I've heard the phrase: "If he’s(I'm) gone, they’re up a creek..." many times. I don't know that I've ever been in a place where it's really held true. In general, if anyone with competence leaves, there will be a loss of knowledge base and a disruption of productivity, but it's rare that such a departure is really catastrophic.
That type of occasional disruption is just a part of the cost of doing business. These days, companies generally don't have much loyalty to the individual and thus shouldn't expect much of it in return. Any company that ignores that deserves any trouble they run into someone departs.
There will always be a few virtuosos that break this rule. I suspect that Bob Pease and Jim Williams would be considered so. But the vast majority of us are just people trying to do our best to get a job done well. The sad truth is that no one is indispensable.
"Most executive managers ... insisting that their training programs have ensured a continuance of this institutional knowledge"
Believe me, they are right. Maybe not 100%, but 99% of the knowledge worth to preserve are there. Even if you think you have world-changing secret that has not been disclosed to anyone, there is a very good chance it has been discovered or will soon be re-discovered by someone else if it really matters.
Number of skilled engineers may be shrinking. Yet, knowledge will pass on. There will be people somewhere in the world. They are curious and willing to keep digging deeper and deeper to get the job done. They may lack the experience. They may hit the wall. However, they will hit the book, search the Internet. As long as the wisdom does not vanish, somebody in somewhere will find it out and learn. I've met fresh graduated engineers who know only a little in the category compared to what my engineers' buddies knew at the time. Yet, they have learned some new knowledge and technique that I didn't know before. I think the presentation of knowledge has been done differently. The fresh graduates just need time to break them down and apply them properly. I am sure they will learn from their peers and seniors. This is how engineers have been trained and will continue so.
Good points, for sure. My belief (and fear) is that in the future, fewer and fewer people will really know how things work, how to design, how to build things--and they will become a sort of small club of "priests", by default, not intention. Then when society needs somethng real done--not just repackaging and re-spinning what has been done already--they will have to go out and find one of these true experts to get it, .
I'm pretty sure there have been science/speculative fiction stories on this theme, can't remember by who--maybe Harlan Ellison?