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Engineering: a vital building block of the UK economy
The annual EngineeringUK State of Engineering report is a key resource providing a data-rich view of the industry in the UK. In this year’s report most of the key themes affecting the industry remain unchanged; however, the report brings to light some interesting changes across the industry. Below, you can find a summary of the key findings, trends and facts included within this year’s report.
The value of engineering continues to increase
Engineering remains essential to the UK’s economic and societal wellbeing. In 2015 the industry directly provided 5.7 million jobs and supported over 10 million more in the UK. It is estimated that engineering contributed £486 billion to UK GDP in 2015 – around 26% of the total GDP. Manufacturing alone contributed over 10% of the UK GVA and accounted for 43% of people employed in engineering. An even more impressive statistic that the industry can now boast is that every person employed in the sector supports another 1.74 jobs (a multiplier effect of 2.74). In light of this, the sector’s economic contribution (and resilience) has been focused upon in the report.
However, with Brexit looming and a new US president in the White House what is also highlighted is the industry’s increasing strategic contribution towards preparing the country for future challenges in a changing global landscape. The government will look to the engineering sector to help cement its leading position for a competitive future, and to develop and implement solutions to major local and global problems. These will include productivity, connectedness, resilience, growth of start-ups, greener cities, health and wellbeing.
Grahame Carter, Managing Director, Matchtech comments:
“As cities strive to become healthier, more efficient, connected urban centres, engineers will be crucial in designing and delivering the infrastructure and technology to transform the UK’s towns and cities. The engineering sector has a responsibility to ensure it drives innovation and adopts technology to keep pace with society’s future wants and needs.”
The skills shortage is taking on a different shape
This year, the skills shortage theme remains. Engineering professionals from around the world recognised a lack of skills as a key issue within their sector; with 69% of participants in our recent Voice of the Workforce survey saying they believe there is a skills shortage. The already well reported skills shortages across the sector will be further exacerbated in the future from new industry growth and emerging technologies, such as big data and robotics.
With a trend towards an hourglass economy, the skills shortage could take on a different shape. The report predicts that there will be faster growth in higher skilled jobs (for example managers and professionals) and lower skilled jobs compared with mid-level skilled jobs. This increased demand in higher skilled jobs is due to the advances in technology and knowledge-intensive services, whereas those working at a middle-skill level may see their jobs put at risk due to automation enhancing efficiency and reducing headcount. Many lower skilled jobs require skills not readily automated, which will protect this slice of the workforce.
So what could this mean for those working in engineering? The report forecasts that across manufacturing, smart automation is set to boost productivity, but the knock on effect could be that less people will be required. A continued demand for highly skilled STEM professionals, as well as growth in higher-middle skilled jobs such as designers and technicians, should create more opportunities for both those entering the industry and those wishing to advance and retrain.
In response to the continued skills shortage and the hourglass economy trend, the report calls for the engineering industry to do more to retain, motivate and improve the skills of those already in engineering. This is something which the engineering community agrees on. In our recent Voice of the Workforce research 1 in 10 engineering professionals said retraining/upskilling the existing workforce is the most important factor in tackling the skills shortage. Fortunately, the Government has just announced its commitment to enhancing the skills of the current workforce, with up to £40m set aside over the next couple of years.
Feeding the supply pipeline remains on the agenda
It is forecast that 265,000 skilled entrants will be required annually to meet the demand for engineering enterprises through to 2024. Engineering graduate supplies still fall short of demand and the UK is highly reliant on international and EU talent to meet the industry’s demands. To further complicate the skills imbalance, the decision to leave the EU has led to some uncertainty around decreasing access to EU talent (which will form a key part of post-Brexit policies) and may have changed international perceptions of the UK in terms of how open and welcoming this country is to work or study in.
Real pipeline concerns remain, highlighting that efforts should be increased to attract, improve the perceptions of and better communicate the opportunities of STEM careers to young people. Engineering is the STEM subject and career that young people seemingly know the least about and there is still a shortfall of 20,000 engineering graduates annually. Schools and universities are active participants in the promotion of STEM subjects; however, the report highlights the importance of corporate responsibility and calls for enterprise to do more to promote STEM careers as an attractive option to young people.
The report does however highlight some positive signs, with 5% growth in applicants on engineering-related Higher Education courses in 2015/16 and the highest number of engineering related apprentices started in England for ten years. Additionally, strong government backing to increase apprenticeships, mean that more young talent will be entering the industry.
The workforce make up won’t be changing any time soon
Statistics prove that the engineering workforce is ageing - currently two in five manufacturers report that over 40% of their workforce is aged over 50 – and as these engineers retire, they leave a huge skills gap behind.
The industry also continues to be male dominated. Currently 1 in 8 of the engineering workforce is female, which highlights that the efforts to attract girls and women into engineering are falling short. Boys are 3.5 times more likely to study A-Level Physics than girls (England, Wales and N Ireland) and 5 times more likely to gain an engineering and technology degree. At university level, female HE UK engineering students are strongly under represented at around 15%.
To further exacerbate this key issue, the low proportion of women under 25 working within engineering means the overwhelming male profile will not change soon without further intervention. Grahame Carter comments:
“Encouraging more women into engineering is key to plugging the industry skills gap. Gender diversity within engineering is not a new issue, but our recent Voice of the Workplace survey of over 2,500 engineers has highlighted how the profession and industry continues to be very male dominated. With females representing only 6% of survey respondents, it seems that gender diversity remains an issue. We are a proud supporter of Women’s Engineering Society who acts as a voice to help bridge the gap between men and women in engineering and promote engineering as a career for young women.”
Whilst many of the long-term issues facing the industry remain, it’s great to see positive moves and the hard work of industry making a big impact nationally. Matchtech fully supports the aims of the organisation. We will continue to promote the contribution that engineering makes to the economy and help amplify the voice of the engineering community.
As a not-for-profit organisation, EngineeringUK’s committed approach to producing this publication year after year is commendable. The report provides the engineering community with a valuable benchmark of the progress being made in the industry and offers practical recommendations for how the industry can continue to move forward.
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