far greater value for
going onto further studies such as a masters and doctorate, which also have
little demand. The vast majority of design decisions can be assessed by
persons trained in one year specialist programmes. On the other hand, there
is also Louis Napoleons quote: New inventions have to remain dormant until
the common intellect raises to comprehend them.

There is little point being able to design something, if the technology is
rejected by the community. If the technology is accepted, then there is
still the problem of availability of resources: cannot weld if do not have
qualified welders. Thus it is all very well to be pushing people through
university, but a population of designers and engineers, is little value if
do not have adequate supply of skilled trades people. But those in school
are not actively pursing studies of the market place, identifying gluts and
shortages: they choose academic programmes, on the basis of interest of
perceived high wages. Further more the universities only partly adjust their
academic programmes to meet the needs of the demand for skills, mostly they
offer programmes based on the student market, and what they can supply.

Which is the other problem. The market doesn't supply to the demand of human
needs. Humans are born into an environment with limited access to resources
they therefore have to transform the relatively useless resources they have
access to, into the resources they really need to survive. Thus it is more a
demand the market buys what is supplied rather than what it needs.

Business is a real world experiment. The purpose of business is to maximise
profits, not minimise costs. The minimum cost of everything is zero: don't
do it. If you choose to do something it costs what it costs. The two ways to
increase profits are: increase sales volume, or increase price. Nothing has
a real price, and it is easier to increase price than expend effort
increasing sales. But has price increases then demand may drop off.

When Aprica introduced its baby pusher, it was apparently possible in the US
to buy a pusher for $30, so selling the Aprica for $250 was considered
crazy. Not only did it sell, but parents bought two of three of the pushers,
to make sure grandparents had one on hand. Perceived quality matters, so
buyers need to be made aware of the quality.

Sole practitioners and small business do not necessarily undercut other
fees. When big projects disappear from the market, the big business lays its
people off, they then become sole practitioners to survive. So here in
Australia we may have State and Federal awards which set minimum pay rates,
but only employing business have to comply with. Those minima keep getting
adjusted to the market, but only ever upwards, they never drop with the
market. A sole practitioner simply has to make enough to survive. Secondly
the sole practitioner when they start, don't have much scope for negotiating
fees, they have to accept what ever fee is offered. So they typically start
out on wages less than the award minima, until they have built a reasonable
client base, then they can start increasing fees to slow the demand for
their services.

So at any point in time there are new businesses and established businesses.
Established businesses may have infrastructure problems. For example in many
instances the only way to provide more efficient manufacturing facilities is
to build a new up to date factory somewhere else, then shut the original
factory down. Taking the product lifecyle into consideration, the old
factory should then be transformed into a still even more efficient factory.
Thus always need at least two production lines or factories, the old and the
incoming new methods.

If engineers are considered to originate, technologists to adapt and
technicians to apply. Then engineers are should always be pushing the
knowledge base down the line to the technicians. Thus last year an engineer
was required to find a solution to a problem, this year only need
technicians to implement that solution.

One of my economics texts indicates that early on the American medical
profession closed down training hospitals, and increased academic
requirements for the profession, creating a shortage of supply and pushing
fees up. Clearly not a case of supplying to the demand for services.
Increased access to quality health care does not require more doctors.
Doctors are just an industrial product, and they can be replaced by other
higher quality products.

Architects and engineers compete for work, depending on the complexity of
the project. Architects and builders also compete depending on the
complexity of the project.

Now historically architects were the chief builders on building projects and
civil engineers were the chief builders systems other than buildings:
canals, dams, bridges, lighthouses, railways.

Now engineers are largely consultants. With the increased emphasis on
applied mathematics, many are also now largely analysts and relatively poor
designers and poor managers. Much of the number crunching can now however be
carried out by computer. So the traditional engineer/builder may have gone
and seen a mathematician to assist with assessing some new structure, before
building it. Increased training of engineers however, meant the engineer
could analyse the system themselves. But increased bias towards analysis,
means few engineers can actually build what they have designed. Worst than
that, increasingly much of what they design cannot be built.

It is potentially an unwarranted and inefficient division of labour, to have
builders and designers. Computers allow calculations to be done quickly. But
the question is whether the computers are used by the modern builders or the
modern engineers. The modern engineers contend that they should be running
the programs, not the builders. But no doubts the computer software is going
to improve to the extent that builders can use the software. For the builder
can either rely on the consulting mathematician or conduct the calculations
themselves. Mathematics is however a model of reality, and the traditional
engineers, may have sought assistance from mathematicians, but they
otherwise did experiments to confirm for themselves, that the predictions of
the mathematical models were reliable. The traditional civil engineers had
access to the building materials and labour necessary to build and test
prototypes. A consultant typically has access to zero physical resources: no
research laboratory, no workshop. No means of validating empirical theory in
house. Also limited opportunity to generate fees to finance experimental
research. Coulomb had the resources of the army. Telford was in control of
the projects.

Engineering businesses need to integrate horizontally and vertically.
Vertically integrate with clients and suppliers: for example to capture the
work which would otherwise go to builders and architects. Increasingly
clients look for a one-stop shop. Buyers also look for products rather than
drawings. Thus they look to buy a shed from a shed manufacturer, the
manufacturer may or may not employ engineers: here most don't. The buyer
thus enters into a kind of design and construct contract: not formal or
intended. The quality of service should thus improve if these businesses
were owned and operated by engineers rather than: trades people and
accountants. And why is it that trades people can afford to build factories
and but expensive machinery, but engineers cannot? Given salaries of the
employee engineers are typically higher than trade employees. Design it once
make it thousands of times. Control the production.

As for horizontal integration: enter those markets with substitute products.
Caravans, motor homes and boats can substitute for houses. Each product has
its advantages and disadvantages. Motor homes allow owners to move and
retain familiar home, whilst rented accommodation can vary significantly.
Young people with low wages entering the market for a home, need low cost
accommodation, and low risk. A motor home they can pay for in a short time
frame, a building would take much longer, and therefore a building requires
a more secure long term job. Birth, nurturing and growth need to be taken
into consideration, the whole place is not mature and established. The
available types of housing has to be varied. Cannot allow a city to develop
to the extent that it becomes incapable of providing for the next
generation. If that happens the city grows old and dies. A city can be
likened to a higher form of life, as can a business. The human resources are
like blood cells, they are constantly refreshed, and also potentially
individually insignificant and expendable. Both the individual and the
collective have an important part to play. Hence shareholders and companies.

It is not competition that we should be protecting, but diversity of product
forms. And as I have said engineers have but just one of those product
forms. No do you really want to be an engineer, or do what is necessary for

A rose by any other name would still be a rose, or smell as sweet. Doctor,
lawyer, accountant, architect and engineer are simply trite titles. Protect
them if you want. But if the title is protected and the holders are to
survive then what they do has to change.

We all operate in a market based economy. It has nothing do with capitalist
and communist ideologies. There is a market demand for capitalist ideology
and also for communist. Both ideologies are flawed, what ever they happen to
be. For the ideologies themselves are not clearly defined, and their
interpretation is as varied as there are people on the planet. Things have
to be named somehow, and consequently language adapts and evolves, and words
change meaning. Thus democracy and republic also have varied and diverse
range of meanings. Descriptive terms maybe added such as social democracy,
then it gets abbreviated to either: socialism or democracy. Such ideas are
complex, and have to revert to individual authors and their views to fully
identify an idea. But even if identify say Karl Marx, still going to get a
diverse range of views of what he meant, or what followers would want him to
have meant. As I say release a product into the environment and it changes
the environment.

An engineers license may protect the public. But there are a multitude of
other ways to protect the public. The license also restricts trade and
creates a product from a person, and potentially creates a redundant

Clearly the licensing system seems directed towards pushing numbers through
codes of practice, and assessing code compliant product. Such activity
however is not really engineering. Engineering requires ingenuity. But the
introduction of the license and the protection of the title, has changed the
nature of engineering and what it means to be an engineer. If I want
something to be code compliant seek an engineer.

If want to solve a real world problem, rather than implement text book
standard solutions, then who do we seek, for it clearly is not the services
of the modern licensed engineer? For they are largely not problem solvers
but code crunchers. Sure some are real problem solvers, and it is their
status and prestige that the code crunchers desire. But such status doesn't
come from passing exam's or joining an elite group, or by association: it
comes from actually solving the real world problems and being seen to be the
one responsible for such solution.

Forget about the title engineer: you have a name. Design is about finding
solutions which satisfy human needs. Business is about selling those
solutions. Be proactive in seeking out problems and solutions to those
problems. Promote those solutions through business activities.

When business concentrates on profits rather than satisfying human needs.
Then there is a shortage in supply, and unsatisfied human needs, and thus
market for other suppliers. Those other suppliers can enter the market
providing product at what ever price they choose relative to their costs of
production. The new suppliers may have vastly more efficient production
systems, or a product which is simply easier and more efficient to make than
other variants. (eg. Technicians take less time to train than engineers and
could do some 80% of the work.) The new players in the market can thus
supply at significantly lower prices. Compare Japanese quality assurance,
versus western quality control: costs less to get it right first time than
it does to filter defects out. Big engineering consultancies often lay off
their older staff: these people have more experience and a better chance of
getting it right first time. When they become sole practitioners they are
more efficient in many ways than the larger established businesses. They do
not have to undercut prices. Big business needs to look internally to the
efficiency of its systems. Large private bureaucracies are just as
inefficient as government bureaucracies. So no efficiency results from
privatisation if hand over to similar organisation.

But then also need to consider synergy: the whole is different than the sum
of its parts: either more or less. Optimising a part of system can result in
the whole becoming extremely inefficient. Optimise the whole and the parts
may suffer. A company can exist beyond the lifespan of its members, a sole
practitioner cannot. But a company can change its nature, and so may not
always provide expected quality of service. Sustaining the product which is
the business is no easy task.

Business is an experiment, life is an experiment. You hypothesise, test,
observe and measure, and adapt accordingly. If you adapt correctly then you
will survive, if not then you will perish.

Forget about trite titles, and improving the status of the collective of
engineers. Concentrate on doing the job properly what ever it may present,
building your reputation for quality and reliability: then your status and
value will grow. If clients want an engineer, then anyone with the title
will do: you want the clients to want you by name. If you belong to a
profession, then your status will rub off on that profession, bad and good.
You don't want profession getting undue prestige, clients may then think
anyone in profession will do. Anyone with the license will do, and lowest
cost is good.

You have to get the clients/market to want you and pay what ever fee you can
command. And licenses are just another product in the market which can be
made redundant and displaced. Little is static.

So go play and experiment.

Conrad Harrison
B.Tech (mfg & mech), MIIE, gradTIEAust
South Australia

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