Aerospace R&D investment boosts UK economy by £10bn

A new study shows investment in aerospace industry R&D helped generate £10bn of wider economic benefits to the UK in 2017 alone.

The study showed almost $200 billion was invested in R&D from 2013-2017, with the UK investing $11 billion during this period.

As a result of the total international investment into R&D, spillovers into non-aerospace industries in the UK helped generate additional gross value added of £10 billion in 2017.

This is the equivalent of £300 per worker outside of the aerospace industry. However, with the UK’s productivity 30% lower than that of the US, there is huge potential to improve on the spillover value already generated.

Spillovers come as a result of technology and knowledge generated in one industry, in this case the aerospace industry, being utilised and delivering wider economic value across other sectors.

Further analysis from ATI shows that over a 10 year period, for every pound spent on R&D in the UK aerospace industry, the wider economy benefits by generating, on average, 70p of gross value added as a result of technology spillover into other industries, every year. Over the same 10 year period, those companies investing in the R&D see a return of 15p every year.

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Commenting on the report Gary Elliott, chief executive, Aerospace Technology Institute said: “Investment in R&D provides incredible value through innovation and technological advances, delivering vast benefits to the wider economy. The UK aerospace industry is a leading investor in R&D and clearly delivers value for money across a number of other sectors by fulfilling the wider potential of technology.

“As the UK works to determine its future relationship with the EU, it is vital that as a leading player in the global aerospace industry, the UK doesn’t fall behind its competitors. Providing support and encouraging continued investment in R&D is crucial. As is clear from the research, investment in the aerospace industry goes on to deliver innovation and jobs across a wide range of sectors.”

Five key sectors account for 90% of the spillover benefits from aerospace R&D investment: automotive (37%), scientific R&D (22%), machinery and equipment (19%), rubber and plastics (9%) and ships, rail, other transport (3%), with the remaining 10% spread across a range of smaller sectors.

The UK aerospace industry employs more than 123,000 people, 4,000 of which are apprentices. In 2017, the UK industry had a combined turnover of £35 billion, with £30 billion of this exported around the world.

Mr Elliott added: “The industry and Government need to look at how the UK can become more productive and maximise the benefits of spillover from the industry.

“There are three key areas that the UK can look at in order to deliver on this: 1) identifying common technology priorities across sectors and focus R&D investment, 2) work with other sectors to develop cross-cutting technologies, 3) involving organisations such as universities and catapults in technology projects.”

ATI www.ati.org.uk