APPENDIX 39
Memorandum submitted by the Royal Aeronautical
Society
INTRODUCTION
1. The Royal Aeronautical Society (RAeS)
is the Learned Society for the Aerospace and Aviation community.
Based in London, it has a world-wide membership of over 19,000,
with over 13,000 in the UK. Its Fellows and Members represent
all levels of the aeronautical community both active and retired.
Through its various Boards and Committees, it can draw upon considerable
experience and expertise in aviation matters. In addition, the
Society has over 120 organisations who are members of its Corporate
Partners scheme.
GENERAL ISSUES
2. As one of the two or three world benchmarked
manufacturing sectors in the UK, Aerospace is central to the future
of British manufacturing. It is also one of the UK's major contributors
to, and users of the national science and technology base. This
factor alone makes Aerospace a vital element in the UK economy,
generating high value products and high quality employment. This
was thoroughly explored in the Aerospace Innovation and Growth
Team report of 2003 and was reflected in subsequent increased
commitments by HMG to aerospace research. HMG is also deeply involved
in funding the industry through the defence equipment budget and
through repayable launch investment for civil aircraft and engines.
3. However, scientific and technological
concepts do not automatically flow through an "innovation
system"—they must be converted deliberately into goods
and services. This is fundamentally an exercise in manufacturing.
With its close links to the national (and international) science
base, and through its supply chain and interaction with several
other high value manufacturing sectors, Aerospace is a vital manufacturing
element in the innovation cycle.
4. Moreover, Aerospace is increasingly an
exemplar of a manufacturing-services hybrid. Aerospace companies
are exploiting their manufacturing capability and intellectual
property to develop high value services. This can be seen in the
evolution of leasing and service-based agreements in the supply
of aero-engines to airlines and life cycle support procurement
for the MoD and other defence customers. Aerospace has also been
a major stimulator of and customer for high-value services in
areas such as IT and research consultancy.
PUBLIC PROCUREMENT
5. With over half of its output in the military
sector, the MoD is a major customer and sponsor for UK military
aerospace. Although UK companies have been very successful in
export markets and in supplying equipment for incorporation in
foreign aircraft, MoD procurement still plays a key role in determining
the health of the industry.
6. Both sides have recognised that the defence
environment has changed markedly in recent years, with increased
globalisation and domestic rationalisation and concentration.
However while the UK has one of the most open markets in the world,
both in terms direct sales and inward investment, the global market
for defence goods is heavily influenced by governments.
7. The recently published Defence Industrial
Strategy (DIS) is an important stage in developing a new procurement
relationship with the Aerospace sector. The DIS presents a challenge
to much of conventional aerospace manufacturing, especially in
the area of fixed wing combat aircraft. However, the demand for
military aircraft and airborne systems will remain high over the
next decade. It is vital, therefore, that the MoD fully recognises
the skills, competences and technologies embodied in the UK Aerospace
supply chain.
8. The DIS, if fully implemented, should
provide a stable framework for company planning as well as reinforcing
the value of partnership between customer and suppliers. However,
there is much still to be done and there are several areas still
to be resolved in the short term if a number of key capabilities
are to be retained in the UK. The most demanding aspect of the
DIS will be maintaining capability in the absence of specific
programmes. Whether through a comprehensive programme of technology
demonstration or some other "virtual" approach to the
problem this will require adequate levels of funding sustained
over long periods of time. It will also be essential to include
supplier companies to a considerable depth or face the danger
of hollowing out the UK defence industrial base.
9. The MoD's continuing commitment to a
relatively open market is not in itself a problem; UK Aerospace
companies have responded positively to the challenge and have
improved their productivity and global competitiveness. The main
issue is the lack of reciprocity in other national markets. Barriers
to trade, explicit or implicit remain high in other EU markets
and in the US While UK aerospace firms have made extensive inroads
in the U.S, this has often been based on inward investment in
the US market and a willingness to accept "100% offset"
to sell a major aerospace platform. US industry (and UK companies
based in the US) also derives considerable advantage from high
levels of R&D spending from NASA and DARPA, as well as specific
investment vehicles administered by the DoD Industry Policy department.
Many of these are specifically aimed at smaller companies.
SKILLS SHORTAGES
10. A major concern is the well-documented
fall in interest in maths and the sciences which are the foundation
for a career in engineering and technology and are therefore directly
relevant to the aerospace manufacturing sector. While the take-up
of physics at GSCE Level has increased, the number of candidates
at A Level continues to fall. This has a major impact on both
university science and engineering departments. While university
student numbers have grown on average by 56%, engineering and
technology student numbers have grown by only 4%.
11. Other reasons attributed to this decline
are the negative perceptions of engineering in the UK. While actual
employer demand for engineering graduates remains strong, most
news stories focus on closures of manufacturing sites with losses
of jobs, and the sale of UK-owned engineering firms to overseas
companies, which many young people and their parents interpret
as reducing future employment prospects in the sector over the
next decade. (Initiatives such as the Midlands Engineering Industries
Redeployment Group go widely unreported nationally.) Teachers
are especially important in forming attitudes towards careers;
they should be targeted in a campaign designed to improve perceptions
of manufacturing.
12. Engineering also struggles to attract
underrepresented groups such as women and minority ethnic groups,
particularly those from Afro-Caribbean backgrounds. For example,
women make up just 3% of modern apprentices in engineering and
manufacturing, 18% of engineering undergraduates and 6% of professional
engineers.
13. Meanwhile, growing economies such as
China and India are producing higher numbers of engineering graduates,
many of whom study in the UK. This will provide a potent reservoir
of talent for aerospace manufacturers and research centres located
in China and India. Equally, UK expertise is also under threat
from European suppliers, particularly in areas such as composites
research where there is competition for research and development
in Spain and Germany.
14. There is, however, a plethora of UK
initiatives aimed at attracting young people into engineering.
The Royal Aeronautical Society's own activities include a Careers
Centre which aims to attract young people into the sector through
publishing appropriate literature for 5-19s; a dedicated aerospace
careers website; and, in partnership with the Independent,
producing an aerospace careers magazine Everything Aerospace;
and providing specialist individual support and guidance to those
seeking employment in the sector. The Society also runs an annual
schools event to showcase UK aerospace activities and has an active
Young Members Board. In addition, the Society runs a scholarship
scheme designed to support those already studying aerospace-related
courses at HE level and other activities with schools and colleges.
15. Aerospace manufacturers also run programmes
for young people in their local area to raise the profile of aerospace
engineering. Funding for companies to bring these schemes to other
regions where they may be a high concentration of minority ethnic
groups, for example, but little aerospace presence, may help to
encourage greater awareness and participation of underrepresented
groups into aerospace engineering.
16. The Royal Aeronautical Society's experience
indicates that while graduate demand is high for top graduates,
and the cream of A-level/sandwich students, young people who do
not meet these criteria can struggle to secure employment. However,
they still have much to offer the sector in technical functions
and in other manufacturing support areas. There is a need to improve
the skills of this type of student in applying for jobs in aerospace
to meet the challenge of assessment centres and their ability
to demonstrate "soft" or "transferable" skills
as well as technical knowledge.
17. There are many Small and Medium Sized
Enterprises (SMEs) in the aerospace sector, but many graduates
find it difficult to identify them as potential employers. There
is a need for greater involvement with university careers departments
with companies at this level. Meanwhile, increased opportunities
for work-based learning for undergraduates such as through placements
and consultancy projects etc. should improve engineering graduates'
employability while ensuring that higher education meets the training
needs of employers.
18. The move of aircraft maintenance (MRO)
away from airlines towards specialist firms and aerospace manufacturers,
and especially those located in low cost countries, also means
that young people are finding apprenticeships in this field harder
to find. Meanwhile, reductions in the numbers of technical officers
in the armed services, another traditional source of technicians
to the aerospace industry, will have an impact on recruitment.
Developing pathways into technician roles for engineering graduates
may be a solution, working with universities who are offering
a greater number of vocational courses in these fields.
19. The Society recommends that government
and industry:
— Encourage the study of science and
maths among young people across the UK through curriculum development.
— Provide positive images of UK aerospace
manufacturing in general media.
— Support initiatives to attract underrepresented
groups to fill skills gaps.
— Develop incentives to attract physics
teachers.
— Develop programmes to support engineering
graduates find work in the industry.
— Address funding for apprenticeships
for the over 25s and re-training of older workers.
29 September 2006
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