Select Committee on Trade and Industry Minutes of Evidence


Supplementary memorandum submitted by the Society of British Aerospace Companies Ltd

INTERNATIONAL COMPARISONS

  All the major aerospace nations (US, UK, France, Germany, Italy, Russia) undertake both basic and applied aeronautical research. the US is home to by far the largest single domestic R&D budget (approximately £10 billion per annum). Although total R&D expenditure in the UK has increased over the last five years, both the French and German Governments have strongly supported aerospace related research over the same time period. In addition, many nations in South America, Asia and the Pacific ring are also curently increasing their support of total expenditure of aeronautical research.

    —  Total aerospace R&D in France was twice that of the UK in 1997 (latest comparable data), and for R&T alone it was almost three time the level of the UK.

    —  Germany, which has an aerospace industry roughly half the size of the UK, spent almost 50 per cent more on R&D and a roughly equal level of R&T than the UK in 1997.


    —  Data on US aerospace expenditure on R&T is unavailable from public sources. However, total R&D (which subsumes R&T) is at least 10 times the level of the UK for an industry which is roughly four times the size in terms of turnover.

UK AEROSPACE R&D IN THE SUPPLY-CHAIN

  Large-scale manufacturing industries such as aerospace have extensive and complex supply chains. In the case of aerospace, some 80 per cent by value is added below the final integration and assembly of the final product or major sub-system. Companies at the top of the manufacturing chain are requiring increasing degrees of financial and technical risk of their suppliers. This, in turn, is placing new research and development demands on smaller companies with commensurate funding requirements.

    —  UK aerospace R&D is conducted at all levels of the supply-chain;

    —  Around £1.7 billion of UK Aerospace Industry R&D was conducted by companies with an annual turnover in excess of £100 million.

    —  At 14.5 per cent, total R&D Intensity is greatest amongst companies with a turnover between £100 million and £1,000 million.

TOTAL UK AEROSPACE INDUSTRY R&D: BY TURNOVER BAND (1999)

Turnover Banding
Total
R&D
Associated
Turnover1
R&D
Intensity
R&T
Alone
Associated
Turnover1
R&T
Intensity
£1,00m+
892
8,180
10.9%
100
8,180
1.2%
£100m-£1,000m
815
5,603
14.5%
125
3,715
3.4%
£50m-£100m
39
1,618
2.4%
3
336
0.9%
£10m-£50m
37
1,469
2.5%
9
483
1.8%
£1m-£10m
12
525
2.4%
3
68
4.4%
<£1m
8
195
4.1%
2
117
1.5%
Grand Total
1,804
17,590
10.3%
242
12,898
1.9%


  Source:  SBAC.

  1 Turnover of companies with positive R&D only.

    —  Companies with a turnover between £100 million and £1,000 million per annum, average a R&T intensity of 2.2 per cent;

    —  SMEs undertook £18 million of R&D in 1999, representing an intensity of only 1 per cent of annual turnover. However, R&T intensity for the same companies was 2.7 per cent of turnover.

TOTAL UK AEROSPACE INDUSTRY R&D: BY SME STATUS (1999)

Size
Total
R&D
Associated
Turnover1
R&D
Instensity
R&T
Alone
Associated
Turnover1
R&T
Intensity
Non SME
1,786
15,864
11.3%
237
12,716
1.9‰
SME
18
1,726
1.0%
5
182
2.7%
Grand Total
1,804
17,589
10.3%
242
12,898
1.9%


  Source: SBAC.

  1 Turnover of companies with positive R&D only.

    —  The joint SBAC/AT Kearney globalisation study classified the UK Aerospace Industry supply chain into six distinct segments: Prime, Equipment and sub-systems, Components and accessories, Material stocking and supply, Material transformation and Services.

    —  In 1999, the prime manufacturers (taken arbitrarily as British Aerospace plc, Rolls-Royce plc, Bombardier Aerospace Shorts, Shorts Missile Systems Ltd and GKN Westland Ltd) undertook £900 million of R&D.

    —  Total R&D spend at the prime level therefore represents 50 per cent of the total R&D spend in 1999.

    —  In terms of intensity, both the Equipment and sub-systems and Services segments average an R&D spend equivalent to 12 per cent of total turnover.

TOTAL UK AEROSPACE INDUSTRY R&D: BY SUPPLY-CHAIN SEGMENT (1999)

Size
Total
R&D
Associated
Turnover1
R&D
Intensity
R&T
Alone
Associated
Turnover1
R&D
Intensity
Prime
900
8,721
10.3%
102
8,486
1.2%
Equipment and
sub-systems
581
4,993
11.6%
96
3,269
2.9%
Service
312
2,549
12.3%
41
752
5.4%
Components and
accessories
6
604
1.0%
2
125
1.4%
Material stocking
and supply
2
125
1.8%
0
93
0.3%
Material
transformation
2
598
0.3%
1
174
0.3%
Grand Total
1,804
17,589
10.3%
242
12,898
1.9%


  Source: SBAC.

  1  Turnover of companies with positive R&D only.

    —  Total R&T intensity is greatest with the Service sector at 5.4 per cent of turnover.

  Although individual company details for R&D cannot be presented for confidentiality reasons, the following companies have been sampled for the 1999 UK Aerospace Industry R&D figures:

Turnover BandingCompany Name
<£1mArmstrong Fastenings Ltd, Baxter Woodhouse & Taylor Ltd, David Brown Defence Equipment Ltd, Hurel-Dubois UK, Mid-West Engines Ltd, Normalair Garrett Limited, Sciaky Electric Welding Machines Ltd.
£1m-£10mA K Fans Ltd, Advanced Composites Group Ltd, AIM Aviation Ltd, AMPEP PLC, Coral, Dunlop Standard Aerospace Group, ERA Technology Ltd, Fairey Microfiltrex Ltd, Farsound Engineering Ltd, Hayes International, Intertechnique (Aerospace) Ltd, J S Cantrill Designs & Manufacturing Ltd, Kearsley Airways Ltd, Kontak Manufacturing Ltd, Labinal Aero & Defence Systems Ltd, Luneside Engineering Co (Halton) Ltd, Marlyn Precision, Middletown Sheet Metal Company Ltd, New Chapel Electronics, Penny & Giles International plc, Saf-T-Glo Aerospace, Sira Electro-Optics Ltd, Specialist Electronics Services, Spectrum Technologies Plc, Strachan and Henshaw Limited.
£10m-£50mAEM Limited, Aero & Industrial Technology Ltd, Aerospace Forgings Ltd, AETC Ltd, APPH Ltd, Centrax Ltd, Claverham Ltd, Dowty Aerospace Hydraulics, Dowty Aerospace Propellors, Dowty Aerospace Wolverhampton, Dunlop Aircraft Tyres Limited, Dunlop Standard Aerospace Group, Gould Alloys Ltd, Hi-Shear Fasteners Europe Ltd, HS Marston Aerospace Limited, IMI Marston Ltd, J S Chinn & Co Ltd, RHP Aerospace Ltd, Rockwell-Collins (UK) Ltd, SPS Technologies Ltd, The Hymatic Engineering Company Limited, TI Reynolds Rings Ltd, UEF Aerospace, Vega Group, Weston Aerospace Ltd.
£50m-£100mAETC Ltd, AIM Group Plc, Dunlop Standard Aerospace Group, Flight Refuelling Ltd, FR Aviation Ltd, GKN Westland Ltd, Meggitt plc, Shorts Missile Systems Ltd, Ultra Electronics, Vickers Turbine Components Division.
£100m-£1,000mAlenia Marconi Systems, Bombardier Aerospace Shorts, British Aerospace PLC, Cobham PLC, EDS, GEC Marconi Avionics Ltd, Hunting PLC, Lockheed Martin UKGS Ltd, Matra Marconi Space Ltd, Smiths Industries plc, TRW Aeronautical Systems-Lucas Aerospace.
£1,000m+British Aerospace plc, GKN Westland Ltd, Rolls-Royce plc.

Source: SBAC


OTHER AEROSPACE RELATED R&T INITIATIVES

EUROPEAN AERONAUTICAL RESEARCH

  Four priorities have been set for European aeronautics research over the next eight to 10 years:

    1.  Cut procurement costs through reductions in aircraft production costs by 35 per cent and development time by 15 to 20 per cent.

    2.  Improve efficiency and performance, with reduction in fuel consumption by 20 per cent and general improvement in reliability and direct operating costs.

    3.  Reduce noise and climate impacts as well as improve pasenger environment, with reduction in emissions of NOX by 80 per cent and CO2 by 20 per cent and decrease of external and cabin noise by 10dB each.

    4.  Improve operational capability and safety, through reductions in aircraft maintenance costs by 25 per cent and decrease in accident rates by at least the same factor as the growth in traffic.

  Technology integration and validation activities are focusing on the following technology platforms; Low-cost, low-weight primary structures; Efficient and environmentally friendly aero-engines; Novel rotary-wing aircraft configurations; More autonomous aircraft in the air traffic management systems; Power-optimised aircraft; Low external noise aircraft; Low noise aircraft cabins; Novel fixed-wing aircraft configurations and Integrated and modular aircraft electronic systems.

US DOD R&T INITIATIVES

  The US aerospace industry spends roughly £10 billion-£15 billion on R&D per annum—almost 10 times the level in the UK. The Department of Defence (sic) has identified the following technology programs which may help achieve US aviation safety goals and objectives: Materials Technology; AV-8B Harrier Mishap Reduction Program; Flying Qualities and Flight Control Technology; Automatic Rating Technique; Flying Qualities Specification—Flight Test; Passive Terrain Estimation Sensor Studies; Nonlinear Outer Loop Control of Naval Aircraft; Vectoring ESTOL Control and Tailless Operational Research; Tactical Weather Senors/Systems; Adaptive Cockpit Hazard Monitoring SBIR; Bird Infrasound (also known as Birdstrike Prevention/Survival); Fly-by-Light Advanced System Hardware; Aging Aircraft; Helicopter Active Control Technology; Rotorcaft Pilot's Associate; Advanced Display Technology; Visual Information Processing and Displays; Design Paramaters for Visually-Coupled Display Systems; Field Emission Display (FED) Cockpit Technology; Cockpit Voice Integration; Real-time Information in the Cockpit (RTIC); Flight Display Integration (FDI); Adaptive Interface Technology and Refractive Turbulence.

  In addition, strategic technologies are also to be developed from the Aviation Safety Program AvSP investment by NASA.

NATO RESEARCH

  NATO has recently produced the Aerospace Research and Development (AGARD) study: Aerospace 2020. This study explored the most advanced technologies, relevant to aerospace, being researched and developed in laboratories today. The study focused on the most promising current technologies and the organisational and tactical consequences they will have at the field and system levels, over the course of the next 25 years.

  Key technologies assessed include: Aerospace engineering; Weapon systems; Forecasting; Directed energy weapons; Arms proliferation; Remotely piloted vehicles; Nuclear proliferation; AUV (Unmanned Aerial Vehicle); Synthetic environments; Tactical aircraft; Miniaturisation, Tactical warfare; Man machine systems; Hypersonic vehicles; Human Factors engineerting; Air-breathing missiles; Man computer interface; Launchers; Situational awareness; Fighter aircraft; Data fusion; Threat evaluation; Communications networks; Laser weapons; Decision making; Defence economics and Information systems.


 
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Prepared 20 March 2001