research and development 2006

research and development 2006

Aerospace is one of the most R&D intensive sectors in the UK economy. While the private return to aerospace R&D is rather low, the external return (spillover) is high.
Research by Oxford Economic Forecasting shows the economy wide social return to aerospace R&D investment is around 70 per cent. This means a one time investment of £100 million in aerospace R&D raises UK GDP by £70 million per annum.
These economy wide benefits are far greater than for manufacturing as a whole, where returns are around 50 per cent.

Source: Oxford Economic Forecasting (OEF), Assesing the Economic Impcat of Aerospace Research & Development, May 2006

Research and development (R&D) intensity averaged 12.7 per cent of total sales, at £2.54 bn, down slightly on 2005.
37 per cent or £0.94 bn of the total R&D expenditure was spent in the civil sector and 63 per cent was spent in defence sector.
For the purpose of this survey, R&D was defined to comprise:
Development activities leading to series production.
Research and technology (R&T) activities which may not be directly attributable to products, i.e. generic technologies that are designed to maintain or expand the technological base.

source: SBAC

Self financed R&D totalled £1.00bn, 69.9 per cent of which was invested in the civil sector.
However, HMG funded R&D has the inverted pattern with 95 per cent being invested in the defence sector. Overall the trend was for externally funded R&D to be heavily defence-focussed, i.e. 88 per cent or £1.17bn.

source: SBAC

R&T expenditure saw a significant increase of 20 per cent to £259 million in 2006.
Civil R&T accounted for 52 per cent or £135 million while defence R&T was 48 per cent or £123 million.

source: SBAC

39 per cent or £991 million of the total UKAI R&D expenditure was undertaken by the aircraft and systems sector. The equipment and engine sectors R&D expenditure increased by 2 per cent each, to £662 and £883 million respectively.

source: SBAC

In the last few years there has been increasing interest in the levels of R&D in aerospace being undertaken outside the UK by UK companies, SBAC data indicates there is a long term increase from £0.14bn in 1996 to £0.47bn in 2006. However as the data below shows it does jump significantly from year to year.
In 2006 overseas R&D grew by 5.5% and accounts for 16% of total and overseas R&D.

source: SBAC

Aerospace R&D is a uniquely long term investment strategy. firms still benefit directly from investment in generic technologies made in the late 1950s and 1960s (e.g. wing aerodynamics and fundamental engine technology which fed into the complete range of Airbus and RB211/Trent engine families). The timescale between research and implementation of new products can be as long as 20 years.

source: AeIGT

The R&D process involves a number of public and private agencies, companies, national research organisations, academia, and increasingly, regional government. It also often requires sophisticated, complex and expensive research infrastructure, i.e. advanced aerodynamics may require wind tunnel test facilities and high-performance computing.
Government support for aerospace research from all sources including the Regions is brigaded through the DTI Technology programme following implementation of the Innovation Review
Aerospace projects currently draw more support from the Technology Programme than any other sector.

source: SBAC