on September 7th, 2009

I am currently travelling with a roadshow, presenting short information sessions in various mining towns in the Australian outback. It has been quite fascinating to learn what is happening in these rural towns, particularly with the massive growth in China in mind.

What was especially striking, here in outback Australia, is the enormous demand for minerals and the incredible engineering skills shortage that has arisen as a result.

There is no doubt that the boom in mining and demand for product from the steel furnaces is driven by China’s soaring growth. This is worrying - does it leave us anything to do as engineers in traditionally manufacturing-based countries? After all, most of the manufacturing and processing of our minerals has fled to countries such as China.

Do we want to end up with all our engineering skills hollowed out?

One of our clients from Shanghai, in China, made an interesting comment. She said that every morning she looks out from her offices across the river to see barges creeping up the river, laden with materials. One skyscraper is being built every day in China.

Here are a few other facts about China - from Rohit Talwar (The Association of Professional Futurists):

  • There is about 10% a year growth - a situation that has been sustained for the last 20 years
  • There are plans to spend $17.4B constructing airports in the next 5 years
  • The number of aircraft will increase from 863 today, to 1580 by 2010 and 4000 by 2020
  • China is now the world's largest manufacturer of personal-computers
  • In 2001, US manufactured exports were more than double China's, but now, in the first-half of 2006, China passed the US, with $404B, compared to $367 billion for the US
  • By 2020 the Chinese middle class is forecast to double to over 40% of the 1.3 B population - 520 million people.
  • In 2006 there will be 4 million graduates - including over 800,000 in engineering.

What can we do ?

We must realize that we are in a global economy. Everyone is impacted. Not only your car manufacturing plant. Even your local fish and chips shop will be affected, with potatoes not necessarily being sourced locally anymore, but internationally. Potatoes are flown airfreight which can potentially put the local ‘veggie’ farmers out of work.

We must redirect our focus to high tech type skills (‘deep know-how’), which are difficult to replicate in lower cost countries. Or to look at products which cannot be made easily on a basis of mass production. Or would cost a significant amount of money to transport any distance, particularly from a lower cost source. One engineer tells me that he makes a very good income running a small foundry business for specialized engineering items (such as pulleys). The production runs are short and the know-how required is incredibly specialized. He sells his product to all sorts of interesting countries. Even China.

As one pundit remarked recently – whilst we are excited by the mining boom throughout the world at present – what we really need is an innovation boom.

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