Gary Elliott, Chief Executive Officer of the Aerospace Technology Institute (ATI) shares his view on disruptive technologies and disruption, and how he sees this emerging topic affecting UK aerospace.
What is disruptive innovation?
Disruptive innovation could broadly be defined as a product, technology, process or business model that radically changes the way an established market operates, it may also create completely new markets and supply chains. Whatever shape or form disruption comes in, it will completely change the way things are done today.
There are many examples that can illustrate the effect of disruption, ranging from fundamental science to commercial products & services, and business models. One of which is Netflix, the online streaming service that contributed to the collapse of Blockbuster.
EXAMPLE: Netflix took a simple gripe, blockbuster late fees, and addressed it by lending DVDs via post and allowing returns at the customer’s leisure. They didn’t stop there. They developed with the available technology and shifted to solely streaming online when broadband made it viable. Netflix evolved and identified disruptive technologies to execute a new disruptive business model, understanding the customers’ value precisely – we didn’t rate the store experience as much as we thought!
What does this mean for aerospace?
Some early analysis suggests that disruption may have two impacts on UK aerospace. One is that it will bring positive change by generating more efficiencies and creating greater competitive and market opportunities. The second is a negative impact for those organisations that have not foreseen, or have disregarded disruptive ideas. No matter what size of business you are, when disruption comes, it will affect each and every one of us.
Another thing we need to think about is the barriers to disruption in aerospace, which include time to market, cost, the complexity of product development, and certification – these challenges should be viewed as opportunities. How we encourage disruption in aerospace is not something the Institute can understand and interpret without consultation, research and testing. It is something that is being scoped out, and requires all involved to take a visionary step into an exciting area.
EXAMPLE: Ryanair landed and expanded the low-cost carrier airline model in Europe, offering dramatically reduced air fare for a bare bones travel experience – and the market was wide open! All incumbent airlines struggled to compete and eventually adopted their own version of the fundamental model.
Will aerospace disrupt, or will it be disrupted?
Disruption will come in many forms. There is no doubt that it will shake-up the sector and completely change the way aerospace operates. Taking the sector out of its ‘comfort zone’ and radically transforming the processes that have been steady for the last 50 – 60 years.
I would like to think that aerospace will become a disruptor in its own right. There is a lot we can do as a sector to influence and challenge other sectors. For example, the development of battery technology through ATI supported project Zephyr Innovation Programme (ZIP), being led by Airbus, the project is aiming to develop key technologies in aerostructures, energy storage and propulsion. And the Institute’s involvement with the Faraday Battery Challenge will represent the interests of UK aerospace. Our Chief Operating Officer Dr Ruth Mallors-Ray OBE is a member of the Faraday Challenge Advisory Group, and Mark Scully, our Head of Technology for Advanced Systems and Propulsion, is a member of the Technical Advisory Group.
Disruptive technologies are already in view and ready for translation into the aerospace industry, we just need the confidence to invest in new ideas and realise their potential. Examples such as urban air mobility and fully electric regional aircraft could clear road congestion, increase rail competition and open-up rural airports, relieving hubs and growing rural economies. Also, technologies such as Blockchain could radically change how aircraft maintenance is managed, and components are tracked through the supply chain, plus many more applications, to name just a few. There are plenty of other ideas and technologies that have been around for years that could positively impact development cycles, supply chains, air traffic control and airport management. What these mean for aerospace as a whole is hard to predict, but the opportunities are there for the taking, for incumbents and new suppliers.
Do you plan for disruption or will it just happen?
For disruption to have a positive impact on the sector, we absolutely need to plan for it. If we understand what this will mean for us, we can use it to our advantage. But if we simply wait for it to ‘happen to us’, then there is a risk it will cause chaos and could have a negative impact on processes, businesses and outputs.
Technology in UK aerospace has a potential to disrupt the global sector. We need to be on the front-foot with this – the UK needs to lead disruption and become a global leader in emerging technologies. By being on the front-foot we can plan for, and be the disruptors. The real challenge will be how as a sector do we remain adaptive and agile. Regardless of how much we plan and anticipate, there will always be certain elements that can never really be planned for, such as wider international regulatory changes, and changing trade rules.
Here in the UK we have a great and a well-connected ecosystem. But what we need more of is ambitious goals. Goals that will set us apart from the rest of the world. Goals that will help the UK to become the next generation of leaders.
What will the ATI do to encourage disruption in aerospace?
Some of you may recall that I spoke at the ATI conference in November sharing my view on disruption, that we must not wait for it to happen. We need to continue investing more time and resources in understanding what the models of disruption may look like, and we need to be braver and bolder if we are to take a lead in this area.
We are seeing a number of start-ups and new entrants coming into the sector. This is where some of our disruption will potentially come from. A lot of positive impact could be extracted from these organisations, as they bring with them a different perspective, new skills, and challenge the sector’s more conservative ways. For example, if we look at hybrid-electric, new entrants such as battery developers are starting to work with both the aerospace and automotive sectors to develop this technology.
The Institute is casting the net widely in its research, by taking an international perspective as well as a national one. We are looking at how other countries are addressing and accelerating innovation, analysing innovation support mechanisms, the role of academia, and successful disruptive ecosystems. As we go through this journey of learning and understanding, we will continue to strengthen our definition and continuously test it, sharing insights with you along the way.
Our current research will help us identify and evaluate how we better support disruptive innovation, and how we attract the best of it into the UK. It will allow us to consider whether we need to apply other levers to support disruptive innovation, such as alternative funding models, mentoring, incubation, accelerators, demonstrators etc. I truly believe that we have the opportunity to make the UK aerospace sector the global hub for disruption, deliver societal benefits by catalysing commercial and economic success for the UK.