President Obama’s plan to turn around the US economy includes $150bn of investment in green energy over the next ten years, driving America towards energy independence whilst creating 5 million ‘green collar’ jobs.
Nobody could question the need for the new US president to take action to resurrect the US economy or our need for the US to take a prominent role in the battle against climate change. However, is creating five million renewable energy jobs in the US realistic currently? And if not why not?
According to Wikipedia a ‘green collar’ worker is someone who is employed in the environmental sectors of the economy. When Obama has talked about green collar jobs in recent times in relation to his New Energy for America Plan he has referred more specifically to jobs within the renewable energy sector and its supply chain.
Today there is a growing skills shortage within the renewable energy sector globally. While many other industries are making redundancies recruiters in the renewable energy markets are currently kept very busy. Many employers within the sector are still battling with a bottleneck that threatens the growth of their businesses and that of the whole sector. Why is that?
The industry is still in its relative infancy so unlike many other industries there are comparatively few professionals with more than a few years’ experience. Over the past 5 years the industry has experienced huge growth and with many countries setting aggressive carbon reduction targets is further growth sustainable or even possible?
It could be argued that the availability of economic capital to simulate growth is not all that’s needed, and in fact the availability of human capital could be in reality the limiting factor.
The majority of jobs within the alternative energy industry are highly technical and based on engineering or scientific disciplines. Certainly, all growing companies need accountants, lawyers and human resources professionals but these are essentially ‘back office’ jobs and for every back office job there are five times as many ‘front office’ jobs: the engineers and technicians that are planning and building wind farms or designing, manufacturing and installing solar panels for example.
In the short term the creation of several million highly technical jobs may be little consolation to the hairdresser, shop manager or average person in the street who may have recently lost their job through redundancy.
You only need look at a specialist renewable energy job site such as RenewableEnergyJobs.com for confirmation of the global shortage of engineering skills in the sector, but why?
According to a study published in America by the National Academies there are 70,000 engineering graduates each year in the US completing their first degree. Compare that with 600,000 graduating from Chinese universities and 350,000 from India and the problem becomes more apparent. In 2005 Duke University released a revised set of figures which concluded that both the original Chinese and Indian numbers include graduates who have completed 3 and 4 years degrees while the US figures are all based on graduates of the longer 4 year degree. Their revised figures discounted those graduates completing the 3 year course, China still graduated 351,537 engineers with 4 year degrees. That's still five times the US total.
This is not just an American problem, as highlighted in the OECD policy paper “Evolution of Student Interest in Science and Technology Studies” published in 2006: in the past 15 years there has been a decrease in the relative number of graduating engineers in Europe. The problem is even more acute in the UK than in the EU as a whole. The number of engineering graduates, currently around 22,000 per annum, has steadily fallen over the last ten years, from 11% of the annual total of graduates in 1998 to 7% in 2007, despite a rising trend in the number of students at university.
In last year’s ‘Energy Pulse’ survey conducted by Doosan Babcock (the energy services firm), the vast majority of energy experts highlighted the serious lack of skills as a major problem for the energy industry as a whole.
Obama’s plan to create 5m renewable energy jobs within 10 years would require hundreds of thousands of jobs to be filled each year. How can this possibly be achieved with such low numbers of engineers graduating through the US educational system?
The plan outlines a goal of retraining America’s currently manufacturing workforce to cope with the demands of the low carbon economy, which if achieved, will go some way to solving the US skills shortage however it is going to be a huge challenge and does not solve the fundamental problem.
The western world is currently not producing enough engineers and those who do graduate with technical degree have many career options to choose from such as telecommunications, nanotechnology, computing etc.
In developing countries like India and China engineers are apparently held in far higher regard than in developed countries. This is possibly due to the very obvious impact that large infrastructure projects can have on everyday lives and local communities.
Unless the number of students taking STEM based qualifications in the western world increases dramatically this global skills shortage will become more apparent and more constraining for business. The creation of new jobs is important, but the success of Obama’s plans could hinge on our ability to overcome the shortage of suitably qualified personnel both in the US and internationally.
It is widely accepted that in many countries such as the UK there is a distinct lack of qualified teachers across all of the STEM subjects, and at all levels. This needs to be addressed urgently, but additionally we need to address prospective students’ perception of the “engineer” brand, tackle our failure to connect with talented students, and actively pursue policies to attract them to STEM related studies at first degree level.
Unless we can tackle the very real issue of available, qualified and appropriately skilled resource, talk of millions of new jobs being filled within the renewable energy sector is, I am afraid, likely to remain someway off.
Sam Newell is a specialist recruiter within the renewable energy sector and the founder of http://www.renewableenergyjobs.com.