DTS Paper.qxp - Royal Aeronautical Society

Aerospace and the UK
Defence Industry and
Technology Strategy
A specialist paper by the Royal Aeronautical Society
FEBRUARY 2007

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Aerospace and the UK Defence Industry and Technology Strategy

Aerospace and the UK
Defence Industry and
Technology Strategy
EXECUTIVE SUMMARY
A Specialist Paper prepared by
Prof Keith Hayward, FRAeS †
Head of Research at the Royal Aeronautical Society
In publishing its Defence Technology Strategy, the UK Ministry of Defence has now completed the first stage of its ‘roadmap’ for the
future of the UK defence industrial base and its main technological concerns. The MoD framework provides a set of guiding principles
and an indication of priorities for both the MoD and industry. As such, they have been welcomed by industry as a means of guiding
its investment with a higher degree of confidence than hitherto and enabling companies to play their full part in meeting MoD
requirements over the next decade.
This Discussion Paper examines the implications for the UK aerospace sector of the MoD’s strategy. It outlines the main features of the
two key MoD documents 1 but its main focus is on the implications of the Defence Technology Strategy on the aerospace sector. These
will be profound: the MoD is unlikely to invest in conventional aircraft platform technology beyond the Typhoon and F-35. There will
be investment in mission systems and complex weapons technology acquisition as well as in systems integration. Materials technology
is also seen as a key cross-cutting investment. Research will also be focused on improving through life support and maintenance. The
strategy confirms the movement towards unmanned systems and networks.
Industry will be expected increasingly to support its own applied research in part shaped by reference to the MoD’s now published
guidelines. However, there are unresolved issues relating to the long-term stability of the MoD plan and UK companies may continue
to find greater opportunities offshore with the risk of increased dependence on particularly the US market with its restrictions on
technology transfer.
The DTS poses a major challenge to the conventional view of an aerospace professional. Working on defence projects will remain a
stimulating and rewarding intellectual career — indeed, the more so given the complexity of some of the high level systems envisaged
for the future. The demand will be for flexible, adaptable professionals, perhaps with a wider range of educational experience than
the traditional aerospace engineer. However, maintaining the human base of the UK defence industry will not come cheap to maintain
real capability, but it should be an essential element in a long-term strategy
While the MoD’s view of the future is based on a solid diagnosis of the trends and developments in the defence industrial sector, the
prescription offered in terms of technology investment is more geared to the MoD’s needs and concerns. While this may be
understandable, there is a risk overall of some diversion between the MoD’s requirements and those of UK-based industry.
While the Royal Aeronautical Society is not directly involved in the evolution of UK defence industrial and technological policy, it does
have a role in monitoring events on behalf of its members, contributing to the debate on policy and, through its specialist committees,
helping to shape views about emerging technologies.
1 Ministry of Defence, Defence Industrial Strategy, December 2005 and
Ministry of Defence, Defence Technology Strategy, October 2006.
† Prof Hayward is Head of Research at the Royal Aeronautical Society. He is the author of several books and articles
on defence and aerospace and has been a consultant to public and private agencies in the UK, US and Europe.
FEBRUARY 2007 3

4
Aerospace and the UK
Defence Industry and
Technology Strategy
CONTENTS
Background ............................................................................ 5
The UK Defence Technology and Industry Strategies —
Main Themes ....................................................................5
The DTS — A 25-year Outlook ..............................................6
Crosscutting Capabilities Technologies ................................ 7
Aerospace in the DIS and DTS .............................................. 7
International Collaboration, Market Access and
Technology Transfer ........................................................ 9
The Future of the Aerospace Professional .........................10
Final Observations ................................................................11
A Role for the Royal Aeronautical Society ........................ 12
Aerospace and the UK Defence Industry and Technology Strategy

The two current major military aerospace programmes are Typhoon (left), now entering service, and F-35 Lightning II (right) which made its first
flight in December 2006.
1.0 BACKGROUND
1. The MoD has now completed the first iteration of its long-term
strategy for the UK defence technology and industry base (DTIB).
Its approach to the industrial component was outlined in the
Defence Industry Strategy (DIS) paper of December 2005 2. The DIS
has been now complemented by the Defence Technology
Strategy (DTS) published in October 2006. Together these
documents and other ministerial statements set out a 20-25-year
perspective for UK defence procurement and research
investment. This is the most comprehensive policy for the DTIB
ever published by the MoD. While not necessarily offering a
detailed prescription for future procurement decisions, the DIS
and DTS present a framework, a set of guiding principles and an
indication of priorities for both the MoD and industry. As such,
they have been welcomed by industry as a means of guiding its
investment with a higher degree of confidence than hitherto and
enabling companies to play their full part in meeting MoD
requirements over the next decade.
2. This paper discusses the implications for the UK aerospace
industry of the MoD’s DTIB policy as expressed in the DIS and the
DTS 3. It briefly recapitulates the main themes of the two
documents with specific reference to the aerospace sector.
However, the main focus is on the 20-25-year technology strategy
and the likely direction this implies for the UK aerospace industry.
A 50-year perspective is not unrealistic given that the F-35/JSF will
be in front line service for much of this period and Unmanned
Airborne Systems (UAS) concepts will shape air power delivery
whatever the specific platform characteristics they may possess.
3. As the UK sets out to celebrate the first 100 years of manned
aviation and of the first steps in the evolution of a domestic
aircraft/aerospace industry, the following conclusions offered may
be unsettling: the future of combat aviation will certainly confirm
the shift away from aerospace as such to airborne systems, with
conventional manned fixed and rotary wing aeroplanes largely
2 Ministry of Defence, Defence Industrial Strategy, December 2005 and
Ministry of Defence, Defence Technology Strategy, October 2006.
3 A Society view on the DIS was expressed in a memorandum submitted
to the House of Commons Defence Committee, Seventh Report of
Session 2005-06 Defence Industry Strategy, HC 824, May 2006.
providing tactical and logistic support. This will imply on the one
hand a different industrial supply chain and on the other
domestic vulnerability to increased global competition. The DTIB
strategy will undoubtedly help UK industry to make the necessary
adjustments and transition to a new business model, but the
process will not be easy nor without casualties.
2.0 THE UK DEFENCE TECHNOLOGY AND
INDUSTRY STRATEGIES — MAIN THEMES
The changing context of defence technology acquisition
4. The defence environment is changing and at faster rate than at
perhaps any time since the end of WW2. As the DTS puts it:
“Never has there been greater uncertainty in the nature of the
threat faced by the UK, nor has that threat adapted and changed
so rapidly. This demands rapid evolution in our response, both
tactically and in the technologies we deploy to combat the
threats.” 4 The DIS “provided greater transparency of the MoD’s
future defence requirements and, for the first time, set out those
industrial capabilities needed to ensure we can operate our
equipment in the way we choose.” The DTS is designed to provide
a “highly innovative, agile and flexible” approach to defence
research. The key word being ‘strategic’, with an emphasis on
meeting the MoD’s ‘core needs’, which includes a ‘clear emphasis’
on Through Life Capability Management (TLCM) and a
‘comprehensive engagement’ between MoD and its collaborative
partners and its technology supply base.
Appropriate Sovereignty
5. Underpinning both the DIS and the DTS is the concept of
Appropriate Sovereignty. The MoD recognises that a significant
proportion of its equipment needs will be satisfied by overseas
suppliers or foreign-owned companies located in the UK. Foreign
ownership per se is not a problem for the MoD as long as the
work and technology remains on on-shore. The DIS tries to tell
industry “very clearly where, to maintain our national security
and keep the sovereign ability to use our Armed Forces in the way
we choose, we need particular industrial capabilities in the UK.”
Appropriate Sovereignty has three dimensions: strategic
4 DTS, A1.1
FEBRUARY 2007 5

assurance (capabilities which are to be retained onshore as they
provide technologies or equipment important to safeguard the
state, e.g. nuclear deterrent); defence capability (where the MoD
requires particular assurance of continued and consistent
equipment performance); and strategic influence (in military,
diplomatic or industrial terms), as well as recognising potential
technology benefits attached to these which have wider value. 5
6. But as the DIS makes clear, even where the MoD would like an
industrial capability to be sustained in the UK for strategic
reasons, that does not necessarily preclude global competition in
that sector for some projects. The MoD cannot afford to maintain
a complete cradle-to-grave industrial base in all areas. Industry
also will make independent investment decisions and an
important indigenous capability as a result may disappear.
Equally, the MoD does not aim to restrict the scope for
international co-operation and competition where this is
appropriate. The DIS does not seek to set out a preferred route to
international restructuring. This is to be left to industry. Nor does
it set out a preferred route to international restructuring as this
will also be left to Industry. What is missing is a clear view or even
some indication from the MoD of its vision for the future in terms
of general structure of the UK Defence Industrial Base. The MoD
has provided elements of a strategy but it has not looked forward
through the next 10-15 years to assess the consequences. This
would have provided an additional and vital perspective for
Industry’s future. Defence is a long-term business and can change
rapidly as circumstances change but a view, however tentative
from Industry’s major customer, would have helped companies to
understand the long-term strategic direction of the MoD.
Total Life Cycle Management, partnership and a new
business model
7. A key feature of the new policy is the adoption of a partnership
approach to both equipment development and production that
fully embraces TLCM concepts. The DTS will also increasingly
require industry to accept a greater share of the risk of applied
research and technology demonstration. The MoD has recognised
the limitations of a pure competition centric model of defence
procurement. The role of competition to encourage efficiency
and value for money remains important but only when
appropriate. Instead, the MoD is to develop long-term
partnerships with major companies, primarily though not
exclusively with traditional prime contractors. This reflects in part
the rapid changes in the defence industrial environment since the
end of the Cold War, especially the increasing globalisation of
defence companies and the importance of civil technology to
modern defence systems, particularly in the areas of electronics
and information technology. Changing times will force the
adoption of new business models on the part of both supplier and
customer.
8. Moving the focus of procurement from delivering a simple ‘end
product’ to a fully supported product life cycle implies a radical
change in the UK defence business model and a different
approach to extracting the best return economically and
industrially from national investment in defence procurement. UK
industry should have no illusions that this will have a profound
impact on much of the supply chain whose role in supporting and
upgrading equipment may be limited, or where the size of
individual companies precludes the necessary investment to adapt
to the new business model.
9. The UK defence industry from top to bottom cannot expect to
remain unaffected by these developments. Over the past two
decades, the UK has fully embraced interdependence in many
5 DIS Section A5.
6
Aerospace and the UK Defence Industry and Technology Strategy
critical areas of defence procurement with the aerospace sector
leading the way through successive generations of international
collaboration. The UK defence aerospace sector is irrevocably
linked to a global network of design, development and
production. This has entailed a loss of autonomous capability to
produce complete aerospace systems, but collaboration and other
international links have allowed the maintenance of an overall
capability that otherwise would have been unsustainable based
on the UK market alone.
3.0 THE DTS — A 25-YEAR OUTLOOK
10. It has become part of the conventional wisdom that, without
an adequate technology base, UK-located defence capabilities
will decline and its industry fall behind in a globalising defence
market. It is equally obvious that, in a period of transition from
platform to network enabled technologies the UK should invest
even more in the defence technology base and to integrate the
opportunities afforded by commercial technology streams. The
DTS follows several recent initiatives to improve the planning and
delivery of defence technology acquisition. For example there has
been an improvement in the co-ordination of aerospace R&D as
exemplified by the development of a National Aerospace
Technology Strategy as one of the recommendations of the DTI
Aerospace Innovation and Growth Team (AeIGT) report.
11. Such developments, if followed through, will bring real benefits
to the UK defence industrial base. Indeed, the MoD intends to
utilise and, if appropriate, participate in AeIGT programmes.
However, these sentiments will come to naught without adequate
funding. The MoD has recently begun to address some years of
relative neglect in this respect. Failure to maintain commitments in
this area would nullify all of the good work entailed in setting out
a comprehensive defence industrial strategy.
12. Equally, early investment in technology increases the
confidence in predicting the cost and performance of new
programmes to the overall benefit of the procurement process.
Reducing the length of time expended in developing new
equipment also depends upon a steady introduction of new
technology through a process of incremental development
drawing from a continual stream of defence specific as well as
civil technological innovation. This is explored at some length in
the DIS and echoes similar findings based on US experience and
analysis. Again, the test of good intentions will be in changing
practices and fully applying the lessons of past procurement. Most
important, the customer will have to resist the dual temptations
of demanding too much at the outset of a new programme and
of interfering in the process of development to capture the latest
example of new technology.
13. The DTS recognises the clear correlation between the absolute
level of national investment in research and development and the
quality of military equipment. The UK has an advanced defence
technology base, second only to the US, albeit at some distance.
This is the result of investments made over the past 20-25 years
and has allowed the UK to play a leading role in European
collaboration and has facilitated a very effective relationship with
the US. As a guide to policy, the MoD has set the target of
matching the world’s major defence exporting nations. 6
14. The MoD will continue to invest in the most challenging, longterm
aspects of defence science and technology but will
increasingly expect industry to fund a substantial share of applied
and demonstrator technology. Increased collaboration with allies
(primarily the US and selected European countries) and the
6 DTS Section A2.

oader national science base will also figure in future planning.
However, the DTS’s primary goal is to identify those areas of
defence science and technology essential to maintain national
sovereign capability, provide maximum leverage in strategic
terms and provide the most overall technology benefit to the UK.
In many sectors, the main focus is on through life management
where the MoD will primarily invest in technologies designed to
facilitate upgrading and long-term affordability. This includes
commitment to developing open systems and systems
architectures that will enable greater long-term flexibility and
adaptability. In many cases the MoD intends to retain control over
critical systems architectures.
4.0 CROSS-CUTTING CAPABILITIES TECHNOLOGIES
15. The MoD will seek to maximise returns from its investment,
looking to derive multiple use from research. In this respect, the
DTS puts considerable emphasis on cross-cutting technologies
that will have the greatest impact across the range of defence
equipment sectors. These are:
■ Sensors and countermeasures
■ Information exploitation
■ Human factors
■ Platforms and structures
■ The physical environment
■ Technologies to enable Through Life Capability Management
(TLCM)
Many of the individual technologies under this heading will be of
relevance to aerospace — for example, simulation technologies
have a priority in the human factors area. However, increased
dependence on commercial sources, again noted in the
simulation case, might place UK firms at a disadvantage if foreign
competitors continue to receive funding through national
defence and civil R&D budgets.
16. C4ISTAR is also identified as a cross-cutting technology
because of its role in most of the individual sectors and its
centrality to delivering the MoD’s Network Enabling Capability
(NEC). This is by definition a complex system of systems in which
the aerospace element strictly defined is limited to the provision
of aircraft and satellite platforms. There is no need automatically
to buy these from a UK supplier unless there is a specific
technological value in integrating platform with equipment and
sub systems. The DIS, for example, recognises this in relation to
micro satellites where the UK has a strong niche capability.
17. Systems Engineering and Integration is rightly afforded
prominence in the DIS. This capability is at the top of the defence
industrial value chain. UK industry has a wide and deep set of
capabilities across a wide-range of defence applications. On shore
systems engineering and integration afford vital access points for
high value UK-based equipment suppliers and will be essential in
facilitating UK-based up grading and support. The DIS also reiterates
the view that such skills are not monopolised by the
traditional prime contractors but are possessed, perhaps more
relevantly, by high-level equipment and IT companies. The key
caveat must be whether the UK has sufficient systems engineers
to meet these requirements. Nor is it clear from either the DIS or
the DTS how the MoD intends to fund ‘systems integration’ R&D.
By definition, such activity tends to be of a ‘one-off’ nature and
thus a business case for industry investment is difficult to make.
One approach used in the commercial world could be for the
MoD and industry to work together to formulate the
requirements for an MoD system to incorporate technologies for
which an industry investment case could then be created.
Procuring the Typhoon (above) and the JSF has removed the
requirement “for the UK to design and build a future generation of
manned fast jet aircraft for the foreseeable future.”
5.0 AEROSPACE IN THE DIS AND DTS
18. For the aerospace sector (here defined as fixed wing, rotary
wing, complex weapons, airborne mission systems, and some
space elements), the DIS and DTS present some major challenges
as well as some important opportunities. The continuing vital role
of airpower, precision weapons and the C4ISTAR functions
facilitated by air and space platforms are reiterated at length by
the DIS and DTS. The UK also has substantial world-class design
and development expertise in manned aircraft construction and
systems integration, the development of guided weapons and in
a wide range of mission systems. However, these statements are
matched by a clear statement that the future will not be like the
past and that the conventional view of airpower and its
supporting domestic DTIB will be replaced by a different set of
priorities, equipment needs and industrial infrastructure.
Fixed Wing Aircraft
19. The most telling aspects of the DIS and DTS are encompassed
by two related assertions based on a view of contemporary trends
in procurement, ever-increasing development costs, longer
equipment life times and consequently fewer numbers that are
eventually procured. This has been especially evident in fixed
wing combat aircraft. Bluntly, procuring the Typhoon and the JSF
has removed the requirement “for the UK to design and build a
future generation of manned fast jet aircraft for the foreseeable
future.” The main DTIB requirement henceforward will be to
retain the technological base to upgrade and integrate new
technologies. The provision of transport and other large aircraft
platforms will be treated as a commodity to be acquired from
international suppliers. Only specific UK operationally relevant
technologies and through life management issues will require
national technology investment.
20. Moreover, in too many cases the flexibility and agility of
airpower has not been “matched by agility in major aerospace
programmes. The time and cost of relatively modest platform
upgrades has too often been hard to justify and air power risks
pricing itself out of business.” On the other hand, the
development of Unmanned Airborne Systems is seen as a major
opportunity to address the traditional economics of
development, manufacture and employment of air systems. The
DTS assigns a high priority to airborne sensors, defensive
FEBRUARY 2007 7

electronics and complex weapons. UAS technology, especially
software and control systems, will also receive special attention.
In all cases, the key focus for national sovereignty in this sector is
control over systems architectures and interfaces. However, the
DTIB required for UAS development and acquisition would be
radically different from that traditionally demanded by
conventional aerospace systems.
21. The recent announcement of the £124 million Taranis UAS
demonstrator programme in some respects goes beyond the
priorities outlined in the DTS. Led by BAE Systems, this will involve
Rolls-Royce, Smiths Aerospace and QinetiQ in a joint MoDindustry
(75-25%) funded national programme. Key areas for
industry will be advanced power systems integration and power
distribution as well as exploring autonomous control concepts.
Taranis may indeed be viewed as a test case for industry
investment in a MoD programme to investigate areas of
particular interest to industry. 7
22. Despite programmes such as Taranis, looking beyond the
current generation of fixed wing aircraft, it would seem that
there is a major threat to the UK’s conventional design and
manufacturing capabilities. There will be considerable business in
upgrade and support work that in some areas will be of a very
high quality, but this will be no substitute for developing a
sophisticated fixed wing platform. There will be a contraction of
the present UK-based supply chain and a threat to UK equipment
suppliers whose technological competence has historically been
honed by access to a major programme where the UK has had
critical influence over design and systems integration. Advanced
aerodynamics and structures research will be facilitated through
co-operation with the UK university research base.
Rotary-wing Aircraft
23. AgustaWestland’s partnership with the MoD gives the
company primary design authority for the management of most of
the MoD’s existing helicopter fleet. Equally, national capabilities in
network enabling, modelling and simulation for rotary military
aviation will remain essential. However, as most of the crucial
rotary-wing platform technologies will be available on the world
market, they are not assigned a high priority in the DTS. New
rotary aircraft also increasingly will be procured through
international competition. The need to maintain security of supply
and access to control software essential to operations, on the
other hand, will qualify for investment. In short, AgustaWestland
will have to secure its future through private venture funding,
Italian MoD investment, civil applications and collaboration, and
export sales. The MoD recognises that this implies a major business
transformation for AgustaWestland and other industry players; as
a result, it will create an MoD/industry Rotorcraft Technology
Steering Committee to plan investment in the sector.
Propulsion
24. The MoD will retain the necessary national capability to
sustain its current and planned fixed wing propulsion systems as
well maintaining an adequate supply base for upgrades. There
will be targeted investment to ensure “both a strategic influence
and a viable source for key capability-enhancing propulsion
technologies.” But the MoD “will not invest in hot section
technologies for new build or higher performance engines.” This
continues a trend first evident seven years ago when the MoD
ceased funding a significant proportion of its engine hot section
technology programmes. However, the MoD will work with the
supply base to enhance through life management and may
participate in AeIGT programmes to de-risk hot section
7 Aerospace International, January 2007, 34, (1), pp 30-31.
8
Aerospace and the UK Defence Industry and Technology Strategy
New rotary aircraft increasingly will be procured through
international competition.
technologies. This may also entail some limited dedicated
investment in relevant hot section research. Over all, however, the
result is that the MoD will have a smaller portfolio of hot section
research activities.
25. There is a commitment to aspects of novel power generation
concepts and UAS propulsion systems that could have important
industrial applications. Although some of these will flow from
developing civil technologies, even here systems integration and
specific military requirements will demand some investment in
dedicated propulsion/power generation research. The result will
be a more subtle and complex relationship between MoD
investment and the aero-engine sector.
Complex Weapons
26. The DIS rightly observes that complex weapons possess
‘battle winning’ capabilities. They are also a critical element in
enhancing the overall capability of platforms throughout their
lifetime. However, many of the most recent acquisitions have
been of COTS or near-COTS weapon systems, stifling indigenous
development. More critically, all current EP funding is predicated
on COTS purchases. Both the DIS and the DTS identify several
critical technology areas in which the UK must retain sovereignty
but there remains an imbalance between this desire and current
funding plans. Nevertheless, the DIS is looking to retain on-shore
capabilities in this sector largely through conceptual studies in
synthetic environments or through a limited use of technology
demonstration. While there may be some short-term protection
afforded to UK-based suppliers, the implication is that the MoD
will be prepared to accept a greater future dependence on
external sources of supply. The MoD is working with the UK’s
main supplier, MBDA, to develop a strategy to maintain UK
competence in this sector; clearly this is one that must be
retained as an on-shore technological and a manufacturing
activity.
27. The DTS notes that the UK has a strong comprehensive
national capability in most of the critical technologies
underpinning Complex Weapon development. However, the
challenge will be to sustain this in the face of and limited R&D
budget and the reduced numbers of orders expected over the
next decade. This will be met through a stress on international
collaboration, especially with Europe (aided by the trans-national
characteristics of MBDA) and several technology demonstration
programmes in critical areas. Work will be based on a strategic
partnering arrangement with industry. 8
8 DTS Section B2.

28. In July 2006, the MoD announced its intention to form Team
Complex Weapons (Team CW), a partnership built around MBDA,
QinetiQ, Thales Air Defence and the MoD. Other companies in the
guided weapons supply chain will be drawn in. There are a
number of legal issues (notably anti-trust regulations) to
overcome, especially if Team CW is to include Raytheon. 9 However,
Team CW will address some of the problems of maintaining core
competences and skills in the guided weapons area and its success
or otherwise will play a major part in determining the future for
this key sector in the UK defence industrial base.
Mission Systems
29. Both the DIS and the DTS recognise the world-class standing
of UK mission systems capability, especially in sensors. The MoD
will work with industry to develop capabilities in this area,
especially in those areas central to the ‘networked battlespace’.
Over the long term, with TLCM in mind, there will an emphasis on
developing “flexible, modular and open platform architectures.”
This will be the key to “realising the affordable through life
employment of fixed wing and unmanned platforms.” 10 It is also
an important way to ensure that the MoD does not become
dependent upon a single or limited number of vertically
integrated prime contractors — a risk frequently noted in the DIS;
and recognition that high-level equipment companies possess key
integration skills.
Space
30. Both the DTS and the DIS recognise the increasing importance
of space systems to the MoD’s future effectiveness. In particular,
both documents assign a high priority to aspects of satellite
telecommunications. However, it is disappointing that the DTS
makes no mention of the special arrangements required to deal
with Private Finance Initiative programmes. While decrying the
low level of industry R&D investment, the DTS fails to lay down
guidelines for how R&D will be funded between the varying
parties in a major PFI such as the Skynet 5 satellite
telecommunications programme (£3bn). These need separately to
specify the respective responsibilities of the MoD, the PFI
contractor, other Skynet 5 contractors and industry. Unless this is
better defined, the partners will be unclear as to the ownership
of any resulting innovation. There is a body of best practice on
this topic from the UK civil government sector that the MoD could
draw upon as the basis for a more satisfactory approach. Until this
issue is resolved industry may be reluctant to commit R&D funds.
31. Surveillance from space is also recognised in the DTS as an
area involving high priority technologies. The DIS identifies small
satellites as an important element of MoD’s ISTAR solution —
calling for “a sovereign ability to design, demonstrate and
perhaps build.” 11 The DTS echoes this priority. Recognition of the
benefits of an indigenous UK industry surveillance satellite
capability is welcomed by industry after two decades in which
especially French, but also German and Italian, industries have
been the beneficiaries of major national programmes.
Homeland Security
32. Homeland Security is one area where the Government may be
able to provide some encouragement for the UK defence
industrial base. This market is growing rapidly world-wide but it
is still not clear whether the UK Government has a co-ordinated
policy to deal with this market and the industrial and technology
base that would provides the products, services and integrated
9 Aviation Week & Space Technology, 1 January 2007, p 62.
10 DTS Section B2.
11 DIS Section B8.45.
The JSF generated much debate on technology transfer.
systems. Developing such systems is not strictly the sole remit of
the MoD or the Home Office. It requires cross-departmental coordination
and sponsorship including other ministries such as
Trade and Industry.
33. It would be highly desirable for both Government and the UK
Defence industry to create a joint approach to Homeland Security
technology acquisition. Most of the major aerospace and defence
companies are already participating in this market to a larger or
smaller degree. There is also an emerging European Union
research budget for this area. However, a clearer strategic
direction from the Government to provide the UK with a safer
environment, co-ordinated through one department (with the
resources and budget to deliver) would give the UK Defence
Industrial base an opportunity to grow despite the impending
down-turn in some segments of the UK defence market.
6.0 INTERNATIONAL COLLABORATION, MARKET
ACCESS AND TECHNOLOGY TRANSFER
34. The UK is unusual if not unique in its degree of openness both
to overseas competition and to inward investment in the
domestic defence industrial base. UK defence companies have
also acquired an unparalleled position inside the US market.
While noting the possibility that the latter may be at the expense
of investment in the UK as well as expressing concern at the
problems of technology transfer entailed in working with US
partners, HMG appears to have made little progress in shifting US
practice to the benefit of the UK customer or UK industry. The UK
has undoubtedly benefited from inward investment, affording
access to resources and technology that otherwise would have
been acquired expensively from domestic resources, but, if the UK
has benefited from overseas investments financially, UK
companies may be limited in their ability to repatriate new
technology for incorporation into new products developed onshore.
This could have serious consequences for the long-term
health of the UK defence industrial base. Equally, as the lure for
inward investment is the buoyancy of the UK defence market and
the relative size of its R&D investment, there is a danger that this
investment will be vulnerable to any future contraction in
defence budgets. While ownership is no longer as important in
the defence sector as it once was, lack of national control over key
capabilities increases our vulnerability to external events and
decisions made by foreign governments and companies.
35. This would be less of an issue if there had been sufficient
progress to open both European markets and to improve the
FEBRUARY 2007 9

terms of technology trade with the US. It also remains the case
that European governments still constrain investment in their
national defence industries. Recent moves to limit national
protectionism in the EU defence market — notably through the
establishment of the European Procurement Agency — should
improve matters. This is still too little, if not too late, to match the
relative openness of the UK defence market and to create a more
balanced and competitive international environment for UK
defence companies. The drift of both the DIS and particularly the
DTS is to see much of the future military aerospace provision to
be satisfied from a global market. With the exception of
commitments to aspects of UAS research, much of the current
military aerospace technology base will steadily diminish. The
mission systems sector should find business in upgrading and
serial development but, without lead platforms developed in the
UK, equipment companies may find international competition
even fiercer. The temptation to move more of their operations
and research offshore to access a new generation of aerospace
platform will become even more intense.
36. The DTS recognises the importance generally of international
collaboration but there is no overt preference for partners, other
than the benefits co-operation may bring to satisfying the MoD’s
needs outside of those associated with maintaining Appropriate
Sovereignty. Perhaps more intriguing is the direction implied by
the less well publicised US Defense Science Board–UK MoD joint
paper on co-operation in defence critical technologies. The core
of fundamental government-to-government research cooperation
is likely to be with the US 12. Co-operation with the US,
combined with the steady drift of UK defence company
investment in the US, could lead to long-term dependence. The
MoD also recognises that working with the US is often based on
what the UK can bring to a collaborative programme and does
not necessarily generate access to new technology that can be
readily transferred to the UK. A closer alignment of industrial and
technological strategy with France and Germany could mitigate
some of the risks of dependence on the US. European
collaboration in the past has usually delivered a more egalitarian
access to jointly developed technology. The Government has said
that it would like to discuss the UK’s strategy with European allies,
notably the French, but progress will have to accelerate to make
much difference. The MoD prefers to manage this on a bilateral
basis or in a small group of nations. It does not have much
confidence in the multilateral or pan-European level.
7.0 THE FUTURE OF THE AEROSPACE PROFESSIONAL
A new skill set and career pattern?
37. The DTS poses a major challenge to the conventional view of
an aerospace professional. Working on defence projects will
remain a stimulating and rewarding intellectual career — indeed,
the more so given the complexity of some of the high level
systems envisaged for the future. This may also be enhanced by
the MoD’s determination both to increase the rate of technology
12 US Defense Science Board Report & UK Defence Science Advisory
Council, Task Force on Defense Critical Technologies, Washington, March
2006. The areas of interest were: Advanced Communication
Environments, Persistent Surveillance; Power Sources/Management for
Small Distributed Networked Sensors; High Performance Computing; and
Defence Critical Electronic Components. With the exception of electronic
components, the MoD was reluctant to publish its list of specifically
critical technologies. Many of these may well relate to nuclear weapons
and cryptographic applications, and advanced surveillance and pattern
recognition concepts which are relevant to internal and external securityrelated
interests. The report concluded that both countries should
actively seek to work together in these fields. Its work was covered by a
US ITAR exemption.
10
Aerospace and the UK Defence Industry and Technology Strategy
insertion and better use of civil technology; raising the prospect
of a more dynamic research environment. Equally, the MoD will
depend more upon the university sector for research into
aerodynamics and structures. This may improve the relationship
between MoD and academia and encourage still better links with
industry — existing collaborative work on UAS technology
concepts point the way perhaps. The key caveat here is the
continued shrinkage in the UK’s science and engineering
personnel base, undermined by a further fall in students taking
up the ‘hard’ disciplines. Many of the current generation are
foreign, some of whom may stay in the UK, but all too many will
return home to provide the base for future competition.
38. The major opportunities for the aerospace professional are
likely to be in electronics, IT and systems design and integration.
In some views of the future, some aspects of the design and
integration process may become more akin to the architectural
profession, with some separation between design and
construction. There are clear and fundamental requirements for
systems engineers as well as human factors specialists. Through
life management will also put a premium on well-trained and
experienced project managers.
39. Overall, however, maintaining design teams and creating a
more flexible and adaptable industry capable of doing more than
just churning out successive generations of familiar platform
concepts will test companies and government alike. This is a
subtler challenge than simply maintaining employment in the
defence industries. The demand will be for flexible, adaptable
professionals, perhaps with a wider range of educational
experience than the traditional aerospace engineer. Multidisciplinary
approaches and awareness will be a key requirement.
Manufacturing and employment
40. On the manufacturing side, there will still be high value
employment in defence aerospace sector but again not
necessarily drawn from the traditional metal-based engineering
skills set. The numbers of future platforms in any event will
diminish still further and the growth area for employment will be
in servicing and upgrading. It is unlikely that the most
sophisticated UAS types will be bought in large numbers and
other UAS platforms are very simple pieces of equipment (even if
their systems are not), and in many cases readily acquired off-theshelf
from a rapidly growing global UAS industry. By the same
token, the UK supply chain will have to accept changes in work
patterns and some of its established elements inevitably will face
obsolescence or be required to seek business outside the defence
aerospace sector.
41. It is unlikely in any case that the MoD, despite attempts to
keep the unions onside, will be swayed by the ‘jobs in Britain’
argument. However, the UK Government may have to do
something to protect high value human assets, especially in
aerospace, one of its few remaining high-value manufacturing
sectors which acts as a focus and stimulus for much of the
country’s engineering talent. Maintaining the human base will
not come cheap if one is serious about maintaining real capability
but it should be an essential element in a long-term strategy.
Technology demonstration and ‘new blood’
42. This might have implied a commitment to an expanded
programme of ‘technology demonstration’ that not only allows
fundamental ideas and concepts to be explored and ‘de-risked’
but also helps to keep design teams together and to attract ‘new
blood’ in the ever-increasing intervals between concrete projects.
However, as the MoD seeks greater involvement by industry in
applied research and technology demonstration, companies may

The growth area for employment will be in servicing and upgrading.
prefer to focus on projects and programme areas that have the
best chance of meeting immediate requirements. This will deter
commitment to higher risk, longer-term areas. The so-called
Grand Challenge projects inspired by the US DARPA experience
may mitigate this to some extent. However, these may not be
launched in great numbers and financial allocations will be
modest. The aerospace sector cannot expect to be singled out for
inclusion in any specific Grand Challenge.
Some operational issues
43. Finally, the future for the operational side of the profession
contains a mixture of continuing trends toward smaller, smarter
forces. While flying fast jets and support aircraft will remain core
applications of piloting skills in a conventionally structure air
force, systems managers will be even more vital to the air force
and associated services. Moreover, the deployment of UAS,
especially the more sophisticated, autonomous aircraft, may
demand a different type of remote piloting skills. This has been
termed air awareness rather airmanship.
8.0 FINAL OBSERVATIONS
DIS/DTS a good start, but challenges remain for the MoD
and Industry
44. In terms of overall quality and depth of analysis the DIS and
the DTS match comparable studies in the US and are unrivalled in
Europe. There is also a sense of urgency attached to the
implementation plans and specific task-forces attached to both
documents. Wisely, the MoD Chief Scientist has described the
MoD’s approach as ‘only a first pass’ at defining a road map for
industry and academia to inform their planning. The intention is
to start a dialogue with the UK defence community. The DTS must
also be adaptable to scientific and technological change.
45. Theses caveats notwithstanding, the DIS and DTS, if fully
implemented, are together intended to provide a stable
framework for company planning as well as reinforcing the value
of partnership between customer and suppliers. There is much
still to be done, however, 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. Moreover there remain unanswered
questions about the level of investment the aerospace sector can
expect over the next few years — and in the case of the DTS, a
classified programme (including nuclear) that might drain
resources from conventional equipment R&D.
Long-term stability
46. To achieve real long-term stability, the strategy will to
negotiate changes in government priorities and of administration.
There are, of course, underlying trends in defence technology and
its environment which will impose some constraints on future
ministers and officials. The pressure of events will also present new
challenges. In its favour, the DTS emphasises the importance of
flexibility and resilience in identifying research priorities but
industry cannot be entirely confident that its long-term
investment in research will be sustainable in a period of political
flux. Companies will have no comeback if they are faced with
nugatory investment and are unlikely to receive assistance in the
event of a major crisis. There is certainly a continued requirement
to improve the profit margins on defence work to encourage a
greater willingness to bear such risks.
47. One of the most demanding aspects of the MoD’s overall
approach to the UK DTIB 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. 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.
Working in the new defence research institutional
framework
48. The UK defence industry also faces a future operating within
a new research institutional context. The privatisation of QinetiQ
is a done deal and the UK is still alone of the major defence
industrial powers in having a commercially motivated national
research centre. The relationship with DSTL will also pose new
challenges for industry. The MoD promises a new era of
competitive research tendering which may offer industry new
opportunities but the current strengths of the UK DTIB were in
part based on a co-operative regime with the government
research agencies and laboratories. In the future, the new
relationships and competitive dynamics may be beneficial —
there may certainly be a better and a more direct flow between
innovation and commercial exploitation (in both defence and civil
markets). But this remains unknown territory.
Rapid and fundamental changes required of customer and
supplier alike
49. The DIS pointed to a new business model demanding radical
changes on the part of the supplier. This should also entail equally
radical changes on the part of the customer. In the first instance
this should entail adopting clearer and more consistent
approaches to full life support contracting as well implementing
the recommendations of the critical evaluation of procurement
practices that the MoD and the National Audit Office have been
jointly conducting. These must be encouraged and their
prescriptions implemented as a matter of urgency.
FEBRUARY 2007 11

50. Similarly, the DTS confirms the messages from the DIS that the
future of UK military aerospace will rest on the quality of its UAS
research and its equipment sector, as well as the general
competitiveness of remaining systems integrators. However, if the
DTS trajectory develops as predicted over the next 20 years, the
UK military aerospace industry may evolve into a branch of the ITelectronics
sector.
51. Industry might also have expanded its services provision
following the TLCM demands of the DIS. Again, there is no longterm
guarantee that the leading players are necessarily the same
companies that currently dominate the aerospace supply chain.
Intellectual property and design authority may afford some
protection but these can be transferable commodities. Equally, as
open systems architectures become the norm and as the MoD
retains overall control of key systems concepts, the customer has
more scope to determine industrial outcomes. However, this does
not necessarily imply the benefits will remain on-shore.
A disconnect between technology and industry strategies?
52. The MoD has set out a bold statement of the technology
needs underpinning the UK’s defence capability — the trick will
be in maintaining the absolute levels of investment in research
and technology acquisition in the face of operational pressures
and constraints imposed by future Public Spending Reviews.
There is also a potential dichotomy at the heart of the MoD’s
revealed DTIB strategy: UK located industry has been given
perhaps a ten-year framework to adjust to a new business model
but the longer term perspective is much more problematic,
particularly for the aerospace sector. It remains to be seen
whether industry will be prepared to increase its commitment to
applied and demonstrator technology. This will depend largely
upon the stability of the MoD’s commitment to emerging
technologies — although in this respect the government-industry
partnership in UAS technology is a promising start.
53. However, the level of commitment to several key aerospace
technologies may not be sufficient to ensure the long-term survival
of UK competence. In particular, MoD investment in platforms has
historically helped to underpin exports which have also helped to
defray the costs of indigenous development. These discrete
products also provided UK equipment companies with a route to
market. In the future, and as UK companies increasingly do business
in the US, routes to market may come through incorporation in
foreign systems — exports may simply follow a different flag. This
entails less certainty and more external dependence; it may also
depend upon more offshore investment, with jobs following the
R&D. This may be a price that has to be paid to maintain anything
approaching a sophisticated and relevant national defence
aerospace industry base but there are implications that must be at
least added to a national cost-benefit analysis.
54. The DIS/DTS combination may reflect a rational approach to
defence procurement but it does not auger well for future
industry and technology policy, particularly if government
investment in civil aerospace is constrained by external forces such
as the World Trade Organization. Much would depend upon
further enhancement in civil technology acquisition as outlined in
the AeIGT. This could be a weak reed as public expenditure
constraints grow over the next five years. Meanwhile, several of
the UK’s major competitors continue to receive support through
both defence and civil budgets. This may still engender a
profitable and productive future but the nature of UK aerospace
may again have to be re-defined.
55. Over the past two decades, the aerospace industry has been
subject to rapid and often disruptive change. As a result, the UK
12
Aerospace and the UK Defence Industry and Technology Strategy
has had to compromise much of its independence to maintain
much of its overall defence-aerospace competence. However, the
MoD has to deliver on its commitment to maintain core skills and
to protect the critical design and development capabilities
embodied in the individuals and teams that, in the final analysis,
comprise the heart of the UK defence industrial base and which
will continue to provide the basis for future world-class UK
sourced defence equipment.
56. However, reconciliation of the MoD’s technology strategy with
its aspiration to retain key industrial competence in key areas is not
fully addressed in the DTS. The main emphasis of the DTS is to
maintain and to improve the MoD’s competence as an intelligent
customer, and its main commitments are in this area, not necessarily
to support the fundamental building blocks for industry’s future.
This in the end may be the main weakness of the MoD’s overall
strategy for the UK Defence Technology and Industry Base.
Globalisation and industrial options
57. In many respects the DIS/DTS offers a sophisticated picture of
the modern defence industrial context, especially in its
recognition of the impact of globalisation, even in the limited
form that characterises the defence sector. However, globalisation
generates a different set of public and corporate policy issues
with the likelihood of several unanticipated consequences. One
could be the incorporation de facto of a large part of the UK
defence aerospace industry into the US defence industrial base,
with the inherent risk of a long-term UK dependence on the US
for a swathe of core defence technologies. This would reflect the
powerful flow of investment both ways across the Atlantic,
linking UK and US industry. If there were a reduction in the
quantity and the value of UK national defence research to the
UK’s leading companies, the temptation to take corporate IP to
the US, to develop it further off shore and to sustain capability by
tapping US funding could become overwhelming. Given the
continued barriers to technology transfer, the benefits of this
investment and experience will stay overseas, even if the profits
are repatriated. Such developments would also undermine the
UK’s contribution to the European defence technology and
industry base and what in the past has proven to be an important
means of maintaining a strong national capability.
9.0 A ROLE FOR THE ROYAL AERONAUTICAL SOCIETY?
58. The Royal Aeronautical Society is not directly involved in
defence industrial developments, nor is likely to be affected by
either the DIS or the DTS. However, it has a legitimate role to play
in enabling the aerospace professional to face the future and to
help equip him or her in meeting the demands of a rapidly
changing market. In this respect, it is not enough simply to observe
and to analyse. The Society is well placed to encourage new
disciplines, the better integration of existing expertise as well as
acting as the professional conscience of the MoD and government.
In general the Society could monitor the implementation of the
DIB/DTS and to note (or to warn) of its consequences. More
specifically, the Society could use its Specialist Groups to support
aerospace related science-based activities as they emerge from the
MoD process; conferences and symposia could be aligned to the
DTS topics and to promote best practice; the Society is certainly
well placed to stimulate discussion on future aerospace R&D
imperatives as well as to review possible aerospace doctoral
research pilots (it could for example, help to develop a Grand
Challenge for the aerospace and related sectors); and finally the
Society should provide a focus for debate about future aerospace
skills requirements and their provision in the UK.