WEBVTT - Looking for a Job? The World Desperately Needs Engineers 0:00:02.800 --> 0:00:10.440 Bloomberg Audio Studios, podcasts, radio news. Johnty Dealey Williamson used 0:00:10.480 --> 0:00:13.640 to work in food manufacturing for a company that makes 0:00:13.680 --> 0:00:17.759 the flaky pastry that bakers use for croissants. But over 0:00:17.840 --> 0:00:20.400 four years ago he got out of the food industry 0:00:20.800 --> 0:00:23.439 and now he's helping make batteries. 0:00:23.760 --> 0:00:27.000 The machinery is very similar, the process are very similar. 0:00:27.440 --> 0:00:30.760 Jaunty is thirty three and lives in Birmingham, England, and 0:00:30.800 --> 0:00:33.720 he says his job change wasn't that huge of a 0:00:33.760 --> 0:00:38.839 pivot because croissant making and battery manufacturing actually have a 0:00:38.880 --> 0:00:39.720 lot in common. 0:00:40.000 --> 0:00:43.240 Instead of using flour, you are now looking at a 0:00:43.280 --> 0:00:46.560 slightly more hazardous substance in slurry that isn't as easy 0:00:46.560 --> 0:00:47.920 to gain that tacit knowledge. 0:00:48.440 --> 0:00:51.440 To make a battery, engineers coat a metal plate with 0:00:51.520 --> 0:00:55.720 a gloopy liquid that consists of chemicals like cobalts or lithium, 0:00:56.280 --> 0:00:57.320 a slurry. 0:00:57.080 --> 0:01:00.800 Quoted onto the surface, dried in an just like a 0:01:00.800 --> 0:01:04.360 croissant would be baked in an oven, and then folded 0:01:04.560 --> 0:01:07.520 into the form factor that you see. 0:01:07.680 --> 0:01:11.280 That's Akshot Rothy, a senior climate reporter here at Bloomberg. 0:01:11.760 --> 0:01:15.160 So you're going through a process of using something like 0:01:15.200 --> 0:01:19.600 a dough that is then heated and cooked in an 0:01:19.640 --> 0:01:23.200 oven and then packaged and sold to a customer just. 0:01:23.160 --> 0:01:26.760 A lot less butter I guess. Oxshot says that in 0:01:26.880 --> 0:01:29.720 Jaunty's role as head of learning and Development at the 0:01:29.800 --> 0:01:33.920 UK Battery Industrialization Center, he's been trying to convince more 0:01:33.959 --> 0:01:37.600 people that their skills and other jobs like making croissants 0:01:37.840 --> 0:01:42.319 are actually really applicable to engineering gigs. Because as the 0:01:42.360 --> 0:01:46.880 global demand for electricity rises an investment in electric energy 0:01:46.920 --> 0:01:51.320 projects surpasses two trillion dollars, the world needs more workers 0:01:51.360 --> 0:01:54.800 who can meet that demand, workers like the ones Jaunty 0:01:54.880 --> 0:01:58.760 is training at the battery facility, but Oxshot says there 0:01:58.840 --> 0:02:00.760 just aren't enough of them to pull it off. 0:02:01.640 --> 0:02:05.320 Almost every source that we spoke to within the whole 0:02:06.120 --> 0:02:11.600 ecosystem of electrification had some sort of problem with labor. 0:02:14.760 --> 0:02:17.079 I'm Sarah Holder, and this is the big take from 0:02:17.080 --> 0:02:20.760 Bloomberg News today on the show, how labor shortages in 0:02:20.800 --> 0:02:24.880 the electrification industry are impacting everything from the green energy 0:02:24.880 --> 0:02:29.000 transition to the AI revolution and what it would take 0:02:29.160 --> 0:02:37.040 to turn things around. Data center builders in the US 0:02:37.200 --> 0:02:41.079 are facing delays. German heat pump customers are waiting twice 0:02:41.120 --> 0:02:45.440 as long as French customers for installations. UK utilities are 0:02:45.480 --> 0:02:48.800 struggling to work through a backlog of solar panel customers. 0:02:49.600 --> 0:02:51.880 These are just some of the growing pains of a 0:02:52.000 --> 0:02:55.880 rapidly electrifying world, and they all have something in common. 0:02:56.440 --> 0:03:01.080 A major global shortfall in labor problem in the US, 0:03:01.240 --> 0:03:04.440 where over one hundred thousand new engineer roles created each 0:03:04.520 --> 0:03:08.520 year go unfilled. In the UK, twenty percent of engineers 0:03:08.560 --> 0:03:11.519 are expected to retire in the next five years, leaving 0:03:11.600 --> 0:03:15.600 a million job openings. Japan is looking at a shortfall 0:03:15.639 --> 0:03:20.000 of seven hundred thousand engineers by twenty thirty. Okshot Rothi, 0:03:20.120 --> 0:03:23.040 who hosts the Zero podcast, has been looking into why 0:03:23.080 --> 0:03:25.240 these issues are coming to a head now. 0:03:25.639 --> 0:03:28.720 It's increase in the number of electric cars on the streets. 0:03:29.040 --> 0:03:31.480 It's increased in the number of heat pumps being sold 0:03:31.520 --> 0:03:35.920 instead of gas or oil furnaces, and it's an increase 0:03:36.040 --> 0:03:39.120 in the number of data centers being built to power 0:03:39.240 --> 0:03:44.960 artificial intelligence. The combination of these three things is leading 0:03:45.080 --> 0:03:47.880 to a level of demand that none of these regions 0:03:47.880 --> 0:03:49.240 have seen in three decades. 0:03:49.520 --> 0:03:52.680 An Axshot says, there are any number of complications that 0:03:52.720 --> 0:03:56.520 can slow down an electrification project beyond just labor. 0:03:57.000 --> 0:04:00.400 Almost anywhere in Europe or America takes between five to 0:04:00.480 --> 0:04:03.400 ten years just to be able to get the permission 0:04:03.400 --> 0:04:06.880 to build this stuff. So that's number one. Number two 0:04:07.560 --> 0:04:11.960 is that the business model of electricity is weird. It's 0:04:12.000 --> 0:04:15.000 not like oil and gas, where you have a global 0:04:15.080 --> 0:04:18.000 benchmark of some sort and people know when they can 0:04:18.080 --> 0:04:23.040 hit profitability or not. Electricity prices vary from minute to minute, 0:04:23.040 --> 0:04:26.520 from hour to hour, and the ability to be able 0:04:26.520 --> 0:04:31.440 to make money on that electricity isn't always guaranteed. Then 0:04:31.480 --> 0:04:34.200 there's a whole host of things that are starting to 0:04:34.240 --> 0:04:38.280 become pretty alarming. There's an extreme shortage of transformers, there's 0:04:38.279 --> 0:04:40.440 an extreme shortage of electrical cables. 0:04:40.680 --> 0:04:43.080 But it's hard to talk about any of these problems 0:04:43.200 --> 0:04:45.480 without coming back to people. 0:04:45.520 --> 0:04:48.719 The people who will be needed to build this stuff, 0:04:49.160 --> 0:04:53.840 all the way from construction activity to having engineers that 0:04:54.160 --> 0:04:56.960 have PhDs that design this infrastructure. 0:04:57.680 --> 0:05:01.039 While surging demand for electricity project might sound like a 0:05:01.120 --> 0:05:04.080 dream for a company in the field, the demand supply 0:05:04.200 --> 0:05:08.440 gap is so severe it's actually posing an existential threat. 0:05:08.880 --> 0:05:11.920 One example Oxshot told me about is the Swedish battery 0:05:11.960 --> 0:05:13.280 company Northvolt. 0:05:13.880 --> 0:05:18.400 North Volt was the bet that Europe was making for 0:05:18.520 --> 0:05:23.839 a battery giant. Domestically, a company raised thirteen billion dollars, 0:05:23.960 --> 0:05:26.400 It was set to IPO in twenty twenty three at 0:05:26.440 --> 0:05:31.200 a valuation of twenty billion dollars, and then it filed 0:05:31.240 --> 0:05:35.400 for bankruptcy. Now, any bankruptcy usually is triggered where you 0:05:35.400 --> 0:05:37.599 don't have enough money, but if you take a few 0:05:37.600 --> 0:05:41.680 steps back, it really started from its difficulty to find 0:05:41.920 --> 0:05:45.480 enough workers in the north of Sweden to fill up 0:05:45.520 --> 0:05:49.400 the positions it needed to have a battery manufacturing facility. 0:05:49.920 --> 0:05:52.640 A lot of the equipment for that plant was coming 0:05:52.720 --> 0:05:57.160 from China and from South Korea. These are really complicated 0:05:57.440 --> 0:06:01.240 machines that require people who know how to operate those machines. 0:06:01.800 --> 0:06:05.320 They could find some people, but not enough, and because 0:06:05.360 --> 0:06:09.040 there's a demand for batteries that was growing, investors were 0:06:09.080 --> 0:06:12.200 keen that north would start to make plans for new plants, 0:06:12.800 --> 0:06:16.040 and in doing so it really stretched itself and thus 0:06:16.680 --> 0:06:19.760 there were cancelations of orders with billions of dollars, and 0:06:19.800 --> 0:06:22.400 then it couldn't pay back its debt hoolders and e 0:06:22.400 --> 0:06:25.640 menually had to file for bankruptcy. The company declined to 0:06:25.640 --> 0:06:29.080 comment on our story, but we did have former employees 0:06:29.440 --> 0:06:32.600 who were involved in trying to hire people who said 0:06:32.640 --> 0:06:35.800 that this was certainly one issue that contributed to the problem. 0:06:36.000 --> 0:06:38.159 If you don't have the people, you can't make the 0:06:38.200 --> 0:06:43.240 thing to sell. Yeah, let's talk about that people problem, 0:06:43.440 --> 0:06:47.360 that labor issue. What kinds of jobs are we talking 0:06:47.360 --> 0:06:50.599 about here and why are they so hard to fill. 0:06:50.920 --> 0:06:54.040 So in the UK, we spoke to a utility that 0:06:54.080 --> 0:06:57.359 builds heat pumps and solar panels and they just don't 0:06:57.400 --> 0:07:01.200 have the number of people to install that device. So 0:07:01.440 --> 0:07:03.880 it doesn't have to be somebody who's highly skilled who's 0:07:03.920 --> 0:07:07.480 gone to university with an engineering degree. It's just somebody 0:07:07.480 --> 0:07:12.320 who's able to handle mechanical things, do things like plumbing, 0:07:12.560 --> 0:07:14.600 do things like going up to a roof in a 0:07:14.640 --> 0:07:18.920 safe manner. When we spoke to data center developers in 0:07:18.960 --> 0:07:23.440 the US, they were missing construction workers, people who would 0:07:23.520 --> 0:07:26.800 lay down the foundations that would make the floor of 0:07:26.840 --> 0:07:30.000 a data center, people who would go out and build 0:07:30.160 --> 0:07:34.320 overhead lines that would bring power and huge amounts of 0:07:34.360 --> 0:07:37.680 power these days for data centers into the data center. 0:07:38.320 --> 0:07:42.280 So a lot of the engineering prowess in Western economies 0:07:42.840 --> 0:07:45.080 in the past decade or two decades have gone to 0:07:45.160 --> 0:07:48.480 the tech industry because that's where you have a sexy 0:07:48.480 --> 0:07:51.840 companies but also higher pay, and so they're having to 0:07:51.920 --> 0:07:54.240 go out and figure out how can we meet the 0:07:54.320 --> 0:07:57.600 salary of a tech engineer so that we can bring 0:07:57.680 --> 0:08:01.440 them in house and do our work instead. But when 0:08:01.480 --> 0:08:05.160 it comes to engineers with skills on the grid, you 0:08:05.320 --> 0:08:08.640 just require a level of study and experience to be 0:08:08.680 --> 0:08:12.400 able to manage something that is so finely tuned and 0:08:12.600 --> 0:08:16.680 has such complexity in it. So it really is a 0:08:16.680 --> 0:08:20.560 big challenge for the employer to figure out what type 0:08:20.680 --> 0:08:24.440 of skill do you train for, what type of skill 0:08:24.520 --> 0:08:27.800 do you go and hire for, and perhaps what type 0:08:27.800 --> 0:08:31.080 of skill could you poach from another industry by paying 0:08:31.120 --> 0:08:32.400 somebody a little more money? 0:08:33.760 --> 0:08:37.080 And across the board, labor shortage is the problem. So 0:08:37.640 --> 0:08:52.160 what's the solution that's after the break? Industrialized countries like Japan, 0:08:52.360 --> 0:08:55.319 the US, and Germany are struggling to find workers you 0:08:55.400 --> 0:08:58.480 can do the labor needed to electrify their economies and 0:08:58.520 --> 0:09:03.120 meet energy demand. But there is an outlier. One country 0:09:03.120 --> 0:09:06.800 that appears to be bucking this trend entirely is China. 0:09:07.320 --> 0:09:08.280 What's happening there. 0:09:08.559 --> 0:09:12.480 So China until recently has had a growing population. That 0:09:12.520 --> 0:09:17.120 population has been heavily incentivized to go in the sciences 0:09:17.160 --> 0:09:22.000 and engineering because the country was growing, Its manufacturing sector 0:09:22.120 --> 0:09:25.360 was growing, its construction sector was growing, its tech sector 0:09:25.480 --> 0:09:28.760 was growing, and all that growth meant lots and lots 0:09:28.840 --> 0:09:31.880 of people were getting the degrees that would provide the 0:09:31.920 --> 0:09:36.000 skills for these industry. Specifically, right now in China, there's 0:09:36.040 --> 0:09:39.840 actually been cuts in the tech industry, so many of 0:09:39.840 --> 0:09:43.640 the software engineers are now looking for jobs in perhaps 0:09:43.720 --> 0:09:47.640 safer industries like the grid industry. State Grid is one 0:09:47.679 --> 0:09:51.720 of the biggest employers and it provides a comfortable job 0:09:51.760 --> 0:09:55.760 as a state owned company, and it saw last year 0:09:56.000 --> 0:10:00.440 four hundred thousand applicants for twenty six thousand jobs. So 0:10:00.960 --> 0:10:04.280 it's a place that does not see any shortage of people, 0:10:04.720 --> 0:10:08.359 and of course there's no shortage of either goods or technology, 0:10:08.559 --> 0:10:12.880 and that's one reason why China is electrifying faster than 0:10:12.960 --> 0:10:15.000 any large economy in the world right now. 0:10:15.640 --> 0:10:19.240 What can other countries learn from china strategy. 0:10:19.040 --> 0:10:23.120 That you need to have a whole supply chain of workers, 0:10:23.360 --> 0:10:27.640 technology and manufacturing and the right policies to be able 0:10:27.679 --> 0:10:32.800 to build the whole electrification industry. You can't just focus 0:10:32.800 --> 0:10:36.840 on solving one part of the ecosystem, because without the other, 0:10:37.120 --> 0:10:38.640 the whole system doesn't work. 0:10:39.600 --> 0:10:42.480 For countries that don't yet have that supply chain of 0:10:42.520 --> 0:10:45.640 workers at home, hiring people with the right skills from 0:10:45.679 --> 0:10:49.160 abroad is one option, but the US and many countries 0:10:49.160 --> 0:10:53.640 in Europe are leaning into stricter immigration policies, making recruiting 0:10:53.720 --> 0:10:55.040 overseas harder. 0:10:55.480 --> 0:10:58.640 When we talk to companies, there's a reluctance to talk 0:10:58.679 --> 0:11:04.520 about immigration policies just because of the toxic politics around 0:11:04.640 --> 0:11:07.640 immigration right now. Nobody wants to be in the news 0:11:07.760 --> 0:11:11.600 and be in the ire of, say the US President 0:11:12.040 --> 0:11:16.640 about hiring more immigrants. But that is one thing that 0:11:16.920 --> 0:11:19.560 we know has been used by industries in the past. 0:11:19.880 --> 0:11:24.480 For example, the tech industry, even in Donald Trump's first term, 0:11:25.120 --> 0:11:28.280 argued for more h men b visas to bring in 0:11:28.360 --> 0:11:31.880 more engineers into the country. And perhaps if this problem 0:11:32.000 --> 0:11:34.560 keeps getting more severe, we might see a change in 0:11:34.559 --> 0:11:38.000 the wind. But right now it's not like industry is 0:11:38.120 --> 0:11:40.320 talking shop on immigration. 0:11:40.800 --> 0:11:44.720 Immigration restrictions have put more pressure on companies and education 0:11:44.880 --> 0:11:48.880 programs to build out the pipeline of workers themselves, and 0:11:48.960 --> 0:11:51.480 Auxtad says there are a few ways to do that. 0:11:51.840 --> 0:11:54.560 So you could start with looking at what's the quickest solution, 0:11:54.920 --> 0:11:57.680 and that often tends to be trying to poach people 0:11:57.720 --> 0:12:01.360 from another industry. So we heard from people who used 0:12:01.360 --> 0:12:02.960 to work in the food industry. 0:12:03.400 --> 0:12:06.320 He's talking about John D. Daley Williamson, who he heard 0:12:06.320 --> 0:12:06.960 from earlier. 0:12:07.280 --> 0:12:10.800 It's not too dissimilar to norm manufacturing, just a few 0:12:10.840 --> 0:12:13.920 little tweaks that we need to give some knowledge to 0:12:13.960 --> 0:12:14.320 people of. 0:12:14.720 --> 0:12:18.520 If you can't poach, then you start to train people 0:12:18.559 --> 0:12:23.040 from scratch, where they're given training to install a heat 0:12:23.040 --> 0:12:26.080 pump in the house, install a radiator for the heating, 0:12:26.760 --> 0:12:29.360 go up on a roof, and employ a solar panel, 0:12:29.760 --> 0:12:33.319 and they work with experienced workers alongside so that they 0:12:33.360 --> 0:12:36.199 gain the skills to be able to do that themselves 0:12:36.320 --> 0:12:38.440 after the two years of training is done. 0:12:38.600 --> 0:12:42.400 But especially in aging economies like Japan and Germany and 0:12:42.480 --> 0:12:45.520 the US where many people are on the brink of retiring, 0:12:46.000 --> 0:12:49.280 some experts argue that the training process has to start 0:12:49.320 --> 0:12:50.080 even earlier. 0:12:50.559 --> 0:12:53.000 Then you can go a step further down the chain 0:12:53.160 --> 0:12:55.960 where you go to universities or even schools to try 0:12:56.000 --> 0:12:59.960 and to impart the importance of education in the science 0:13:00.200 --> 0:13:03.959 is in engineering because there are all these job opportunities 0:13:04.000 --> 0:13:07.120 available to them, because they are contributing to trying to 0:13:07.160 --> 0:13:10.520 solve a problem like climate change or trying to help 0:13:10.679 --> 0:13:14.000 their country grow economically at a time of need. 0:13:14.559 --> 0:13:17.280 That kind of messaging is part of a larger strategy 0:13:17.320 --> 0:13:20.360 to sell people on these kinds of jobs, and John 0:13:20.400 --> 0:13:23.800 d who's training the next generation of battery makers, is 0:13:23.840 --> 0:13:25.640 on the front lines of that message. 0:13:26.320 --> 0:13:30.280 Johnty talked about how many times he heard that when 0:13:30.320 --> 0:13:33.040 the job of an engineer was mentioned, it was seen 0:13:33.080 --> 0:13:36.240 as a job that is dirty in the sense that 0:13:36.280 --> 0:13:38.800 you have to get oil on your hands and you 0:13:38.800 --> 0:13:42.080 are working in a space that would have filed around you. 0:13:43.000 --> 0:13:46.600 But he had to tell them, look, battery factories have 0:13:46.800 --> 0:13:50.360 some of the cleanest rooms in the world. In fact, 0:13:50.559 --> 0:13:54.920 some of the clean rooms are cleaner than hospital operating theaters. 0:13:55.400 --> 0:13:59.440 In other cases, we found, for example, in Gievarova, which 0:13:59.480 --> 0:14:03.920 makes trunmers, the company used to advertise for jobs that 0:14:04.080 --> 0:14:07.839 had the word heavy engineer in it. And the word 0:14:07.960 --> 0:14:12.760 heavy engineer was because they played around and moved things 0:14:12.840 --> 0:14:15.040 that were heavy, except you didn't have to lift it. 0:14:15.040 --> 0:14:17.400 There were machines that lifted it for you, but just 0:14:17.440 --> 0:14:22.360 removing the word heavy saw them have more applications from women. 0:14:23.000 --> 0:14:25.720 So there are these small perception issues that do matter. 0:14:26.320 --> 0:14:29.800 But these are small tweaks that perhaps contribute towards solving 0:14:29.800 --> 0:14:31.320 a very big problem. 0:14:31.760 --> 0:14:35.680 But Oxshad says, those perception shifts won't happen overnight. 0:14:36.680 --> 0:14:40.520 It's going to take a while for this signal that 0:14:40.560 --> 0:14:43.840 there is a huge demand for people in this industry 0:14:44.440 --> 0:14:48.720 to trickle down to the level where students in schools 0:14:48.920 --> 0:14:53.520 are thinking their future lies in electrifying the economy rather 0:14:54.040 --> 0:14:57.040 than sitting in front of computers and writing code. 0:14:57.640 --> 0:14:59.760 Akshat, thank you so much for coming on the show. 0:15:00.120 --> 0:15:00.960 Thank you for having me. 0:15:03.960 --> 0:15:06.720 This is the Big Take from Bloomberg News. I'm Sarah Holder. 0:15:07.120 --> 0:15:09.840 To get more from The Big Take and unlimited access 0:15:09.880 --> 0:15:13.560 to all of Bloomberg dot com, subscribe today at Bloomberg 0:15:13.560 --> 0:15:16.960 dot com slash podcast offer. If you liked this episode, 0:15:17.120 --> 0:15:19.760 make sure to follow and review The Big Take wherever 0:15:19.800 --> 0:15:22.440 you listen to podcasts. It helps people find the show. 0:15:23.080 --> 0:15:25.120 Thanks for listening. We'll be back tomorrow.