Scottish Aerospace, Defence & Marine Industry Study Summary of study findings

Transcription

1 Scottish Aerospace, Defence & Marine Industry Study 2010 Summary of study findings

2 This presentation complies key findings from a study undertaken by SQW Consulting An Industry Baseline Study for the Aerospace, Defence & Marine Sector in Scotland. The study was commissioned by Scottish Enterprise in association with A D S Scotland. The work was undertaken during February to May For more information on the study findings please contact Ross White - ross.white@scotent.co.uk

3 The study finds that 842 businesses are involved in the Aerospace, Defence & Marine (AD&M) sector in Scotland. These can be dived by sub-sector as follows; Proportion of businesses in the AD&M Sector 10% 8% 4% 1% 20% 58% Marine Aerospace Security Defence Research & Development Space

4 SQW estimate that employment in the AD&M industry is almost 40,000. This is broken down by sub-sector on the following basis; AD&M Employment by sub-sector Employment (FTE's) M arine Aerospace Security Defence Research & Development Space

5 The AD&M sector in Scotland is understood to generate combined sales of 5.2Bn in year. Slightly under half (45%) is accounted by the marine sector, while Aerospace contributes around a third (31%) and defence generates a further 18% of the total. AD&M Turnover by sub-sector Turnover ( M) Marine Aerospace Security Defence Research & Development Space

6 Using the official Scottish Government GVA figures for the Aerospace and Shipbuilding industries and applying an average of these to the wider AD&M sector, SQW reports that the sector contributes 2.1Bn a year to the Scottish economy. GVA by sub-sector GVA ( M) Marine Aerospace Security Defence Research & Development Space

7 Public sector funding for AD&M businesses was also examined and found to be 68.6M in the period since 2006/07 with 43% of this spend focused on R&D / Innovation projects. Public Sector AD&M Project Spend Since 06/07 SMART / SPUR Scottish Development International Business Support Project Type General Support Route Development Organisational Development Infrastructure Regional Selective Assistance 21.2 R&D / Innovation Spend ( M)

8 Results of industry SWOT analysis following consultation with a range of sector figures. STRENGTHS Workforce: skilled & highly trained Quality of research base: the strong capability and a high concentration of engineering departments in universities for a small country Supply of graduates: a good supply of graduates from Scottish universities Business R&D and innovation capability: both among Tier 1 companies and also through the supply chain. Supply Chain: stability, breadth, exemplar high tech companies; work via SC21 on supplier development Engineering and design capabilities: including world leading Tier 1 companies; complex systems integration capabilities Support infrastructure: including support from A D S and AD&M Industry Advisory Group WEAKNESSES Perceived lack of recognition: perceived lack of recognition and political will to support the AD&M sector in Scotland and sell it pro-actively Industry structure: small number of large Tier 1 companies and large number of small firms for whom it is crucial to establish and sustain good relationships with the former Access to finance: need for a greater level of private sector finance but also evidence of an aversion to equity finance Support infrastructure: sector needs a greater degree of organisation and leadership; and greater clarity over the roles of Scottish Enterprise and A D S Overseas ownership: subsidiaries of foreign-owned companies perceived to be vulnerable to decisions made from overseas headquarters; same firms in competition with different divisions within their parent In-Scotland competition: the view amongst some smaller firms that the relationship with Scottish universities is now a competitive one University-industry interactions: there remain difficulties in collaboration due to the parties operating on different timescales

9 Results of industry SWOT analysis following consultation with a range of sector figures (continued) OPPORTUNITIES Collaboration over strategic positioning: to further differentiate and promote the offer from Scotland - willingness among Tier 1 companies for joint-working with their peers (and other market players) Pro-active political and industry leadership: there are opportunities to strengthen the position of the sector through pro-active political support and leadership Diversification: into the energy sector e.g. offshore Renewables Demand for quality: despite the low-cost production elsewhere, major firms still seek suppliers from Western countries for mission critical components. Related to this is the opportunity to develop enhanced value added engineering and business solutions based on Scotland s strong engineering capabilities THREATS Low cost competition: the competition from low-cost economies Public sector budget cuts: and current uncertainty over UK Government spending on defence procurement Political uncertainty: the long-run uncertainty and implications of Scotland seeking independence Ageing workforce: the increasingly older workforce in Scotland Increasing demand for offsets in international markets: using offsets to localise more of the value chain and therefore introduce new competitors into the international supply chains Emerging and still growing mature markets: in defence (e.g. Saudi Arabia); civil aerospace (e.g. India, China and the wider Asia- Pacific area); high tech marine equipment over the medium to longer term (e.g. Brazil and India); space related technology