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Lib Dem Conference 2010: ETF Fringe report - An industrial policy for the 21st century: Engineering growth in Britain
21.09.10
Dods Monitoring reports from
the Social Market Foundation and Engineering the
Future event at Liverpool where the panel discussed
how to rebalance the economy and encourage
manufacturing in the UK.
An industrial policy for the
21st Century: Engineering growth in Britain (SMF &
Engineering the Future)
Monday September 20, 18:15pm,
Suite 6, Jury's Inn, Liverpool
Chair: Ian Mulheirn, Social
Market Foundation
Speakers:
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Jane Atkinson, SembCorp
Utilities
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Kate Bellingham, STEM
Ambassador
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Steve Coulter, LSE
-
Lord Shipley, Leader,
Newcastle City Council
 At a fringe meeting hosted by
the Social Market Foundation and Engineering the
future, the panel discussion centred around how to
rebalance the economy and encourage manufacturing in
the UK by building skills and innovation and setting
the right institutional framework to deliver
manufacturing growth.
Kate Bellingham opened the
debate saying that engineering was vital to the
ambitions of the UK, but that people were also vital
to the sector. There were shortages of appropriate
skills and qualifications in the UK economy and this
must be addressed, she said.
Young people needed to be made
aware of the opportunities in engineering and the
profile of the subject must be raised Bellingham
added, and said it must be reinforced in schools
that science and maths opened doors to careers in
engineering.
Bellingham praised the
industries who were connecting with schools and said
that the 'Visit Your School & College' campaign had
been very successful.
On getting more women involved
in engineering, she said that in a European Labour
Force study, the UK came last in terms of the
proportion of professional engineers who were women
- about eight per cent. She also pointed to the fact
that of the top ten professions for graduate
salaries, five of those were engineering related
careers. There was an urgent opportunity to get more
young people interested in engineering as a career,
she said.
Jane Atkinson, of industrial
utilities and services company SembCorp, said that
the big issues for engineering in the UK were low
carbon technologies and capitalising on the UK
science and engineering base.
Engineering skills were in
demand and there will be half a million new
manufacturing jobs in the UK by 2017 so
manufacturing is not in decline. STEM subjects
underpin all engineering and young people need to
understand the options that these subjects could
give them.
Encouraging apprenticeships
were one option she said, but the cost to an
employer for an apprentice over two years was
£25,000, so she felt this was not a solution.
Investment in UK engineering was needed so that
engineers in the UK could meet the challenges of
climate change.
Jane Atkinson said that
investment in low carbon technologies was risky and
a stable regulatory framework was needed to create
the right environment for investment. The barriers
to market entry would help - the future price of
carbon was one of the biggest barriers to investment
and the government should put a floor on the carbon
price, she said.
On tax credits for research
and development, she was a supporter but said that
there needed to be more collaboration between
industry and business. It was suggested that public
money could be used on innovative projects to
stimulate the industry and support large scale
research. She added that the UK civil service would
benefit from having some engineers and a chief
engineering advisor to government posts created.
Steve Coulter said that there
were misconceptions about the state of UK
manufacturing, but wanted to take a broader look at
the overall picture. He argued that data on gross
value added (GVA), a measure of productivity,
indicated that UK manufacturing produced slightly
more GVA than German firms.
The UK had a high degree of
trade specialisation, he said, with the industry
being dominated by a few areas such as aircraft and
engines and that the UK concentrated on niche
markets. There were many firms in the UK competing
on price in low tech industries with low paid
workers and making a low contribution to GVA, he
said. It was noted that this sector was particularly
vulnerable to competition from developing countries.
Coulter felt that a rebalance
within the manufacturing sector was required, away
from low GVA companies towards medium to high tech
mature industries.But this was difficult to change,
he acknowledged.
The UK could learn from a
country like Germany who manufactured a lot of high
tech goods in a stakeholder capitalist model, he
said. Coulter argued that UK firms produced low GVA
because of short-termism; timid management; ease of
joining the market; inadequate skills; and lack of
support through the state for individuals to invest
their time and money.
Coulter argued that a more
co-ordinated approach was needed to encourage firms
to invest in high tech industries.
On the question of the
involvement of the state, he argued that initiatives
such as tax credits for R&D did not necessarily work
as many firms were being subsidised for work they
would do anyway, and that schemes to encourage
engineering and manufacturing should be strongly
evidence based. He argued that institution building
could be done without direct interference in the
market.
Leader of Newcastle City
Council, Lord Shipley said that whilst he was not an
engineer, he understood its importance to his area.
The Tyne is about to be reborn as a place for new
technology, he suggested, and he was pleased that
high technology industries would be returning to
that area.
Lord Shipley stressed the
importance of encouraging specialist industries such
as the sub-sea sector as well as considering the
future needs of the energy sector and creating
future employment.
He understood that there was a
shortage of 600,000 engineers in the UK and thought
that this mismatch must be addressed. He was
concerned about the reduction in science and
language teaching, blaming education league tables
for the problem.
On investment, he suggested
that councils could prudentially borrow to buy land
and sites and therefore encourage development in
their areas and bring derelict sites back into use.
A recently introduced Treasury measure will mean
that soon councils will also have the right to
borrow against future business rates and this could
be used to encourage the development of science and
technology, he added.
Lord Shipley pointed out that
good public spending could have a major multiplier
effect and could thus be an important tool for
developing manufacturing. It should not be forgotten
that the public sector has a role to pump prime
industries and make things possible, he added,
especially with new technologies.
Newcastle university was doing
some work on bringing sustainability industries to
the area and renewable energy was a major potential
business for jobs on the Tyne, Lord Shipley said. He
added that the regional growth fund and LEPs would
be important, but the size of the fund may need to
be increased.
He argued that sea-based
industries in the North East and Scotland could help
rebalance the economy and that there was a need to
push forward with innovation in new technologies. He
urged engineers and industry to demonstrate
financial cases for government support.
Question & Answer:
The panel were asked questions
about the importance of patents; the need for
creative subjects to compliment STEM subjects; and
support for job creation in low carbon industries.
Lord Shipley emphasised the
importance of using all our sources of energy, but
that developing new sources would take time. He also
pointed out that Newcastle had fared relatively well
during the recession because of its creative
industries. He echoed earlier comments about the
lack of skills at Level 4.
Kate Bellingham stressed the
importance of how opportunities in engineering were
presented to young people and that career choices
should be supported and valued.
Jane Atkinson said that she
had been working with Teeside University to get
graduates 'employer-ready'. On feed-in tariffs, she
said that there was a need for investment in the
UK's electrical infrastructure - the National Grid -
as it did not have the capacity to support
businesses.
Further questions were asked
about the ownership of infrastructure in the UK; the
consequences for skills of the cap on immigration;
innovation; and the coherence of engineering policy.
Steve Coulter said that the
German companies collaborated more on technology and
standards and this was something the UK could do
more of. He added that it was important to address
the image of science and improve the incentives for
university studies in scientific subjects.
On migration he said that the
immigration cap was a political idea with
uncomfortable economic consequences that were bad
for manufacturing.
Jane Atkinson said that the
£1billion investment fund for companies would help.
On migration she said that skills were now quite
limited in the UK and that industry needed the
ability to bring in foreign skills for specialist
advice. It was beneficial for engineers to gain
experience in other countries but most of her
workforce was local, she added. Finally, she added
that there needed to be more engineering role models
for young people.
Lord Shipley said that more
graduates needed to be encouraged to stay in the UK
and that Scotland had a good scheme for granting
working visas to overseas students.
Finally the panel agreed with
Keith Plumb from the Institute for Chemical
Engineers who said that the UK needed to move from
invention to innovation so that engineers could be
better at turning ideas into money.
(Information provided by Dod’s)
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