https://www.engineeringnews.co.za

Effects of globalisation hamper industry growth – MD

2nd August 2013

By: David Oliveira

Creamer Media Staff Writer

  

Font size: - +

The effects of globalisation on the consulting engineering industry in South Africa have not been properly considered and the long-term implications for the country could be negative, says international consulting company Knight Piésold MD Leon Furstenburg.

“Rather than the primary driver being an opportunity for South African consulting engineering firms to expand, globalisation is a mechanism for firms from other parts of the world, which find their traditional markets shrinking, to try to gain a foothold in Africa,” he says.

Furstenburg notes that there are syner- gies between local and foreign firms that will have advantages, but there might also be significant structural changes required in the South African firms, such as retrenchments of staff, rethinking their local office network and the like.

He notes that, when buying a firm, the general sense is that a company is investing in the number of personnel. Often, the key skills sought sit in a small part of the acquired firm, not in all their staff.

“During the years of isolation as a result of apartheid, the South African consulting engineering industry operated in a closed market and, owing to this, needed to diversify by doing all types of work rather than focusing on a particular niche,” explains Furstenburg. As a result, all the bigger firms are diversified and geographically spread, which, he says, is not the ideal situation from which to address part of a global market. Therefore, several of the newly globalised South African firms may have to consider downsizing the number of employees at branches and in divisions, which could be detrimental to the local industry.

Another concern is that corruption is becoming more blatant in South Africa.

Furstenburg also highlights the lack of technical ability and technical decision- making in many South African client bodies as another challenge facing the consulting engineering industry. “Insufficiently qualified people now affect decisions about infrastructure investment in South Africa and the merits or demerits involved – there is a total disregard for the technical or operational implications on industry.

“It has become more common for someone who is not technically qualified or experienced to be put in a position of reasonable decision-making, without him or her having the necessary tech- nical understanding, which is causing many concerns for our country,” he warns.

Knight Piésold operates worldwide, with offices on five continents. However, the company has learnt, over time, that if a consulting engineering company does not have a relevant presence in its local base, it is insecure within the industry, says Furstenburg.

The problem, he points out, is that some South African firms are being awarded contracts or tenders that they are, in many instances, not capable of undertaking. “This is crippling the larger capacity of South Africa and it is becoming increas- ingly difficult to attract skills.

“The focus on black economic empower- ment, though warranted and justified, given South Africa’s past, is negatively impacting on the consulting engineering industry. The focus on transformation as a numbers game will cripple the industry, unless government starts looking at policies to develop and train new engineers,” says Furstenburg.

In the past, if someone wanted to become an engineer, he or she could approach any municipality or govern- ment-owned company and, more often than not, receive a bursary in engineer- ing, but this is no longer the case, he notes.

Popular thinking is leaning towards industry being responsible for training unskilled individuals and financing this through the appropriate harnessing of skills levy-funded Construction Education and Training Authority (Ceta) training opportunities, Furstenburg adds.

“Knight Piésold is at the fore in terms of mobilising Ceta-administered funds for training and development and professional skills development. “The company also acts as adviser to several other firms to mobilise Ceta funds and establish educational programmes in the consulting engineering fraternity,” he notes.

Furstenburg says, some clients conclude that there is a surplus of engineers, as technicians are being equated with engineers. Therefore, according to the principles of supply and demand, these clients believe consulting engineering firms should reduce their fees.

This creates a vicious cycle, because reduced fees lead to some consulting firms appointing less skilled or know- ledgeable personnel to undertake projects they may have won simply on price.

He adds that engineers and techni- cians have different roles adding that “in many respects, technicians are as good as any engineer when it comes down to designing things but, in terms of conceptual planning, engineers have received different training that stimu- lates thinking in a different way”.

He notes that, unfortunately, there is also a trend to group consultants in gene- ral, such as management and change consultants, with consulting engineers. “Management and change consultants often get called in when, for example, a government department or company is underperforming, and they often write a report recommending that the top structure be replaced or restructured. More often than not these reports get discarded and are never acted upon.

“Expenditure on the consultants is, therefore, deemed to be wasteful and consulting engineers are often looked at in the same light, creating the perception that money spent on consultants is wasteful,” says Furstenburg.

As a result, some government depart- ments have stated their preference to try and build their own engineering expertise in-house. Furstenburg says this has never been a positive practice and believes the development will not have a positive effect on the industry or government.

Education and Skills Development
If a company wants to be involved in the best projects, Knight Piésold believes that company must employ the best people for the job. As such, the com- pany places a lot of emphasis on training its staff and those it is considering employing.

Knight Piésold has a formal mentorship programme in place that provides initial training for technicians and engineers, which they require for professional registration, Furstenburg explains.

“In terms of career development, the company has formal performance development appraisals, which set train- ing goals for each individual. It is the responsibility of the relevant manager to ensure the individual reaches the set goal,” he adds.

Over the past three years, Knight Piésold has invested many hours into acquiring Ceta funding for training in the consulting engineering industry. “Originally, Ceta programmes were written for trainees, generally employed by contractors. When Knight Piésold received the first training grant from Ceta, there were issues concerning the structure of Ceta’s programme, which allowed learners to sign up for only one year when it is not possible to receive the necessary technical training in one year,” explains Furstenburg.

As a result, the company worked closely with Ceta in rewriting its constitution, which now incorporates the principles of a three-year training cycle.

In 2012, Knight Piésold was the first company to receive a grant from Ceta for a three-year programme on a one-year trial basis. This year, the company helped two competitors set up similar programmes with Ceta, he says.

Furstenburg notes that Knight Piésold is also involved in a support scheme for high schools in underprivileged areas across South Africa. “The schools were initially selected on the basis of nonperformance, particularly in terms of having poor matric pass rates. Knight Piésold is pleased that all the schools we have supported and supplied with equipment, such as text- books, have improved their academic results,” he adds.

Edited by Tracy Hancock
Creamer Media Contributing Editor

Comments

Showroom

Booyco Electronics
Booyco Electronics

Booyco Electronics, South African pioneer of Proximity Detection Systems, offers safety solutions for underground and surface mining, quarrying,...

VISIT SHOWROOM 
Rio-Carb
Rio-Carb

Our Easy Access Chute concept was developed to reduce the risks related to liner maintenance. Currently, replacing wear liners require that...

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.488 0.56s - 161pq - 2rq
Subscribe Now