Scottish Aerospace, Defence & Marine Industry Strategy 2009 Competing in a Global Industry
Scottish Aerospace, Defence & Marine Industry Strategy 2009 Industry Advisory Group Tom O Neill (Chair) Neil McManus Alastair Morrison Angus Holt Steve Callan Fred Gorrie Alan Fraser David Lockwood Craig Lockhart Jim Trail Stephen Boyd George Adams Prof. Jim McDonald Bob Bishop Gordon McGuinness Ian Watson Ian McMahon Elisabeth Stark (Observer) Independent Vice President & Managing Director, Spirit AeroSystems (Europe) Deputy Senior Vice President, Radar and Advanced Targeting, SELEX Galileo UK Programmes Director, BVT Surface Fleet Managing Director Europe, Goodrich Corporation Managing Director, Inter Tec Services Managing Director, BAE SYSTEMS Regional Aircraft Managing Director, Thales Optronics Managing Director (Clyde), Babcock Marine Chief Operating Officer, Raytheon Systems Assistant Secretary, Scottish Trades Union Congress Operations Executive, Rolls Royce Principal, University of Strathclyde Chief Executive Officer, V.Ships Shipmanagement Head of Industry & Enterprise, Skills Development Scotland Director, A D S Scotland Head of Aerospace, Defence & Marine, Scottish Enterprise Head of Manufacturing & Economic Response, Scottish Government
Aerospace, Defence and Marine is one of Scotland s highest value industry sectors, currently employing well over 22,000 people and supporting the jobs of a further 30,000. It is a dynamic and successful, hightechnology sector operating in a truly global market place. It boasts the presence in Scotland of some of the world s leading sector companies. At the heart of its success is a highly skilled workforce with a very high proportion of graduates. The sector s commitment to the future is evidenced by its strong emphasis on training and development, with industryleading apprenticeship programmes. Average salaries are over one third greater than the Scottish average. Innovation and the application of technology are hallmarks of the sector which recognises the importance of investing in research and development to remain competitive. With over one hundred companies and university departments involved, Aerospace, Defence & Marine related research has a strong presence in Scotland. The importance of industry engagement and having a strong industry voice in the development of future strategy and policy is fully recognised. Scottish Enterprise brought together industry leaders, stakeholders and government in an Industry Advisory Group to provide advice and guidance on the needs of the sector. The first task of our Industry Advisory Group has been the development of this strategy, which we have determined must be action driven. Its aim is simple to create an environment in which the Aerospace, Defence & Marine sector can grow and prosper and ultimately contribute even more to Scotland s economy. This strategy represents the collective views, aspirations and ambitions of industry, academia and the public sector. It sets out actions and identifies the stakeholders responsible for delivering these, with a timeline focused on delivery in the short to medium term. This strategy is the first step in an ongoing process. We are committed to reviewing and refreshing this work on a regular basis towards shaping and evolving long term strategies to ensure that the sector makes a substantive and growing contribution to the Scottish economy. Scotland s Aerospace, Defence & Marine sector will face increasing challenges as global competition increases and customer and government budgets become increasingly constrained. The stakeholders must take concerted action now to position the sector not only to face those challenges, but more importantly to exploit the opportunities. This strategy sets out our shared commitment to securing and growing Scotland s position in a global industry. Its aim is to maintain and develop a vibrant and competitive Aerospace, Defence & Marine sector in Scotland. INDUSTRY FOREWORD Tom O Neill Chairman, Aerospace, Defence & Marine Industry Advisory Group 1
Scottish Aerospace, Defence & Marine Industry Strategy 2009 SCOTLAND S AEROSPACE, DEFENCE & MARINE SECTOR Scotland has a proud tradition and enviable global reputation for engineering excellence, built on the skills and innovation of its people. Nowhere is this more evident than in the Aerospace, Defence and Marine sector, where traditional engineering skills combine with cutting edge research and development capability to create and sustain a technology driven sector and to provide a firm foundation to support long term growth and success. But in the face of ever increasing global competition, in order to stay ahead the Scottish sector must continue to innovate and improve. The shared goal of all stakeholders must be to maximise the impact of this high technology engineering sector on the Scottish economy. This strategy aims to address a variety of issues facing the sector and develop actions which will contribute towards this shared goal. A significant sector The Scottish sector is part of a truly global industry. The global Aerospace, Defence and Marine industries taken together in 2008 were valued at over $1.42 Trillion (Source: Datamonitor). The UK s Aerospace, Defence and Marine industries are key players in world markets. In aerospace alone, the UK has around 13% of global aerospace industry sales, second only to the United States. In a UK context, according to official government figures the Scottish Aerospace sector is significant, comprising almost 7% of the total UK turnover of 19.4 billion in 2007. The UK Shipbuilding sector has an annual turnover of almost 2.5 billion, with Scotland contributing 33% of the UK total, reflecting Scotland s particular strength in complex, high value naval shipbuilding. The Scottish sector is varied and dynamic. Taking into account defence companies, it is estimated that there are in excess of 400 companies directly involved in the sector and even more in the wider supply chain. Overall the core sector is estimated to employ well in excess of 22,000 people directly and to support almost a further 30,000 jobs (Source: Scottish Enterprise). Scotland s talented workforce and engineering expertise continues to prove attractive to international investors with many global companies having a significant presence in Scotland. Notable aerospace, defence and marine companies operating in Scotland include Rolls Royce, BAE SYSTEMS, SELEX Galileo, BVT Surface Fleet, Thales, General Electric, Spirit AeroSystems, Raytheon, Goodrich and Babcock. Scotland also has a significant and growing range of indigenous companies providing high quality products and services, with activities including research and development, design, manufacturing and component supply. 2
Technology driven Research and development is strong in Scotland with around 100 companies and university departments involved in a wide range of R&D activities. (Source: Scottish Enterprise) These include the development of satellites and space communications, research into optoelectronics and sensors and the development of new manufacturing techniques for aerostructures utilising composite materials. Scottish based companies are participating in R&D programmes under the UK National Aerospace Technology roadmap for example, Spirit AeroSystems is an active partner in the Next Generation Composite Wing programme, and BAE SYSTEMS Regional Aircraft is involved in the ASTRAEA unmanned aerial system programme. A survey carried out by SBAC Scotland (now A D S Scotland), the trade association for aerospace, defence and naval companies in Scotland, showed that overall companies spent some 84 million, or 4% of sales, on research and development (R&D) activity in 2006. The Defence sub sector dominated, spending some 11% of sales on R&D. University research strengths in Aerospace, Defence & Marine include optoelectronics, systems engineering, information and signal processing, electronics systems, materials, power systems, space technology, naval architecture and marine engineering. Nine Scottish universities are directly involved with relevant industry research and 17 Aerospace, Defence & Marine related units of assessment achieved the top (4*) research quality rating in the 2008 Research Assessment Exercise. Closely aligned with Scottish Government Economic Strategy The Aerospace, Defence & Marine sector is closely aligned with the aims and ambitions of the Scottish Government Economic Strategy, demonstrating: a focus on high technology activity ever accelerating activity in research and development a commitment to the training and skills development the provision of quality jobs that significantly exceed the national average wage high growth potential a capacity and desire to boost productivity a commitment to, and actions in place aimed at securing significant environmental improvements in both products and processes Spirit AeroSystems (Europe) Spirit AeroSystems employs around 850 people at its Prestwick facility, which includes its new European maintenance, repair and overhaul (MRO) headquarters. Spirit specialises in advanced aerostructures, designing and manufacturing leading and trailing edges wing assemblies and structural components for the Airbus A320, A330, A340 and A380 families of aircraft. The site also provides airframe structures for other customers in the commercial aerospace market, including Boeing. Spirit has won the major contract to design and manufacture the fixed leading edge wing structure for the all new Airbus A350XWB. The company has also established a Composites Development Centre, a new research and development facility dedicated to developing new production techniques using composite materials, aimed at reducing aircraft weight, fuel burn and emissions. 3
Scottish Aerospace, Defence & Marine Industry Strategy 2009 BVT Surface Fleet BVT is the UK's leading provider of surface warships and through life support, a world class industrial partner for the UK Ministry of Defence and a leader in the global export market for warships and innovative naval surface ship support. The company boasts a major ship design facility and a steelwork centre of excellence at its yards at Scotstoun and Govan and has an enviable worldwide reputation for quality, service and innovation. BVT is currently working on a programme of six Type 45 Air Defence Destroyers for the Royal Navy, the most advanced ship of its type in the world. In addition it is also currently involved in a programme of three offshore patrol vessels for the Trinidad and Tobago Navy. BVT is a founder member of the Aircraft Carrier Alliance and has also commenced work on major sections of the first of two 65,000 tonne Queen Elizabeth Class carriers, the largest ever ships ordered by the Royal Navy, its share of which was increased by a further 50% with the transfer of additional work to the Clyde. With a workforce of 3500 in Scotland, which includes over 500 design engineers and naval architects, BVT is Scotland s largest private sector employer of Modern Apprentices with around 700 being taken on since 2002. In addition to training support, BVT has worked closely with the public sector, which has provided grant support for the improvement and development of its Clyde facilities. The Aerospace, Defence & Marine sector s contribution to society does not stop at the narrow economic value it creates. The sector also: drives innovation sustains and enlarges the pool of skills and good quality jobs encourages and supports local supply chains and services is spread throughout the country, cementing communities with many middle income/middle status jobs. The Aerospace, Defence & Marine sector therefore makes a substantive contribution towards the broader ambitions in the Scottish Government s Economic Strategy for a smarter, wealthier, greener and fairer Scotland. Successful and growing rapidly The Aerospace, Defence & Marine sector has demonstrated a record of strong performance and growth in recent years a record it is committed to maintaining and indeed accelerating in future years. A small snapshot of just some of the numerous successes in the sector over recent years appears towards the end of this strategy document. Companies are increasingly working with partners in industry, academia and the public sector to help secure future success. A prime example is the Advanced Forming Research Centre, a collaborative project to create state of the art manufacturing technologies for the aerospace, energy, marine and other industries. The sector has proven to be resilient and forwardthinking in the face of wider economic uncertainty and challenging market conditions. This is both a measure of its long term market focus and an acknowledgement of the quality of the Scottish based companies and their workforces. An extremely positive factor, and one which will continue to play a vital role in the sector s development, expansion and adaption to change, is the strong and very positive engagement of the sector companies with their workforces and trades unions. There is a joint commitment of all towards the development of a shared goal of long term industry success. Companies continue to drive productivity improvement, maintain a commitment to staff development, invest in R&D and explore diversification strategies. It is vital that companies continue to do this to meet future challenges and to grow sustainably. 4
Strategy This strategy has been developed by the Scottish Enterprise Industry Advisory Group to address the challenges and issues that stakeholders in the sector have identified. It builds on the concerns and ambitions set out in A D S Scotland s Vision for the Future published in 2008, echoing and expanding on the issues and themes it explored. Other issues have been identified through industry, academic and public sector consultation, including specific industryfocused events. The shared aim is to create an environment in which the Aerospace, Defence & Marine sector in Scotland can grow and prosper. The task has been to set out a range of planned actions, with clear and shared responsibilities for ownership and implementation by all stakeholders. It is the first step in an ongoing process. There is a commitment from all stakeholders to review and refresh the strategy on a regular basis to ensure that it remains focused and relevant. A key concern of stakeholders is to ensure the best available industry baseline data is in place. Official government data is based on strict SIC classification and does not take into account the wider supply chain. It also does not cover areas such as R&D expenditure, the split between civil and defence activity, skills or industry capabilities. Available data is not comprehensive enough to adequately describe the entire Aerospace, Defence & Marine sector despite significant and well regarded efforts by industry to address the shortfall in official data. The Industry Advisory Group expressed a need for the industry and Scottish Enterprise to work together to gather robust data as a priority action. Extensive information on the size and scope of the sector will inform and shape other actions such as capability mapping. This has been reflected in the action plan. Whilst this strategy focuses on immediate issues facing the sector and actions to address these within the immediate time horizon, it does so against the backdrop of a universally shared ambition to secure a minimum 100% increase in overall sales by the sector within 15 years, the ambition set out in A D S Scotland s Vision for the Future. This will be challenging, particularly when set against the backdrop of the current economic climate and pressure on both civil and defence markets in the sector. SELEX Galileo As one of Europe s foremost defence electronics companies, SELEX Galileo is a leader in the supply of electronic systems for military platforms in air, at sea or on land. The company is a major supplier to several military aircraft, land and naval programmes, serving an international range of military forces. SELEX Galileo s site in Edinburgh is home to the UK s largest defence electronics business and has a reputation for producing high quality sophisticated technology. The Radar and Advanced Targeting Line of Business based at Edinburgh brings together an established yet diverse range of products such as Eurofighter Radar, where it jointly forms in excess of 50% of the Euroradar consortium, as well as Infrared Counter Measures (IRCM), Lasers, Seaspray 7500 and Seaspray 7300. In March 2009 SELEX Galileo s Vixen 1000E was selected for SAAB s Gripen Next Generation (NG) programme. Edinburgh also produces the leading edge Nemesis system which protects aircraft and helicopters from infrared missiles and an advanced technology targeting laser for Lockheed Martin s F 35 Joint Strike Fighter. Scottish Enterprise is supporting SELEX Galileo in R&D programmes designed to develop civil applications for its defence technology. 5
6 Scottish Aerospace, Defence & Marine Industry Strategy 2009
STRATEGIC ISSUES FACING THE SECTOR This strategy has the advantage of being able to build on a series of detailed inputs which have helped to capture the voice of the sector in Scotland. A detailed insight into the strategic issues facing the Aerospace, Defence & Marine sector in Scotland has been developed through consultation with industry stakeholders. It is apparent many of these issues and concerns are not unique to the sector. In addition to being able to learn from the experience of other industries, the approaches developed in this strategy may provide useful insights for Scotland s other key sectors. The Industry Advisory Group identified issues grouped under a series of key themes: Industry Baseline Data Industry Development & Growth Research & Technology Skills Supply Chain Internationalisation These issues form the basis of a detailed action plan. Rolls Royce Rolls Royce is one of the largest UK employers in the sector, with long established presences in Scotland. Its highly skilled 750 strong workforce in East Kilbride undertakes maintenance, repair and overhaul (MRO) on military and medium sized commercial aero engines such as the V2500. Rolls Royce also employs around a further 900 people undertaking the R&D, design and manufacture of compressor blades at its purpose built facility at Inchinnan, near Glasgow Airport, which has been responsible for numerous technological and associated manufacturing improvements aimed at increasing fuel efficiency and reducing aircraft emissions. Rolls Royce is a founder member and has been involved in detailed planning for the Advanced Forming Research Centre. Rolls Royce s marine division in Fife designs and manufactures a range of ship motion control equipment, including the rudders for the Queen Elizabeth Class aircraft carriers and steering gear and stabiliser systems for a range of international customers in the civil and defence markets. Sustainability Environmental sustainability is a critical issue for the whole of industry and this is particularly the case for Aerospace, Defence & Marine. As a specific example of the way that the sector is tackling the issue of sustainability, aerospace manufacturers in the UK are working towards the targets set by the Advisory Committee on Aeronautics Research in Europe (ACARE) which aim to cut CO2 emissions by 50% and NOX emissions by 80% by 2020. Given the wide range of initiatives and research programmes actively addressing the issue on both an industry wide and sector specific basis, this strategy/action plan will not address sustainability as a separate issue. 7
Scottish Aerospace, Defence & Marine Industry Strategy 2009 ADDRESSING THE ISSUES A PLAN FOR ACTION Inter Tec Services Ltd An independent stress engineering consultancy based in Ayrshire, Inter Tec is a Scottish owned SME providing structural analysis and design solutions to major companies within the UK and internationally. Inter Tec s principal client base has been in the aerospace sector but, in recent years, it has successfully expanded into other sectors such as the offshore oil and gas industry and the naval and maritime sectors. Established in 1992, the company has a team of highly motivated and skilled engineers offering an extensive stress analysis and design service across a wide range of structures and specialist activities. The Industry Advisory Group is clear that this action plan must: be industry focused and led be based on considered inputs from all the key stakeholders acknowledge the need for shared responsibility between industry, government and academia for its successful implementation provide clear responsibilities for implementation collectively and individually recognise the context of planned actions, building on existing initiatives and exploiting opportunities for addressing shared issues with other industries. This strategy is not starting from a zero base. Many of the issues have been considered by industry, government and academia previously and various initiatives are already underway. It is clear, however, that there is not uniform awareness of such initiatives nor indeed that they are coordinated. Rather than re invent the wheel, this strategy seeks to take advantage of existing initiatives and shape them to suit the needs of this sector where appropriate. Underpinning the strategy development process is the need to ensure that it remains relevant and focused. Whilst this first strategy will focus on the near term, there is a commitment from stakeholders to review and refresh the strategy on a regular basis to move towards a long term vision. 8
OVERVIEW OF STRATEGIC ISSUES Based on the diverse input provided from industry and other stakeholders, an extensive range of strategic issues has been identified under the six key themes. The issues have been identified in great detail. In summary the issues include: Industry Baseline Data the availability and quality of information on industry metrics to help shape and assess the impact of future strategies Industry Growth company performance/productivity the development of new/enhanced industry propositions small scale and low value add of the indigenous business base competitiveness with growing international comparators over reliance on domestic defence markets Research & Technology linkages between industry and academia availability of funding coordination of research funding streams engagement of the SME community in Aerospace, Defence & Marine programmes Skills low awareness/use of existing skills support programmes workforce demographics increasing age profile coordination and engagement in attracting workforce poor perception of Engineering as career choice Supply Chain Scottish supply chain potential not fully exploited lack of penetration of the A D S 21st Century Supply Chains (SC21) initiative 9
Scottish Aerospace, Defence & Marine Industry Strategy 2009 Internationalisation Thales Glasgow based Thales Land and Joint Systems designs and manufactures a wide range of electro optical systems including laser targeting and range finding devices in use by armed forces in the UK and internationally. Products developed and manufactured at its Glasgow facility include the sensor suites deployed on the Watchkeeper Unmanned Aerial vehicle (UAV). The largest UAV programme in Europe, Watchkeeper provides a range of day and night capability in Intelligence, Surveillance, Target Acquisition and Reconnaissance (ISTAR) missions. Around 50 of these advanced UAVs are expected to be use by British Armed Forces in the future. Thales also provides a combined sonar and electronic warfare support service to the Royal Navy's frontline fleet, including Vanguard and Astute class submarines. Thales has established an annual Scottish Technology Prize competition aimed at working with the academic community to uncover ideas that have the potential to become commercial projects. The Prize acts as a platform for dialogue and engagement and allows Thales to give something back to the academic community in Scotland. relatively poor levels of internationalisation activity in small & medium sized enterprises (SMEs) the need to refine and enhance Scotland s inward investment sales proposition for Aerospace, Defence & Marine A range of actions has been developed, with clear direction on: How implementation will be achieved Who will be responsible for implementation and When implementation will take place. This action plan is an essential first step to delivering a long term vision for a successful Aerospace, Defence & Marine sector in Scotland. It will provide the first set of milestones towards achieving that vision. Its aim is to overcome short term issues to provide a firm foundation and a supportive environment for continued growth. 10
The need for comprehensive Industry Baseline Data describing the sector is seen as an essential pre requisite to the development of an effective and well founded long term vision. This will in turn help inform follow on actions. ACTION PLAN SHORT/MEDIUM TERM 2009 2012 Theme Industry Issue How? Industry Data Baseline The diverse nature of the AD&M industry means that the structure and sources of government economic data do not fully reflect activity within the sector. There is a need to refine and expand current sources of data to accurately describe the scope, scale and capabilities of the entire Scottish Aerospace, Defence & Marine sector. SE and industry to jointly agree a common data set and commission a wide ranging study of the Aerospace, Defence & Marine industry in Scotland (including information on employment and training, sales, gross value add, civil/defence market split, research spend and capabilities) with industry taking responsibility for cooperation with the study and its updating on an ongoing basis. Who? A D S Scotland (Leader) Scottish Enterprise Industry Advisory Group When? 2010 11
Scottish Aerospace, Defence & Marine Industry Strategy 2009 Under the theme of Industry Development & Growth, industry growth aspirations will also be heavily reliant on a range of issues being addressed in areas such as skills, research & technology, supply chain development and internationalisation activity. These are addressed elsewhere in this action plan. A number of actions specific aimed at securing continued growth and development of the sector have been identified. Theme Industry Development & Growth Babcock Marine Babcock Marine, the largest division of Babcock International plc, is a strategic provider of engineering and support services to the Royal Navy and specialised commercial markets. The company operates Rosyth dockyard in Fife, the first Royal Navy dockyard to be privatised, where its current workload includes a mix of MoD ship refit and repair contracts and civil engineering contracts. A founder member of the Aircraft Carrier Alliance, Babcock s Rosyth yard will also be the location for final assembly of the Queen Elizabeth Class aircraft carriers for the Royal Navy. Babcock has recently expanded one of its dry docks to accommodate the aircraft carrier work, making the dock one of the biggest in Europe. The company is also responsible for HM Naval Base Clyde and won an extended contract on the basis of its high quality management expertise and performance. Faced with the challenge of reducing the costs of running HM Naval Base Clyde by about 40m per year over a ten year timeframe, Babcock Marine has carefully implemented a wide variety of tools, techniques and initiatives to help process improvement campaigns. These are aimed at getting the best return from its process re engineering effort. This smart approach has enabled huge strides to be made and targets achieved on an annual basis over the first four years of the contract. Babcock Marine has also been supported by the public sector in various training and development activities aimed at improving yard efficiency and safeguarding jobs. Industry Issue How? Who? When? Increasing competition from developing nations in the areas of high technology manufacturing, design and R&D is driving the need for the Scottish sector to remain at the leading edge of technology and service development in order to provide market differentiation for its companies. Capability mapping of the Scottish industry (with specific input from academic institutions and SMEs) led by the Industry Advisory Group, with the aim of 1) highlighting key company strengths which can be exploited in the development of new markets, products and services and 2) undertaking scenario planning to assess possible responses to future changes in the market and industry environment. Industry Advisory Group (Leader) Scottish Research Partnership in Engineering (SRPe) A D S Scotland Scottish Enterprise 2010/11 12
Theme Industry Development & Growth Industry Issue Comparatively low value add of indigenous Scottish company base when compared to inward investment companies, and the need to address this in order to drive sustained growth within the sector in Scotland. How? Who? When? Brokered by large Aerospace, Defence & Marine companies, Scottish Enterprise/SMAS and A D S Scotland, creation of a programme for large companies to mentor SMEs engaged in, or seeking to engage in the sector with the aim of assisting SMEs to become aware of the needs of the larger Tier 1 and 2 companies and allow them to position themselves to win potential business by adapting products, processes or manufacturing capabilities. A D S Scotland (Leader) Large Aerospace, Defence & Marine industry companies Scottish Enterprise/Scottish Manufacturing Advisory Service (SMAS) 2010 2012 Advanced Forming Research Centre The new Advanced Forming Research Centre (AFRC) is a collaborative project between Scottish Enterprise, the Scottish Government, the University of Strathclyde and leading companies including Rolls Royce, Boeing and Mettis Aerospace. The first of its kind in the UK, it will create state of the art manufacturing technologies for the UK's aerospace, energy, marine and other industries. Modelled on the highly successful Advanced Manufacturing Research Centre, the AFRC is designed to be a beacon for engineering and manufacturing excellence and to drive improvements in performance and profitability of UK industry. It focuses on a range of areas including primary techniques, technologies, supply chain issues, processes and design tools. The industrial partners have played a major part in shaping the centre and the research programme. The aim is that the industrial partners will drive the research and industrial support agendas, with the University of Strathclyde delivering world class support from within its own teams and its worldwide partners. 13
Scottish Aerospace, Defence & Marine Industry Strategy 2009 Theme Industry Development & Growth Industry Issue Low levels of engagement of the SME community and the wider Scottish supply chain with Tier 1 suppliers and prime contractors resulting in missed opportunities for business development for companies further down the supply chain. University of Strathclyde Advanced Space Concepts Laboratory The Advanced Space Concepts Laboratory, based at the University of Strathclyde s Department of Mechanical Engineering, is a new 3 million research centre funded by the European Research Council. The centre will further expand its team in 2009 and will conduct a five year programme of frontier research on visionary space systems through an investigation of the orbital dynamics of spacecraft. How? Who? When? Development of increased opportunities for large companies to interact with the SME community through joint industry and crossindustry trade body meet the buyer events supported as necessary by the public sector. A D S Scotland (Leader) Industry Advisory Group Society of Maritime Industries Shipbuilders and Ship Repairers Association Scottish Enterprise 2010 2012 14
Aerospace, Defence and Marine is a technology driven sector. Effective company and university Research & Technology development is essential to furthering the growth of the industry in Scotland, as is the commercialisation of such research. High priority actions for this theme are: Theme Research and Technology Industry Issue How? Who? When? The Aerospace, Defence & Marine industry is a technology driven sector and the importance of companies taking an active role in R&D is recognised. The need exists for increased coordination of research programmes to ensure future market requirements are addressed. Equally the development of existing and future funding streams is required to assist/secure Scottish participation in programmes at national and regional levels.. Scottish based companies to identify suitable R&D related projects and take the lead role in the formation of multi company, multipartner collaborative research programmes, with strong engagement of SMEs and universities, to submit coordinated bids for Scottish, UK and European government research funding and support. (Possible involvement of a specialist sub group of the Industry Advisory Group (IAG) to help coordinate company involvement and bids). Industry Advisory Group (Leader Spirit AeroSystems on behalf of IAG) Large industry companies Appropriate SMEs Scottish Research Partnership in Engineering (SRPe) Scottish Enterprise A D S 2010 2012 Raytheon Systems Ltd Raytheon Systems Limited s electronics facility in Glenrothes, Fife, has over 40 years experience in the design, development and manufacture of a wide range of integrated electronics components and equipment. Specialising in markets where integrity and reliability are critical, Raytheon Systems also provides a full electronic manufacturing service for the defence and aerospace industries. In the defence field, current work programmes include the Control Section for AMRAAM (Advanced Medium Range Air to Air Missile), and components for UK Tomahawk TLAM, for which Glenrothes is the sole UK supplier. Commercial activities include power products for the International Space Station. In line with its major commitment to R&D and product innovation, Raytheon has established the Chair in Power Electronic Systems at the University of Strathclyde. 15
Scottish Aerospace, Defence & Marine Industry Strategy 2009 Theme Research and Technology Industry Issue Sources of R&D funding need to be more widely publicised to allow Aerospace, Defence & Marine companies to explore funding mechanisms aimed at increasing levels of commercial research and development activity. ThinkTank Maths Through a deep mathematical approach, TTM, a Scottish start up company, tackles problems where no off the shelf tools or software solutions exist. TTM resolves complex issues in the areas of cost reduction, process efficiency and product innovation. With particular expertise in the areas of decision making, human machine trust, optimisation, game theory, data compression and digital signal processing, TTM is developing disruptive technologies with the UK MoD and European defence prime contractors in the areas of autonomous systems and quantum information. How? Who? When? Increased levels of promotion for the SMART: SCOTLAND programme, Scottish Enterprise R&D funding programmes, Scottish business grants and European funding mechanisms, e.g. FP7, to be undertaken. Scottish Enterprise (Leader) Industry Advisory Group A D S Scotland 2009 2012 16
Theme Research and Technology Industry Issue Relatively low levels of participation and engagement of SMEs within larger Aerospace, Defence & Marine company research and development projects or in the potential R&D supply chain. How? Who? When? Raise awareness of R&D collaborative opportunities and benefits through establishment of an Aerospace, Defence & Marine specific competitive technology prize, jointly funded, promoted and run by a consortium of sector companies with support from Scottish Enterprise. The technology prize will focus on creating links with both SME companies and university researchers. Industry Advisory Group (Leader Spirit AeroSystems on behalf of IAG) Large Aerospace, Defence & Marine sector companies Scottish Enterprise A D S Scotland 2010 2012 Goodrich Corporation Goodrich is a global supplier of systems and services to aerospace, defence and homeland security markets. The company s Aerostructures European Service Centre was opened in 2004 at the Prestwick International Aerospace Park. As a highly autonomous division of the corporation, it provides complex maintenance support services for aircraft engine nacelles and thrust reversers, flight controls, quick engine change and engine build up components. The facility employs 280 highly skilled and qualified people. The launch customer for the Prestwick international Aerospace Park, the recent doubling of its facility at Prestwick will potentially create a further 220 jobs. 17
Scottish Aerospace, Defence & Marine Industry Strategy 2009 The availability of a skilled and experienced workforce is at the heart of Scotland s future success in Aerospace Defence and Marine. In developing action plans for Skills, a long term optimistic view of needs has been taken, extending beyond the immediate pressures of the economic downturn. There is considerable activity already underway in the public and private sectors, in the education sector and through professional bodies, to address the significant skills challenges that are facing the engineering industry. Rather than re invent the wheel, this action plan aims to highlight and promote greater industry involvement in existing initiatives and programmes. There has been industry criticism on the availability of school leavers with the required qualifications to enter the engineering sector. It is recognised that a number of government initiatives via the Scottish Qualifications Authority and others, are underway to address this issue, which is not unique to Aerospace Defence & Marine. Initiatives include Curriculum for Excellence, Skills for Work, Determined to Succeed and the Scottish Baccalaureate in Science. This action plan will not therefore seek to address this issue. Theme Industry Issue How? Who? Skills Poor knowledge of, and low involvement in existing generic and specific skills initiatives to develop a pipeline of future skills, including initiatives aimed at schools. Skills Development Scotland/Scottish Enterprise to review the Talentmap online portal and explore potential for Aerospace, Defence & Marine use, with industry and public sector taking joint responsibility to populate Talentmap with appropriate skills information and company skills opportunities. SDS, SE, SEMTA and trade bodies to publicise and promote the use of the portal to encourage company engagement in existing skills initiatives. Skills Development Scotland (Leader) Industry companies SEMTA A D S Scotland Society of Maritime Industries Shipbuilders and Shiprepairers Association Industry Advisory Group Trades Unions Scottish Enterprise When? 2009 2012 18
Theme Skills Industry Issue Lack of coordinated engagement with academia to identify, and plan to address, industry skills needs and inadequate funding for Master s level courses in universities How? Who? When? a Summer placement programmes and internship programmes to be developed by companies and promoted by university departments to encourage an active interest in an engineering career and to provide companies with visibility of the calibre of students with a view to potential future employment. (Possible coordination and promotion of summer placement programmes via a Skills sub group of the Industry Advisory Group) b Universities and Aerospace, Defence & Marine companies to explore opportunities for co supervision of MSc projects, via SRPe and/or directly as appropriate. Industry Advisory Group (Leader) Companies Universities Education Funding bodies Scottish Research Partnership in Engineering (SRPe) From 2010 Vector Aerospace Corporation Vector is an industry leading, independent provider of maintenance, repair and overhaul (MRO) services for fixed wing and rotary wing aircraft operators around the globe. In 2009, the company s Almondbank site was presented with a 2008 Boeing Performance Excellence Award, an annual award to recognise suppliers who have achieved superior performance. Vector Aerospace Component Services Almondbank was one of only three suppliers outside the USA to receive Gold level recognition within Boeing s overall supplier base of some 10,000 companies. 19
Scottish Aerospace, Defence & Marine Industry Strategy 2009 Theme Skills Industry Issue Inadequate supply of science and engineering graduates, lack of visibility of future industry skills demand leading to a mismatch between industry needs and academic provision, and the constraint that only graduates who are UK nationals are able to undertake defence related research. Profile A D S Scotland A D S is the trade body advancing the UK AeroSpace, Defence and Security industries, with A D S Scotland representing the Scottish based sector. A D S, also encompassing the British Aviation Group (BAG), was formed from the merger of the Association of Police and Public Security Suppliers (APPSS), the Defence Manufacturers Association (DMA) and the Society of British Aerospace Companies (SBAC). With over 800 member companies A D S is the leading trade organisation for the sector combining the interests of the prime contractors such as BAE SYSTEMS, Rolls Royce and EADS, with the interests of the many SMEs active in the sector. The organisation has, and continues to lead on a number of important initiatives on behalf of the sector such as 21st Century Supply Chains, Sustainable Aviation, Defence Industries Council, Aerospace and Defence KTN, Space IGT and the Security and Resilience Industry Suppliers' Community. A D S Scotland s Vision for the Future published in 2008, provides a valuable start point for the development of this industry strategy. How? Who? When? SEMTA to ensure that its existing Skills Balance Sheet (SBS) surveys provide coverage of the entire Scottish AD&M sector and that these be expanded if required to provide adequate coverage and they are adequately representative of SME company needs. SEMTA s SBS to be provided to SRPe to aid coordinated academic planning and to Industry Advisory Group, SDS and SE for monitoring purposes. SEMTA (Sector Skills Council for AD&M) (Leader) Scottish Research Partnership in Engineering (SRPe) Skills Development Scotland Scottish Enterprise 2010 and ongoing annually 20
Theme Industry Issue How? Supply Chain The potential Scottish supply chain for the sector remains underutilised and the A D S supply chain training and accreditation initiative, 21st Century Supply Chains (SC21), has not achieved the desired penetration within the Scottish company base. Promotion of SC21, the industry s own standard, and the importance of supply chain excellence as a key business driver should be undertaken through established routes by the key trade body and Tier 1 Aerospace, Defence & Marine companies, with support for the provision of SC21 training and accreditation to target companies. The development of an effective Supply Chain is as important as the extension of supply chain opportunities to companies which has already been addressed under proposed actions in the Industry Growth and Development section of this action plan. The Aerospace and Defence sector has the benefit of having a well developed supply chain improvement/accreditation initiative, A D S 21st Century Supply Chains (SC21). The strong defence orientation of the Marine sub sector means that SC21 also has potential for implementation in appropriate companies. Who? A D S Scotland (Leader) Companies Scottish Manufacturing Advisory Service Scottish Enterprise When? 2009 and ongoing 21
Scottish Aerospace, Defence & Marine Industry Strategy 2009 Theme Internationalisation Industry Issue Relatively low levels of export activity exist with in the indigenous Scottish company base in the Aerospace, Defence & Marine sector, resulting in companies missing potential market opportunities. The need to attraction additional inward investment to Scotland from Aerospace, Defence & Marine companies. Clyde Space A Scottish start up SME, Clyde Space provides affordable, high performance subsystems for small satellites and micro spacecraft. The company s off the shelf products which include spacecraft power systems, small satellite battery systems and other digital and analogue systems have been used on a number of space missions worldwide. Clyde Space also offers innovative bespoke solutions and consultancy services based on its extensive experience of micro spacecraft platforms. The CubeSat system a 1 kg 100x100x100mm cuboid spacecraft unit offers faster and lower cost access to actual space missions when compared to traditional small satellites and has been the basis of over 40 missions since 2003. Clyde Space works extensively with researchers in Scottish universities, particularly the University of Strathclyde, in the development of new technologies and products, with support also provided by Scottish Enterprise to help commercialisation of its cutting edge research capability. How? Who? When? a Appropriate Scottish based companies to be identified by Scottish Enterprise account managers and supported in internationalisation activities by Scottish Development International. b Scottish Enterprise, in conjunction with the Industry Advisory Group, to develop enhanced inward investment propositions, featuring content and input from industry and academia and the output from planned capability mapping, to promote the benefits of Aerospace, Defence & Marine companies locating in Scotland. Scottish Development International (Leader) Scottish Enterprise Industry Advisory Group 2009 2012 22
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Scottish Aerospace, Defence & Marine Industry Strategy 2009 NEXT STEPS Many stakeholders need to be fully and actively engaged in order to achieve implementation of this action plan. While the impact of successful implementation will be of benefit to the Scottish economy, individual stakeholders obviously also stand to benefit principal amongst them Scotland s Aerospace, Defence & Marine companies themselves. For this reason the Scottish Enterprise Industry Advisory Group has a pivotal role in overseeing the implementation of this strategy/action plan. There is a need to ensure that those companies and organisations identified in the plan as having a role, assume full responsibility for that role and that activities are coordinated. In consultation with stakeholders, the Scottish Enterprise Aerospace, Defence & Marine industry team will have responsibility for coordinating and pursuing progress in conjunction with the nominated leaders for each of the actions, aimed at ensuring the successful implementation of the plan. Scottish Enterprise will report to the Industry Advisory Group on progress. In certain circumstances, it may prove more effective for the Industry Advisory Group to appoint theme subgroups to progress individual specialist topics. Operational matters will be a matter for the Industry Advisory Group to determine. The Industry Advisory Group will also have overall responsibility for steering future refreshes of the strategy and for evolving the long term vision for the sector. But the Industry Advisory Group will not have University of Dundee/STAR Dundee The University of Dundee s Space Technology Centre has been carrying out world leading research for over a decade in several areas of space technology: spacecraft onboard data handling, planetary lander technology and satellite data reception. In addition research is also carried out on system on chip and software development tools and its ground observatory is used by NASA to track spacecraft during missions. The Centre is also responsible for the highly successful spin out company, STAR Dundee, which provides a range of support equipment and services for users of the SpaceWire onboard satellite data handling system. Its team has established a global reputation within the sector by creating new products which meet the needs of spacecraft designers. The SpaceWire system is in use on many European Space Agency (ESA), NASA and Japan Aerospace Exploration Agency spacecraft and by research organisations and the space industry across the world. STAR Dundee has won two SMART research awards from the Scottish Government in recognition of its cutting edge technology. 24
sole responsibility for the success of the action plan and for the development of the long term vision. The entire industry, academia and identified public bodies must jointly share this responsibility for it to be fully effective. Where appropriate, this strategy will seek both to inform and to influence the development of Aerospace, Defence & Marine strategy at the UK and European level. The Aerospace, Defence & Marine Industry Advisory Group will seek to explore opportunities for joint working in key strategy areas with other Scottish key sectors where there is considered to be overlapping issues and mutual opportunity. These will include, although not exclusively, the Energy sector, the Digital Markets & Enabling Technologies sector and the Textiles sector. The potential for the establishment of cross industry groups should also be explored with a view to pursuing areas of specialist or common interest, for example the Marine sub sector links with the Energy sector in areas such as offshore renewables. The ultimate aim of this strategy is for the full and comprehensive engagement of all stakeholders, successful implementation of the actions set out in the plan and significant progress towards the development of a long term vision for the Aerospace, Defence & Marine sector in Scotland. This will provide a platform for a comprehensive review and update of the strategy within three years. University of Glasgow The Department of Aerospace Engineering at Glasgow is recognised as one of the world s leading research and development facilities, with a significant track record of innovation in aeronautical engineering. As one of only three in the UK to be endorsed by BAE SYSTEMS, the department s key fields include low and highspeed aerodynamics, avionics, flight systems and non linear dynamics, solar sail technology and blade vortex interaction. The University also houses a space mission analysis design department headed by a leading expert in space engineering. 25
Scottish Aerospace, Defence & Marine Industry Strategy 2009 The Scottish Aerospace, Defence & Marine sector has a good and continuing track record of success. Below is just a snapshot of some of the sector highlights over the last ten years, to provide an indication of the diversity and the vibrancy of the sector. Highlights and Successes Highlights and Successes 2009 Slingsby Advanced Composites formally opens new facility at Prestwick 2009 Spirit AeroSystems opens new Composites Development R&D Centre 2009 Advanced Space Concept Lab opens at University of Strathclyde with 3M European Research Council support 2009 Launch of Advanced Forming Research Centre 2009 Scottish Manufacturing Advisory Services becomes approved training partner for SC21 supply chain programme 2009 Vector Aerospace receives Boeing Gold excellence award 2009 First steel cut on Queen Elizabeth carriers on the Clyde and at Rosyth 2009 MB Aerospace wins $30M Harpoon missile extension contract from Boeing 2009 Glasgow College of Nautical Studies announces planned 5.6M Marine Skills Centre with 5.2M Scottish Funding Council support 2009 Spirit AeroSystems opens new MRO centre 2009 Scottish Enterprise launches Future Ship Shape shipbuilding recruitment campaign 2008 MoD signs contract for two Queen Elizabeth Carriers valued at around 4 billion 2008 Thales celebrates 120th anniversary in Scotland (former Barr & Stroud) 2008 Vector Aerospace purchases MoD s Defence Aviation and Repair Agency (DARA) Rotary Wing and Components businesses in Perth 2008 SELEX Galileo created (formed from merger of Finmeccanica and BAE SYSTEMS avionics businesses) 2007 MB Aerospace wins Rolls Royce contract extension 2007 GE Caledonian announce Prestwick as centre for MRO of new generation GENx aero engine 2007 Launch of Maritime Skills recruitment campaign by Scottish Enterprise 2006 USA manufacturer, Spirit AeroSystems, invests in wing facility at Prestwick 2006 MB Aerospace wins Boeing Gold Supplier status, one of only three companies in Europe 2006 First of six Type 45 Destroyers, HMS Daring, launched on the Clyde 2006 BAE SYSTEMS Surface Fleet solutions becomes largest private sector employer of apprentices in Scotland 2008 Goodrich opens extension, doubling the size of its original facility 2008 Creation of the UK s only Higher National Certificate award in Shipbuilding 2008 Spirit AeroSystems wins major Airbus A350XWB wing Fixed Leading Edge contract 2005 Space Technology Centre opens at University of Dundee 2005 Clyde Space establishes space engineering company in Glasgow 26
Highlights and Successes 2004 Ryanair opens new MRO facility at Prestwick 2004 Rolls Royce opens Inchinnan Compressor R&D and manufacturing facility 2004 Goodrich invests in new facility at Prestwick International Aerospace Park 2003 BAE SYSTEMS Aerostructures (now Spirit AeroSystems) delivers first A380 wing assembly to Airbus 2003 UK MoD establishes Electromagnetic Remote Sensing Defence Technology Centre in Edinburgh MB Aerospace 2002 BAE SYSTEMS Regional Aircraft re launched as aircraft service business MB Aerospace is a world class provider of supply chain management in design, 2002 Launch of STAR Dundee as Dundee University spinout to commercialise SpaceWire development, integrated manufacturing 2001 on board computer network standard Thales Glasgow wins 230M MoD order for thermal imaging units solutions and component manufacture. The company employs over 100 people and specialises in the manufacture, test and assembly of defence and commercial aerospace systems and components. MB Aerospace s high standards and commitment to customer service have 2000 1999 Thales Optronics formed (formerly Barr & Stroud/Pilkington) Opening of Scottish Enterprise s Prestwick International Aerospace Park enabled it to secure Preferred Gold Supplier status from aircraft manufacturer Boeing, making it one of only three European companies to hold the status and one of only 20 organisations worldwide. 27
Scottish Aerospace, Defence & Marine Industry Strategy 2009 In addition to the active involvement of the Industry Advisory Group (IAG) members themselves, the IAG and Scottish Enterprise wish to acknowledge the support and guidance provided by a wide range of Aerospace, Defence & Marine sector specialists in the development of this strategy/action plan. These include: Graeme McGregor, Thales Optronics (sub group Chair) Marcello Grassi, Spirit AeroSystems (sub group Chair) Paul Simpson, Alba Consulting, USA (Globalscot) Paul Allison, Thales Optronics Norman Bone, SELEX Galileo Prof. Graham Burt, University of Strathclyde Vanetha Cuthbert, Inter Tec Phil Curnock, A D S Jane Duffy, Scottish Enterprise Neil Ewart, Vector Aerospace Mike Foley, BVT Surface Fleet Solutions John Gallagher, Raytheon Systems Prof. Gavin Gibson, Heriot Watt University Donald Gunn, Raytheon Systems Alan Hughes, Scottish Funding Council Stuart Hunt, BVT Surface Fleet Brian Humphrey, SEMTA Katie Hutton, Skills Development Scotland Kris Jones, BAE SYSTEMS Regional Aircraft Heather Knox, Goodrich Corporation Peter Laurie, SELEX Galileo Elaine McKeown, Scottish Development International Jim McHarg, BVT Surface Fleet Andrew McIntyre, Rolls Royce Warrick Malcolm, A D S Scotland Angela Mathis, ThinkTank Maths Martin Mennie, Raytheon Systems Joanne Nelson, Spirit AeroSystems Dr. David Nash, University of Strathclyde Dr. Chris Pearce, University of Glasgow Tom Reid, BAE SYSTEMS Regional Aircraft Dave Rollo, BAE SYSTEMS Insyte Nick Shields, Scottish Manufacturing Advisory Service Jim Speirs, Slingsby Advanced Composites David Stewart, Spirit AeroSystems Andrew Watson, Raytheon Systems Ross White, Scottish Enterprise 28
The Industry Advisory Group wishes to thank BVT Surface Fleet, Goodrich Corporation, Rolls Royce, Babcock Marine, Spirit AeroSystems, Thales, SELEX Galileo, Scottish Development International, British Airways and other sector companies for the photographs used in the production of this publication. The Aerospace, Defence & Marine Industry Advisory Group acknowledges the support from Scottish Enterprise in the production of this strategy document. 29
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