Prof S F Bush
31 October 1997
In 1955 Britain’s engineering industry was responsible for 20% of the world’s machinery exports. Today we are responsible for 6%. If you go round any factory in the process industries, be it chemicals, fibre-making, food processing, paper-making, polymer processing, you will find that the equipment is overwhelmingly imported usually from one of four countries – the United States, Germany, Italy and Austria. It would be unreasonable to expect that the percentage of world exports that we had in 1955, ten years after the war, would be maintained up to 1997, 42 years later. Countries like Austria, Germany, Japan, were devastated by war and were only just recovering. Taiwan didn’t exist as a producer of modern electrical and electronic goods, neither did Korea. However nobody really can believe, or should pretend, that the picture of British engineering is a successful one.
It is annoying to put it at its least for certain people to launch something called the Year of Engineering Success. It flies in the face of figures and in the face of experience which is open to everybody to see. In parallel with this precipitous decline in the machinery sector, we have seen every single significant car-maker pass into foreign hands. There are those who believe, or affect to believe, because personally I don’t think they really believe it, that ownership doesn’t matter; only manufacturing matters. A moment’s thought will see that this a ridiculous sentiment. Ownership decides where manufacturing can take place and in the case of the car industry, countries that have no indigenous car plants themselves are simply open to blackmail.
We have seen this recently in the debate, or rather the one-sided pressurization which passes for a debate in this country, on economic and monetary union. Without wanting in this article to develop the arguments for or against Britain’s giving up its own currency, one can observe the fact that every single foreign owner of car plants in this country has either denied that it would make much difference, or what is more usual, stated that Britain should give up its currency or else particular car manufacturers will take their factories away. On the other hand we are daily bombarded with information to the effect that the financial services industry is a highly successful one. London is the capital of this or that financial service for the whole world and certainly there is no doubt that the salaries paid to individuals in the City of London are out of this world by comparison with those paid in most of engineering.
In another paper entitled “The Importance of Manufacturing to the Economy” I have advanced the thesis that the financial services sector is exaggerated in its importance in Britain and vastly exaggerated in its own estimates of itself. But, having said that, what is a young person of ability and energy to do when, in their VI form somewhere between the ages of 16 and 18, they are making up their mind what type of career to go for? Perhaps they put it off and they leave the decision until they have gone to university and then they find that having read engineering, for instance, or physics, or chemistry, or mathematics, they are still given the chance of joining the financial sector.
Now, of course, those of us who educate engineers can take some satisfaction from the fact that we are preparing generalists for the world, not just for engineering, but for almost any career that you care to mention. But it is clear that in the employment stakes the most able will either not opt for engineering in the first place, because it is well-known to be a very tough and demanding course, at least in our best universities, or having opted for it, will then make a choice not to join engineering or manufacturing generally, but to join one of the great banks, which recruit vigorously each year on our campuses. Here we need to see some numbers, as always. The Swiss Bank Corporation, which recently acquired a major investment bank, the British bank Warburg and an American investing house as well, has been on the campuses of Britain aiming to recruit around about 200 graduates for this coming year 1998. Our great manufacturing companies, Shell, ICI, Rolls Royce, limit themselves to round about 10. Last year, for example, Shell looked for 10 graduates (all but 2 of those were geologists).
Now this, gentlemen, is the reality that we have and no amount of embarrassing activities like the so-called Year of Engineering Success should divert us from the fact that unless we do something to relaunch engineering, it will, to all intents and purposes, become a very minor activity over the next 20 years in this country. Now I have a specific recommendation and this is to build on the evident wish of able, energetic young people for two features of their career. One is to be able to take decisions and the other is to be rich.
Do not be beguiled by talk about people wanting to care for others and make contributions to society and all the rest of it. These are things which people say when they are expected to say them, when they give face to face interviews and in surveys of various sorts. Take it from me, the two things that people want to do are to run their own lives and to make money. And here Britain has a unique opportunity and engineering should take advantage of that. Every government in every western country is very clear, and for once governments are right, that the small and medium sized enterprise, that which is employing fewer than 500 employees, with a turnover of less than £30M is likely to be the main supporter and generator of employment.
In the paper I have referred to I show that the decline in employment in manufacture has been vastly exaggerated by reason simply of many services which previously were part of manufacturing having been sub-contracted to SMEs. Now the question is how do all these facts fit together?