Supplementary memorandum submitted by
Society of British Aerospace Companies (SBAC)
AEROSPACE AND DEFENCE, RESEARCH AND DEVELOPMENT
FUNDING MECHANISMS
Government support for Research and Development
investment that leads to innovation and new technological development
is a crucial part of many aerospace developments. A proactive
and positive approach to R&D by governments provides the necessary
reassurance to long-term industries such as aerospace that there
is a strong government commitment to investment.
There are many different types of funding mechanisms,
partnerships, university and business collaboration types around
the world. SBAC welcomes the opportunity to provide information
to the House of Commons Trade and Industry committee on the different
types of funding mechanisms that the aerospace industry uses.
SBAC has canvassed the opinions of members
on the types of R&D funding mechanism of which they are aware
and this paper introduces some of the programmes that are taking
place throughout the world. It describes:
— US Defense Advanced Research
Projects Agency (DARPAR)
— Israel, Defence research and
development funding
— France, Aerospace Valley
— Canada, New Strategic Aerospace
and Defence Initiative
A COMPARISON BETWEEN
DARPA IN THE
US AND THE
COMMON EU MODEL
OF R&D INVESTMENT
Through contrasting the mission driven
approach to research and development investment employed by DARPA
in the US and the common European model of RTOs in a bridging
or facilitating role, there are some clear distinctions. The former
has enabled the US to remain in at a pinnacle position in technology
development and exploitation terms, where as the latter has limitations
in terms of being able to globalise.
Mission-driven research is where the objective is
to deliver needed and useful capability, which involves innovation.
This is different to research initiated by "principal investigators"
which is aimed at advancing specific technologies or areas of
science. Mission-driven research provides the opportunity for
suppliers to identify new solutions to end-users' problems, whilst
maximising the economic leverage achieved from innovation taking
place within the supplier base.
Supporting evidence for the importance
of this mission-driven research can be seen from the difference
in approach to government-funded research between UK and the USA.
Figure 2 compares US and UK Government funded R&D that is
committed to mission-driven as compared with principal investigator
(PI) initiated research.
The difference in approach between the
US and UK is striking, with a greater proportion of US Government
R&D funding addressing directly exploitable outcomes that
are driven by legitimate procurement needs of Government. The
higher percentage of mission driven research in the US means that
more of the capabilities generated in undertaking the research
are created in the supply base, and are therefore more directly
exploited in subsequent delivery of the solution. This explains
the greater pull-through of research into products and services
that drive the US economy. The UK does not have an equivalent
magnitude of mission-driven programmes and this has an important
effect on innovation in UK industry.
A good example of this would be to examine
the operation of DARPA in the USA.
THE DEFENSE
ADVANCED RESEARCH
PROJECTS AGENCY
(DARPA)
DARPAR aspires to sponsor "revolutionary,
high pay-off research that bridges the gap between fundamental
discoveries and their military use".[195]
It seeks radical innovation for national security and acts as
a programme management organisation. DARPA does not conduct research
and development themselves and managers are short-term appointees
rather than permanent staff. There is also a "complete acceptance
of failure if the pay-off from success was high enough".[196]
The "Bridging"/facilitation model can be
seen in many parts of mainland Europe. The UK lags behind the
leading group of EU nations when it comes to R&D, the figures
below are taken from OECD R&D data, which indicates that spending
on R&D as a proportion of GDP in the UK is low by comparison
with other developed countries
| R&D as %of GDP
| % from industry | % from Government
|
EU-27 | 1.74 |
62 | 30 |
| UK | 1.78 | 42
| 33 |
| France | 2.13 | 53
| 38 |
| Germany | 2.46 | 67
| 26 |
| USA | 2.62 | 65
| 30 |
| Finland | 3.48 | 67
| 31 |
| |
| |
The bridging model of European RTO undertakes R&D
and provides related technology services in the public interest.
They undertake specific projects bringing forward value from their
knowledge base into the economy and society. Most commonly research
is funded through government sources for:
— Informing public policy
— Certification and standards setting
— long-range strategic R&D on promising
new technologies,
Such funding needs to be reasonably predictable in
order to provide the necessary institutional stability.
Although popular with some commentators the model does have limitations,
one of the main ones being that because of their subsidised status
they can't globalise easily. For example Fraunhofer can only operate
in those countries where there is German industry and it wants
their support.
There are a number of other mechanisms used in the
US (eg small business innovation research (SBIR), small business
technology transfer research (STTR) and co-operative R&D agreements
(CRADA) that demonstrate the potential for more imaginative thinking
in the UK.
DEFENCE RESEARCH
AND DEVELOPMENT
FUNDING IN
ISRAEL
Israel has been very successful in generating innovative,
cutting edge solutions in a wide variety of sectors from a relatively
modest budget. While this has been greatly assisted by often preferential
assistance from the US (government and Industry), it is true to
say the Israelis have impressed many by their ability to optimise
their investment. Key features of this appear to be:
— very close relationships between the warfighter
and industry so that industry has a real understanding of the
armed forces' operational needs. It acquires this knowledge direct,
not through a filter of requirement managers.
— strong R&D funding up to Technology Demonstrator
Programme (TDP) maturity level. Money is allocated to key companies
to fund innovative TDPs; these are not specified at the outset—industry
receives an allocation and comes up with ideas for how best to
spend it.
AEROSPACE VALLEY—FRANCE
The French Government took the decision to set up
competitiveness clusters in September 2004. €1.5bn has been
allocated over three years to these clusters. Sixty-six clusters
were identified in 2005, of which there are six global competitiveness
clusters including Aerospace Valley which is located in the South-West
of France.
The objectives of Aerospace Valley are to:
— Consolidate the cluster's world number
one position in civil aeronautics
— Consolidate the European number one position
in the field of space
— Strengthen a position of excellence in
the field of embedded systems
— Become a world-wide reference for research
and education/training
— Reinforce the strengths and synergies of
the major corporations and SMEs in the face of worldwide competition
— create 40,000 to 45,000 jobs within the
next 20 years
The aim of the Association is to develop the competitiveness
of the cluster on a national, European and international level.
The initiative provides Research and Development investment
and recognises the scientific and technological skills as being
the core of the cluster's project. Technological development and
innovation are widely supported in the region and already constitute
major assets and levers for all the cluster's participants.
Examples of composite programmes that have received
R&D funding are:
— Development of Commercial Aircraft Composites
Door
— Development of complete composite fuselage
section
— Nanotechnologies and Nanostructures for
advanced composites materials
Companies involved in this initiative include large
companies, SME's and Universities for example, Airbus, Safran,
ATR, Latecoere, Thales, Dassault and an Aerospace campus with
over 1,000 researchers has been create in Toulouse.
Canadian: New Strategic Aerospace and Defence Initiative
In the second quarter of this year the Canadian government
launched a new research and development investment initiative
to promote excellence and accelerate innovation in Canada's aerospace,
defence, security and space (A&D) industries.
The Strategic Aerospace and Defence Initiative (SADI)
which is a collaborative research and development programme between
the Canadian Government and the aerospace and defence industries
is designed to deliver new products, processes and services.
This new initiative has been developed with three
key objectives in mind: 1) to encourage strategic R&D that
will result in innovation and excellence in new products and services;
2) to provide enhanced opportunities for Canadian A&D industries;
and 3) to foster collaboration between research institutes, universities,
colleges and the private sector.
This programme of investment sends a strong signal
to aerospace and defence companies that the Canadian government
is seriously committed to this industry, for the long-term.
SADI, is a repayable contribution program, which will
be administered by Industry Canada's Industrial Technologies Office
(ITO), a Special Operating Agency, which is subject to regular
internal and external reviews. New transparency and accountability
measures include providing Canadians with such information as
project assessment criteria, the assessment process, contribution
recipients, as well as regular updates on project results, program
performance, and program accomplishments.
In his statement the Minister of Industry Maxime Bernier
said that, "Canada's aerospace and defence industries are
among the world's best, and they are important economic drivers
in all regions of the country. All Canadians will benefit from
the economic growth and technological advancements developed under
this new initiative."
The aerospace sector in Canada alone had sales of
$21.8 billion, exports of $18.5 billion, and employed 75,000 highly
skilled-and-paid Canadians in 2005.
SADI is expected to invest nearly $900 million over
the next 5 years, with funding to reach a maximum of $225 million
per year.
December 2007
195
Dr. Tony Tether, Director, Defense Advanced Research Projects
Agency, July 21, 2005 Back
196
DARPA Over the Years, http://www.darpa.mil/body/overtheyears.html Back
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