ENGINEERING SKILLS DEVELOPMENT: Developing South Africa’s Future Engineering Managers The 5 th Annual Engineering Manager Conference 27 – 30 June 2011

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 20112 Based on purchasing power parity PPP adjusting price differences across countries

The World in 2050 2

2 The World in 2050, PWC, January 2011: World Bank Estimates for 2009; PWC estimates for 2050

PPP 2009 GDP at PPP PPP 2050 GDP at PPP

Rank Country 2009 UJ$bn Rank Country 2009 UJ$bn

1 US 14256 1 China 59475

2 China 8888 2 India 43180

3 Japan 4138 3 US 37876

4 India 3752 4 Brazil 9762

5 Germany 2984 5 Japan 7664

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

South Africa 2009:

GDP (PPP) as a % of world total

= 0.70%

The World in 2050 2

2 The World in 2050, PWC, January 2011

Average annual Average annual Average annual

Country real growth in GDPpopulation

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.

The World in 2050 3 - Opportunities for Emerging Markets

3 Hawksworth, J. The World in 2050, PWC, 2006

% CEO Respondents

PWC, 9th Annual Global CEO Survey



Main actions that CEOs are taking or planning to take in emerging markets

PWC, 9th Annual Global CEO Survey

% CEO Respondents

Potential Winners Potential Losers

Companies •Retailers

•Leading global brand owners

•Media companies

•Niche high value added manufacturers

•Health care providers

•Education providers

•Financial services

•Energy and utilities companies

•Mass market manufacturers, both hi and low tech

•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

4 UNESCO Report on Engineering, 2010

•Students enrolled in Engineering Education 2002 – 2005

•China has 1.3 million engineering graduates per year


5 Heckel, R.W. A Global Study of Engineering Undergraduate and Doctoral Degrees Awarded in Ninety-One Countries, 2008.


4 UNESCO Report on Engineering, 20105 Heckel, R.W. A Global Study of Engineering Undergraduate and Doctoral Degrees Awarded in Ninety-One Countries, 2008.

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

The Current Situation – SA Engineering Indicators 2010 6

6 ECSA Annual Report 2010

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

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%

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.


Waves of Innovation 4


1st wave

2nd wave

3rd wave

4th wave

5th wave6th wave

1785 1845 1900 1950 1990 2020

IronWater power

MechanisationTextiles

Commerce

Steam powerRailroad

SteelCotton

ElectricityChemicals

Internal combustion

engine

PetrochemicalsElectronics

AviationSpace

Digital networksBiotechnology

SoftwareInformation Technology

SustainabilityRadical

resource productivity

Whole system design

BiomimicryGreen chemistry

Industrial ecology

Renewable energyGreen

nanotechnology

© The Natural Edge Project 2004

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.”


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

10 Global Competitiveness Report 2010 – 2011 © 2010 World Economic Forum www3.weforum.org

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

South Africa - Global Competitiveness Index 10


1Factor Driven

Transition1 - 2

2Efficiency

Driven

Transition2 - 3

3Innovation

Driven

Stage of Development: Efficiency driven economyRank: 54 out of 139 countries

Average score: 4.3 on a 7 rating scale

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



Strengths of South Africa Weaknesses of South Africa

•Highest ranked country in Sub-Saharan Africa

•Large economy

•Intellectual property protection and property rights

•Accountability of private institutions

•Goods market efficiency

•Financial market development

•Business sophistication

•Scientific research institutions

•Strong collaboration between universities and

industry

• Labour market efficiency

•Inflexible hiring and firing practices

•Lack of flexibility in wage determination by

companies

•Low university enrolment rate of 15%

•Improvements required in infrastructure

•Poor security and business cost of crime and violence

•Poor health of the workforce

South Africa – 2009 Sectoral Value-Add as a % of GDP 11

11 The World Bank, Economist Intelligence Unit

Agriculture Manufacturing Non-Manufacturing Services3% 19% 15% 63%

South Africa – % Change in GDP per Sector 12

12 SA Reserve Bank, Annual Economic Report 2010, www.resbank.co.za

Sectors 2008 2010

Primary Sector•Agriculture•Mining

-1.210.9-5.4

2.52.32.6

Secondary Sector•Manufacturing•Electricity, gas and water•Construction

3.42.71.09.3

6.98.42.62.3

Tertiary Sector•Commerce•Transport and communication•Financial and other services

4.71.13.97.9

2.92.92.82.5

Non-agricultural sector 3.7 3.8

Total 3.7 3.9



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

South Africa – Towards an Innovation Driven Economy 10




• 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




• 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


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


Potential Winners Potential LosersIndividuals •Global star performers

•Providers of high value personal services without cultural barriers to migrant labour

•Individuals with strong cross-cultural skills

•Experience of working across a range of E7 economies

•Specialised project component work and contract employment

•Low- and medium skilled workers in tradable sectors.

•Low and medium-skilled workers in non-tradable sectors.

English remains the dominant business language

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. Manual, T. Green Paper on National Strategic Planning. www.info.gov.za Accessed 12 June 2011.

2. PricewaterhouseCoopers, The World in 2050. www.pwc.com. Accessed 11 June 2011.

3. 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-to-industry

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

http://www.info.gov.za/

http://www.pwc.com/

http://www.pwc.com/

http://www.unesco.com/

http://www.ecsa.co.za/

http://creo.ptc.com/2011/04/28/global-shortage-of-engineers-presents-challenges-to-industry

http://www.designnews.com/article/11425-Teaching_the_new_engineering_skills.php

http://www.resbank.co.za/

Documents

ENGINEERING SKILLS DEVELOPMENT: Developing South Africa’s Future Engineering Managers The 5 th Annual Engineering Manager Conference 27 – 30 June 2011