Offshoring

At the end of last month The Economist’s Debate on offshoring and outsourcing ended with the motion “Do multinational corporations have a duty to maintain a strong presence in their home countries?” winning by 54% to 46%. (The Economist Debate winners seem to range from just 51% to as much as 61%). So I was interested to read in The Times (£) on 26 February an article by Sir James Dyson, (who has provided the topic for posts here before, most recently in November 2012), Why we invent in Britain, but build abroad. In it he gives some background on his company having just opened a manufacturing plant in Singapore:

For the past 15 years Dyson’s highly skilled engineers have been developing a tiny revolution in our laboratories. It is a new motor a third the size of a traditional one, but which can spin 100,000 times a minute — five times faster than a Formula One engine. Making 6,000 adjustments a second for optimal performance, it can supercharge prosaic machines.  

… Our new motor performs like no other — and because we are developing it in our own laboratories, with our own people, no one else can get their hands on it (despite trying). This is good for Dyson, but also for Britain. The intellectual property is owned here and all the profits will flow back to the UK, where we pay more than 85 per cent of our global tax. But last week Dyson opened a new £150 million motor manufacturing facility in Singapore. Why?  

… Building a complex motor with minute tolerances requires the precision of a fully automated production line. The highly skilled workforce, the tax incentives and the nearby supply chain make Singapore appealing for us. We will make four million motors in 2013, increasing our production capacity by 100 per cent to meet rising demand, particularly from Japan and America. We source the motor’s 22 components from across Asia, so it makes little sense to ship them to Britain, only to export the finished motors back again. So Singapore is the obvious place for production.

Presumably many of these motors will be fed into the production line of the Dyson factories in Malaysia to which manufacturing was transferred from Malmesbury ten years ago. I hope that his confidence that his intellectual property will be safe in Singapore is not misplaced. The FT (£) recently touched on the island state’s place at the forefront of technology. Dyson would no doubt argue that he is committed to a “strong presence in [his] home country” because:

At Dyson we invest heavily in our ideas and develop all of our technology in Britain: all our research takes place in Malmesbury, where we employ 850 world-class design engineers and scientists — about a third of them recent graduates.

He thinks:

Britain should focus on generating ideas and patenting them, that is the high-value part of the process that will earn our country a competitive advantage. We must focus on being the best problem-solvers in the world, developing technology and then exporting it.  

Thankfully, Britain is moving in the right direction and there is a renewed desire to develop technology on our shores. After my Ingenious Britain report, David Cameron increased the research and development tax credit — which supports companies that take risks and invest in developing ideas for the future — to 225 per cent. As a result, patent applications rose 29 per cent in 2011 and investors have reacted positively. But we still have a deficit of 60,000 engineers.

which is a big “But”. What worries me about Dyson’s model for Britain is that it ignores the reality of there being a considerable spread in human abilities. Even with a perfect education system which develops the abilities of individuals to the full, not everyone is cut out for the rigours of STEM education. The validity of the IQ-based analysis of educational achievement used by Charles Murray is open to argument but most people would agree that only a minority of the population have the ability to function as “world class design engineers and scientists” – assuming men and women with such talents don’t chose other career paths.

So what do the lesser mortals do? The jobs at Dyson Malmesbury up to 2003 would have made use of more people with a broader range of abilities, skilled and semi-skilled, for manufacturing than are now needed for research. The most skilled would presumably have found similar work fairly easily – for example, Renishaw plc, not far from Malmesbury, undertakes manufacturing of very high technology. But in general employment opportunities for those not capable of more than semi-skilled work are probably less attractive and are poorly rewarded, as in fulfilment centres and retail.

And this seems to be the residual problem with offshoring the manufacturing base for a lot of consumer products, although the commercial logic of global markets and supply chains is unarguable. I think that the societal advantages which the UK and other advanced economies once possessed of a wide range of employment skill levels which accommodated the spectrum of ability in their citizens are being transferred elsewhere. Conversely, the recipient countries are unlikely to be content for long with just operating production lines. To quote from Dyson’s Ingenious Britain report (page 26):

Students from outside the UK now make up more than 70% of all engineering and technology postgraduates. Although their numbers have risen by almost 20% in the last five years, the growth has almost entirely been made up of overseas students. In other words, of the additional 3,825 students in postgraduate engineering education in 2008, only 70 came from the UK.

He doesn’t say how many of the 3,750 overseas postgrads came from Singapore or Malaysia!

Lightning enlightenment

The Lightning has now been moved elsewhere.

For some months now, there has been a strange sight just off the A46 about 2 km north of J18 on the M4 (left) in SW England. At the edge of a disused lorry park sits an English Electric Lightning airframe with its fin and wing extremities removed (above left).

The Lightning was in RAF service from 1960 to 1988 when its primary role was the interception of Soviet aircraft like the Tupolev Tu-95 ‘Bear’ (above right) intruding into NATO airspace – (and probably still attempting to do so!).

Search results from simply Googling “A46 Lightning” reveal that the F1 A XM173 will probably not be at the side of the road for much longer. An application has been submitted to Wiltshire Council for its display at the Dyson premises in Malmesbury. The plan is for XM173 to be placed near a Harrier to provide a second exemplar of British engineering achievement. The Dyson Lightning will be mounted pointing to the sky, which seems appropriate given its mode of near-vertical climb, as experienced by Professor Brian Cox in his 2010 BBC series Wonders of the Solar System:

The limitations of the Lightning included its limited endurance without air-to-air refueling and its proneness to fuel fires because of the complex arrangement of the two engines, and the aircraft was never given a sensor and weapon fit to match its aerodynamics.

À la recherche de la poésie française lesbienne

In a post after the death of Christopher Hitchens almost a year ago, I mentioned in passing the British educational system’s encouragement of “Two Cultures”, essentially science and the arts. This unfortunate separation was originally identified by CP Snow as long ago as 1959 and there are occasional reminders of its existence. I have mentioned Sir James Dyson’s speaking up for STEM (science, technology, engineering and mathematics) before, so I was interested to read an article based on an interview he recently gave to The Times (£), whose science and technology supplement, Eureka, ended recently. (The article was headed, rather oddly, ‘Dyson inventor says schools should focus on science, not arts’ – he may be ‘inventor Dyson’ but surely not ‘Dyson inventor’, just ‘Dyson’?). He was reported thus:

Britain has turned its back on what made it great, with too many students choosing to read humanities at university, Sir James Dyson has said in an interview with The Times.

But the engineer and entrepreneur infuriated some who said he was trying to revive an outdated “two cultures” view of science versus humanities. Sir James, who became Britain’s 22nd richest man by developing bagless vacuum cleaners, said: “The more sophisticated you get as a nation the more you turn your back on the thing that made you wealthy. You don’t choose the difficult, hard work, of science and technology and engineering.”  

He said we should talk more about technology so that “little Angelina wanting to go off to study French lesbian poetry will suddenly realise that things like keeping an aircraft industry, developing nuclear energy, high-speed trains, all these things are important”.

Notice that the reader is told of the existence of counter-arguments even before any report of what Dyson actually said! And of course the red-rag-bull reference to “French lesbian poetry” set off the arts-based intelligentsia in the media and elsewhere, most significantly the Education Department, whose Secretary of State, Michael Gove, in a speech soon after The Times article said:

This anti-intellectual strain in British life, and thinking, may have protected us from following the sort of ideological fashions that captured continental minds over the last century. As has been pointed out before, both fascism and Marxism were ideas so foolish only an intellectual could have believed in them. But I fear the anti-intellectual bias in our way of life has, at times, become a bias against knowledge and a suspicion of education as a good in itself.  

… This bias against knowledge manifested itself most recently when the otherwise saintly inventor Sir James Dyson had a crack at people who want to go to university to learn French lesbian poetry rather than applying themselves to matters technical. Having devoted as much of my department's discretionary budget as possible to attracting more teachers into maths and science subjects, including computer science I am certainly no enemy of equipping people with the skills required to master technology. But I am certainly an enemy of those who would deprecate the study of French lesbian poetry. Because the casual dismissal of poetry as though it were a useless luxury and its study a self-indulgence is a display of prejudice. It is another example of the bias against knowledge.

A quick Google search for “French lesbian poetry” now turns up dozens of articles agreeing with Gove and none seeming to support Dyson. An example from the left is Glosswitch in the New Statesman, in a piece headed ‘Vacuum cleaners vs French lesbian poetry: The eternal battle James Dyson is dead wrong - studying things like "French lesbian poetry” can make people's lives better, even if they don't suck dirt up off carpets.’:

Take me, for instance. I’m British. I have a BA in languages, an MPhil in European Literature and a PhD in German and I’ve never invented a single piece of useful household equipment in my life.

and in a loftier manner on the right from Allan Massie in a Daily Telegraph blog:

I would guess that James Dyson is engaging in a bit of guesswork himself. Not having access to the statistics – has he? – I don’t know how many people are taking French Lesbian Poetry as their special subject in A-Level exams. I would however be surprised to find that the number was big enough to doom British manufacturing, as he seems to suggest. This hunch is fortified – if you can fortify a hunch – by reading the entry on Gay & Lesbian Writing in The Oxford Companion to French Literature. Though it runs to three columns, the only Lesbian poets mentioned are Nathalie Barney (1876-1972) and Renée Vivien (1877-1909).

accompanied by a photograph of Renée (above), English-born apparently, and seemingly a bit of a poseuse.

And so forth. At which point it is worth noting that Gove, although playing nicely to his gallery of admiring journalists (he was one himself once), has no ministerial responsibility for higher education, which Dyson was referring to not A level. University education is the responsibility of the Business Innovation and Skills (BIS) Department under Vince Cable and specifically David Willetts, and The Times quoted the latter as having “… thought Sir James’s comments unhelpful”:

“The true source of UK greatness is the breadth of our research activities — from nuclear physics to history and ethics. We’ve got great life sciences, which come up with great drugs; the aid programme in Africa that sponsors a great vaccine. But then local leaders fear the vaccine is a plot to make them ill. To get humans to take the vaccine you need anthropologists and linguists who can understand the culture. The future is multidisciplinary."

But no doubt BIS are appreciative of the James Dyson Foundation’s initiatives like the Royal College of Arts Dyson Building. Willetts as a BIS minister must be well aware of the economic prospects for the UK, which would be grim enough if we had a dozen Dysons and we don’t. But as Universities minister in particular he must also be well aware that the UK’s higher education system is turning into a house of cards held together by the readiness of students to take on large loans - long-term debt to be repaid from future income. Little consideration seems to be given to the realities of the graduate employment market by those in well-paid media jobs where they can join in the sniping at ‘the otherwise saintly Dyson’. Scratch the biographical surface of the commentariat and you often find that not only did its members mostly go to Oxbridge, but also that they are so well-connected by family or background that it is little surprise that they are where they are. But what are the prospects for an ordinary young graduate who has been studying for example French literature or history at a university ranked below the top 20 in the league tables? Many arts graduates find themselves in a call centre, supermarket or other workplace where knowledge of poetry, if not a useless luxury, is likely to be of marginal relevance, and they might well conclude that another course of study could have been more sensible.

Perhaps Dyson should have known better by now than to come out with the comment that he did, but possibly his exasperation got the better of him. After all, his company is engaged in a continuing battle with  international competitors to hold on to intellectual property let alone expand it. The Dyson Company’s headquarters are in Malmesbury, the birthplace of the philosopher Thomas Hobbes (left), so the boss taking a Hobbesian view of the nature of failure in a competitive struggle is understandable:

In such condition, there is no place for industry; because the fruit thereof is uncertain: and consequently no culture of the earth; no navigation, nor use of the commodities that may be imported by sea; no commodious building; no instruments of moving, and removing, such things as require much force; no knowledge of the face of the earth; no account of time; no arts; no letters; no society; and which is worst of all, continual fear, and danger of violent death; and the life of man, solitary, poor, nasty, brutish, and short.

It’s a great pity if Dyson’s underlying point about individual choices in higher education is not being debated because The Times alighted on one particular phrase.

(By the way Malmesbury is in Wiltshire in SW England, so I should point out that, although an admirer of Dyson, I gain no personal benefit from supporting him. In fact I’ve never been able to afford any of his products, but I always think the Airblade hand drier is a brilliant device when I use one!)








ADDENDUM 21 November

The Times (£) published a letter from Sir James Dyson today:

Sir, The comments attributed to me in this paper caused confusion. I was taken aback by the headline (“How to make Britain Great? More science, less French lesbian poetry, says Dyson”, Nov 10); those were your thoughts and words, not mine.  

Unfortunately Michael Gove, Mary Beard and others have used that headline to leverage their own causes and to reassert the arts. Don’t be misled; I’m a supporter of the arts and humanities — my concern is the shortage of engineers in Britain.  

Engineering, science, technology and making things are all being marginalised. We need the hard skills of engineering and science to complement our excellent arts base, otherwise where will our future exportable technologies come from?  

This year’s cavernous deficit of engineering graduates is 60,000. By 2017 we will have a deficit of 217,000 engineers — a staggering shortfall. We ignore it at our peril. The UK depends on the engineering sector for one fifth of GDP, employing 5.6 million people across 550,000 enterprises. 

We must make sure students are given a broad knowledge and the skills to grow this part of the economy. We need poets. But the development of patentable, exportable technology depends on a ready supply of engineers.  

Sir James Dyson  

Chair, James Dyson Foundation

Engineers in the UK (and China)

In a post in February I lamented the status of professional engineers in Britain, and the misuse of the term “engineer”. I didn’t hold out any prospect of significant change then, and the situation was hardly helped last week on the BBC1 reality show, The Apprentice.   Lord Sugar (enobled, and rivalled for charm, by Gordon Brown) chairs a “Board” and selects an aspiring young business person for (in this series) investment and partnership – tasks are set and each week one of the wannabes is stood down. On the 15 June show Sugar decided to ‘fire’ senior design engineer Glenn Ward from the competition because he was an engineer. According to the New Civil Engineer, Sugar told Ward:

“I have never yet come across an engineer that can turn his hand to business. I’m not convinced that a leopard is ever going to change his spots, and [that] an engineer is going to have the right ideas to come in business with me.
He later said that Ward was “exactly the example” of an engineer who fails at business.

This produced a predictable chorus of complaint, for example in the Observer from James Dyson, the inventor and vacuum cleaner tycoon. He was kind enough not to bring up Sugar’s famous prediction in February 2005: 'Next Christmas the iPod will be dead, finished, gone, kaput,'.   In fact it was well before then that Sugar seemed to have lost the nous for consumer electronics he had shown in the 1980s.

While not intentionally trying to make amends, the BBC is providing a much less half-baked view of the role of engineers in Made in Britain, a three-part series presented by Evan Davies . Unfortunately this is on BBC2 and will get a much smaller audience than The Apprentice on BBC1. In the first episode on 20 June Davies visited China, including Shanghai, to look at high-volume, low-value manufacturing of the type no longer viable in the UK. That morning, The Times (£), under the headline, Children get maths lessons from Asian ‘Tigers’, reported that maths teaching in English schools would adopt practices from Singapore and Hong Kong. It also pointed out:

Singapore came second in the latest international league of pupil achievement in maths, the UK was in 28th place. Shanghai came first.

Davies’ later programmes (if his accompanying book of the same title is anything to go by) are very likely to bring out the need for graduate engineers, if Britain is to undertake the necessary expansion of its manufacturing base. There is already no lack of demand: Dyson remarks “… the City loves engineers. I wish it didn't. I'm trying to lure another 400 bright minds to our Wiltshire laboratories.”

Rory Sutherland (vice-chairman of Ogilvy Group UK ) revealed in an article in the Spectator on 18 June, a marked contrast to the British way of running things :

This is from a 2007 blog, listing the Chinese politburo:

Hu Jintao, 62, President of the People’s Republic of China, graduate of Tsinghua University, Beijing, Department of Water Conservancy Engineering.
Huang Ju, 66, graduate of Tsinghua University, Department of Electrical Engineering.
Jia Qinglin, 65, graduate of Hebei Engineering College, Department of Electric Power.
Li Changchun, 61, graduate of Harbin Institute of Technology, Department of Electric Machinery.
Luo Gan, 69, graduate of Freiberg University of Mining and Technology, Germany.
Wen Jiabao, 62, premier of State Council, graduate of Beijing Institute of Geology, Department of Geology and Minerals.
Wu Bangguo, 63, graduate of Tsinghua University, Department of Radio Engineering.
Wu Guanzheng, 66, graduate of Tsinghua University, Power Department.
Zeng Qinghong, 65, graduate of Beijing Institute of Technology, Automatic Control Department.

I just checked to find out if anything had changed since 2007; perhaps they had recently decided to embrace diversity, appointing two female poets and someone with a background in contemporary dance. And so they have. Of the four new appointments since 2007, one is only in his late 50s and only three are engineers. Li Keqiang, the lone non-engineer of the nine, has a PhD in economics. This preponderance of engineers is not quite so exceptional as it first seems, since it reflects the communist fetish for heavy industry 45 years ago. And it is not all good — left unchecked, engineers are prone to devise grandstanding infrastructure projects that deliver little human value. But it is still revealing.

How many scientists are there in the House of Commons? Rather few, it seems. … No, I don’t want to be ruled by engineers. But you can’t deny that over the past 150 years they have solved more problems than politicians have.

China came up again in The Times when, kicking off its CEO Summit, it provided the results of a Populus opinion poll which had asked voters to rank the UK alongside its five major competitors on tax, infrastructure, skills, workforce and business friendliness, as summarised in the table below.

Obviously this is about public perceptions more than realities on the ground – after all how could “2,047 adults aged 18+ online between 17th June 2011 and 19th June 2011 across Great Britain”, and, “Generally speaking from everything you know or have heard or read”, be equipped to make such judgements?   38% of the sample had not taken a foreign holiday in the last three years, and 34% had left school before the age of 16. “Infrastructure” was defined “like the road & rail networks and other transport links” – but what about broadband, secure supplies of electricity and water, and so on?

Not that my views are likely to be of much value, either. I’ve been to the US and Germany in the last 10 years, but never to China or India, although I’ve probably been to France enough to have a stab at comparisons with the UK. Looking at the Table, the workforce skills relativities look dodgy: China second to Germany – one day maybe. France is almost certainly not fifth in workforce skills, nor behind the UK in my view, I’m sorry to say (plombiers being only a minor element of the French workforce). I also find it difficult to believe that France is worse than India as a place to set up a small business, and I wonder if France’s infrastructure is superior to Germany’s, taking the old East and West together, despite the enormous investment of recent years in the former. With its large fleet of nuclear reactors, France certainly won’t have Germany’s dependence on imported gas for electricity production in years to come.

To end on a more upbeat note, I see that BT send a ‘technician’, not an ‘engineer’, out to fix your stuff, unlike British Gas (see previous post). However, BT are well aware of the cost of what they call “wagon rolls” and, unless the problem is their fault, you may well get a bill shortly after the visit! I would expect that in China they are all called technicians.