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    Economic Considerations Regarding the Future of the Architecture Profession

    Lian Chikako Chang Jul 24 '12 3

    Hi Archinect,

    Here's the excellent slide deck from a presentation by Kermit Baker, Chief Economist at the American Institute of Architects, in a "collateral discussion" (whatever that is) held on March 4, 2012 (as posted online at aia.org). The main theme, as I see it: baby boomers holding on to jobs that young people desperately need to gain a foothold in the profession is bad, and you should feel bad about yourselves. I don't think Baker is blaming the baby boomers for the demographics they were born into, but this message did resonate with what I've seen among my younger peers in recent years.

    As I look forward to graduating in May 2013, I'd be lying if I said I wasn't concerned about my immediate and long-term job prospects. It's been a tough few years for young architecture grads in the USA. Seeing the adventures of friends and fellow students as they start their own ventures, dive into competitions, and cultivate their own brands and side projects, I've felt inspired but also daunted. I'm reminded of a column by David Brooks at NYT.com from late April, in which he approvingly cited PayPal founder Peter Thiel's ideas about how to find success:

    "Instead of being slightly better than everybody else in a crowded and established field, it’s often more valuable to create a new market and totally dominate it. The profit margins are much bigger, and the value to society is often bigger, too."

    What do you think of Baker's analysis of the economic climate for architects? Does it reflect your own situation over the past few years? And second, do you think Thiel's bootstrap theory is sturdy enough to lift us all?

    Thanks for reading!

    Lian

     

     

     

     
    • 3 Comments

    • Donna SinkDonna Sink
      Jul 24, 12 8:44 pm

      I can't cite any data on this, but I suspect most architects in the last 50 years have worked well into retirement age, as we 1. love what we do and 2. become really good at it only later in our careers.

      I don't know where to find it, but I wonder how architecture school graduates as a percentage of population have shifted since the boomers entered the field?  There was a thread asking this question awhile back, which is here, and it included this quote from quizzical: I haven't updated my data in some years, but my earlier research also indicated that the population of both Architects and architectural employment has grown considerably faster than the general population since the 1960s - thus suggesting that the share of new construction spending per architect has declined significantly over this same period of time.

      toasteroven
      Jul 25, 12 10:28 am

      "Instead of being slightly better than everybody else in a crowded and established field, it’s often more valuable to create a new market and totally dominate it. The profit margins are much bigger, and the value to society is often bigger, too."

       

      in architecture this means doing a lot of very unglamorous projects and mostly offering the "non-design" architectural services that no one else wants to do. 

       

      design is cheap.  design will always be cheap.

      Gregory WalkerGregory Walker
      Jul 28, 12 7:18 am

      hi lian - a few of my observations (and donna's dead on about why people stay in our profession as long as they do. i mean, frank gehry didn't do his own house (the one that really launched him as "FRANK GEHRY" until he was 50. think about that.): 

       

      biggest challenge we have stateside for the next 10 years is: how much building truly NEEDS to be done. we'll still keep on with work, but it's a quantity question. i don't think we'll see anything like the early 2000's pace within that time span. it'll keep nudging up year after year, but probably won't outpace inflation. 

       

      without quantity, the issue is who will get the jobs that do remain? in some cases, the boomers are holding on. but, in many cases, they're also being cut out. case in point: one of the larger firms here, in atlanta, just laid off about 25%+ of their workforce last month. almost all of them were associate/senior associate/associate prinicipal level people, including many boomers, because they were too expensive. i've seen cuts all over the board. but, this is a different issue from there not being enough new jobs created to allow opportunities for those trying to get into the profession. 

       

      the 60k+ payroll jobs lost could be right - it may be a net number - but it doesn't reflect how many self-employed architects have had to give up or haven't had nearly enough work to enjoy a 'normal' salary. and, given that 60% of all our firms are 1 person... yeah, that's a severe understatement of the true impact being felt.

       

      i'm not sure if he's counting this way, but there have been a lot of mergers and acquisition of firms the last few years. my guess is those are showing up in his slide as 'lost firms'. (there's plenty that have gone under,  though). 

       

      his 'what do we do next' slide is cute. and way too long to answer in depth. for me personally:

      1. diversify your income streams. meaning, don't put all your eggs in the 'fee for services' basket.

      2. "we" can't offer jobs that don't exist yet. if we can expand what we do as architects (see #1), then maybe we can create new opportunities in those arenas.

      3. stability in a cyclical industry relies on diversification of income to ride out/over/through the churn (is the theme obvious yet?)

      4. baby boomer 'threat' is overblown to some degree. this is, potentially, a larger issue within the economy overall as much as it's unique to architecture...

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Lectures and exhibitions, life in the trays, happenings around Cambridge...and once in a while, some studio and course work. Please note that all live blogs are abridged and approximate. If you want to see exactly what happened, in most cases a video of the event is posted online by the event's hosts. If you have concerns about how you are quoted, please contact me via Archinect's email.

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