Low Interest Student Loans – Is that enough?


Recently I wrote to Senator Elizabeth Warren, thanking her for her efforts to keep the student loan interest rates as low as possible. It is a very important effort and we hope the senator will succeed.

But, I need to call to attention to an equally if not more serious issue (i.e.) the kids who borrow money and go to college, do not have enough jobs when they get off school. This is not just a matter of bad economy. It is a serious evolution happening world wide. We call this as the Binary Economy as outlined in my recent book. Please see the materials attached.
THRIVING IN THE 21ST CENTURY ECONOMY.FA_Subbu&Srini_Foreward plu Intro.

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What we need are initiatives to create new STEM jobs and in large numbers. While this happens, the students should be smart to create their own jobs as outlined in our book, through Transformational Skills.

Industry will create such STEM jobs only when they need them and they can create most of what they need outside of USA (at lower cost). What we need are initiatives to create new STEM jobs, inside the USA, simply because they are needed to employ all our kids who graduate from colleges. We need Wind, Solar and PV and other jobs not because they will be economical some day – which is for the industry to start out – but simply because we need STEM educated kids to go to a job, have decent living and and pay off their student loans. Same goes for oil and natural gas jobs, High Speed Trains, Improved Infrastructure, Space Exploration, Medical Research, etc.

Government can not and should not choose the side among companies or industries. But, Government MUST choose side with educated kids and their long term living standards, since they are the future of the nation.

So, while the senators and congress fight for keeping the loan interest at low level, they are also required to fight for STEM jobs, so that the educated kids pay off the very same loans. Otherwise it is better to let them not borrow so much money, since they will only find low wage jobs with which they will be burdened with their loans for their life time.

Please don’t get me wrong. I want low interest student loans for education. But, we will be doing disservice to these kids showing them a rosy path, if we don’t create the necessary jobs available at the end of the tunnel.

Until that day comes, it will be smarter for the students to learn the Transformational Skills and for the parents help them with such education, to chart their own path for jobs and careers and avoid the pitfall of large student loans for an education that does not and will not get them decent jobs.

What do you need to create good jobs? The answer is not “more of the same” education

Different educationIn a recent article, with the by-line, “What happens when good jobs disappear? It’s a question that has been asked for centuries”, Dr. Paul Krugman states, “Today, a much darker picture of the effects of technology on the labor is emerging. In this picture, highly educated workers are as likely as less educated workers to find themselves displaced and devalued, and pushing for more education may create as many problems as it solves”.  “Sympathy for Luddites”, Paul Krugman, The Global Edition of New York Times, Page 9, Saturday-Sunday, June 15-16, 2013,

In this description Dr. Krugman uses the commonly used version of “technology” (i.e) Digital Technology. The real world of technology is far larger than mere limitations and constraints of DT. The industrial society has to come to the realization that Technology in its broader context is an integration of Science, Engineering and Management of any phenomena of nature. This broader view of technology opens limitless possibilities for the educated work force. Absent such Transformation in their learning and thought process the broader range of educated work force – and their educators  and the society at large – will not be served well by the constant evolutions in DT. This is not to suggest that DT is a detriment. Instead it has to be used wisely and prudently with technology pertaining to other fields to create a stream of new solutions.

We agree with Dr. Krugman in that the opportunities even for the highly educated is limited to a narrow set of jobs, where knowledge is integrated from everywhere across the globe (using DT as an enabler for such integration) and hence create a constant stream of “New” solutions. There will also be a large range of low wage jobs, where the skills of educated work force is not much needed, thanks to standardization and de-skilling of the work and as a result automation and outsourcing of the jobs. Most others – in the middle – will find uncertainty and loss of economic competitiveness as the norm, which we have come to accept as the crisis of the middle class. For details on this emerging Binary Economy and the Transformational Skills to cope with that please see:

New book authored by Dr. Subramanian and Prof. Rangan has been published by ASME Press.

Thriving in the 21st Century Economy:
Transformational Skills for Technical Professionals

Dr. K. Subramanian and Prof. U. Srinivasa Rangan

Subbu Book 2Thriving in the 21st Century Economy: Transformational Skills for Technical Professionals, co-authored by Dr K. Subramanian, President, STIMS Institute Inc., USA and Professor U. Srinivasa Rangan, Luksic Chair Professor of Global Studies, at Babson College has been published by the ASME Press. Copies of this book can be accessed at any of the following links:

Below is the link for the image of the cover of the book along with reviewer’s comments:


The following is a short summary of the book:
Technical professionals, represented by the short hand STEM (Science, Technology, Engineering, and Mathematics), face a crisis, especially in the United States. Fewer American students are interested in pursuing these disciplines in college. Even many professionals currently working in these areas discourage their children from following them into their profession, since they see few attractive and financially rewarding jobs and careers when compared to the IT or financial sector. As research budgets shrink in the public and private sectors, many professionals feel that their contributions are not valued. Some blame the outsourcing fad for this and some others believe that foreign professionals are taking their jobs. Amidst all this, senior managers in major industrial and technology firms expect technical professionals to manage their own careers rather than help the professionals to develop their abilities for such career management.
Drs. Subbu Subramanian and Srinivasa Rangan address these concerns through three critical and related questions:
1. What is the nature of the challenge facing STEM professionals in the twenty-first century global economy?
2. What are the reasons for it?
3. How should STEM professionals manage their careers in the future if they want to lead a professionally fulfilling and productive life?

At the outset, Subramanian and Rangan assert that, since the 1980s, the workplace in most industrial companies has been undergoing a rapid transformation largely due to two factors: globalization and business model revolution. Globalization is described as the outcome of Global Capitalism combined with evolutions in Digital Technology. The business model revolution is seen as the result of disaggregation of the value chain and its disbursement across the world. These new business models require a new type of professional skillset. The result of these two trends are pushing more firms to rely on a small cadre of high quality professionals to be problem solvers or solution providers and a much larger group of professionals (even with lower levels of technical skills as required), to be replicators of those solutions across the globe. As more firms across the world adopt this new model of workforce deployment, a binary labor force is emerging. The first part, consisting of leading technology professionals, specializes in creating and implementing new solutions. This is enhanced through the use of DT solutions, which aggregates information from across the globe. The other part of the labor force, required for lower skilled jobs, is finding their functions further de-skilled and de-localized because of DT driven automation and off-shoring. There appears to be no middle ground, which in the past employed a large number of technical professionals. All STEM professionals now face the challenge of adapting to this binary economy that is becoming the hallmark of the twenty-first century.

STEM professionals are experiencing angst because of their transition to new roles in this binary economy. Many who have invested years getting trained at advanced levels and acquiring specialized skills suddenly feel unable to create new solutions that are considered valuable.
Subramanian and Rangan argue that STEM professionals need to become exceptional and relentless solution providers. They must be able to identify new opportunities, convert such opportunities into complete and integrated solutions, and maximize the benefits from these solutions. These skills are not purely technical or managerial. Instead they are a combination of skills pertaining to Science, Engineering and Management. These Transformational Skills are:

• Identify a problem or opportunity and frame it as a “need”:
• Develop a Common Language
• Three Dimensional view of Core Capabilities and their deployment:
— As an individual
— As part or member of a team
— As part of the company or enterprise
— As part of the industry/community
• Develop the need into a “Solution”:
• Integrate Knowledge from all available sources (across the globe)
• Place emphasis on “Science”; Relentlessly use Portable Diagnostic Tools and methods, Analysis
techniques and Analytics
• “System Thinking”: Focus on the big picture and not merely on the pixels;
• Deploy the Science/Engineering/Management pertinent to the “solution” simultaneously (The
System Approach); Emphasize on mobile/portable diagnostic tools.
• Synthesize: Connect the dots leading to the “Solution”; Emphasis on Core Technology driven
• Exploit the “Solution” and maximize the benefits:
• Focus on “End to End Innovation” = Idea X Use X Impact
Measure innovation in a scale of 1 to 125 (= 5X5X5 and not 1 to 5 scale in isolated silos). “Branding” as an outcome of End to End innovation
• “Emotional Intelligence”:
Find ways to be useful to others, which in turn benefits you.
Co-create value; I open the door for you, and you let me in as well.
Focus on end user (Customer) benefits as the primary goal and driver for innovation and entrepreneurships.

The authors then describe the roles of individual professionals, organizations, management, the Government and the educators. Each player is called upon to understand these Transformational Skills and integrate them into education as part of a Life Long Learning strategy. The authors conclude that this education is the only reliable pathway enabling technical professionals to thrive in the 21st Century economy.

System Approach for Engineers – a new course developed and being offered at Thyagaraja College of Engineering in Collaboration with TVS Co., India.

Madurai Temple 2                      How do you promote system thinking and why is it necessary?

This subject was discussed in depth recently by Dr. K. (Subbu) Subramanian, President, STIMS Institute, with a large manufacturing company and a well renowned College of Engineering in India recently. As a result it was concluded that while system engineering and the structures and techniques related to that are well established, System Thinking is not a natural part of working for practicing engineers. It was noted that, while there is a lot of discussion on Cross functional teams and concurrent engineering, there is little in terms of education and practice that promotes concurrency in thought process that brings together the Science, Engineering and Management disciplines pertaining to any problem or solution. While we see every medical professional with a Stethoscope, thermometer and blood pressure monitor, practicing engineers rarely resort to active diagnostic tools to obtain the “Vital signs” of the process or solution they deal with. There is also a tendency to execute whatever they are asked to do or assigned, rather than constantly ask the question “Why?”
With out a system thinking outlook, engineers tend to work in silos and stick to their cubicles. Knowledge, which is available from many sources – suppliers, inside the company, customers, … – is rarely integrated in a deliberate fashion, since there is no framework readily available for such frame work. While tools like Fishbone diagram look at the Cause and the effect, they rarely focus on the “phenomena” or the science that links the cause and the effect. The effect itself is seen only in technical terms (what is the solution) and rarely in terms of the “Why?” or benefits to stake holders and the order of priority.
To address the above needs, a new course is being developed to be offered as an optional course for the 7th semester students. While the initial plan was targeted the ME and EE students, the college has decided to offer this course for all majors. The expected outcome of this course are:

  • Definition of any solution as the System: Input/Transformation/Output Scheme
  • Distinction between:

—    System Thinking (which underlies the) System Engineering
—   Task Orientation Vs. Solution orientation (System Thinking)
—   Technical Output Vs. System Output

  • The four components of the Inputs categories of any system or solution
  • Definition and distinction between Science, Engineering and Management
  • The role of each of the above three pathways for critical thinking
  • Transformation — What does it mean?
  • How to identify the “transformation” behind any solution?
  • Ability to frame any assignment, job or problem as the system and its parts
  • Ability to recognize the need for diagnostic tools and their use to probe the “Transformation”
  • Principles of the System Approach (Captured in the books referenced below)
  • Comfort level to know who the stake holders are (who are also the sources for inputs)?
  • Ability to seek them out for help and collaboration from both inside as well as outside the company.



    1. Thriving in the 21st Century: Transformational Skills for Technical Professionals”, K. (Subbu) Subramanian, Srinivas U. Rangan, ASME Press, 2013, ISBN: 978-0-7918-6016-8


Manufacturing in India – View Points

Managing growth EM Magazine 04 13

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The trade magazine on Efficient Manufacturing
Questions for Editorial Advisory Board comments
A view from abroad:
Changes in Indian Economy is often described as analogous to the movement of the elephant – slow, steady and often aimless!The slow and steady nature of the changes in Indian economy is often seen as a welcome and reliable opportunity, compared to the rapid and volatile changes elsewhere. However the aimless nature of the economic changes in India, often mask the gradual and sustained growth of the middle class in India and their growing consuming power. It is this internal capacity for consumption by the middle class that bodes well for the long term sustained growth of the Indian economy and in turn its manufacturing base.
It is doubtful if the manufacturers who are committed to this domestic consumption alone, can ever compete in the global market. There is a term used such as “best in class for India”, which suggests a lower level of quality, precision, reliability acceptable to the Indian market and its internal customers. “Good is good enough and best in class is for the imported items” mindset has to change, for the Indian manufacturers to compete in the global market place. While the US manufacturing is showing signs of improvement, there is a depleted manufacturing base thanks to relentless outsourcing and off shoring for the past three decades. This has created a void for precsion components, accessories, tooling and machine tools for many critical manufactured goods. While small and medium manufacturers in US will strive hard to regain this void, there could be an unique set of opportunities for Indian manufacturers with world class quality in their veins.
Dr. K. (Subbu) Subramanian
President, STIMS Institute Inc., USA.
(A Knowledge Integration Company).

The context
US manufacturing output has bounced back in February 2013, the latest signal of strength in an economy that is showing clear momentum after a near-stall at the end of last year. Industrial production grew 0.7 percent last month, as per the Federal Reserve. Economists expected industrial output to rise 0.4 percent. However, manufacturing output rose 0.8 percent during the month, snapping back from a decline in January.
Similarly, showing green shoots of recovery, Indian industrial production inched up 2.4 per cent in January mainly due to perk up in manufacturing output and enhanced power generation.The factory output, as measured by the Index of Industrial Production (IIP) had grown by 1 per cent in January 2012.
With these clear signs of recovery in the US & Indian manufacturing output, do you see India’s manufacturing furthering on a positive note in 2013-14?
Please reason your expectations & recommendations in about 200 – 250 words.