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ENGINEERING SKILLS DEVELOPMENT: Developing South Africa’s Future Engineering Managers The 5th Annual Engineering Manager Conference 27 – 30 June 2011 Johannesburg Presented by: Hannelie Nel THE WORLD IN 2050 “South Africa does not exist in isolation. We operate in a global environment that provides both opportunities and constraints to what we do as a nation. We rely, to a significant extent, on the rest of the world for markets, capital and technology.” 1 Minister Trevor Manual National Strategic Planning 2010 The World in 2050 2 • • • The largest E7 emerging economies are likely to be bigger than the current G7 economies by 2020.2 China’s economy is projected to grow to around 94% - 143% of the size of the US economy by 2050. India’s economy is projected to grow to between 58% - 100% of the size of the US economy. 2 The shift in global economic power will steadily increase competition from emerging market internationals. G7 economies: US, Japan, Germany, UK, France, Italy and Canada. E7 economies: China, India, Brazil, Russia, Indonesia, Mexico and Turkey. • Long-term economic growth is driven by: • Growth in the labour force of working age. • Increase in human capital (average education level) and skills development. • Growth in physical capital eg infrastructure. • Total productivity growth, driven by technological progress and use of technology and processes. 2 The World in 2050, PWC, January 2011 2 Based on purchasing power parity PPP adjusting price differences across countries The World in 2050 2 PPP 2009 Rank Country GDP at PPP PPP 2050 2009 UJ$bn Rank GDP at PPP Country 2009 UJ$bn South Africa 2009: 1 US 14256 1 China 59475 2 China 8888 2 India 43180 3 Japan 4138 3 US 37876 4 India 3752 4 Brazil 9762 GDP (PPP) as a % of world total 5 Germany 2984 5 Japan 7664 = 0.70% 6 Russia 2687 6 Russia 7559 7 UK 2257 7 Mexico 6682 8 France 2172 8 Indonesia 6205 9 Brazil 2020 9 Germany 5707 10 Italy 1922 10 UK 5628 11 Mexico 1540 11 France 5344 12 Spain 1496 12 Turkey 5298 13 South Korea 1324 13 Nigeria 4530 14 Canada 1280 14 Vietnam 3939 15 Turkey 1040 15 Italy 3798 16 Indonesia 967 16 Canada 3322 17 Australia 858 17 South Korea 3258 18 Saudia Arabia 595 18 Spain 3195 19 Argentina 586 19 Saudi Arabia 3039 20 South Africa 508 20 Argentina 2549 2 The World in 2050, PWC, January 2011: World Bank Estimates for 2009; PWC estimates for 2050 The World in 2050 2 Average annual Country Average annual Average annual population real growth in GDP growth GDP per capital growth Brazil 4.4% 0.6% 3.3% Russia 4.0% -0.7% 3.2% India 8.1% 0.8% 5.3% China 5.9% 0.1% 4.6% South Africa 5.0% 0.3% 3.6% All countries, except India, are expected to see a decline in the prime working age group of 15 – 59; and an increase in the population over 60. 2 The World in 2050, PWC, January 2011 The World in 2050 3 - Opportunities for Emerging Markets PWC, 9 Annual Global CEO th Survey % CEO Respondents 3 Hawksworth, J. The World in 2050, PWC, 2006 The World in 2050 3 - Opportunities for Emerging Markets Main actions that CEOs are taking or planning to take in emerging markets PWC, 9th Annual Global CEO Survey % CEO Respondents 3 Hawksworth, J. The World in 2050, PWC, 2006 The World in 2050 3 - Opportunities for Emerging Markets Companies Potential Winners Potential Losers •Retailers •Mass market manufacturers, both hi and low tech •Leading global brand owners •Media companies •Niche high value added manufacturers •Health care providers •Education providers •Financial services •Energy and utilities companies 3 Hawksworth, J. The World in 2050, PWC, 2006 •Financial services who are vulnerable in their own markets •Companies that over commit to key emerging markets without the right local partners and business strategies THE CURRENT SITUATION WITH REGARDS TO SKILLS DEVELOPMENT IN ENGINEERING The Current Situation – Global Engineering Indicators 4 •Students enrolled in Engineering Education 2002 – 2005 •China has 1.3 million engineering graduates per year 4 UNESCO Report on Engineering, 2010 The Current Situation – Global Engineering Indicators 5 5 Heckel, R.W. A Global Study of Engineering Undergraduate and Doctoral Degrees Awarded in Ninety-One Countries, 2008. The Current Situation – Global Engineering Indicators 4 Country Engineering Graduation Rate (%) 20054 Engineering Graduation Rate (%) 20064 First Engineering Degrees per million population5 Germany 16.8% 16.3% 259 UK 8.0% 8.2% 322 Australia 7.9% 7.9% 527 USA 7.4% 7.2% 254 Brazil 4.9% -- 136 South Africa 7.5% 8.3% 130 Engineering Graduates as a % of All Graduates 4 UNESCO Report on Engineering, 2010 5 Heckel, R.W. A Global Study of Engineering Undergraduate and Doctoral Degrees Awarded in Ninety-One Countries, 2008. The Current Situation – SA Engineering Indicators 2010 6 Professional Engineer Professional Engineering Technologist Professional Certificated Engineer Professional Engineering Technician Total Registrations 14 639 (1.1%) 3 491 (7.6%) 1 036 (4.9%) 3 422 (81.3%) New registrations 412 290 48 259 Transfer from Candidates 204 83 5 72 Cancellations 281 47 20 105 De-registrations 88 12 6 26 ( ) depicts registration growth rate in % from 2009 - 2010 6 ECSA Annual Report 2010 The Current Situation – SA Engineering Indicators 4 Year Engineering as a % of national article output % of articles in engineering by women % of articles in engineering by authors <30 years % of articles in engineering by authors ≥ 50 years 1990-1992 5% 6% 10% 26% 1993-1995 6% 7% 9% 29% 1996-1998 6% 8% 9% 36% 1999-2001 6% 10% 8% 35% 2002-2004 7% 11% 5% 39% 4 UNESCO Report on Engineering, 2010 The Current Situation – SA Engineering Indicators 2010 6 • • • 51 BEng / BSc(Eng) programmes in 8 universities. 95 BTech programmes in 10 universities of technology or comprehensive institutions. 92 National diploma programmes in 10 universities of technology or comprehensive institutions. • • • A total of 388 606 enrolments for degrees and diplomas from 1998 – 2008. A total of 53 342 graduates for degrees and diplomas from 1998 – 2008. An average pass rate of 13.7% compared to an international average pass rate of 25%. A total of 20 819 engineering degrees. A total of 32 523 engineering technology diplomas. • • 6 ECSA Annual Report 2010 FUTURE OUTCOMES IN ENGINEERING: CHALLENGES AND OPPORTUNITIES The Great Age of Engineering 4 • The age of great engineering, the Industrial Revolution from the 18th century into the 20th century, enjoyed seemingly unlimited sources of power, coal, oil and gas; and a world environment of apparently boundless water supply and materials. • Now we face issues of global challenge: • • • • • • • • • Sustainable social and economic development; Globalisation, energy use and transportation; Affordable and accessible health care; Education; Clean drinking water; Man-made and natural disaster mitigation; Environmental protection and natural resource management; Equitable access to infrastructure; Poverty reduction. 4 UNESCO Report on Engineering, 2010 Waves of Innovation 4 6th wave 5th wave Petrochemicals Electronics Aviation Space Iron Water power Mechanisation Textiles Commerce Steam power Railroad Steel Cotton Electricity Chemicals Internal combustion engine 4th wave Sustainability Radical resource productivity Whole system design Biomimicry Green chemistry Industrial ecology Renewable energy Green nanotechnology Digital networks Biotechnology Software Information Technology 3rd wave 2nd wave 1st wave © The Natural Edge Project 2004 1785 1845 4 UNESCO Report on Engineering, 2010 1900 1950 1990 2020 The Millennium Development Goals – WEHAB Agenda 4 • The Millennium Development Goals requires engineering to contribute to developing appropriate solutions to a wide range of global issues, including: • • • • • • Water and sanitation Energy Health Agriculture productivity Biodiversity and ecosystem management “The critical roles of engineering in addressing the large-scale pressing challenges facing our societies worldwide are widely recognized. Such challenges include access to affordable health care; tackling the coupled issues of energy, transportation and climate change; and providing more equitable access to information and natural resource management.” 4 UNESCO Report on Engineering, 2010 The Impact of Globalisation on Engineering • India will become less dependent on outsourcing and more on manufacturing, building on its strong engineering skills and higher levels of education.[4] • The Internet and the connectivity it provides has generated new markets for products and services. It has also enabled affordable and accessible educated labour. [7] • The range and opportunities offered by alternative careers has caused a decline in the interest of young people in engineering and science. [8] • The level of innovation and competitiveness of a country is directly related to the number of its engineering graduates. [4] • A decline in population growth coupled with an ageing workforce has a direct impact on a country’s economic development. [4] • “The Renaissance Engineer” : an engineer with a strong technical foundation and a broader non-traditional skill set. Engineers with broader world-views. [9] UNDERSTANDING THE DEMAND FOR ENGINEERING SKILLS DEVELOPMENT IN SOUTH AFRICA: TOWARDS GLOBAL COMPETITIVENESS AND INNOVATION Internationally - the Twelve Pillars of Competitiveness 10 Basic requirements •Institutions •Infrastructure •Macroeconomic development •Health and primary education Efficiency enhancers •Higher education and training •Goods market efficiency •Labour market efficiency •Financial market development •Technology readiness •Market size Innovation and sophistication •Institutions •Infrastructure •Macroeconomic development •Health and primary education Factor Driven Economies Efficiency Driven Economies Innovation Driven Economies 10 Global Competitiveness Report 2010 – 2011 © 2010 World Economic Forum www3.weforum.org South Africa - Global Competitiveness Index 10 Stage of Development: Efficiency driven economy Rank: 54 out of 139 countries Average score: 4.3 on a 7 rating scale 1 Factor Driven Transition 1-2 2 Efficiency Driven Transition 2-3 Pillar 5: Higher education and training Pillar 6: Goods market efficiency Pillar 7: Labour market efficiency Pillar 8: Financial market development Pillar 9: Technological readiness Pillar 10: Market size 10 Global Competitiveness Report 2010 – 2011 © 2010 World Economic Forum www3.weforum.org 3 Innovation Driven South Africa - Global Competitiveness Index 10 10 Global Competitiveness Report 2010 – 2011 © 2010 World Economic Forum www3.weforum.org South Africa – 2009 Sectoral Value-Add as a % of GDP 11 Agriculture Manufacturing Non-Manufacturing Services 3% 19% 15% 63% Strengths of South Africa Weaknesses of South Africa •Highest ranked country in Sub-Saharan Africa • Labour market efficiency •Large economy •Inflexible hiring and firing practices •Intellectual property protection and property rights •Lack of flexibility in wage determination by •Accountability of private institutions companies •Goods market efficiency •Low university enrolment rate of 15% •Financial market development •Improvements required in infrastructure •Business sophistication •Poor security and business cost of crime and violence •Scientific research institutions •Poor health of the workforce •Strong collaboration between universities and industry 11 The World Bank, Economist Intelligence Unit South Africa – % Change in GDP per Sector 12 Sectors 2008 2010 Primary Sector •Agriculture •Mining -1.2 10.9 -5.4 2.5 2.3 2.6 Secondary Sector •Manufacturing •Electricity, gas and water •Construction 3.4 2.7 1.0 9.3 6.9 8.4 2.6 2.3 Tertiary Sector •Commerce •Transport and communication •Financial and other services 4.7 1.1 3.9 7.9 2.9 2.9 2.8 2.5 Non-agricultural sector 3.7 3.8 Total 3.7 3.9 12 SA Reserve Bank, Annual Economic Report 2010, www.resbank.co.za South Africa - Global Competitiveness Index 10 10 Global Competitiveness Report 2010 – 2011 © 2010 World Economic Forum www3.weforum.org South Africa – Towards an Innovation Driven Economy 10 Key Sectors and Focus for Future Development Towards Innovation: • Infrastructure Development and Maintenance • Quality of overall structure 56 / 139 • Quality of electricity supply 94 / 139 • Fixed telephone lines 98 / 139 • Mobile telephone subscriptions 73 / 139 • Health and Primary Education • Business impact of HIV / AIDS 138 / 139 • Quality of primary education 155 / 139 • Primary education enrolment rate 109 / 139 10 Global Competitiveness Report 2010 – 2011 © 2010 World Economic Forum www3.weforum.org South Africa – Towards an Innovation Driven Economy 10 Key Sectors and Focus for Future Development Towards Innovation: • Higher Education and Training • Secondary education enrolment rate 41 / 139 • Tertiary education enrolment rate 99 / 139 • Quality of the educational system 130 / 139 • Quality of math and science education 137 / 139 • Local availability of research and training services 49 / 139 • Staff training 26 / 139 • Quality of management schools 21 / 139 10 Global Competitiveness Report 2010 – 2011 © 2010 World Economic Forum www3.weforum.org South Africa – Towards an Innovation Driven Economy 10 Key Sectors and Focus for Future Development Towards Innovation: • Selected Competitiveness Indicators • Business costs of crime and violence 137 / 139 • Extent of market dominance 43 / 139 • Hiring and firing practices 135 / 139 • Reliance on professional management 19 / 135 • Brain drain 62 / 139 • Female participation in labour force 64 / 139 • Availability of latest technologies 51 / 139 • Firm-level technology absorption 35 / 139 • Technology transfer 37 / 139 • Local supplier quality 22 / 139 • Production process sophistication 39 / 139 10 Global Competitiveness Report 2010 – 2011 © 2010 World Economic Forum www3.weforum.org BRIDGING THE SKILLS GAP: WHAT IS NEEDED IN SOUTH AFRICA? What is needed in South Africa? • Higher quality and enrolment in primary, secondary and tertiary education; particularly maths and science. • Higher graduation rates of engineers and scientists. • Sustainable construction, improved infrastructure and continuous electricity supply. • Improved healthcare and security. • Improved labour relations and flexible hiring policies. • A focus on women education and inclusion in labour force. • Significant public sector investment in research institutions and R&D. • Significant private sector investment in R&D and collaboration between industry and academia. Characteristics of The Renaissance Engineer 3 Individuals Potential Winners Potential Losers •Global star performers •Low- and medium skilled workers in tradable sectors. •Providers of high value personal services without cultural barriers to migrant labour •Low and medium-skilled workers in non-tradable sectors. •Individuals with strong crosscultural skills •Experience of working across a range of E7 economies •Specialised project component work and contract employment English remains the dominant business language 3 Hawksworth, J. The World in 2050, PWC, 2006 What is needed for Engineering? 10 “Engineering as a human endeavour is also facing numerous additional challenges of its own, including: • Attracting and retaining broader cross-sections of our youth, particularly women; • Strengthening the educational enterprise; • Forging more effective interdisciplinary alliances with the national and social sciences and the arts; • Enhancing our focus on innovation, entrepreneurship and job creation; and • Promoting increased public awareness and support for the engineering enterprise.” 10 UNESCO Report: Engineering: Issues, Challenges and Opportunities for Development, 2010 THANK YOU FOR YOUR ATTENTION. Reference List 1. 2. 3. Manual, T. Green Paper on National Strategic Planning. www.info.gov.za Accessed 12 June 2011. PricewaterhouseCoopers, The World in 2050. www.pwc.com. Accessed 11 June 2011. Hawksworth, J. PricewaterhouseCoopers, The World in 2050: Opportunities for emerging markets www.pwc.com Accessed 11 June 2011. 4. UNESCO Report Engineering: Issues, Challenges and Opportunities for Development. www.unesco.com ?? Accessed March 2011. 5. Heckel, R.W. A Global Study of Engineering Undergraduate and Doctoral Degrees Awarded in Ninety-One Countries, 2008. ?? 6. ECSA Annual Report 2010. www.ecsa.co.za. Accessed 12 June 2011. 7. IEEE Engineering Management Review (2009), Vol.37, no.1 pp. 38 – 39. 8. Schmitz, B. http://creo.ptc.com/2011/04/28/global-shortage-of-engineers-presents-challenges-toindustry 9. www.designnews.com/article/11425-Teaching_the_new_engineering_skills.php 10. Global Competitiveness Report 2010 – 2011 © 2010 World Economic Forum www3.weforum.org 11. The World Bank, Economist Intelligence Unit 12. SA Reserve Bank, Annual Economic Report 2010, www.resbank.co.za