Factors Driving R&D Investment
Unlike other industries examined in this forecast, concern over federal budgets and spending is a significant factor in U.S. ADS company R&D investment. Reflecting these concerns, 56% of ADS
respondents are more pessimistic about their 2014 budgets. Cost
cutting and budget reductions in recent years appear to be taking
a toll on R&D investment and functions in the industry. Approximately 40% of the respondents believe their R&D staff budgets are
not large enough to accomplish their goals. R&D costs are becoming a significant issue for 46% of the ADS industry, and 44% of the
respondents are concerned their aging R&D infrastructure is affecting their work, again to a greater degree than any other industry.
Even with reductions in defense-related aircraft R&D budgets,
growth in commercial aviation and non-traditional defense and
homeland security technologies, such as UAVs, will continue to
provide momentum in ADS R&D investment. R&D related to improving the fuel efficiency, operating costs and production of commercial aircraft will continue to benefit from the growing demand
for global air travel. Growth in the deployment of UAVs, primarily
(but not exclusively) from increasing military demands, is driving
R&D related to structures, materials, electronics and communication and surveillance technologies. As border security and civilian
uses of similar autonomous vehicles emerge over the next few years,
R&D efforts will evolve to develop payload and sensor platform
technologies for a wide array of new applications.
As external funding declines and costs continue to increase, industry
leaders are looking for ways to increase R&D efficiency and spread
the financial and development risks. Nearly half (47%) of the ADS
respondents believe increased collaboration would be beneficial
to their R&D operations. Such collaborations are becoming more
important to the ADS industry. One illustration is the recently
announced government-industry partnership between NASA and
six aerospace prime contractors to advance composite materials
research, development and certification.
Changing Technology Landscape
Given the competitive nature and security requirements of the U.S.
and global ADS industry, it is not surprising that in-house development (identified by 85% of the respondents) is by far the most
important mechanism for technology development. No other approach reaches the all-industry average.
The development of autonomous vehicles and related technologies
has increased in importance over the last two years as 70% of our
ADS industry respondents now cite it as a key area of development
over the next three years, compared to 57% in our 2012 forecast.
Among the ADS respondents, development of cybersecurity
technologies also has taken on increasing importance. 45% of the
respondents in our current survey cite it as a key development area,
compared to 31% two years ago. Both robotic/drone systems and
composite materials are cited by half of the respondents in both
years’ surveys, indicating a continued platform level of development
is expected in these areas. Finally, within a new response category,
half of the respondents cited more development in commercial
space technologies as important over the next two years.
All Industry Respondents
Aerospace / Defense / Security sector
Sources of Innovation
The two largest global aerospace/
defense/security R&D firms, Boeing
and EADS, both exceeded US$ 3.0
billion in R&D in 2012, though EADS
reached this level by averaging 3.5%
growth in each the last two years,
where Boeing declined by 10% on
average in each of the last two years.
Italy’s Finmeccanica, the third largest
R&D performer, also has decreased
its R&D over the last two years, but
still maintains the highest R&D intensity among the U.S. & global leaders.
Corporate leaders in aero-
space & defense R&D
Source: Battelle/R&D Magazine, Schonfeld & Associates, European Commission-JRC/EIRI
2% 6% 8% 10% 12%
2012 Corporate R&D Intensity
Top 5 Non-U.S. Firms
Top 5 U.S. Firms
Size of Ball Re;ects Amount in US$ of R&D Expenditure