"This is all about the task of backing research with genuine potential, and "keeping faith", as it evolves, for what can be ten – fifteen – years or more."
Royal Aeronautical Society, London
17 June 2009
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Good evening.
Let me say first of all that I'm genuinely thrilled to give this lecture in the name of one of my all-time heroes.
Frank Whittle's life and achievements have long been an inspiration to me: his persistent efforts, both honest and underhand, to secure an apprenticeship with the RAF; the daredevil flying and spectacular accidents which prompted one furious officer to say, "Why don't you take all my bloody aeroplanes, make a heap of them in the middle of the aerodrome and set fire to them – it's quicker!"; the technical triumphs represented by the Gloster Meteor, the de Havilland Comet, and – later – Concorde.
As a minister at the MoD, I fulfilled the dream of a lifetime by occupying the back seat of a Eurofighter on a supersonic run – and I have Whittle to thank for that.
But another feature of Whittle's story – as most of you will know – was the obstacles he faced during the most productive years of his career, from the late 1920s through to the 1940s.
It's no secret that the Air Ministry responded with scepticism to his early design of a gas turbine that would produce a propelling jet; that, in the mid-30s, it refused to pay a negligible fee to renew Whittle's jet-engine patent; that officials continued to blow hot and cold over the technology for several more years, and changed their minds over who should produce it.
The truth is that his was no isolated experience. It's not confined to aerospace, nor to defence. It's been a fault that has characterised many governments, irrespective of their political stripe.
Let me give you another example, which has parallels to Whittle's own travails. The wonderfully christened Lancelot Eldin De Mole was an Australian engineer who, in 1912, submitted a concept to the British War Office for an armoured vehicle that would run on treads.
It was rejected on a number of occasions, and – at one point – De Mole attempted, unsuccessfully, to enlist in the Australian Imperial Force as a way of interesting the British in a model of the tank he'd conceived.
After the first British tanks took the field in 1916, he tried – again without success – to gain recognition for his designs, some of which the War Office had held onto.
Clearly, one of the issues we face in government – and it's a major one – is giving the right backing at the right time and for an appropriate length of time to disruptive technologies; no longer to solo inventors like Whittle or De Mole, but to support the most promising ideas that can drive forward key sectors like aerospace.
Easier said than done, of course, for it would be both naïve and anachronistic to dismiss the dilemmas confronting the Air Ministry officials who worked with Whittle – not least, the problem of his volatile temperament.
So what can Government do to increase the number and the hit rate of sensible, prescient decisions that it makes – so that, in future, Schneider Cup-type successes far exceed TSR2-like disappointments?
This is all about the task of backing research with genuine potential, and "keeping faith", as it evolves, for what can be ten – fifteen – years or more.
That task has not been made any easier in the current economic climate – but it is one we cannot abandon.
At present, the UK aerospace industry still claims a 17 per cent share of the global market – second only to the US – and 10 per cent of the defence market. With a turnover of some £20 billion a year, it directly supports well over 100,000 jobs, and – indirectly – perhaps three times as many.
It has thrived, thanks in large part to its considerable R&D spend – close on £3 billion in 2007. Only the pharmaceuticals industry invests more. No-one should underestimate the legacy of continuous innovation in the UK – the skills and knowledge amassed. It's the basis of our world-class reputation in this sector.
Now, I recognise that after four or five years of record orders, the effects of a globally synchronised downturn are starting to be felt. Some orders are being cancelled. Airbus and Boeing have announced modest production cuts – while other manufacturers, especially those in the business aircraft market, have announced steeper cuts which are already affecting UK suppliers.
We're seeing a decline in global airline traffic, with air freight’s steep drop leading the way.
Of most concern – and it's not unique to this sector – is the acute difficulty of securing finance for deliveries on the commercial markets.
I'm under no illusions, therefore, about the existence of immediate problems within and beyond the industry.
At the same time, however, there are strong grounds for optimism. This industry is cyclical. The overall trend is still for substantial growth over the next 20 years in the large aircraft market, with forecasted deliveries of nearly 30,000 aircraft worth an estimated $3 trillion.
My main message today is that the new Department for Business, Innovation and Skills has been formed specifically to tackle these challenges faced by aerospace, and those confronting other sectors of our economy – to get through this downturn and position the UK to compete globally when the upswing kicks in.
The purpose of BIS is to build a dynamic and open knowledge economy, driven by excellence in education and skills, by high levels of productivity and growth, and by strategic investment from government in our people, in businesses and our society more broadly.
In line with the vision contained in the "New Industry, New Jobs" plan, we now have a single department that gathers expertise in these areas from across Government.
As my colleague, Peter Mandelson, has observed, we are on the cusp of another industrial revolution – one driven this time by green tech, biotech, nanotech.
We have the expertise in high-value manufacturing and energy, in healthcare and financial services, and – my abiding priority – an outstanding science base at the leading edge of both pure and applied research.
A low-carbon world, therefore, is one where we have every chance to succeed – in spite of the increasing competition posed by emerging nations.
But we need to be taking the right strategic decisions now to secure comparative advantage and sharpen our competitiveness for the long term. We need to be targeting Government support where it can really count – by creating market certainty, improving the regulatory environment, helping the most innovative small businesses to become high-growth enterprises.
In aerospace, then, we will have a more joined-up relationship between officials with deep knowledge of the competitiveness issues affecting the sector and those who have worked on stimulating innovation and building links to the research base.
This more integrated set-up will also allow the aerospace sector to influence skills policy so the UK has the right people to design, assemble, operate and maintain technologically advanced aircraft.
My job within the new department is – above all – to champion science and engineering across Government.
And I do want to reiterate that UK science is in its strongest position for some time.
We have transformed the science base over the last 10 years – thanks to a more-than-double, real-terms increase in spending.
And among the most positive changes has been the way in which the science base has forged productive links with business. Universities, for example, have grown their external income substantially – while the quality and number of science innovations from universities have never been higher; the investment opportunities for spinouts never better.
We will not allow anything to undermine this progress. The Prime Minister, Lord Mandelson and I have repeatedly gone on record to confirm that the ring-fenced science and research budget will remain intact. Indeed, we are fully committed to raising investment – and to commercialising more of the science that emerges from both pure and applied projects.
The priority now is to focus scientific effort and research on those sectors most likely to deliver national success. As arguably our greatest national – our greatest natural – resource, scientists and engineers must be fully involved in the new industrial activism.
Which is why I launched a debate among the research community earlier this year, to identify how and where we prioritise.
We need to concentrate where the UK has a clear competitive advantage; where growth opportunities are significant over the next 20 years; and where we have a realistic prospect of being number one or two globally.
For the past several months, for example, I've been working with academics, NHS clinicians and industry leaders through the new Office for Life Sciences. Our mission is
to make pharmaceuticals, biotech and medical devices combined a much bigger growth engine for this country.
I'm now delighted to be back again at the MoD, where my priorities will concern strategic defence acquisition reform, and defence science and technology.
The first area will involve following up on Bernard Gray's detailed examination of the MoD’s acquisition change programme – assessing whether it's sufficient to meet the challenges of the combat environment we now face. This includes seeing what more can be done to address the longstanding challenges of cost-growth and time delay in equipment programmes – issues faced by all the leading industrial countries, and ones we must resolve, given the current tempo of operations.
I'll also be looking at the Defence Industrial Strategy, published in December 2005 during my first spell at MOD. The Ministry has made good progress since then in a number of areas, with maritime receiving perhaps the highest profile.
On the science and technology side, the agenda is still about delivering cost-effective capability and enabling smart acquisition, but also supporting national competitiveness.
Defence has always been prepared to spend on innovation. As Minister for Defence Equipment and Support, I launched the Grand Challenge to coincide with Defence Technology Strategy – a competition open to anyone with an idea or solution that could be developed to save lives and protect our troops.
With its prize named for R J Mitchell – who needs no introduction in this forum – response to the Grand Challenge exceeded all expectations, and has tangibly boosted both innovation and skills within the UK science and engineering community.
More recently, the MoD issued a Defence Technology Plan outlining its top priorities. I’ll mention two.
First, a more cost-effective means of achieving the effects currently provided by manned aircraft and cruise missiles, by exploiting new concepts in unmanned air vehicles and unmanned combat air vehicles.
Second, we need to reduce operational dependency on fossil fuels by looking at alternative energy sources and technologies under development in the civilian market – a great example of where Defence can learn from others.
In a similar way, the new Centre for Defence Enterprise at Harwell offers a fabulous opportunity for investors and inventors, entrepreneurs and academics to incubate new technologies and businesses. Already, some incredible ideas have come from groups not conventionally associated with defence.
This model of engaging with our best scientists and engineers is attracting much international interest and is setting a new standard for innovation in defence technology procurement. It has also given funding and opportunities to suppliers looking to develop such technologies and work with MoD.
Returning to the civil side, the National Aerospace Technology Strategy (NATS) has been in place since 2004, building collaboration between UK companies – both primes and the supply chain.
The Government has committed £232 million to NATS through the Technology Strategy Board, the regional development agencies and the devolved administrations.
More than 70 projects have been launched under the strategy to date, including major programmes in aero engines, wings, and associated systems; in unmanned air systems and rotorcraft. Many companies are involved either as partners or sub-contractors.
There's a vast amount of work going into wing design: replacing key structural and external surfaces with composite materials; exploring alternative means of power distribution; introducing new sensor technologies; considering radical approaches to on-wing systems for heat, fuel and de-icing.
And in aero-engine manufacture, a huge shared effort is going into developing high-temperature turbine blades and nacelles out of new composites; into better coatings to improve wear and component lifetimes; into investigating non-invasive, non-destructive means of testing these technical advances.
Informing all of this, of course, is the climate change agenda. As many of you know, the UK aviation industry has adopted several ambitious targets, including to halve emissions per passenger kilometre by 2020. Given the extended life-cycles of aircraft and the sector's necessarily rigorous safety standards, de-carbonisation is a real challenge.
Again, it's essential that we invest in technologies now in order to achieve the improvements to engines, airframes and systems that will cut CO2 emissions, nitrous oxides and noise.
Last month, for instance, a joint project involving Airbus and four UK universities reported that its new way of reducing mid-flight wing drag – by using air-powered jets to redirect airflow laterally – could reduce fuel consumption by 20 per cent.
Space, meanwhile, has been back in the headlines this week, with the fantastic news – confirmed yesterday at the Paris air show – that our very own Major Tim Peake will definitely make it into orbit.
The announcement of the UK's first astronaut has been a real boost. I've no doubt that space is unrivalled in its capacity to inspire young people to study science and engineering.
Yet our domestic space industry – with an annual turnover of £5.8 billion – is an inspiration in its own right. We're the best there is, for example, in the field of small satellites – which are critical to the ongoing digital revolution and have huge potential in other areas, international security among them.
Next week, I will be launching, together with industry, an Innovation and Growth Team for our space sector, whose job will be to set out a 20-year vision for the UK in space, together with the costed deliverables required to realise it.
And, with the opening of the UK's first European Space Agency research centre – also at Harwell – next month, we have the prospect of attracting more international aerospace firms to our shores; 50 US-based companies are visiting the Harwell innovation campus as soon as the space centre is open.
Like Major Tim, I was also in Paris this week, where I met with ministers from France and Germany and Airbus's senior management.
I was pleased to confirm UK support for both Airbus and the A350 XWB. We are currently in detailed negotiations to finalise our support arrangements, but are committed to doing so in the next few weeks.
The new wide-body A350, which has already racked almost 500 orders, epitomises – I believe – the quality and influence of UK aerospace right now.
It is powered by Rolls-Royce's latest and most advanced engine, the Trent XWB, which will offer better operating economics and environmental benefits through reduced emissions.
I am equally proud that the UK is providing the A350 wing, containing increased levels of advanced composites.
On this front, the Government is supporting GKN with £60 million in repayable advances to design and develop trailing edge and rear spar components at its new facility in Filton. We've also made £50 million available to Airbus UK to undertake a range of R&T projects over the next five years – keeping this country as Airbus’s Centre of Excellence for Wings and Pylon.
Together with launch investment for Bombardier's new CSeries aircraft – where wing design and development will be carried out in Belfast – this is all boosting our composite capability, which could have further applications in wind and marine technologies, and in construction.
The highlight for me in Paris was getting a close look at the A380 – around 50 per cent UK-made, thanks to its Rolls-Royce engines – whose performance during its first 18 months of operation has been remarkable in terms of fuel consumption, noise emission and passenger comfort.
On the flight deck of the A380, I was briefed on an exciting technology to prevent runway overruns. Known as Brake-to-Vacate, it allows the pilot to preset the runway exit for turn-off, so the aircraft braking system can operate in the most efficient way, minimising runway occupancy time and reducing fuel burn.
But the key point here is that both the A380 and now the A350XWB will play a vital role in determining UK opportunities on future aircraft programmes, including the next-generation single aisle – the replacement for the Airbus A320 and Boeing 737 aircraft. Expected to enter service around 2020, this market opportunity could be worth about $1.5 trillion.
This may appear some way off, but the technologies need to be identified and developed, demonstrated and certified in the UK now.
By working with our European colleagues, we can ensure the UK aerospace sector remains one of our crown jewels in high-value manufacturing. I'm very clear that the industry will benefit most – and most rapidly – from national governments acting together: boldly and decisively.
One last point. There's plenty of doom-mongering around at the moment. But from what I heard and discussed in Paris – from what I've just relayed – there are also justifiable reasons for optimism.
Here's another. As Peter Mandelson announced earlier today, Britain has comfortably retained its position as the leading European target for inward investment – with only the US ahead of us globally. That’s no small achievement while international companies tighten their belts and focus on those countries which can guarantee the best returns; and it's safeguarding tens of thousands of jobs.
Advanced engineering projects were up 15 per cent in the last year. There was strong growth in the creative industries and IT. Over 250 world or European headquarters were established in the UK.
So, I don't want people to overlook the reality that – although times are extremely tough, although international competition hasn't diminished (far from it) – we still offer one of the best and most productive investment climates in the world. We still offer open and flexible markets. We remain committed to free trade. Our science base is superb.
Let me close by recognising that UK aviation has come a long way since Samuel Cody briefly left the ground in British Army Aeroplane No.1 – and then famously tethered it to a tree as if it were a horse.
There's no question that the UK has fundamentally shaped the history of aeronautics – but also that aeronautics has changed the UK.
It has given ordinary working people the chance to widen their horizons and see the world. Air freight put exotic produce on our supermarket shelves that had never been seen, still less tasted. Aerospace technology has been critical to defending our country and protecting our armed forces.
We must do everything we can to ensure that aerospace has an even more prominent part in our nation's future.
To keep faith with emerging ideas and technologies, we have to agree the most appropriate strategy now. I'd like to think that that's what Whittle himself would have insisted upon – but I'd welcome your views. To hear what you see as the opportunities for UK aerospace, as well as some of the barriers.
For now, it only remains for me to thank you for listening.
