Dyson’s fears over a lack of UK graduates

Reporting record profits and sales for 2010, the vacuum cleaner-to-hand dryer manufacturer said it is boosting its investment in research and development (R&D) in the UK, and called on others to follow.

“There are just not enough engineering or science-based graduates coming out of our universities,” said Martin McCourt, Dyson chief executive.

“I’m not sure they are churning out enough but they are churning out good quality.”

He said the problem can be traced all the way through the UK curriculum, adding the Government’s austerity measures should not result in key scientific research programmes being cut.

“Something like 25 per cent of the students emerging from universities in China hold engineering or science qualifications,” said Mr McCourt. “It’s not the calibre, more the quantity. It’s just a question of priorities. The will is there and the money can also be there.”

His comments echo concerns from oil giant BP, which recently said it is struggling to recruit enough skilled workers such as engineers for North Sea operations.

Clive Parkman, managing director of Yorkshire firm Airedale International Air Conditioning, recently said neither school-leavers nor engineering graduates are ready to fill vital roles without up to three years of further training.

Dyson, which pioneered the bagless cyclone vacuum cleaner, said operating profits increased 8.4 per cent to £206m in 2010 while turnover was up 15.2 per cent at £887m.

The Malmesbury, Wiltshire-based company now employs 2,730 people. It increased spending on R&D to £45m in 2010, and said it is on track to double the number of engineers in Malmesbury to 700. Some 200 new engineers joined its UK team in 2010, an increase of 66 per cent.

Dyson is recruiting more graduate engineers, who join with a starting salary of £25,000 and a joining bonus of up to £3,000

“We haven’t been afraid to take a risk – doubling our engineering team during a recession,” said founder James Dyson. “The swelling ranks are working on new technology that is five or ten years away, as we plough our profits back into our lifeblood – R&D.”

In 2002 Mr Dyson established the James Dyson Foundation, to inspire young people to study engineering and become engineers. Over the next three years, its donations to undergraduate bursary winners and postgraduates will total more than £1m.

Mr McCourt said: “We have the benefit of being a private company. That allows us to take our own decisions.

“If you’re trying to protect your bottom line, all areas of investment are under pressure.

“In recessionary times, the key question is how much does that change the behaviour of shoppers?

“(We have found) provided what you’re offering them represents a substantial improvement they will justify buying it.”

The company launched seven new makes in 2010, taking the total to 52. Some 80 per cent of its machines are now sold outside the UK.

During the year it launched six new machines. Its bladeless Air Multiplier fan had its first full year of sales, boosting profits.

Dyson’s DC35 Digital Slim, its latest cordless vacuum cleaner, became a global sell-out.

Vacuum cleaner sales continued to perform well despite the recession, said the group, and it saw a big increase in sales in the United States.

Dyson is focusing in particular on its digital motor technology, and has a 70 strong team of motor specialists. The motor on the DC35 Digital Slim spins five times faster than a Formula 1 car engine.

Its Airblade hand dryer, which dries hands by scraping liquid away with air travelling at 400 miles per hour, had its most successful year so far. Dyson believes a new partnership with facilities services firm Rentokill Initial will “catapult Airblade into washrooms across Europe”.

Mr McCourt said within a short space of time its Airblade and Air Multiplier have come to represent about 20 per cent of the group’s global profits.

“Our diversification is based on technology breakthroughs,” he said.

“Other companies that have diversification strategies are not necessarily geared to technology breakthroughs – its mostly just been a broadening of existing technology.

The company makes its products in Malaysia, but employs 1,200 in the UK. Dyson added 88 per cent of its taxes, some £50m in the UK, are paid to the British Exchequer.

“The chant made by Britain rather than made in Britain is much more important for our economy,” said Mr McCourt.

A mind for inventions

As an architecture student, James Dyson was more interested in marine engineering than colonnades and cladding.

Soon he had developed a flat-hulled high-speed landing craft and a new kind of wheelbarrow – one with a big ball that didn’t sink into mud.

However, the Ballbarrow proved to be a steep learning curve for Mr Dyson. When he needed more money to fund the project, his business partners introduced more cash in return for shares.

Soon Mr Dyson found he was a minority shareholder with little control. Against his wishes, the majority shareholders decided to sell his invention. His big breakthrough came when he tried to create a better type of vacuum cleaner. Inspired by a sawmill, he ripped the bag from his old vacuum and replaced it with a crude prototype. It was some 5,126 prototypes later before Dual Cyclone technology and the first bagless vacuum cleaner was born.