ABSTRACT
12.1 THE NATURE OF THE INDUSTRY. Aerospace industries of any mettle require both costly plant and on-going R & D expenditures in order to remain abreast of state-of-the-art technology in the first place and be internationally competitive in the second. As a technology-intensive industry in need of continual innovation, the first requirement is a matter of course. However, the second requirement is all but necessary too; for, nations denied the cost-mitigating effects of export earnings find themselves severely hard-pressed when it comes to maintaining an indigenous aerospace design and production capability. In the past, the US and Soviet aerospace industries could afford to spurn export orders by virtue of their reliance on huge domestic markets but, of late, the burdens of aerospace innovation have compelled even these giants to court export markets. France, the UK and the other EEC producers have long recognised that the viability of their aerospace industries rests on the attractiveness of their aircraft, missile, engine and equipment offerings in international markets. Difficulties encountered in achieving sufficient exports have played no small part in forcing the Europeans to contemplate integrating significant portions of their national aerospace capabilities within supranational (albeit, mainly EEC) ventures. Similar pressures of climbing development costs operating in conjunction with limited or uncertain domestic markets are obliging the hitherto financially-sturdy US firms to accommodate foreign risk-sharing partners (e.g. Boeing and the Japanese firms). Already, virtually all new aeroengine projects—including those initiated by P & W and GE—take on such an international flavour. Indeed, this willingness to share new projects with others (perhaps former rivals) tends to enhance technology transfer and can work to the benefit of neophyte aerospace industries (a point not lost on the Japanese who are also in the fortunate position of having a government willing to subsidise technology acquisition as well as unprofitable production runs). Certainly, the profusion of co-production agreements, offset transfers of process as well as product technologies, and the establishment of turnkey plants besides, have come to typify the global aerospace 124industry since the 1970s. Yet, the upshot of this trend is moot: while it is true that aircraft assembly has become much more widespread, it is far less the case that aeroengine and avionics production has shifted markedly from its geographic core, and it is altogether questionable whether the high-technology design assets responsible for leading-edge aerospace developments have decentralised at all.
