NORTH SHIELDS, ENGLAND — Andrew Esson has plenty of workshop space to expand his small, thriving company that designs and makes hydraulic equipment here in the northeast of England. His investors have offered more financing should he need it.
Even his bank is supportive.
His problem is people — more specifically, finding enough skilled engineers. And it is a shortage of a type afflicting much of British industry that some experts worry could help tip the country into its third recession since the financial crisis.
When Mr. Esson’s advertisement for a design engineer and an experienced technician produced no suitable applicants last year, he decided to train apprentices instead. Even that proved impossible until he widened the search beyond those leaving the closest secondary schools — despite the fact that more than one in five young people are unemployed here in this pocket of the Tyneside area of around 830,000 people.
With the right pool of skilled talent, Mr. Esson thinks he could have won extra orders worth £700,000 to £800,000, or $1.1 million to $1.3 million, a year for his company, Quick Hydraulics, which had revenue of £3.1 million in 2012. Its primary business is designing and building hydraulic power units for businesses including military contractors and paper producers.
His lost opportunities illustrate one of the reasons experts say the British economy is vulnerable. Another potential drag is new economic uncertainty resulting from Prime Minister David Cameron’s plan, if he stays in office, to hold a referendum by the end of 2017 on whether the country should remain in the European Union. Regardless, a key to putting Britain’s economy back on the path to growth will be overcoming the shortage of people with mathematics and science skills.
Mr. Esson, who acquired the company in 2011 when it had a staff of 14, planned to take on his 24th employee Monday, a sales and marketing administrator recruited from his former company. But if there were a bigger pool of engineering talent, Mr. Esson said, he would be able to add even more staff and more aggressively pursue new business.
The problem is endemic in Britain. In the aftermath of the financial crash, the country’s politicians acknowledged that they had put too much faith in a bloated financial sector that plunged the country into crisis. But rebalancing the skills of the British labor force may require a shift that is as much social and cultural as it is economic.
Engineering has never been truly prestigious in Britain, where traditionally many of the best brains have opted for careers in law, medicine, the civil service or the news media. Add to that the more recent lure of London’s financial sector, which, despite recent layoffs, still offers lavish salaries and bonuses. It is little wonder that British manufacturing struggles to compete for the country’s most capable young people.
In 2010, British manufacturing output accounted for only 2.3 percent of the global total. Among big Western economies, that trails even the relatively weak total of France, which has a 2.6 percent share in global manufacturing, and is far behind Germany’s 6 percent and the United States’ 18.2 percent, according to statistics compiled by the British Parliament.
The engineering community in Britain complains about the better support the German government gives to people in the field.
“You only have to go to Germany to see how revered engineering and industry are,” said Sir John Parker, president of the Royal Academy of Engineering. Britain has started to change course, he said, but still has much catching up to do. “Many of the countries I have visited have been more proactive in industrial policy than we have.”
The Cameron government argues that it has expanded its apprenticeship program and has set up several programs to promote engineering. But last September, the business secretary, Vince Cable, acknowledged the scale of the problem, describing the dearth of engineers as “one of the biggest long-term challenges” facing the British economy.
“We are chronically short at present,” he said. “I take encouragement from the fact that this year’s applications to university show engineering has remained a popular choice. But we need to do much more.”
Article source: http://www.nytimes.com/2013/02/04/business/global/04iht-ukskills04.html?partner=rss&emc=rss
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