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