So, last week I was having a discussion with a potential new client. The firm liked our expertise in taxation and finance, as well as management, but…

They were very worried that we were too technical. Every one of us has a strong background in engineering, among other disciplines. (Of course, chemical engineering is a cross between engineering and science, but this client was – in their minds- a non-technical entity.)

Except, it turns out that when companies populate their staff with engineers and scientists (techies), they get tremendous benefits. We techies are far more productive that those without the training we’ve received. But, even if we are not in R&D (research and development, which means innovation studies), we still provide vast benefits to businesses. (That’s probably a good thing, since most techies have a higher salary scale than non-techies.)

You don’t have to take my word for it. (You don’t?!?!?!) There’s a new research paper, authored by Drs. E Barth (Institute for Social Research, Oslo) , JC Davis with AJ Wang and RB Freeman (Harvard), that has the data to prove the point. These folks’ paper, The Effects of Scientists and Engineers on Productivity and Earnings at the Establishment Where They Work, is published by NBER (paper 23484).

The research was conceived because it was obvious why scientists and engineers should populate entities that rely on heavy R&D, or for those that developed new products. But, it was far from clear if there would be any benefit for more conventional firms should they employ techies.

It shouldn’t be surprising that manufacturing facilities would demonstrate gains. But, it only took 10 techies among 100 employees to demonstrate a 4.4% gain in productivity compared to those that lacked that number of  scientists and engineers among the staff.

The research demonstrates that the effects also apply to new systems in accounting, HR, or production, among other areas.  All of these gain by the skills afforded by those with technical backgrounds. For example, if the air transfer in a facility needs to be improved; those engineers and scientists could clearly handle the issues.

The authors employed data from manufacturing plants in operation between 1992 and 2007. And, the authors noted that most engineers and scientists are NOT employed in corporate laboratories or are devoted to new product/process design efforts. But, they chose manufacturing facilities because the definition of productivity in such facilities is a conventional measure, and manufacturing is a lead sector in the American economy. And, while manufacturing employs 10% of American workers- 20% of the engineer and scientist census is employed by manufacturing firms. (Manufacturers also employ 60% of engineers and scientists devoted to R&D.)

So, there you have it. Our technical backgrounds, coupled with our tax, finance, and management expertise provides the best of all possible worlds.

I’ll let you know when we get retained by this firm.

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