Memorandum 27
Submission from the Engineering and Machinery
Alliance (EAMA)
SUMMARY (NUMBERED
TO SECTIONS)
1.1 Manufacturing's added value offers potential
to raise the living standards of those that service jobs may not
reach.
1.2 The terms engineer and engineering are
used to cover too many different meanings. We need a new, broadly
shared vocabulary, so that we can talk about these problems precisely.
Unless we can define the problems precisely we can't will the
means to resolve them.
2.1 Innovation is about new value.
2.2 Engineering lies at the heart of this
endeavour.
3.1 UK intermediate skill levels are well
below the best performers. But is that what we mean by engineers?
4.1 As companies simplify their activities
to concentrate on core competences, SMEs are increasingly responsible
for technological development or innovation in an information-overloaded
business environment.
4.2 Under such circumstances it is not clear
where or how the market will provide the "bite sized"
information packages that SMEs can absorb to inform their future
activities and R&D.
5.1 From an SME perspective, far too many
young people are leaving school without the basics.
5.2 Some work in a Danish engineering college
shows that: growth in knowledge based jobs doesn't necessarily
lead to an increase in value added; exposing undergraduates to
real life work environment raises their respect for practical
skills.
INTRODUCING EAMA
1. The Engineering and Machinery Alliance
represents 1,300 mechanical engineering firms in nine subsectors
represented by the following organisations:
- British Automation and Robot Association
- British Paper Machinery Suppliers Association
- British Plastics Federation
- British Turned Part Manufacturers Association
- Confederation of British Metalforming
- Gauge and Toolmakers Association
- Manufacturing Technologies Association
- Printing, Papermaking and Converting Suppliers
Association
- Processing and Packaging Machinery Association
2. Together they represent mostly SME firms
with a total turnover of some £7 billion split pretty evenly
between finished capital goods and components for capital goods.
3. UK mechanical engineering sector turnover
in 2006 was some £37 billion, 76% of it from exports-we are
one of the few UK manufacturing sectors to regularly run a positive
trade balance. Our customers are in other manufacturing sectors,
automotive, aerospace, medical, food and materials handling and
processing for example.
|
| Sales £ billion
| Exports £ billion
| Trade balance | Exports % sales
| GVA £ billion |
No. of firms |
|
| 37 | 28
| +5.6 | 76
| 13.1 | 13,007
|
|
| Sources: Annual Business Inquiry (16 November 2007, reporting 2006 data).
|
| Export data from Monthly Review UK External Trade (November 2007).
|
4. The sector is high value added to unit of energy consumed.
For example, work undertaken by ILEX for the DTI (gas use to gross
value added), shows mechanical engineering has high value added
to energy (gas) consumption. So it is the sort of industry that
the UK should be encouraging in this increasingly carbon constrained
world.
|
| Gas use/GVA (mcm/£)
|
|
| Construction | 0.01
|
| Mechanical engineering | 0.09
|
| Vehicles | 0.10
|
| Paper, printing | 0.19
|
| Food, beverages | 0.21
|
| Mineral products | 0.34
|
| Chemicals | 0.50
|
| Iron and steel | 0.89
|
| Non ferrous metals | 1.25
|
|
1. THE ROLE
OF ENGINEERS
AND ENGINEERING
IN UK SOCIETY
1. If the UK economy is to provide rewarding jobs that
enable everyone to improve their standard of living then that
means tackling the task for all people at all levels of aptitude.
Both the manufacturing and service sectors have vital roles to
play, because they require different skill sets of the people
who work in them.
2. One of the clearest points of differentiation between
the two sectors is that manufacturing is capital intensive, that
value is added through a physical transformation process involving
some sort of machinery. This process may well have been conceived
in the first place by a highly qualified engineer. Running the
process may well require specialist skills, but in all probability
at a lower level than those of the original engineer.
3. Adding value in this way offers an excellent foundation
for employment in a job that does not necessarily require university
levels passes, although it may well require good judgment, solid
maths and a keen ability to see concepts on a paper in three dimensions.
4. The challenge for government and society as a whole
is to recognise this diverse and oft-overlooked societal potential
that's embedded in manufacturing alongside the economic benefits.
5. We need policies that will lock it in for the UK,
rather than let it move offshore to the benefit of citizens in
other countries.
6. To do this we need to be much more precise about
what we mean by "engineer" and "engineering",
even perhaps as the terms are used in these questions. Are they
intended to cover a multitude of different things? They have surely
been weakened through over-use.
7. As the director of one of our member association writes:
"In Germany an engineer is a revered person. He can
only be called an engineer providing he/she is suitably university
qualified.
"In England we have many levels of engineer ranging
from the university graduate to the Corgi gas fitter! We seem
ashamed to refer to trades people and must disguise their trade
with the term engineer. Sadly as a nation we have far too few
qualified trades people whether it be in manufacturing or building
trades. It seems unless you have been to university and have a
degree you are deemed to be a failure, which of course is absolute
nonsense.
"Sophisticated manufacturing technology producers probably
need well qualified engineers, even chartered engineers. On the
other hand, turned parts manufacturers need well qualified craftsmen.
People who are good with "their hands" and able to picture
the end result before they start. They are people who require
more "hands on" training than in the classroom/lecture
theatre type training.
"Too often they are looked down on but in reality they
should also be prized for their `practical abilities' in a multitude
of disciplines covering: tooling and its geometry, computer programming,
speeds and feeds for machining various materials, as well as the
ability to improvise."
2. THE ROLE
OF ENGINEERING
AND ENGINEERS
IN THE
UK'S INNOVATION
DRIVE
1. Innovation is about creating new value. It depends
on technology, talent and a tolerance of failure.
2. Engineering lies at the heart of many of the solutions
that are needed to treat "today's problems", from climate
change and depleting energy sources to waste handling and the
elimination of risk, and that's quite apart from the development
of new life enhancing products.
3. If "politics is the art of the possible",
what about "engineering as the science of the impossible"?
From flight, to containing nuclear fission to produce domestic
power, to looking inside the human body without a single cut or
walking away from 180mph car crash apparently unscathed, none
of this would be without engineers and engineering.
3. THE STATE
OF THE
ENGINEERING SKILLS
BASE IN
THE UK, INCLUDING
THE SUPPLY
OF ENGINEERS
AND ISSUES
OF DIVERSITY
1. Again this question begs the clarification, what
do we mean by engineers in this context? Do we need a new vocabulary
that will communicate much more clearly what we mean? Is it the
need for fully qualified engineers? Or technically competent people?
Or very specialist skills?
2. The EAMA survey in December 2007 shows 93% of companies
have problems recruiting the people they want. But this is not
just engineers, but technicians and craftsmen too. It also shows
that apprenticeships are becoming more popular again.
3. The UK does not compare favourably with the best at
intermediate skills levels. According to the OECD 35% of the UK's
working population aged 25-64 are low skilled. This is twice the
rate of the best performers, USA, Canada, Switzerland, Germany
and Sweden. 36% are qualified to intermediate status compared
to 50% in Germany and New Zealand.
4. THE IMPORTANCE
OF ENGINEERING
TO R&D AND
THE CONTRIBUTION
OF R&D TO
ENGINEERING
1. It has been shown (Bower and Christensen 1995) that
companies act most effectively in their area of expertise when
they have extensive knowledge of what is going on in their business
sector. When they are well "plugged-in" they exploit
R&D more sharply and counter or adapt threats such as disruptive
technologies more dynamically.
2. But business structures are changing. Large original
equipment manufacturers (OEMs) are narrowing their focus to certain
key, core competences, divesting all sorts of technical requirements
onto their supply chains, often onto SMEs.
3. However, SME suppliers are often so strongly focused
on their day-to-day operations that looking beyond their suppliers
and customers to `scan the horizon for technological developments'
is a low priority.
4. Universities, research centres and even trade associations
can help here, but the real question is, are the Knowledge Transfer
Networks fit for this purpose in this information overloaded world.
5. And if so, how are SMEs to acquire the bite size information
packages from them that they need to ensure that they are up to
speed and as a result can decide to be directly involved, perhaps
with others, in R & D programmes progressing emerging technologies,
new product and process technologies, new markets and new techniques,
new standards and regulations and other factors relevant to the
SME and OEMs' interests? It is not clear that the market is going
to produce this information service.
5. THE ROLES
OF INDUSTRY,
UNIVERSITIES, PROFESSIONAL
BODIES, GOVERNMENT,
UNIONS AND
OTHERS IN
PROMOTING ENGINEERING
SKILLS AND
THE FORMATION
AND DEVELOPMENT
OF CAREERS
IN ENGINEERING
1. As far as engineering and manufacturing more generally
are concerned, the UK education system has failed.
2. Too many firms find that young people don't have the
basic grounding in English, Maths and ICT. Their work ethic also
is generally poor.
3. Companies, particularly SMEs find that they have to
educate young recruits in these basics. This is costly. Also,
it is patently not their role. Ideally, the nation should educate.
Business should train.
4. Work by Professor Ove Poulsen (Rector, Aarhus Engineering
College, Denmark) throws some interesting light in this area.
5. For example, he shows that while high tech jobs in
EU manufacturing declined 11% in the ten years to 2005, high tech
service jobs grew by 37% based on Eurostat and Work Foundation
data. But he observes that the expansion in knowledge based service
industries (in which he includes education) has seen little pay-off
in terms of increasing the EU's potential growth and productivity.
"Indeed the expansion of employment in knowledge based industries
has seen a slowdown in productivity growth in Europe, while a
similar expansion in the USA has been accompanied by an acceleration
in productivity growth."
6. In other case studies he suggests that there may well
be a link between the amount of time a student spends in tertiary
education (in Denmark) and that individual's propensity to favour
service/public service employment. In part this may be because
education is becoming increasingly academic.
7. And in what may be described as an `antidote' project
between Aarhus Engineering College and the Danish wind turbine
industry, undergraduates apparently working as junior staff on
projects as part of their studies rediscovered respect for practical
skills.
CONCLUSION
1. We endorse Semta's recommendations to the committee
as the immediate priorities:
(a) Continued and enhanced flexibility for funding of provision,
to suit small firms, those wishing to reskill and upskill existing
employees, and those wishing to offer training at higher levels.
(b) More help for companies to plan their training needs in
a more strategic way, using tools such as Semta's Business to
Skills Model, the Strategic Workforce Planning Tool, and the Six
Stage Model Assessment Tool.
(c) The need for sectoral experts to help companies use the
tools identified in two above to ensure that training and development
undertaken by companies delivers a measurable business benefit.
2. However, we fear that this policy area may continue
to confound best endeavours until there is a broadly accepted
terminology that enables all stakeholders to define the problems
and solutions precisely.
3. Progress in research, development and innovation needs
SME input as well as that of the larger, international groups.
It is not clear that the market is going to provide the information
that SMEs need to be dynamic participants. Mentoring or other
forms that foster supply chain co-operation need to be explored
to see if they can provide the solutions in a fast changing, globally
competitive environment.
March 2008
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