Mainland's boom on a rocky road as skills crisis emerges

PUBLISHED : Saturday, 10 February, 2007, 12:00am
UPDATED : Saturday, 10 February, 2007, 12:00am


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Planning and building a road is usually a straightforward process, with suitably located junctions and areas for passengers to alight from buses and taxis. But when such a task was attempted recently in Shanghai, the road had to be ripped up and rebuilt after the construction team forgot to put junctions in the middle of a grassy central divider. A lamp post had also been placed where buses were supposed to pull in.

Similar glitches are occurring across the mainland, where a critical shortage of qualified project managers is resulting in ineffective planning and co-ordination.

It's a problem that David Cox, chief representative of Minter Ellison Lawyers in Shanghai, has seen many times. An adviser to the public and private sectors on project finance and infrastructure development, he said different departments tended to look after separate aspects of a project and, because each contractor didn't want problems preventing him from finishing his job and getting paid sooner, there was little co-ordination between the departments.

Enter the project manager, the planning professional responsible for ensuring all the relevant parts come together and that the task is finished on time, within budget and with all risks mitigated.

But that role is becoming harder to fill on the mainland. Data compiled by the Pennsylvania-based Project Management Institute put the number of project managers on the mainland at about 1.7 million, less than 1 per cent of the country's workforce of about 700 million.

A 2002 study by the United Nations Industrial Development Organisation's Investment Promotion Office estimated that 5 million managers on the mainland needed training in project management, and that 600,000 project managers needed certification.

'The bottom line is that it's a big number, whichever way you look at it,' said Hong Kong-based Sylvain Gauthier, managing director of ProTrain China, which provides project management training and consulting services. 'The reality is that even if we train 1 million project managers in China today, they won't be effective because the organisations they need to work in are not mature enough.'

Mr Gauthier said the shortage was creating a greater awareness among company executives of the importance of project management. 'The project manager can help by teaching senior executives about doing the right project - also called portfolio management,' said Mr Gauthier. 'If we can educate senior Chinese executives about how to make resources investment decisions in their portfolio of projects to maximise the impact on their profit and loss statement, they will understand the connection between doing the project right and growing revenue or reducing costs.'

He warned that failure to do this would result in project management being 'just another management tool that foreigners are pushing'.

The urgent need for qualified project managers could not be exaggerated, said the Project Management Institute's chief executive, Gregory Balestrero. The mainland's current 11th five-year plan calls for a reduction in the number of state-owned enterprises to about 1,000 from about 24,000.

'Even though 1,000 is still a lot, it's just 1/24th of the total and it's pushing organisations into a competitive environment,' Mr Balestrero said.

At a discussion the institute had in Beijing last year with the chief executives of 22 state-owned construction firms, the biggest question was how to get funding for projects, he said.

'All of a sudden, they were thinking about procurement and how to secure contracts. They weren't prepared yet for that part of the business,' Mr Balestrero said.

'I don't think the government is going to manage projects that locally. They're going to be forced to look at global standards, develop the professionals and learn how to get to the marketplace faster.'

Mr Gauthier said the way forward for the booming mainland was to restructure companies and free project managers to work with all departments and groups. State-owned enterprises, joint ventures and traditional Chinese companies were typically 'functional base' organisations and needed to change.

'That means the old Chinese management style needs to accept change - they have to let go of some of their decision-making power. But that won't happen overnight,' Mr Gauthier said.

With Beijing's 11th five-year plan emphasising education, health and renewable energy as a way to improve the less developed inland areas, Mr Gauthier said the mainland approach was to train the trainer. 'The mindset, as I understand it, is to teach [people] how to fish so they can catch their own fish instead of bringing them fish ready to eat,' he said.

'I believe that's the right priority ... The foundation of project management needs to be sustainable and requires that local project managers ... drive the projects.'

In the area of health, an efficient healthcare service depends on information and easy access to experts in Beijing, Shanghai and Hong Kong. He said this meant support would have to come from developing key infrastructure related to long-distance medical services. For renewable energy, such as wind, solar and ethanol, project management is crucial as experts need to properly implement the plan and work with other companies.

'These areas are fundamental to the success of closing the gap between the inland and western regions and the east. Without this, any push in the sectors will create a gap in resources and won't be sustainable,' Mr Gauthier said.

Mr Balestrero said the institute would ideally like to see the mainland introduce a national standard and certification for project management. However, Mr Cox warned that doing so would also force foreign companies to help project managers, who were certified under different standards, to obtain the right qualifications.

Huawei Technologies, a major technology company based in Shenzhen, created its own programme to train and qualify project managers in 2002.

Since then, more than 4,000 Huawei employees have been trained and the company has become the Project Management Institute's first Corporate Council Partner in the region.