Practical Advice

Aerospace and Defense: Securing Long Term Economic Growth Through a Partnership Approach

About the Author

Paul Everitt

Chief Executive, ADS Group

It is encouraging news that the UK’s economic recovery is really starting to take hold. For the first time since the recession, we have seen a full year of economic growth.

The journey has been long and difficult, with our nation – like many others – facing the need to put our own public finances in order, withstand the drag created by the Eurozone crisis and caution created by weak wage growth. Our challenge is now to maintain the growth momentum; ensuring that the economic recovery is sustainable and creating long-term jobs and prosperity.

Among those leading the economic recovery is the aerospace industry which centers round high value manufacturing and has delivered impressive growth throughout the recession.

This sector is world-leading and the largest in Europe. Founded on the UK’s strong industrial heritage, ongoing investment in research and technology has ensured that the UK remains at the cutting edge of what is technically possible, despite mounting competition from around the world.

UK government and industry recognized that a focused strategy and continued investment were critical to helping ensure the nation maintains its global position in these high value sectors.

As such, just over two years ago, a joint industry and UK Government initiative was established to safeguard the future of the aerospace sector. The Aerospace Growth Partnership (AGP) put mechanisms in place to ensure that we continue to make the most of both our unique strengths and skill sets – both here in the UK and in valuable growth markets internationally.

The AGP’s strategic focus centers around a three step program which is designed to maximize the UK’s aerospace prospects up to and beyond 2025. These plans see the Group investigate current capabilities and look at what may need to be done in the future to develop these capabilities.

Already, the AGP has achieved some notable successes: it has secured more than $165 million of investments by Government and industry in low carbon aeroengine technology and other innovative aerospace technology projects; it has established a fund to train 500 new aerospace engineers to Masters level over the next three years, and, significantly, in March 2013 the AGP established the Aerospace Technology Institute – a unique $3.3 billion fund to develop technology and propel our world-leading sector forward over the next seven years.

With the next generation of aircraft set to feature substantially different technologies from those used today, and an increasing challenge to be greener, leaner, and more efficient – both in product development and product performance – this investment is a substantial step forward for the sector.

It is estimated that this investment could secure up to 115,000 high value jobs in the aerospace sector and its supply chain, and that is critically important to the well-being of the UK economy.

The Aerospace Growth Partnership’s vision is to:

  • Ensure that the UK remains Europe’s number one aerospace manufacturer – an ambitious goal given intense international competition and the rapid pace of innovation in the sector
  • Support UK companies at all levels of the supply chain to broaden and diversify their global customer base – critical given the entry into the market of new manufacturers of large civil aircraft across the world
  • Provide long-term certainty and stability to encourage industry to develop technologies for the next generation of aircraft in the UK
Airbus

Airbus

In the meantime, recognizing the success of the joint industry and government approach through the AGP for the aerospace industry, the Defence Growth Partnership (DGP) was established.

The DGP aims to tackle many of the challenges faced by the sector in a world of constrained defense spending, focusing on strengthening supply chains and scope to exploit links between civil and military technologies.

The group recognizes that export opportunities are vital to the future growth of industry. Government already plays a leading role in promoting defense exports and encouraging defense SMEs, and industry recognizes that it is important to think about export opportunities at the conceptual phase. Similarly, ongoing reform of defense acquisition should ensure industry is best placed to win the competition in export markets.

Despite the challenges, the UK defense industry is in a good position to achieve future growth – there are significant opportunities in some markets, and the UK is world-leading in terms of innovation and research and technology in many areas. The key will be in adapting and utilizing our technical know-how to offer new markets systems and secure more long term through-life support contracts to strengthen order books and offer greater stability.

These successful partnerships are changing the way major investors regard the UK. A world-leading sector with coherent support from its Government sends a very strong signal and we are seeing colleagues all over the world looking closely at how the UK has managed to achieve competitive advantage.The long-term commitment to industrial strategy to support successful sectors with global growth opportunities is important and will help to maintain the UK aerospace and defense industries’ world-leading position. But we cannot afford to be complacent and must look to encourage private sector investment in R&D, new plant and machinery, as well as skills.

AgustaWestland

AgustaWestland

AgustaWestland

AgustaWestland

The Defence Growth Partnership’s strategic vision is to:Take a fresh and ambitious approach through a joint commitment from Government and the Defense Industry to work together to develop new opportunities by building on our nation’s strengths in air capabilities and intelligent systems, delivering growth through innovative and tailored solutions for customers around the globe.
Taranis

Taranis

The long-term commitment to industrial strategy to support successful sectors with global growth opportunities is important and will help to maintain the UK aerospace and defense industries’ world-leading position. But we cannot afford to be complacent and must look to encourage private sector investment in R&D, new plant and machinery, as well as skills.

With the right focus and priorities, 2014 will continue on its path to become a transformational year not just for these two important sectors, but for the wider UK economy. We want sustainable growth that delivers a better, balanced economy and more high value, high skilled jobs.

CASE STUDY

Derby, the UK’s Capital for Innovation

Derby in the British Midlands has a global reputation as a center of advanced engineering innovation and is at the forefront of aerospace technology. Home to the civil aerospace headquarters of Rolls-Royce, the city has one of the largest clusters of aerospace companies in Europe.

Rolls-Royce’s aerospace operations in the city include design, purchasing, R&D, testing and manufacturing, with on-site state-of-the-art repair and overhaul facilities and integrated data management services. Its Trent XWB and Trent 1000 engines are designed and manufactured in the city.

There is a wealth of engineering talent locally. A strong aerospace supply chain cluster contributes to 53,000 people working in hi-tech industries in Derby, and an increasing number of overseas companies are choosing to set up in Derby attracted by the skilled workforce, especially staff who work to high technical standards and close tolerance levels.

Inward investments to the city in recent years have included global companies Gardner Aerospace, Pattonair and MB Aerospace, and the city’s inward investment team is currently assisting a number of U.S. aerospace companies looking to establish a base in Derby and join the cluster.

The city is also nurturing its talent pool to help meet the future demands of aerospace employers. Apprenticeship academies and, to be opened in 2015, a new University Technical College (UTC) with a focus on advanced manufacturing, are just some of the local initiatives being delivered in partnership with local companies.

Derby’s new 250-acre commercial and technical park, Infinity Park Derby, located adjacent to the Rolls-Royce headquarters, will bring thousands of new hi-tech jobs to the city. At the heart of the park will be a $19 million Innovation Center providing small and medium-sized companies with access to leading R&D and supply chain management expertise, and supporting growth and product innovation as well as workforce development.

To find out more about investment opportunities or relocation advice in Derby, please contact:
Jimmy Drew
Tel: +44 (0) 133 220 1860
Email: jimmy.drew@marketingderby.co.uk
Website: www.investinderby.co.uk
www.hitechderby.co.uk

Further Information

Paul Everitt is the chief executive of aerospace, defense, security and space trade organization, ADS Group.
Farnborough International Limited is a wholly owned subsidiary of ADS Group.

Website: www.adsgroup.org.uk
Twitter: @ADSgroupUK
Blog: blog.adsgroup.org.uk

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