The US has often served as an economic barometer for the world. Owing to its size and influence, it signals economic downturns – ‘when the US sneezes, the rest of the world catches a cold’ – and can be used to track significant trends: Offshoring, the process by which economies were deindustrialised began in the US; reshoring, encouraged by shale gas-induced falling energy prices and rising transport costs for goods, was also first recognised as a US phenomenon.
In the wake of the financial crisis, President Obama aimed to promote production. Along with bailing out the US car giant GM, he introduced incentives for companies to maintain production capacity in the US. This strategy was an important part of his 2012 re-election campaign – ‘An economy built to last begins with manufacturing’. The message has broken through with the next US generation showing far more interested in industry than their predecessors.
The number of people undertaking engineering courses has grown by 38 per cent in the states since 2005, while those opting for law fell by roughly 7 per cent. This is in part reflective of a rapid rise in tuition fees for law and comparatively affordable prices for engineering courses, but it also points to a shift in attitude. There are a wide range of factors which influence course choice, one of which is perception of future job opportunities – more than a simple response to the cost of education, a steep rise in engineering undergrads signals a vote of confidence in US production.
Such a shift in education preferences can have a profound effect on an economy, influencing the labour market and availability of skills for decades. An overspill of engineering qualifications could also lead to an increase in new businesses involved in production.
US economic strategy is closely followed by the British government. Reshoring has been referenced as an ambition of the government multiple times by the prime minister, most notably in his speech to the World Economic Forum in 2014. Introducing shale gas to the UK will also be a key element of the Conservative manifesto and likely to happen under any configuration of coalition government after 2015.
Whether the same can be replicated in skills remains to be seen. The financial crisis marked the beginning of a tough period for UK graduates. General wage depression and a rapid increase in competition for high value service jobs, like law and financial services, left almost a third without a ‘graduate-level’ job even five years after leaving university.
There has been a good deal of discussion on how to boost the up-take of STEM subjects among policy makers, including the Perkins Review to look at engineering courses especially, but to little avail. STEM up-take remains poor.
