Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Johnty Dealey Williamson used
Speaker 1: to work in food manufacturing for a company that makes
Speaker 1: the flaky pastry that bakers use for croissants. But over
Speaker 1: four years ago he got out of the food industry
Speaker 1: and now he's helping make batteries.
Speaker 2: The machinery is very similar, the process are very similar.
Speaker 1: Jaunty is thirty three and lives in Birmingham, England, and
Speaker 1: he says his job change wasn't that huge of a
Speaker 1: pivot because croissant making and battery manufacturing actually have a
Speaker 1: lot in common.
Speaker 2: Instead of using flour, you are now looking at a
Speaker 2: slightly more hazardous substance in slurry that isn't as easy
Speaker 2: to gain that tacit knowledge.
Speaker 1: To make a battery, engineers coat a metal plate with
Speaker 1: a gloopy liquid that consists of chemicals like cobalts or lithium,
Speaker 1: a slurry.
Speaker 3: Quoted onto the surface, dried in an just like a
Speaker 3: croissant would be baked in an oven, and then folded
Speaker 3: into the form factor that you see.
Speaker 1: That's Akshot Rothy, a senior climate reporter here at Bloomberg.
Speaker 3: So you're going through a process of using something like
Speaker 3: a dough that is then heated and cooked in an
Speaker 3: oven and then packaged and sold to a customer just.
Speaker 1: A lot less butter I guess. Oxshot says that in
Speaker 1: Jaunty's role as head of learning and Development at the
Speaker 1: UK Battery Industrialization Center, he's been trying to convince more
Speaker 1: people that their skills and other jobs like making croissants
Speaker 1: are actually really applicable to engineering gigs. Because as the
Speaker 1: global demand for electricity rises an investment in electric energy
Speaker 1: projects surpasses two trillion dollars, the world needs more workers
Speaker 1: who can meet that demand, workers like the ones Jaunty
Speaker 1: is training at the battery facility, but Oxshot says there
Speaker 1: just aren't enough of them to pull it off.
Speaker 3: Almost every source that we spoke to within the whole
Speaker 3: ecosystem of electrification had some sort of problem with labor.
Speaker 1: I'm Sarah Holder, and this is the big take from
Speaker 1: Bloomberg News today on the show, how labor shortages in
Speaker 1: the electrification industry are impacting everything from the green energy
Speaker 1: transition to the AI revolution and what it would take
Speaker 1: to turn things around. Data center builders in the US
Speaker 1: are facing delays. German heat pump customers are waiting twice
Speaker 1: as long as French customers for installations. UK utilities are
Speaker 1: struggling to work through a backlog of solar panel customers.
Speaker 1: These are just some of the growing pains of a
Speaker 1: rapidly electrifying world, and they all have something in common.
Speaker 1: A major global shortfall in labor problem in the US,
Speaker 1: where over one hundred thousand new engineer roles created each
Speaker 1: year go unfilled. In the UK, twenty percent of engineers
Speaker 1: are expected to retire in the next five years, leaving
Speaker 1: a million job openings. Japan is looking at a shortfall
Speaker 1: of seven hundred thousand engineers by twenty thirty. Okshot Rothi,
Speaker 1: who hosts the Zero podcast, has been looking into why
Speaker 1: these issues are coming to a head now.
Speaker 3: It's increase in the number of electric cars on the streets.
Speaker 3: It's increased in the number of heat pumps being sold
Speaker 3: instead of gas or oil furnaces, and it's an increase
Speaker 3: in the number of data centers being built to power
Speaker 3: artificial intelligence. The combination of these three things is leading
Speaker 3: to a level of demand that none of these regions
Speaker 3: have seen in three decades.
Speaker 1: An Axshot says, there are any number of complications that
Speaker 1: can slow down an electrification project beyond just labor.
Speaker 3: Almost anywhere in Europe or America takes between five to
Speaker 3: ten years just to be able to get the permission
Speaker 3: to build this stuff. So that's number one. Number two
Speaker 3: is that the business model of electricity is weird. It's
Speaker 3: not like oil and gas, where you have a global
Speaker 3: benchmark of some sort and people know when they can
Speaker 3: hit profitability or not. Electricity prices vary from minute to minute,
Speaker 3: from hour to hour, and the ability to be able
Speaker 3: to make money on that electricity isn't always guaranteed. Then
Speaker 3: there's a whole host of things that are starting to
Speaker 3: become pretty alarming. There's an extreme shortage of transformers, there's
Speaker 3: an extreme shortage of electrical cables.
Speaker 1: But it's hard to talk about any of these problems
Speaker 1: without coming back to people.
Speaker 3: The people who will be needed to build this stuff,
Speaker 3: all the way from construction activity to having engineers that
Speaker 3: have PhDs that design this infrastructure.
Speaker 1: While surging demand for electricity project might sound like a
Speaker 1: dream for a company in the field, the demand supply
Speaker 1: gap is so severe it's actually posing an existential threat.
Speaker 1: One example Oxshot told me about is the Swedish battery
Speaker 1: company Northvolt.
Speaker 3: North Volt was the bet that Europe was making for
Speaker 3: a battery giant. Domestically, a company raised thirteen billion dollars,
Speaker 3: It was set to IPO in twenty twenty three at
Speaker 3: a valuation of twenty billion dollars, and then it filed
Speaker 3: for bankruptcy. Now, any bankruptcy usually is triggered where you
Speaker 3: don't have enough money, but if you take a few
Speaker 3: steps back, it really started from its difficulty to find
Speaker 3: enough workers in the north of Sweden to fill up
Speaker 3: the positions it needed to have a battery manufacturing facility.
Speaker 3: A lot of the equipment for that plant was coming
Speaker 3: from China and from South Korea. These are really complicated
Speaker 3: machines that require people who know how to operate those machines.
Speaker 3: They could find some people, but not enough, and because
Speaker 3: there's a demand for batteries that was growing, investors were
Speaker 3: keen that north would start to make plans for new plants,
Speaker 3: and in doing so it really stretched itself and thus
Speaker 3: there were cancelations of orders with billions of dollars, and
Speaker 3: then it couldn't pay back its debt hoolders and e
Speaker 3: menually had to file for bankruptcy. The company declined to
Speaker 3: comment on our story, but we did have former employees
Speaker 3: who were involved in trying to hire people who said
Speaker 3: that this was certainly one issue that contributed to the problem.
Speaker 1: If you don't have the people, you can't make the
Speaker 1: thing to sell. Yeah, let's talk about that people problem,
Speaker 1: that labor issue. What kinds of jobs are we talking
Speaker 1: about here and why are they so hard to fill.
Speaker 3: So in the UK, we spoke to a utility that
Speaker 3: builds heat pumps and solar panels and they just don't
Speaker 3: have the number of people to install that device. So
Speaker 3: it doesn't have to be somebody who's highly skilled who's
Speaker 3: gone to university with an engineering degree. It's just somebody
Speaker 3: who's able to handle mechanical things, do things like plumbing,
Speaker 3: do things like going up to a roof in a
Speaker 3: safe manner. When we spoke to data center developers in
Speaker 3: the US, they were missing construction workers, people who would
Speaker 3: lay down the foundations that would make the floor of
Speaker 3: a data center, people who would go out and build
Speaker 3: overhead lines that would bring power and huge amounts of
Speaker 3: power these days for data centers into the data center.
Speaker 3: So a lot of the engineering prowess in Western economies
Speaker 3: in the past decade or two decades have gone to
Speaker 3: the tech industry because that's where you have a sexy
Speaker 3: companies but also higher pay, and so they're having to
Speaker 3: go out and figure out how can we meet the
Speaker 3: salary of a tech engineer so that we can bring
Speaker 3: them in house and do our work instead. But when
Speaker 3: it comes to engineers with skills on the grid, you
Speaker 3: just require a level of study and experience to be
Speaker 3: able to manage something that is so finely tuned and
Speaker 3: has such complexity in it. So it really is a
Speaker 3: big challenge for the employer to figure out what type
Speaker 3: of skill do you train for, what type of skill
Speaker 3: do you go and hire for, and perhaps what type
Speaker 3: of skill could you poach from another industry by paying
Speaker 3: somebody a little more money?
Speaker 1: And across the board, labor shortage is the problem. So
Speaker 1: what's the solution that's after the break? Industrialized countries like Japan,
Speaker 1: the US, and Germany are struggling to find workers you
Speaker 1: can do the labor needed to electrify their economies and
Speaker 1: meet energy demand. But there is an outlier. One country
Speaker 1: that appears to be bucking this trend entirely is China.
Speaker 1: What's happening there.
Speaker 3: So China until recently has had a growing population. That
Speaker 3: population has been heavily incentivized to go in the sciences
Speaker 3: and engineering because the country was growing, Its manufacturing sector
Speaker 3: was growing, its construction sector was growing, its tech sector
Speaker 3: was growing, and all that growth meant lots and lots
Speaker 3: of people were getting the degrees that would provide the
Speaker 3: skills for these industry. Specifically, right now in China, there's
Speaker 3: actually been cuts in the tech industry, so many of
Speaker 3: the software engineers are now looking for jobs in perhaps
Speaker 3: safer industries like the grid industry. State Grid is one
Speaker 3: of the biggest employers and it provides a comfortable job
Speaker 3: as a state owned company, and it saw last year
Speaker 3: four hundred thousand applicants for twenty six thousand jobs. So
Speaker 3: it's a place that does not see any shortage of people,
Speaker 3: and of course there's no shortage of either goods or technology,
Speaker 3: and that's one reason why China is electrifying faster than
Speaker 3: any large economy in the world right now.
Speaker 1: What can other countries learn from china strategy.
Speaker 3: That you need to have a whole supply chain of workers,
Speaker 3: technology and manufacturing and the right policies to be able
Speaker 3: to build the whole electrification industry. You can't just focus
Speaker 3: on solving one part of the ecosystem, because without the other,
Speaker 3: the whole system doesn't work.
Speaker 1: For countries that don't yet have that supply chain of
Speaker 1: workers at home, hiring people with the right skills from
Speaker 1: abroad is one option, but the US and many countries
Speaker 1: in Europe are leaning into stricter immigration policies, making recruiting
Speaker 1: overseas harder.
Speaker 3: When we talk to companies, there's a reluctance to talk
Speaker 3: about immigration policies just because of the toxic politics around
Speaker 3: immigration right now. Nobody wants to be in the news
Speaker 3: and be in the ire of, say the US President
Speaker 3: about hiring more immigrants. But that is one thing that
Speaker 3: we know has been used by industries in the past.
Speaker 3: For example, the tech industry, even in Donald Trump's first term,
Speaker 3: argued for more h men b visas to bring in
Speaker 3: more engineers into the country. And perhaps if this problem
Speaker 3: keeps getting more severe, we might see a change in
Speaker 3: the wind. But right now it's not like industry is
Speaker 3: talking shop on immigration.
Speaker 1: Immigration restrictions have put more pressure on companies and education
Speaker 1: programs to build out the pipeline of workers themselves, and
Speaker 1: Auxtad says there are a few ways to do that.
Speaker 3: So you could start with looking at what's the quickest solution,
Speaker 3: and that often tends to be trying to poach people
Speaker 3: from another industry. So we heard from people who used
Speaker 3: to work in the food industry.
Speaker 1: He's talking about John D. Daley Williamson, who he heard
Speaker 1: from earlier.
Speaker 2: It's not too dissimilar to norm manufacturing, just a few
Speaker 2: little tweaks that we need to give some knowledge to
Speaker 2: people of.
Speaker 3: If you can't poach, then you start to train people
Speaker 3: from scratch, where they're given training to install a heat
Speaker 3: pump in the house, install a radiator for the heating,
Speaker 3: go up on a roof, and employ a solar panel,
Speaker 3: and they work with experienced workers alongside so that they
Speaker 3: gain the skills to be able to do that themselves
Speaker 3: after the two years of training is done.
Speaker 1: But especially in aging economies like Japan and Germany and
Speaker 1: the US where many people are on the brink of retiring,
Speaker 1: some experts argue that the training process has to start
Speaker 1: even earlier.
Speaker 3: Then you can go a step further down the chain
Speaker 3: where you go to universities or even schools to try
Speaker 3: and to impart the importance of education in the science
Speaker 3: is in engineering because there are all these job opportunities
Speaker 3: available to them, because they are contributing to trying to
Speaker 3: solve a problem like climate change or trying to help
Speaker 3: their country grow economically at a time of need.
Speaker 1: That kind of messaging is part of a larger strategy
Speaker 1: to sell people on these kinds of jobs, and John
Speaker 1: d who's training the next generation of battery makers, is
Speaker 1: on the front lines of that message.
Speaker 3: Johnty talked about how many times he heard that when
Speaker 3: the job of an engineer was mentioned, it was seen
Speaker 3: as a job that is dirty in the sense that
Speaker 3: you have to get oil on your hands and you
Speaker 3: are working in a space that would have filed around you.
Speaker 3: But he had to tell them, look, battery factories have
Speaker 3: some of the cleanest rooms in the world. In fact,
Speaker 3: some of the clean rooms are cleaner than hospital operating theaters.
Speaker 3: In other cases, we found, for example, in Gievarova, which
Speaker 3: makes trunmers, the company used to advertise for jobs that
Speaker 3: had the word heavy engineer in it. And the word
Speaker 3: heavy engineer was because they played around and moved things
Speaker 3: that were heavy, except you didn't have to lift it.
Speaker 3: There were machines that lifted it for you, but just
Speaker 3: removing the word heavy saw them have more applications from women.
Speaker 3: So there are these small perception issues that do matter.
Speaker 3: But these are small tweaks that perhaps contribute towards solving
Speaker 3: a very big problem.
Speaker 1: But Oxshad says, those perception shifts won't happen overnight.
Speaker 3: It's going to take a while for this signal that
Speaker 3: there is a huge demand for people in this industry
Speaker 3: to trickle down to the level where students in schools
Speaker 3: are thinking their future lies in electrifying the economy rather
Speaker 3: than sitting in front of computers and writing code.
Speaker 1: Akshat, thank you so much for coming on the show.
Speaker 3: Thank you for having me.
Speaker 1: This is the Big Take from Bloomberg News. I'm Sarah Holder.
Speaker 1: To get more from The Big Take and unlimited access
Speaker 1: to all of Bloomberg dot com, subscribe today at Bloomberg
Speaker 1: dot com slash podcast offer. If you liked this episode,
Speaker 1: make sure to follow and review The Big Take wherever
Speaker 1: you listen to podcasts. It helps people find the show.
Speaker 1: Thanks for listening. We'll be back tomorrow.