To teach engineering value: an introduction to a special issue

Abstract

This paper introduces the work of five authors who contributed to this special issue and reports an analysis on the significance of value and its relevance to engineering. The etymological foundation of value is discussed, concluding that, in essence, the value concept is a metric. A trip through different sciences and disciplines shows different value meanings, presenting a rich variety of the concept's extensions, all of them in some way relating to engineering work. The economic value adding process is modelled, both at micro and macro levels, and explained in a pedagogic style, in order to show how those matters could be easily taught to engineering students. An economic growth condition is derived, which illustrates the very basic background where engineering students should build their technical knowledge. Some basic principles are proposed on which the teaching of value to engineers should be supported.

Acknowledgements

Jean Michel, the European Journal of Engineering Education editor, asked for my contribution to organize this special issue. It was an honour and a privilege and I enjoyed it fully. I am in debt for his initiative. Some analyses reported in this paper are part of a research project on the Economy of Engineering, carried out at the CEG-IST and funded by the Fundação para a Ciência e a Tecnologia (FCT). This project aims to understand roles of engineering and technology in economic systems and their importance to growth.

Notes

Economists have rigorous and highly mathematical methods to analyse micro and macro models, which can be easily followed by engineers but need special courses. See, for instance, Varian (1992) and Aghion and Howitt (1998).

This statement, which is odd to the common sense, will be justified in section 4.1.

Gross domestic product (at market prices) is the sum of gross value added (at basic prices) by all firms in a country plus direct and indirect taxes over products.

Within this simple model, there is no need to distinguish between book value and market value.

If we consider shareholders' capital in the category of borrowed capital, which is often the case for accounting models, profits become the cost of that particular capital, and the GVA by the firm will have only the two components, labour value and technology and capital use value (Fernandes 2002a).

KP is the inverse of what economists name unit labour cost. See OECD Glossary, http:// cs3-hq.oecd.org/scripts/stats/glossary/search.asp.

For instance, y = (dY/dt)/Y.

Calculation based on 70 000 engineers, whose average total labour value is about 20 000 per year, and a GDP of 130 000 million. In 1998, Total GVA was 86.6% of GDP (INE, Contas nacionais trimestrais—national accounting).

Nomenclature of Economic Activities of the European Unit, NACE 4, 1993, rev. 1.

In Portugal, adding engineers' labour value and technology use value, is responsible for about 20% of total national GVA. This is a figure that engineering students feel to be of a foremost responsibility.