Introduction

The report Engineering and economic growth: a global view was undertaken by the Centre for Economics and Business Research (Cebr) and commissioned by the Royal Academy of Engineering to understand the impact of engineering on global economic development and to provide a worldwide comparison of potential growth in, and need for, engineering.

The report is the most comprehensive of its kind, bringing together data from 99 countries to paint an in-depth picture of global engineering, and presenting the first ever ‘Engineering Index’, which seeks to rank countries by their engineering strength.

The study has been published to coincide with a global gathering of engineering and international development leaders in London, the Engineering a Better World conference.

Methodology

Cebr used data from a variety of sources to compile the study, including the World Bank, UNESCO, the International Labor Organization (ILO), the OECD, Eurostat and National Statistics sources.

The Engineering Index, an effort to rank countries by their engineering strength, is a composite index; it combines a comprehensive selection of indicators into a single, directly comparable value for each country. The Engineering Index was constructed using data from 99 countries from across the globe and is comprised of the following engineering related indicators:

  • Employment in engineering-related industries
  • Number of engineering businesses
  • The gender balance of engineering graduates
  • Wages and salaries of engineers
  • Human capital investment in engineering
  • The quality of infrastructure
  • The quality of digital infrastructure
  • Exports of engineering-related goods

Overall Index findings

The report found that:

  • There is a demonstrable, positive, link between engineering and economic development across the world. The Cebr analysis found that a one-percentage point increase in the Engineering Index score is associated with a 0.85% increase in GDP per capita. To put this into context, the latest data1 from the World Bank shows that in the UK, which is 14th in the Index, GDP per capita was £27,100. If the UK ranked 1st in the Engineering Index, UK GDP per capita would be 10% higher, at £29,900.
  • Sweden, Denmark and the Netherlands take 1st, 2nd and 3rd positions on the index respectively, claiming the top spots due to high employment in engineering, high average engineering wages, and good quality engineering infrastructure.
  • The top 20 Index can be found in Appendix A, below.

Gender

The study finds that:

  • Developing economies including Myanmar, Tunisia and Honduras lead the world in gender parity in engineering, with the highest proportion of female engineering graduates: 65%, 42% and 41% respectively. This compares to 21% in the Netherlands. 
  • The majority of the OECD countries have increased the number of female engineering graduates over the period 2008-12. The most notable increases were in the emerging economies of Mexico, Hungary and Turkey (by over 150%).
  • However, in developed countries, the increase was often less marked, with countries such as the UK and US increasing the number of female engineering graduates by 31% and 24% respectively.

Skills gap

The study shows that:

  • Emerging economies tend to have a higher concentration of engineering graduates than developed nations. Russia, Iran, South Korea and the Ukraine have three times the number engineering graduatesper capita (around 0.3% of the population in each country) than the UK does (0.1%).
  • Mexico experienced the strongest growth in the number of engineering graduates over the period 2008-12. Mexico had more engineering graduates per capita in 2012 than the US (0.06% compared with 0.04%)
  • The economic benefit of higher numbers of engineering graduates in emerging economies does not manifest immediately. Many graduates will continue to leave their country of origin to seek further education or employment in more developed countries, of which only a proportion will return. This phenomenon is particularly apparent in China where, each year, it is estimated that approximately 15% of graduates from the top Chinese Universities pursue further education in overseas universities, mainly in the U.S. and Europe.

Hotspots

The report forecasts that India and Vietnam will be future engineering ‘hotspots’; countries where there will be great future need for and growth in engineering.

  • India appears 46th in the Engineering Index, as a result of the country’s relatively strong performance in gender parity and engineering research, offset by its relatively low quality of engineering infrastructure.

    India is tipped for growth in engineering strength as a result of the significant expansion of its urban population, which is predicted to increase by 500 million over the next 40 years, and forecast growth of India’s built asset wealth from $15 trillion in 2015 to $23 billion by 2025. India’s GDP is expected to grow at an average annual rate of 7.4% between 2016 and 2021, in comparison to the Chinese average of 5.3% a year. The report therefore predicts that India will go through its own version of the infrastructure and construction boom that continued for two decades and is now gradually easing in China, and that demand for engineering expertise and workers will rise in line with this boom.
  • Vietnam appears 38th in the Engineering Index as a result of its relatively strong performance in gender parity and engineering exports. Relative to the other countries in the Index with a similar GDP per capita and a similar level of investment per head, it scores highly for engineering strength, suggesting that it is already punching above its weight. The report explains that Vietnam’s high rates of GDP growth in recent years indicate that GDP per capita will continue to rise. In the short term, higher rates of GDP growth will stimulate further investment in engineering and therefore will boost areas such as employment and salary levels.

    In the longer term, increasing engineering strength through other indicators such as the number of engineering graduates and infrastructure quality will play an important role in continuing Vietnamese GDP growth.

Gaps in global engineering data

One further important finding from the research process was that there is a lack of consistent disaggregated data about engineering in some countries, with no occupational breakdowns for engineering as a whole in many instances, and a significant lack of data for specific engineering disciplines.

Whilst systemic data shortages largely affected developing countries, there are isolated examples of missing information for developed countries as well.

This data is essential to allow the engineering community to understand both the number of engineers needed for the future, as well as the specific skill sets required, and to help policy makers make informed decisions that will help achieve sustainable growth.


Appendix A

The Engineering Index: Top 20 countries

 

Country Ranking Engineering Index score
Sweden 1st 75%
Denmark 2nd 75%
Netherlands 3rd 75%
Germany 4th 74%
Japan 5th 72%
Switzerland 6th 71%
Australia 7th 69%
Hong Kong 8th 69%
Norway 9th 66%
Austria 10th 66%
Finland 11th 65%
Belgium 12th 64%
Republic of Korea 13th 63%
United Kingdom 14th 63%
France 15th 61%
Singapore 16th 61%
United States 17th 60%
Luxembourg 18th 59%
Italy 19th 57%
Slovenia 20th 56%

1Data from 2013

2Based on UNESCO data relating to engineering, manufacturing and construction programmes.