Auditing Welsh Industry: A Clusters-Based Approach – Aerospace (original) (raw)
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European Planning Studies
Commercial aerospace is a key sector in the Welsh economy, engaged in complex overlapping activities from aircraft manufacture (AM), through maintenance, repair and overhaul (MRO), to research, development and training (RDT). Defining and operationalizing a framework for analysis using both qualitative and quantitative data, this paper examines the actual and potential roles of the relationships in Wales between commercial aerospace firms, industry, government and institutional stakeholders, at both local and non-local levels. Concentrations of manufacturing in North Wales, and MRO in South Wales along with RDT operate as distinct constituent parts of aerospace clusters in neighbouring regions of England and beyond. The results, however, highlight links between the location of AM, MRO and RDT in Wales, emphasizing their (partially) geographically symbiotic relationships. Moreover, there are key inter-linkages that need consideration if the long-term health of Welsh aerospace is to be secured. Simultaneously, all three sub-sectors in Wales exhibit weaknesses which could render them vulnerable to greater external competition, particularly from developing countries. This emphasizes a need to alter the current governance arrangements and utilize different clustering characteristics that currently exist, with government, as a major sponsor of the industry, having a strong (but changing) role to play in encouraging these more balanced industry structures and decision-making processes.
Proximity and Procurement: A Study of Agglomeration in the Welsh Aerospace Industry
European Planning Studies, 2009
The notion that knowledge and skills are at the heart of innovation and competitiveness has become widely accepted by spatial academics and policy-makers. The role that knowledge and skills play in aerospace has only been examined by few accounts, however, and outsourcing as a key feature has hardly been studied. Hence, this article investigates how and to what extent knowledge and skills influence the outsourcing decisions of the aerospace industry, located in two agglomerations, in Wales. It emerges that the availability of technological capabilities and competencies is indeed the key to understanding outsourcing decisions. Airbus compensates for its own knowledge deficits through outsourcing to benefit from suppliers' enhanced expertise. The availability of well-developed skills is crucial to the success of the Airbus supply chain and other aerospace firms. Although skilled companies perform well today, challenges from future technologies must be addressed to remain competitive. An overdue upgrading of knowledge and skills, if met, promises to improve the competitive position of Welsh aerospace.
This report details the activities of a workshop that took place on 13th and 14th December 2001 at the University of Nottingham. The workshop was organised as one of the activities of the Network in Next Generation Manufacturing Enterprises (NNGME), which is sponsored by the Engineering and Physical Sciences Research Council (EPSRC). The subject of the workshop was the World of 2020, the ramifications for manufacturing, with particular reference to the aerospace and automotive sectors, and the evaluation of a framework and process to feed the resulting drivers into national, sector and enter¬prise action plans. The primary aims of the workshop were: (1) To apply the NNGME framework and process in order to derive a set of action recommendations for the aerospace and automotive manufacturing sectors (2) In doing so, to evaluate the NNGME framework and process (3) To encourage dissemination and interchange of views amongst delegates with a view to further collaborative research work
We examine the evolution and role of multinational corporations (MNCs) in the restructuring of the automotive industry in the West Midlands (WM), traditional heartland of the UK automotive industry. We critically assess the activities of the vehicle assemblers and tier-one component suppliers in the WM in the process of knowledge creation and innovation, while focusing on inter-firm relationships. In the pursuit of creating differentiated networks of dispersed operations, multinational corporations seek locations that can bring some added value in terms of competencies and capabilities. As the manufacturing industry that makes up a significant share of WM activities faces global challenges, the future prosperity of the region depends on how MNCs perceive the location-bound advantages that it offers. As part of an ongoing research, this paper proposes some future research questions and argues that the automotive industry retains considerable potential for future development of the region, providing it manages a process of restructuring. This process of strategic transformation of the West Midlands may involve a process of specialisation based on premium manufacturing, engine design and development, and further local collaboration at different levels. Increasing interdependencies between vehicles manufacturers and first tier component suppliers are also taken into account. This paper provides further understanding of the impact of these changes on the position and economic performance of the region, while discussing some policy implications. Keywords: Industrial clusters, Innovation, Automotive industry, Vehicle manufactures, Component suppliers, West Midlands
AEROSPACE CLUSTERS: World's Best Practice and Future Perspectives
The following report provides an in-depth analysis of the phenomenon of clusters in the aerospace sector, with particular attention to those that have greater emphasis on the space segment. Aerospace clusters differ consistently from other high-tech clusters, particularly with respect to the geographical dimension of their economic impact and the related knowledge spillovers. As a result of the sector’s unique features – namely the global dimension of the value chain, the average size of the investment, the length of the development process of a new product/service, the strategic importance of the aerospace industry for the national economy, and the very nature of the products and services delivered – aerospace clusters exhibit higher levels of internationalisation. The common practice of collaboration among clusters in international aerospace programs creates wide and deep networks for commercial relations and knowledge transfer that cross the traditional regional dimension, acquiring stronger international connotations. The analysis carried out on an heterogeneous sample of clusters - in terms of location, geomorphological features, governance, date of establishment, government support, extension of the value chain – clearly points out the presence of common elements that are vital in determining the success of the world’s best practice. The clusters considered are: the Aerospace Valley of Tolouse, the BavAIRia Aerospace Cluster, the Luft- und Raumfahrt Baden-Württemberg cluster, the Bangalore Aerospace Cluster, the Lombardia Aerospace Cluster, the Harwell Science and Innovation Campus, and the US aerospace clusters of Colorado and New Mexico. The results of the comparison of the best practice analysed highlight the elements that are paramount in determining the competitiveness and innovativeness of an aerospace cluster, for each one of the four dimensions of the Porter’s Diamond Model: the Factor Conditions; the Context for Strategy and Rivalry; the Related and Supporting Industries; and the Demand Conditions. As for the Factor Conditions, there is clear evidence that universities and research institutions provide significant impetus to aerospace clusters, thanks to their ability to provide both support to R&D activities and highly skilled human capital, essential in high value added industries and in particular in aerospace. In addition, adequate infrastructure is essential to guarantee that concentration (of people, firms, institutions, etc.) produces beneficial effects and does not create congestion, which would eventually hamper the cluster’s activity. The comparison of the clusters’ Contexts for Strategy and Rivalry underlines the pivotal role played by Institutions For Collaboration (IFCs) in promoting interaction between the cluster’s members and between the cluster as a whole and external partners. In this respect, IFCs foster the attraction of Foreign Direct Investment, which brings international companies (and thus expertise) to the cluster. A key element for the development of a network of industrial players is the presence in the area of one or more anchor firms, usually multinational companies, prime, tier 1 and 2 contractors, able to attract a wide array of specialised suppliers at different levels of the value chain. Finally, the context for strategy and rivalry is believed to benefit from the participation in international programs, and evidence indicates that an adequate level of public involvement (mainly through fiscal incentives that encourage innovation) leverages the cluster’s potential for innovation and competitiveness on the international landscape. With respect to the Related and Supporting Industries, the common features exhibited by the clusters analysed are: high levels of interconnection both with other aerospace clusters and with clusters in other sectors, a high degree of internationalisation (from the multidimensional perspective of 7 Matteo Paone, Nicola Sasanelli AEROSPACE CLUSTERS - World’s Best Practice and Future Perspectives commercial linkages, cooperation in R&D, attraction and retention of talent), and specialisation in highly innovative segments of the value chain as a source of competitive advantage. Evidence shows that the support from the research sector is of the utmost importance. The analysis of the Demand Conditions illustrates how, given the strong international connotations of aerospace clusters in general, each one of them is expected to benefit from the forecasted long-term growth in the global demand for aerospace-related products and services, as well as from the constantly increasing level of integration between aerospace and other sectors (such as security, telecommunications, environmental monitoring, agriculture, healthcare, etc.). Those clusters that exhibit stronger internationalisation are likely to draw higher benefits from these trends. On the other hand, they all face the increased competition from the emerging players from the Asia-Pacific region: since a large share of the future demand is expected to originate from this area, the proximity of such competitors would foster the match between demand and supply, relegating the clusters taken as world’s best practice to a marginal role in the future. For this reason it is essential for the clusters to be supported by a significant domestic demand, originating from both the civil and the defence sectors.
The ten myths of manufacturing:what does the future hold for UK manufacturing?
2010
The recent recession has caused upheaval for the economies worldwide. The impact has been felt enormously all over and especially in the manufacturing sector. This report discusses significant data on China's manufacturing industry that suggests they are already growing again despite recent events, while India has continued to maintain their efforts. One question the report raises is as the balance of economic power shifts to the East, what if the future for the once great UK manufacturing industry?
The presence of Porter's sectoral clustering in Irish manufacturing
1994
Industrial clustering is seen by Porter (1990) as a dynamic process of national sectoral linkages and regional proximity that can systematically interact and reinforce each other, and which is central to international competitiveness. This article examines the extent to which • Porter-type industrial clustering is currently present in Irish manufacturing, and its association, if any, with industrial performance. It also comments on the implications for industrial policy. National linkages between manufacturing sectors are not substantial; and spatial concentrations in two urban centres is more an effect of general urban economies than of sectoral linkages. Little association has been found between the clustering that is currently present in Ireland and various aspects of industrial performance. I INTRODUCTION T he Culliton Report (1992) sees sectoral clustering as an important element of industrial structure, and considers that building industrial clusters should be an important objective of industrial policy. In adopting this view, the Industrial Policy Review Group were heavily influenced by Porter (1990). Porter sees industrial clustering as a dynamic process of national sectoral linkages and regional proximity that can systematically interact and reinforce each other, and which is central to international competitiveness. This article examines the extent to which Porter-type industrial clustering is currently present in Irish manufacturing, and its association, if any, with industrial performance. It also comments on the implications for industrial policy. *This article is based on the author's MBA thesis submitted to Dublin City University and supervised by Mr W. Kelly, MA. I would also like to thank Dr David Jacobson and Dr Rory O'Donnell for helpful comments. Financial assistance from FAS is gratefully acknowledged. The author is currently on secondment to the EU Industry Evaluation Unit, Dublin.