Aerospace innovation – A new dawn

How some innovation leaders in the industry excel despite risks and declines in funding

The aerospace & defence (A&D) industry has traditionally relied on the US Department of Defense (DoD) to fund major innovation initiatives, but with declining budgets and affordability challenges, the sources of innovation are changing and new players are emerging.

Drivers of change

Historically, the A&D industry has created some of the most game-changing technology innovations including commercial aircraft, human space flight, the Internet, GPS navigation, and satellites. Recently, there have been long term declines in government support for innovation funding as well as company-funded research. Deloitte's analysis found that spending on aerospace innovation has declined sharply since 2009, both on independent research and development spending, down by 26.5 percent, and DoD innovation spending, down by 21.1 percent in the sector.

Despite these challenges, some of the leading A&D companies are developing innovative technologies, creating new markets, and expanding their growth opportunities. It is important to note that innovation is focused on not only the technology products themselves, but also the process for using innovation effectively, using a mix of non-traditional industry partnerships, rapid evolution/commercialisation of core technologies, and collaboration with ideation partners. Even the DoD awarded a new flexible hybrid electronics manufacturing innovation hub in Silicon Valley. Read the full report at the link to the left.

How the leading innovators are thriving

Despite the challenging environment in the A&D sector today, a number of companies are forging ahead with innovation using non-traditional approaches that not only provide increased revenues, but also help avoid being disrupted by new technologies and establish defencible competitive advantages in new markets.

Based on our analysis, innovative A&D companies are reshaping their thinking by focusing on non-traditional partnerships, rapid evolution of core technologies, and collaborating with ideation partners.

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