Engineering a recovery

Where are we going to find new jobs and growth in the British economy? Software, social media and mobile phone app development? Not according to Sir James Dyson - he says the government is ignoring the importance of hardware and engineering, which provide far more jobs.

When I spoke to Sir James at the opening of the Royal College of Art's Dyson Building, he seemed mightily irritated about the UK's attitude to product design and engineering. He has put his money into a building which will, among other things, provide a home for start-up firms, mostly producing tangible products rather than software.

He pointed out that the government was supporting initiatives like East London's Techcity, home to many web start-ups, but hadn't put a penny into his project: "Government money is going to Silicon Roundabout but not into the production of hardware.

"The hardware trade around the world is growing at a much faster rate than social media or anything that's going on in Silicon Roundabout." He pointed out that Apple's success is based on hardware not software. "Hardware creates jobs, it creates exports, it creates wealth. I'm not sure that Google and Facebook do that."

But his biggest concern is what is happening to Britain's production line of engineers. "We're producing far too few engineering graduates - there's a 50,000 shortage now, in a few years time we'll be 200,000 short.

"Britain produces fewer engineers out of our universities than the Philippines." The vast majority of postgraduate researchers in British universities were from overseas - and were likely to to take their ideas abroad and compete with us, he said.

After our interview I went to chat with some of the young graduates who are turning ideas they conceived at the Royal College into products. They ranged from a waterless toilet for the developing world to a slideable screen designed to give patients privacy in hospitals - or act as an instant billboard. What they had in common was that they all involved hardware, offering the promise in the long run of exports and jobs if they succeed.

Whether it is true that hardware is better than software at generating employment is a subject for someone with a better economic brain than mine. It is worth noting that Dyson moved its manufacturing out of the UK many years ago - though the company does employ many engineers and designers at its Wiltshire headquarters.

But it is certainly true that for all the buzz around the TechCity initiative, it is hard to find any companies there employing more than a handful of people. iPhone apps and social media are a lot more glamorous to some eyes than fold-away hospital screens or waterless toilets - but they may not be the way to get Britain growing again.