Cebr report: Engineering and Economic Growth (1.28 MB)
Most comprehensive study of its kind brings together engineering data from 99 countries
Sweden tops the new Engineering Index, which ranks countries by their engineering strength
The UK is ranked 14th on the Index, above the US
India and Vietnam identified as future engineering hotspots
Developing economies such as Myanmar and Honduras have the highest proportion of female engineering graduates worldwide
There is a strong positive correlation between engineering strength and economic development, according to a new global study undertaken by the Centre for Economics and Business Research (Cebr), published to coincide with a global gathering of engineering and international development leaders in London, the Engineering a Better World conference. The groundbreaking report brings together analysis and insight from a range of sources to paint a picture of global engineering: its workforce, output, prospective recruits, the quality of research and where its impacts are most needed.
The report, which was commissioned by the Royal Academy of Engineering, also unveils the first ever ‘Engineering Index’, which ranks 99 countries by their engineering strength. Sweden, Denmark and the Netherlands top the list, scoring well due to high employment in engineering, high average engineering wages, and good quality engineering infrastructure.
The latest data shows 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 only 22% in the UK (with just over 15,800 female graduates in engineering per year) and Australia and 21% in the Netherlands.
Engineering in the UK
The UK ranks 14th in the Engineering Index. The UK’s position is thanks, in part, to relatively high annual salaries commanded by British engineers. Recent figures show that the average annual salary of a UK engineer1 is $54,400, compared to $50,100 in Sweden and $46,000 in Finland, both of which outrank the UK in the Engineering Index, holding positions of 1st and 11th respectively.
The UK also outperforms almost all other nations with the quality of its educational institutions – with nine British university engineering departments making the UK Times Higher Education University Rankings top 100 list. Only the US beats the UK in this field, with 31 engineering departments in the top 100, of which four are in the top five.
However, the UK’s percentage of female engineers is far lower than other developed countries, with women only making up on a small fraction of the nation’s engineering graduates (22%). This compares to a European average of 28%; of the 34 European countries considered in the analysis, the UK only ranks 22nd in gender parity.
The size of the engineering workforce in the UK also compares less well to other countries, with latest data indicating that engineers only represent 0.7% of the UK population. This is less than half that of Finland (9th on the Index), where engineers make up 1.7%. In the UK, 53% of all engineering employers are currently seeking new recruits with engineering and technology skills, with the highest demand in the construction (67% of employers), electronics (61%) and aerospace (60%) sectors.
Data from the World Bank shows that UK GDP per capita was £27,100 in 2013. If the UK ranked 1st in the Engineering Index, UK GDP per capita would have increased by 10% to £29,900.
Future hotspots: India and Vietnam
The report forecasts that India and Vietnam will be future engineering hotspots, namely countries where there will be great 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 finds that Vietnam’s high rates of GDP growth in recent years – stimulated in part by the major Doi Moi market-based economic reforms introduced by the Vietnamese government from the mid-1980s onwards – suggest that GDP per capita will continue to rise in line with its relatively high Engineering Index score. In the short term, higher rates of GDP growth will stimulate further investment in engineering and therefore boost employment and salary levels.
In the longer term, increasing engineering strength through other indicators such as the number of engineering graduates will play an important role in continuing Vietnamese GDP growth.
Gaps in global engineering data
The study was commissioned by the Royal Academy of Engineering to understand the relationship between engineering and global economic development and to provide a worldwide comparison of potential growth in and need for engineering.
One important finding from the research process was that there is a lack of consistent disaggregated data about engineering across the world, with no occupational breakdowns for engineering as a whole in many instances, and a significant lack of data for specific engineering disciplines.
This data is essential, both to allow the engineering community to understand the number of engineers needed for the future and the specific skill sets required, and to help policy makers make informed decisions that will help achieve sustainable growth.
David Whitaker, Managing Economist at Cebr said:
“This is the first time a global study has looked holistically at the value of engineering and its role in economic development. The Engineering Index pulls together data from 99 countries to comprehensively map engineering today: its workforce, output, graduates, the quality of infrastructure and research, and where its impacts are most needed.
“Our analysis also shows that a one percentage point increase in a country’s score on the Engineering Index is associated with a 0.85% increase in GDP per capita, demonstrating a clear link between economic development and engineering strength.”
Dr Hayaatun Sillem, Deputy CEO & Director of Strategy at Royal Academy of Engineering commented:
“Engineers have historically played an important role in driving economic and social development, and continue to do so, by designing and delivering systems that facilitate education and healthcare, enhance quality of life, and help to eliminate global poverty. For the first time, this report shows that there is a direct link between engineering capability and economic development across the world.
“This report is a further step towards understanding the world’s engineering capabilities and future demands for engineering, building on the collaborative work we do with professional engineering institutions, academic institutions and engineering businesses in the developing world to build capacity. It coincides with the Academy’s Engineering a Better World conference, where it will form the basis of useful discussions between the engineering and international development communities, not just about where engineering investment is needed, but also about how we can build on this data to develop a fuller picture of how engineering can further drive international development.”
To find out more about the Engineering a Better World conference, please go to: www.raeng.org.uk/engineeringabetterworld
Notes to editors
1. Cebr: The Centre for Economics and Business Research (Cebr) is an independent consultancy which advises some of the world’s largest companies. Cebr’s reputation for insightful economic analysis, award-winning forecasting and decisive business advice is based on innovative research by a renowned team of macro and micro-economists.
Since its foundation in 1993, Cebr has been ‘making business sense’ by applying theoretical economics backed by quantitative evidence to real world decision for FTSE firms. It provides analysis, forecasts and strategic advice to major multinationals, financial institutions, government departments, charities and trade bodies.
This report, by Cebr and commissioned by the Royal Academy of Engineering, considers the impact of engineering on economic development on a global scale. For the first time, it brings together all available data from 99 countries to paint a picture of global engineering: its workforce, output, prospective recruits, the quality of research and where its impacts are most needed. It uses a comprehensive selection of indicators to calculate a new ‘Engineering Index’: a measure of the engineering strength of different countries.
The full report is available on request.
2. The Engineering Index: The Engineering Index is a composite index, combining various engineering-related fields as components into a single, directly comparable index value for each country. This single index value then enables us to rank countries by their strength in engineering. The Engineering Index has been constructed using data from 99 countries from across the globe. It includes all 26 CAETS countries. The Engineering Index is comprised of the following engineering related indicators:
Employment in engineering-related industries;
Number of engineering businesses;
The gender balance of engineers;
Wages and salaries of engineers;
Human capital investment in engineering;
The quality of infrastructure;
The quality of digital infrastructure;
Exports of engineering-related goods.
3. Royal Academy of Engineering. As the UK’s national academy for engineering, we bring together the most successful and talented engineers for a shared purpose: to advance and promote excellence in engineering. We provide analysis and policy support to promote the UK’s role as a great place to do business. We take a lead on engineering education and we invest in the UK’s world-class research base to underpin innovation. We work to improve public awareness and understanding of engineering. We are a national academy with a global outlook.
We have four strategic challenges:
Make the UK the leading nation for engineering innovation
Address the engineering skills crisis
Position engineering at the heart of society
Lead the profession
For more information please contact:
Jo Trigg or Jane Sutton at the Royal Academy of Engineering
T: 020 7766 0744
E: Jo Trigg
E: Jane Sutton
1Expressed in US dollar Price Purchasing Parity (PPP) terms. PPP is a means by which the value of different currencies can be directly compared. In this context, PPP is used to convert wage income or GDP from different countries into a common currency: international dollars. PPP reflects both the currency exchange rate and the relative cost of living across countries, reflecting the fact that the quantity of currency needed to buy goods and services will vary across countries.