Author: Sir John Parker GBE FREng, president, Royal Academy of Engineering In today’s society, we are faced with a huge rebalancing task in our economy as North Sea oil and gas resources decline, and the recognition sinks in that there are clear limits to growth in our financial sector – the slack has to be taken up by ‘leveraging off’ good science and research via innovative engineering and technology that can create new products and new exportable services that will also compress our balance of payment deficits. We cannot escape the crucial role that innovative engineering can and must play in our future growth in these Islands. In future, we will have to make increasing use of our intellectual horsepower and our creative talent. Hence, the Royal Academy of Engineering has over the last three years promoted the critical need for a modern industrial strategy to create tomorrow’s growth. A key objection of any strategic plan in a corporate entity is to bring alignment across different departments and disciplines, so that there is collectively a focus on delivery of the plan’s goals and targets. We have lacked such an industrial framework for so many years as we have haphazardly reduced our industrial base. For me, industrial activity is a broad church of applied research, excellence in product design creation of value-adding services, adapting leading manufacturing processes, and building long-term customer relationships. At the end of the day, it is about being recognised as the innovative and quality leader in your field – whether you are a country or a company. Having pursued with government, from my earliest days as president, the critical need to adopt an industrial strategy, I am happy to say they have now embraced such a strategy focused on key sectors. INDUSTRIAL STRATEGY FOR GROWTH [caption id="attachment_13282" align="alignright" width="682"] Sir John Parker[/caption] Our generation and those who follow us face some fundamental global challenges in supporting a global population of seven billion people – and rising. We are sharing a common environment and competing for common resources as never before. But in a world where such resources are finite, competition can only take us so far. We must also learn to co-operate. We need new ways of working. The Irish Academy of Engineering’s excellent report on the future of manufacturing in Ireland summarises the serious challenges faced here. It states that “education, research and innovation practices are going through a seismic shift at global and European level”. I could not agree more. The conventional view of manufacturing is evolving rapidly towards a concept of ‘making value’ – not simply making things or creating services. This involves the complete cycle of understanding customers, research, development, design, manufacturing and services. In a networked world innovation is no longer simply about making widgets. It can create entirely new industrial ecosystems in a matter of a few months. Such a changing world requires a renewed focus from policymakers, so in addition to the UK government’s approach to a modern industrial strategy, we had Lord Heseltine’s 2012 report on UK competitiveness, entitled, ‘No stone unturned’. UK science minister David Willetts has followed this up with a research focus on ‘Eight Great Technologies’ that are seen as key areas for future development: big data, space, robotics and autonomous systems, synthetic biology, regenerative medicine, agri-science, advanced materials and energy. The Royal Academy of Engineering is actively supporting these areas. For example, Dr Fleur Loveridge, a Research Fellow at the University of Southampton, is working on ground heat exchangers and ground source heat pumps, which can reduce energy consumption by up to 75%. She aims to develop foundations that can double as heat exchangers. Dr Damien Coyle at the University of Ulster, one of our Leverhulme Fellows, has developed a game called Neurolympics to help patients who are unable to move or speak to communicate with their family and their doctors. A cap filled with electrodes passes signals from the brain’s motor cortex to a computer so that patients can directly control characters on a screen. The Royal Academy of Engineering has embarked on a major new campaign called Engineering for Growth, in partnership with some of our major companies. We aim to highlight new models for growth and celebrate success wherever those precious green shoots are emerging. Our new Academy Enterprise Hub has had over 80 of our Fellows, who are amongst the UK's top technology entrepreneurs and business professionals, volunteer at least one day a month to mentor researchers in start-ups to grow new small- and medium-sized enterprises. An effective collaboration between industry and academia is vital to commercialise innovative ideas. The Northern Ireland Science Park is a shining example of what can be achieved, for example, by companies like Andor. Spun out from Queen's University in in 1989, it now employs over 400 people in 16 offices worldwide and distributes its products to 10,000 customers in 55 countries. Two years ago, Andor was shortlisted for the Royal Academy’s premier award for engineering innovation, the MacRobert Award. The Irish Academy also identified in its report that co-ordination between government departments is essential for an innovative manufacturing strategy to succeed. Targets for growth are meaningless without buy-in from all the relevant government departments, including most crucially education. In the words of the late Charles Vest, former president of the American Academy of Engineering: “Government is not going to do the things that are required for us to have a vibrant economy, health, security and quality of life.” He went on to say that applied equally to business and academia. And he was right – neither government, business nor academia can or should do all these things on their own. He said: “The fact is that we have to have all hands on deck. Each of these sectors must play its proper role and forge an alliance to meet today’s challenges.” GROWTH COMPANIES To create and lead growth, companies require bold and imaginative leadership – the confidence to take on residual risk after you have wrestled with its mitigation.I am fortunate in my non-executive roles today, to be on the Boards of three major overseas companies that have truly exhibited significant growth and each has a strong UK presence as well.

  • Airbus Group (Ex EADS)
Airbus produces some of the world’s best civil and military aircraft and, in 2012, produced more aircraft than Boeing. Twenty years ago, Airbus produced 123 civil aircraft. In 2013, it delivered five times as many – some 615. Today, its accumulated web orders since the start of Airbus is 13,815, around 7.5 times those at the end of 1994. The group now employs some 130,000 employees. It is an engineering- and technology-led company that is today probably short of 2-3,000 professional engineers. Every wing of every Airbus is designed and built in the UK, while Bombardier Aerospace in Belfast is also an important supplier to the company.
  • Carnival Corporation
Carnival Corporation is the world’s largest cruise group, comprising many famous brands including Cunard, P&O Cruises, Princess Cruises, Holland American and Seabourne. In the 1970s, Ted Arison, the company’s founder, started with one old second-hand ship – the ‘Empress of Canada’ – and adapted it for cruising, renaming it the ‘Mardi Gras’. Today, the group has 103 cruise ships. Each new large vessel has a capital cost of over $600 million. great engineers and naval architects design and build such ships, but highly talented engineers and a raft of other skills are needed to operate and manage them.
  • DP World (Dubai)
DP World is now the third-largest container port company in the world, operating 65 container terminals across six continents. Some 22 years ago, DPWorld handled one million containers; today it handles 55 million, a 55-fold increase. London Gateway is the company’s latest investment on the River Thames, with the Thames now dredged to 14.5 metres to intake the largest container vessels in the world. The port has adjacent to it what will be Europe’s largest business park. This huge infrastructure investment of over £1 billion has created significant employment in its construction and will support the creation of thousands of jobs as the port and business park expands. It is a great example of fuelling economic growth via infrastructure development – we need much more of it. In all these growth examples, it was driven by excellence in engineering. Growth in our economies is a crucial ingredient to create meaningful employment for our citizens to build growing profits and increases in tax revenues to enable a country to fund its health, education, research and new infrastructure. We in the business world, as well as engineers, are not good at advocating the importance to all our citizens of creating profitable, growing sustainable businesses. ENERGY CHALLENGE There is something that could present our economic growth with a serious challenge over the next few winters. That is our energy system. Firstly, the capacity margin of the GB electricity system could continue to fall over the next five years as old generating plant closes – both nuclear and coal. That is what a report by the Royal Academy of Engineering found earlier this year. Our study was carried out at the request of the Prime Minister's Council for Science and Technology. Our working group concluded that although the electricity supply is expected to be sufficient to cover predicted levels of demand, it is likely to stretch the system close to its limits – notably during the winter of 2014-15, increasing the chances of power outages if several adverse events were to happen at the same time. And we know from weather events over the past winter that adverse events can and regrettably do happen. Random interference and threats to our energy companies by politicians seriously undermine confidence to invest in vital new power stations. We need an overall systems approach to electricity supply, coupled with long-term planning, well beyond the short political horizon. We need to join up the dots between fuel, power and heat, rather than treating each as a different problem. We must also recognise that energy security and cutting emissions are global challenges – our Academy is now working closely with the Chinese Academy of Engineering on carbon capture, utilisation and storage and also on air quality and we are keen to further develop this critical relationship. The Irish Academy has also done a lot of work on energy policy, with similar objectives of reducing emissions to meet the EC Directives whilst also meeting demand. Renewable energy has become a real success story in Ireland – on average, about a fifth of Ireland’s annual electricity usage is from renewables. That’s one of the highest in the world and an excellent example of what can be achieved with a creative approach to both policy and technology. I note an interesting proposal in your latest energy advisory – to use surplus power from the combined-cycle gas turbine stations to power heat pumps in rural areas, as a way of reducing Ireland’s reliance on oil-fired central heating systems. DIVERSITY IN ENGINEERING Only 8% of the professional engineering workforce are women. Also, while ethnic minorities make up 24% of first degree qualifiers, according to the Labour Force Survey, they make up only 6% of those working in engineering occupations. Our Academy, together with the Royal Society, is leading a major drive for diversity across the engineering and science professions. To date, 26 of the 36 professional engineering institutions, as well as the Engineering Council and the Royal Academy of Engineering, have signed up to our Diversity Concordat, this represents over 90% of the UK’s engineering registrant population. Our newest, most exciting award – the Queen Elizabeth Prize for Engineering – has at its heart the mission of engaging young people in engineering and telling the story of how innovations develop and evolve into real technical advances. I am delighted at the global reach of this new prize in raising awareness of engineering in new and surprising ways. Nominations for the next £1 million prize, awarded every two years, will open next month and it will be presented in 2015. Later this year, I will come to the end of my term as president of the Royal Academy of Engineering after a three-and-a-quarter year stint. However, I am delighted to tell you that our Council has nominated Prof Dame Ann Dowling to the Fellowship as my successor. A world authority on combustion and acoustics, Dame Ann became a Cambridge University research fellow in 1977 and is Head of the Engineering Department at Cambridge. I cannot think of an engineer better qualified to take the Academy forward into this ever-changing but fascinating world of global engineering challenges and I wish Ann the best of good fortune in her new role at the Academy’s helm. This article is based on the recent Sir Bernard Crossland Lecture entitled 'Engineering for Growth', delivered by Sir John Parker on 27 February in Queen's University Belfast. Sir John Parker has chaired five FTSE100 companies, including National Grid, from which he stepped down in December 2011. He is currently chair of the mining conglomerate Anglo American. He is vice chair of DP World (Dubai) and a non-executive director of Carnival Corporation and EADS (AIRBUS). He was elected to the Royal Academy of Engineering as one of its youngest fellows in 1983 and became president in 2011.