Who wants to be an engineer?

David Bowen investigates the cause of a looming skills shortage that could stifle economic recovery

Colin South is head of advanced research for Fujitsu Telecom Europe, part of the great surge of high-tech foreign investment in the UK. He was hired earlier this year to build a small team of top-flight engineers to peer into the future - and he is frustrated. "We planned to have six people in place by 1 October," he says. "I'm getting my first guy in November. It's much harder to find people than we thought it would be."

Michael Sanderson is chief executive of the Engineering and Marine Training Authority (EMTRA). His job is to keep up the supply of qualified skilled engineers by engaging apprentices. He too is frustrated. "We've been doing a big job in the West Midlands, paying for advertisements on buses to attract trainee engineers," he says. "But we haven't been able to attract enough people."

Up and down the country, industry is getting increasingly twitchy about the shortage of engineers at all levels. At the moment, those shortages are patchy but there is growing concern that they could develop into a full-blown crisis that will stifle economic growth. "I'm very concerned," says Llew Aviss, personnel director of Siemens Microelectronics and president of Newcastle Chamber of Commerce. "Our latest chamber survey shows that 50 per cent of manufacturing companies in the North-east say that skills are an issue - even though we have the highest unemployment in the UK."

It is a complex problem, but one that needs tackling urgently. Right now, there are specific shortages. Electrical and electronic skills are already running short.

Siemens, which is building a semiconductor plant, is (like Fujitsu) part of the North-eastern inward investment boom. Mr Aviss has found 400 people so far, and is aiming for 1,000 - about half of whom will be engineers. He says the rapid build-up is "like trying to climb up the north face of the Eiger in a pair of slippers". The company has had to scour the world for expats to lure back and has been offering salaries that are exceptional by North-eastern standards - pounds 40,000-plus for graduates in their late thirties.

Even if Siemens finds the staff it needs, Mr Aviss worries that the announcement of two more big semiconductor factories - Hyundai's in Scotland and LG's in south Wales - will drain the skills pot dry. "It depends on how fast they ramp up their employment as to whether the UK can sustain them," he says. "My concern is whether we're going to bust ourselves by having too many major projects growing fast."

The problem is not a peculiarly British one - the shortages in electronics skills are worldwide. But, Mr Aviss says, foreign high-tech companies' interest in the UK could be threatened as wages - still low by developed country standards - are bid up more rapidly than elsewhere.

Mr South is finding the same problem at an even higher level. His responsibility at Fujitsu is to create a team to carry out fundamental research - an encouraging sign for those who worry that inward investors are interested only in "screwdriver plants". For him, though, finding the skills he needs, "is like looking for a needle in a haystack. Even when we find someone, they can take the offer back and use it as a lever with their employers."

Demand from outside industry, and from abroad, is increasing the squeeze. The RAF is now recruiting again and is finding the going tough. "Every organisation is recruiting electronics graduates and they are in short supply," says Squadron Leader David Childs, who works on engineer recruitment. "It is not just total numbers that worry us, but the quality of the applicants." He is much more picky than he used to be, he says, because some colleges have been giving places to low-grade applicants to fill their quotas.

Then there is Boeing's recruitment drive, which aims to lure 1,500 of the country's best engineers to Seattle. With pay likely to run at $100,000 a year for the best-qualified people, it has not found the task too difficult.

EMTRA's failure to attract enough applicants into technician engineer courses illustrates the gap at lower skill levels. So does the RAF's experience: it has yet to fill 250 of the 1,000 technician engineering jobs it is offering this year.

Not every organisation is feeling the pinch. Companies with good names and above-average wages still find queues outside when they advertise. "We recently had 250 replies for four vacancies," says Philip Ashmore, personnel director of Nissan Motor Manufacturing in Sunderland.

However, Mr Ashmore concedes that, "we would be the very last to find out if there's a shortage, because we are at the elite end of the market". But figures produced by the Year of Engineering Success - a Government- sponsored campaign to persuade youngsters of the joys of engineering - suggest that even Nissan will eventually be affected.

We are galloping towards a gaping hole in engineering skills. In 1992, 21,300 people accepted degree places in engineering and technology, including computing. The next year the number was 21,500, then 19,000 and last year, 17,500. Mary Harris, director-general of YES, says 10 per cent of these will not complete the course and another 20 per cent will go into other jobs, mostly in finance. That means about 12,000 people will obtain their degree and take subsequent training to become chartered engineers in about seven years' time.

There is a similar pattern at the next level down - incorporated engineers taking Higher National Diploma courses. Numbers entering courses have fallen by about 30 per cent since 1992: only about 2,000 people will qualify in 2003. Figures for technician engineers - with the skills sought by Mr Sullivan - have not been tracked, but industry experts predict that about 8,000 people will take up modern apprenticeships this year.

YES reckons we need 30,000 to 35,000 new engineers a year to satisfy current demand. Although industry and education work to different timescales, it is still difficult to see where they will come from.

Even if we assume that publicity will boost the number of apprentices qualifying to above 10,000, there will still be a massive shortfall. The only solution will be to entice staff from abroad - and this, as Boeing is now showing, will be expensive.

How is it that we are running into such shortages? We are, after all, barely out of recession. Two million people are unemployed and the manufacturing sector is hardly booming.

The squeeze has been caused by the gentlest of upturns after a 15-year decline in industrial employment. Underlying this is the unwillingness of British people to become engineers: a century-old problem which is universally acknowledged, but one that seems to show no signs of disappearing.

In 1980, 3 million people worked in engineering. Now 1.5 million do. As industry contracted because of the recession, companies found little difficulty finding the skills they needed, so they cut right back on training. Towards the end of the Eighties, when the economy was booming, there was a brief "skills scare" - but the early Nineties' recession swept that away.

"It was fine that there was less training as long as things were going down," EMTRA's Mr Sanderson says. "But two or three years ago they plateaued and are now going up." His organisation aims to keep up the flow of technician engineers - people who in the past would have done a full apprenticeship.

"They are retiring at the rate of 12,000 a year. Two years ago we were getting 4,000 new apprentices. Now that is up to 8,000 but we need 12,000 just to keep pace. There is a real problem," he says.

The doubling of entrants in the last two years comes, he says, from the introduction of "modern apprenticeships" in 1992. They are designed to provide more flexible training than traditional apprenticeships - essential in a world where "multi-skilling" is becoming the norm.

Shortsighted management must take much of the blame for the continuing shortfall in trainees. It costs a company between pounds 26,000 and pounds 40,000 to fund a three-year modern apprenticeship - and many companies are refusing to make the investment.

However, subsidies can make a difference. Wales, where companies can reclaim pounds 11,200 from the Government for each modern apprentice - against pounds 7,000 in England - has 5 per cent of the population and 20 per cent of modern apprenticeships. "I find it revealing," Mr Sanderson says.

Tony Doherty, Boeing's recruitment agent, knows who to blame. "I say British industry is paying the price for its disinvestment in training and engineering in the past 10 years," he says.

But the demand side problems go back much further than this. The so-called "anti-engineering culture" in Britain has kept academics debating happily for the last century and more. Many earnest attempts have been made to counter it, but the battle seems lost: the fastest-growing degree subject is media studies, which first appeared as a course in 1981. In 1986 there were 4,481 applications for media studies courses; last year there were 22,029, although the real number is much higher because it is commonly offered as part of a combined degree. There were 169,000 applications for engineering and technology degrees - a healthy contrast, it would seem, until we consider that 47,000 of these were from overseas students.

Other lightweight courses are on the increase. There were more than 12,000 applications for tourism courses last year, and 11,000 for communication studies. In the all-important terms of image, these courses glitter brightly alongside plodding and poorly paid engineering - despite the best efforts of one engineering initiative after another.

Perhaps pay is the answer. Engineers say wages are not that bad - but an engineer in Britain rarely earns headline-making money. The average pay of a 45-year-old member of the Institute of Electronic Engineers is pounds 36,000 - an impressive hike on the pounds 25,500 in 1990 but still not enough to send pound signs dancing in front of youthful eyes. Fujitsu's Mr South says he is offering a PhD graduate with two or three years' experience about pounds 35,000, a fortune in engineering terms but, he concedes, "not a lot in the City".

Perhaps the best hope is some serious wage inflation in engineering. If the Boeing brain drain can create "six figure engineer" banners in the media, they might just persuade youngsters to abandon their dreams of tourism studies and send them rushing towards engineering courses. Healthy for them - life-saving for the economy.