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.
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.
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.