Engineering expansion

UK economic growth will require new products, new ideas and a new generation of trained innovators to provide them. Is industry the best source of such talents? In association with Bosch UK, MT's panel of experts debate the issue and point the way forward.

by
Last Updated: 09 Oct 2013

THE PANEL

Martin McCourt, ex-CEO of Dyson, now partner at Montagu Private Equity

Becci Taylor, associate engineer, Arup

Peter Fouquet, president, Bosch UK

Peter Emery, production director, Drax Power

Ben Taylor, assistant chief executive, Renishaw

James Woudhuysen, professor of forecasting and innovation, De Montfort University

Paul Stein, chief scientific officer, Rolls-Royce.

 

Andrew Saunders: We all know the mythology surrounding Britain's great manufacturing past and our wonderful heritage based on the virtues of engineers and their powers of innovation. And we are equally familiar with the cries from industry that UK plc needs more engineers. But since the economic crash of 2008 so eloquently demonstrated the risks of an economy too heavily reliant on a single sector, both government and society seem more ready to listen to these cries. So how can engineers regain their rightful place in the national consciousness as the key source of innovation and growth? And how can we ensure that Britain can look forward to a great engineering future to match its great engineering past?

Peter Fouquet: There has certainly been a change in the past year or two. Many people now recognise that the UK needs more manufacturing, based on technology, to grow. This can only be done with engineers and skilled people. But we are competing with the City. Firms there can afford double the salaries we can. Engineering offers up to £30,000 a year for graduates. The City pays double that for skilled, ambitious young engineers.

Martin McCourt: I accept that starting salaries for graduates with an engineering degree don't really come up to scratch compared with other professions such as the law and accountancy. But the issue is about the interest and the desire. It's whether we've got sufficient numbers of children who are interested in making things. I also think it's a mistake for us to talk about manufacturing and engineering as though they're the same thing. They have to be separated, because then we can talk about the greater importance of being created in Britain, rather than made in Britain. I'm not against rejuvenating manufacturing in Britain, but it's not too important where something's made. When Dyson used to make its products in the UK, we tipped about £5m into HM Treasury. Since we transferred manufacturing to the far east 11 years ago, the business has grown tenfold, because we are able to access benefits that weren't available to us. Now HM Treasury receives more like £55m from Dyson, and more jobs have been created in the UK.

Paul Stein: It's about exciting young people. I was at the young enterprise awards recently in Derbyshire. It was fascinating to see the energy, creativity and innovation among young people. So it's there - it just needs to be helped along. But here's where I disagree with Martin: a typical Rolls-Royce product requires a high level of manufacturing. It's very clever and very hard to do. If anyone doubts that statement, visit any of the advanced manufacturing centres we've set up in the UK. We use phenomenal bits of machinery to make stuff: growing turbine blades from single metallic crystals, for example, remains a deep company secret. We could never export that. The manufacturing technology of those high-pressure turbine blades provides our competitive advantage. We've got to pull back now and do more primary manufacturing in the UK.

Martin McCourt: We don't disagree. I'm not saying that it's not important that things are made here - it's fantastic if you can add the value of making it here. But if you can't, you shouldn't get too wound up about it. You should go to the best possible place and instead make sure you keep all your ideas here.

Andrew Saunders: Becci, you're newer to the industry than the rest of the table. How did you get into engineering?

Becci Taylor: I was sucked into it at high school, inspired by my craft, design and technology teacher. Engineering is quite a broad industry. In construction, we actually don't want lots of people who have been to university. What you need is a combination of people - contractors, people who have done apprenticeships, and so on. A team is best being diverse. That's about education, but also gender, background and everything else.

Ben Taylor: Something has to get 10 year-olds interested in taking the right kind of courses. We need to make them willing to go to university and get an engineering degree. That's where the schools aren't providing us. At Renishaw, we have trouble getting hold of kids that even want to become engineers. We have a turnover rate of about 6%. Our staff, when on board, stay. And because we export 95% of our products, an engineer will join us and a year later might go to our Hong Kong office for two years. So that can be pretty exciting. But we need to get kids excited about engineering and manufacturing. We used to have about 40 sponsored students at a time; now we have about 130 open requisitions. We're just not getting the job done.

Peter Emery: I disagree somewhat. Since I was a teenager I've heard politicians exulting in the fact we need engineers. But when people go into the industry, they often find it a struggle. When I graduated in the early 1980s, half the people on my course chose to become accountants. Those who did go into engineering were either made redundant a few years later or found more lucrative jobs elsewhere. My teenage sons ask me whether they should go for a career in engineering and I find that a tough question. I started in petrochemicals and went to a business that rewarded well and was relatively stable. But there was an awful lot of engineering in the 1980s and 1990s that wasn't well managed and highly qualified engineers went elsewhere. This country's economy is dominated by the City, media and retail. No amount of bleating from politicians will get people interested. A lot of good engineers at Drax started off as apprentices and technicians. They didn't have the opportunities at school, but they went to night school and are now brilliant engineers. I think you're going to get more graduates going into engineering when the economy starts to move. But I'm not going to advise my sons to go into engineering if the rewards elsewhere are twice as much.

Paul Stein: The heyday was fuelled by the cold war. There was a massive influx of engineers into the defence industry when I joined in the mid-1970s. All of us were given job offers as soon as we left university. Then there was a big shift towards financial services and the dotcom boom after in the 1990s. But I think things are starting to shift back and some of that is fuelled by what's going on in the far east.

Becci Taylor: It makes you happier being an engineer, though.

Peter Emery: All the engineers I know are happy being accountants or in the City. But the market will drive this - not us deciding we need more engineers. People aren't stupid. The worst thing is pushing them down an avenue and them finding it's a blind alley, which a lot of engineers in my generation did. The good thing about an engineering degree is that it can be applied to lots of different professions.

Peter Fouquet: I'm not sure I agree with engineering and unemployment. I tell my son to become an engineer because there isn't a risk of unemployment. When you finish training, you have a job. Engineering in the UK has one of the lowest rates of unemployment. Even in the crisis we looked for engineers.

Ben Taylor: The problem is, how many jobs can we create? If we can generate enough jobs, then it could be an incentive to parents to tell their kids to become engineers. We have to make sure the government co-operates so that manufacturing and engineering companies are able to develop with competition. Renishaw manufactures in Ireland for the simple reason that tax is 10%. So we put manufacturing jobs in Ireland, when they could have been here.

James Woudhuysen: Ben is right to whinge. What do we think about growth? A new generation has grown up that doesn't believe in growth in the old style, believing that further innovation in fossil fuels, for example, is not something one should look towards, and people should go hybrid or electric as fast as possible. I'm much more in favour of exports as a job creator. I see green jobs as labour-intensive, but they don't create many opportunities.

Peter Emery: Manufacturing can contribute in many ways. Exporting is one of them. I think the green agenda does generate jobs. Until about five years ago, we couldn't recruit anyone because no one thought Drax had a future. We then started to do work on biomass, so we needed to learn a lot more about combustion. We recruited three graduate mechanical engineers with combustion experience. I've got engineers who spend a lot of time driving down costs at our plant so we can sell cheap power. If we sell cheap power, then that will help cheap exports. So this isn't just about exporting - engineering plays a part. Green is a real opportunity because it does bring engineering jobs, and people can see a career path.

Peter Fouquet: Creative technology is a big opportunity for the UK. A good example is wind energy: you can create a lot of jobs through that. Two big firms have announced that they will erect a new manufacturing base in the UK, creating thousands of jobs. We need a lot of insulation and technology in houses - we have five million old boilers in homes. We need a government deal to scrap them, get efficiencies into households and save energy.

James Woudhuysen: I don't agree. Neither biomass, offshore wind nor solar panels can be the basis for a revival of the engineering skills this country needs. We are not looking at building the R&D-intensive new industries of the future. If we were serious about other ways of innovation we'd be looking at new industries. Loft insulation and home energy in Britain is not nearly ambitious enough. There's a lot of tinkering by reducing tax here and there. If we want growth, we need engineering. And we need growth to be 5% or 6%, not 1%.

Ben Taylor: The only way we grew over the past 10 years was by developing innovative products and exporting them. And as a result, we need more engineers than we're able to hire. We feel it's got to be patented technology, because we sell in other markets and they'll copy it. At Renishaw, we developed innovative products, grew the business, hired more engineers. But we didn't hire them fast enough.

Paul Stein: We should be spending more in fundamental research. There is a debate about how much the government should sponsor and whether companies should pay.

James Woudhuysen: It should be the role of the government. But the recent OECD figures suggest government expenditure on R&D has collapsed. Most government-funded facilities have closed down.

Andrew Saunders: Is that a chance for companies to step in?

Paul Stein: No. It's the government's role.

Peter Emery: There is an opportunity for companies to collaborate by working on a project with a local university. We've got several examples of that at Drax.

Paul Stein: Rolls-Royce has a network of university technology centres dotted around the world - the majority in the UK - which are part funded by us, the university and the government. But we have to do that because some of the material science we require in our products doesn't exist in any other business. We need rigorous engineering to produce remarkable products, and that will be helped by innovative SMEs and the right tax framework.

Andrew Saunders: So what can be done?

Paul Stein: We need to be supportive of the revival of the UK manufacturing industry. We also need to bind industry and universities closer together and create more fertile ground for SMEs to grow - either encouraging them to do their own thing or marinating them with larger companies. In the US, Start-up America is quite good. We need something like it here.

Peter Fouquet: Without a manufacturing base, the UK economy cannot survive. We have to work on the development of skills, through apprenticeships or projects at university.

Peter Emery: The government's got to make it attractive to invest in the UK. Car manufacturing is a good example - we're seeing that flourish. Create the opportunities and the markets. When you've got the markets, people will come into this profession. It's the agenda for growth that we're all a bit disappointed in.

Martin McCourt: We need to encourage and inspire our youngsters. Business leaders need to put together a proper, integrated plan that we can all get excited about, even if we don't all agree on everything.

Ben Taylor: The business environment needs to encourage companies to invest in both engineering and manufacturing. There needs to be a better environment so that we get some benefit from doing the investment. Also, there needs to be a bigger effort to ensure the right people are going in and out of university.

Becci Taylor: People need take a long-term view of production development. Products are what will keep us growing. But we should do this in a way that allows job and wealth creation while reducing resource consumption.

James Woudhuysen: Stop apologising for engineering having an impact on the world. Start rating the romance of risk-taking in engineering. And let's not look to the past. I don't want to hear about Brunel. I want to hear about the people of the future who are going to invent wonderful products.


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