The Aerospace and Defence (A&D) industry has been the source of some of the most influential technological advances in modern history - computers and computer networking, satellites and satellite navigation, and important advances in physics - all have their roots in the sector's research. That is why there is a strong innovation imperative for the industry.

The aerospace executives interviewed for PricewaterhouseCoopers' report A&D Insights: Gaining Technological Advantage agree. Differentiation has long been critical to gaining and maintaining contracts, programme positioning and market share. It is even more important today given the increasing globalisation of the industry.

New competitors are already emerging, so maintaining a competitive edge is seen as absolutely essential.

Sunstroom Solar Park at Los Arcos, Navarra, Spain
 © Geoff Moore/Rex Features
Companies shouldn't miss opportunities to expand into adjacent markets

That is not the only reason A&D companies are focusing efforts on innovation, despite the economic downturn. Executives also see researching and developing the right new technologies as an essential way to build revenues and cut costs.

While a look at the top 20 companies in the sector showed most held R&D spending steady in 2009 and 2010, they may nonetheless find their overall budgets decreasing in future, with reductions in external funding.

So, how do you achieve cost cuts and still make necessary investments in new technologies and new markets?

Given the long-term programmes in place in the sector, it is difficult to make significant changes to the cost structure in mid-stream.

We believe focusing on making the right choices about which markets to pursue is absolutely critical. By expanding into adjacent markets beyond their traditional core, companies can benefit from industry overlap, diversification, new technologies with cross-over applications and making the most of core skill sets.

For example, smart grids may represent an extremely promising adjacent market. Smart grids offer the potential to significantly reduce grid inefficiency, enable more interactive demand management, better integrate distributed power sources into the grid, change customer experience and facilitate new uses for electric power.

Importantly, they offer A&D companies the opportunity to tap into funding for energy-related projects - and a fast growing global market.

Another strategy is to consider carefully how new technologies can help cut costs (of production or of operation) on existing products or systems. Stronger, lighter, smarter materials are helping airline customers to achieve this, by reducing aircraft weight, increasing fuel efficiency and reducing maintenance requirements.

Fibre-reinforced polymer composites are now used in nearly every part of an aircraft. Composite materials account for 50% by weight of the Boeing 787 aerostructures. By reinforcing a plastic matrix with fibres made from glass, carbon or other materials, engineers are able to reduce weight, whilst adding benefits like corrosion resistance. And it's not just composites, aluminium manufacturers have also been working to develop lighter, stronger alloys with better resistance to heat, cold and fatigue.

Looking further ahead, alongside research to deliver incremental benefits, we can see innovations such as self-healing composites if current academic research in the USA and UK leads to commercial applications.

A&D equipment and systems are maintenance-intensive. Improving technologies that help to monitor aircraft health are becoming increasingly important and hold promise for reducing maintenance costs without compromising safety.

One innovative approach to structural health monitoring is to replace traditional fasteners with sensors to test for fatigue cracks in airframes.

That is because cracks most often begin at fastener holes and so, by turning airframe fasteners into sensors, aircraft operators may be able to dramatically reduce the frequency of inspections. The gathering of real-time, health-monitoring data help manufacturers better understand the in-service operation of their parts and thus design improvements in the future.

A key factor in many of the emerging technologies and adjacent markets identified is that working together with government, within the industry and even beyond sector boundaries, is more important than ever.

Governments will continue to hold the purse strings, not only on military budgets but on some key adjacencies as well. Technological breakthroughs in key areas such as biofuels will require cooperation across the supply chain. Succeeding in some of the most promising new adjacent markets - such as smart grids - will mean cooperating across sector boundaries too.

There is an extremely high level of synergy between new technologies and adjacent markets. That means companies are likely to get the strongest benefit from their research efforts when new product directions can also help build a presence in growing adjacent markets. When those efforts are aligned with government priorities, and companies are able to collaborate effectively both within and beyond the industry, the future looks brightest.

Source: Flight International

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