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Electronic Systems – Challenges & Opportunities
THE INDUSTRY
How long is a piece of string?
Is it possible to determine the size of a pervasive industry?
The ESCO project believes it is. By Graham Pitcher.
E
lectronics is everywhere: it’s a
pervasive technology which either
enables almost all of the devices we
use or makes a substantial contribution to its
functionality. But because electronics is
pervasive, it’s also hard to determine the
extent of the industry – particularly in the UK.
But how far does electronics permeate
and what is its benefit to the UK economy?
That’s a challenge being addressed by one of
the ESCO workstreams. Leading the activity is
Ian Phillips, principal staff engineer with ARM.
He said the research grew out of earlier
work by the Electronics Innovation and
Growth Team and by the Electronics
Leadership Council. “In a way, it was born out
of frustrations,” he said. “Both bodies had a
traditional view of electronics and this didn’t
really reflect what was going on.”
The aim of the ESCO report is to highlight
the importance of electronics to the UK, but
without a solid grasp of the underlying
economics, its impact may well be diluted. So
how do you measure the length of the
proverbial ‘piece of string’? Phillips said: “I
thought it couldn’t be that difficult; even if it
wasn’t definitive. As long as it was a
repeatable approach and could produce
comparisons, it would serve.”
Phillips started with what he called a
‘simple model’. “If we take the UK’s total GDP
and divide by the working population, we get
a figure per head. The implicit assumption
here is the workforce ‘makes it happen’.”
After that, the process gets harder. “You
then have to determine the size and scope of
the electronic systems community. I started
using a range of databases and, from them,
began manipulating by applying SIC filters
and so on.” A further refinement came from
applying the average figures developed to
real employment numbers obtained from The
Treasury. “We ended up with something like
15,000 enterprises and 200,000 employees
contributing 3% of GDP,” he noted.
Phillips: “We need to show
the sector is important and
we are being overlooked
today because we have
failed in the past to show
that in a way the public
can understand.”
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THE INDUSTRY
While Phillips thought that was a ‘good’
figure, he knew it was based on ‘too much
guesswork’. “I didn’t claim it was the best
way,” said Phillips, “but it generated interest.”
Phillips knew from personal experience
the initial results were exclusive. “The
electronic systems community does all kind
of things; we didn’t want to get trapped by
existing labels when we think we’re
inclusive.” As an example, he cited ARM. “ARM
has, until now, been an uncomfortable fit in
the electronics industry; it delivers a
software product which enables people to
develop complex hardware.”
The other problem which Phillips faced
is that the electronic systems community
is ‘rather invisible’. “People are developing
complex products by offering their skills
into a communal ‘pond’,” he asserted. “They
are doing what they are good at for a range
of customers. That’s a surprise to some
people and they are the ones we’re trying
to address.”
Politicians are high on the list of people to
be addressed. “They need to know because
what they do relates to the incentives that
are available to encourage development. We
need to show the sector is important and we
are being overlooked today because we have
failed in the past to show that in a way the
public can understand.”
Use of ‘electronic systems’ as a descriptor
is not accidental. “We wanted a term that
prompted people to ask ‘what’s that?’. It’s a
term used in research proposals and it
seems to be bringing the industry together.”
He noted that since NMI has started using
the term, it has attracted new members, such
as Jaguar Land Rover and McLaren, who
don’t consider themselves microelectronics
companies. “Microsoft is now a member,” he
added. “Once you have the name right,
people are on the same side. If you stick with
older descriptions, people become
protective.”
Even with what he terms a ‘rich database’,
he still faced the question of where the
boundaries lie. “Traditional definitions might
be good for classification, but they create
their own boundaries. The electronics
industry has a problem with SICs and
geographies,” Phillips said. “If you rely on the
10 or so SICs that define the basic
constituency, you can get fairly good
numbers. But if you’re trying to find the
genuine engineering activity in electronic
systems, the boundaries are harder to pin
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24 July 2012
Electronic Systems – Challenges & Opportunities
rather than a solid, line. “It has to be ‘fluffy’ at
the extremes,” he said.
The process also included what Phillips
termed ‘cross cutting’. “This allows you to
include part of a business, rather
than all its activity.” Included
here are businesses
which don’t identify
themselves as
associated
primarily with
electronic
systems, but
which have a
secondary
association.
“Companies
which supply
point of sale
terminals to
banks may think
of themselves as
being in the financial
sector, but they are
supplying electronic
systems products.”
Because you can’t
‘claim’ all the people
“We wanted a term that
working for those
prompted people to ask ‘what’s
companies, it becomes
harder to apply a GDP
that?’. It seems to be bringing
model. “You can find out the
the industry together.”
number of heads working in
much.
electronic systems and add that to the
But if you
contribution,” he said.
use the FAME
He also pointed to companies like Tesco
database and enter ‘chips’ as a keyword, you
include Golden Wonder. So the search needed and British Airways. “Tesco employs more
than 100,000 people, most of whom have
to be more sophisticated.”
Again, he used ARM as an example. “It was nothing to do with electronic systems. Yet
Tesco is a leading innovator in logistics –
one of the more awkward companies to
which is electronic systems – and there’s
include and wasn’t picked up by the primary
maybe 100 people involved. Then there’s
or secondary SIC search; it only came up in a
keyword search.” Yet it would be hard to argue the IT community, whose design and
installation work is supported by work in the
against ARM’s inclusion in the electronic
electronic systems domain.”
systems community.
Add it all up, he says, and there are
How wide is the net? “Electronics,
software, mechatronics,” said Phillips. “Then ‘hundreds of thousands of people’. “Now we
have a idea of the value that companies are
we go into design and manufacturing. That
contributing.”
means metrology, robotics, those making
One of the problems, says Phillips, is that
power supplies and so on.” But how far do
you go down a product’s life cycle? “Can we previous studies have tended to focus on
‘silos’. “That doesn’t encourage a feeling of
draw a line at manufacturing?,” he
community,” he concluded. “There are a lot of
wondered. “No, because systems
companies in the UK doing similar things and
reproduction is a component. And we have
we can get value by learning from them. And
to look at maintenance, which takes a
if they can identify themselves as belonging
product to end of life.”
to a group, it enhances them.”
The community is bounded by a dotted,
down, simply because electronic systems
are more encompassing.”
He encountered one problem when he
turned to keyword searching to
enhance the SIC
results. “With
SICs, you
don’t have
to filter
too
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