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THE INNOVATION CHALLENGES IN
THE AVIATION ENVIRONMENTAarti Panday
2
Overview
National System of Innovation
TIA – Mandate, Role, Themes
The Aviation Landscape
Innovation Challenges
Where To From Here?
3
The National System of Innovation
(NSI)
New Technologies
Initiate
Import Modify
Diffuse
Increased Wealth
Improved Quality of Life
Private Sector
Universities
Science Councils
Government
NGO’s
International Funders
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TIA Act No. 26 of 2008
“…stimulating and intensifying technological innovation in
order to improve economic growth and the quality of life of all
South Africans by supporting the development and exploitation
of technological innovations.”
“…the application in practice of creative new ideas, which includes
inventions, discoveries and processes by which new products and
services enter the market and the creation of new businesses.”
Technology
Ideas
Technology
Innovation
TIA Mandate
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Basic Research Applied Research Tech Development Commercialisation
IP V
alu
e
Lowered Risk/
More certain Return
High Risk/
Uncertain Return
Partnerships
(e.g. IDC, NEF)
Partnerships
(e.g. NRF)
TIA’s Positioning Along
The Innovation Value Chain
Focused TIA Support
Technology Readiness Level (TRL)
Business Readiness Level
TRL 1-2 TRL 3-9
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TIA’s Role
VALUE CHAIN AREA
TIA ROLE
ORGANIZATION CAPABILITY
DEPENDENCIES
Applied Research
Innovation Catalyst [Connector]
Technology Development
De-Risk Innovation- Technology Value- Market Acceptance
Commercialization
Venture Capital Catalyst
“Investor Spotting”Core Business:
Innovation Market-Readiness
“Innovation Spotting”
- Innovation Forum
- Top Tech 100- “Brokerage”
- Market Readiness skills and mindset
- Tech Transfer- Science Councils- Private Sector- “Outliers”
Technology Stations and Platforms
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TIA’s Role + Other Funders in
the Value Chain
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TIA’s Themes
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The Aviation Landscape
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The Aviation Landscape
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The Aviation Landscape -
Value Chain
• South African Aviation Industry 2011 (IATA)
– 2% GDP, 300 000 jobs directly
– Catalytic : jobs & economic impact – millions & billions
• Broadest Context: Design Life Cycle
– Tier One (Complete System)
– Tier Two (Major Sub-Systems)
– Tier Three (Minor Sub-Systems)
– …
12
The Aviation Landscape -
Value Chain
• Broadest Context:
• Innovation Diversity Continuum:
Adapting/refining existing
products/systems/processes
Cumulative simple, small incremental
innovation on existing
products/systems
New, large-scale, complex systems
Innovation Challenges - Global
• Change of innovation paradigm
• Technological complexity vs. faster, cheaper, better
• Managing globalisation
• Offshore manufacturing
• A380, B787, …
High profile program execution “failures”
• Established industries have a different class of problems
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Innovation Challenges: South
Africa
High Barriers to Entry
Compliance & Safety
Access to Finance/Funding
Narrow Focus in Aviation
Landscape
Fragmented Participation
Socio-political History
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Innovation Challenges
High Barriers to Entry
• First mover status
• Product innovation
• Process innovation
• Disruptive technology• Product
differentiation
• Value proposition
Innovation Challenges
• Regulated industry
• Rigorous framework – across life cycle
• Country-specific regulations
• Licenses, Ratings, Competencies
• Common place vs. new players
Compliance & Safety
Socio-political History
• BBBEE
• Employment Equity/Affirmative Action
• Women
Innovation Challenges
• Industry, Academia, Science Councils, Service Providers, Policy-makers, Funders, Regulators, …
• Engineers, Artisans, Pilots, Technicians, Fire Personnel, Cabin Crew, Aeromedical, Dangerous Goods Inspectors, Air Traffic Controllers …
Fragmented Participation
• Customers?
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• Clusters, Networks, Hubs, Aerotropolis
• Geography
Innovation Challenges
Fragmented Participation
Innovation Challenges
Access to Finance/Funding
• Generic Criteria
• Decision to invest?
– Market Opportunity
– Business Model
– Strong Management Team
• What investors want?
– Return on investment: 3 – 7 years
– Diverse management team: technical, business, … all the skills
• Risk averse vs. risk aware?
• Business models for commercialising innovative new technology
• Exit strategies
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Innovation Challenges
• Some numbers:
– Development cost, Airbus A380 : R149 billion (€11 billion)
– Eurocopter Tiger: R13.8 billion (US $ 1.4 billion)
– Rooivalk: R1 billion (concept to first prototype flight)
– Rooivalk: R7 billion (total project cost)
Access to Finance/Funding
• Scale of funding required
• Years of investment
• Source: Government, Private Equity, Venture Capital
• Tangible milestones
• Disciplined project management
Innovation Challenges
• Aircraft design
• Major subsystem design
• OEM/System Integrator
Narrow Focus in Aviation Landscape
• Innovation diversity
• Innovation across aviation landscape – wide portfolio
• Organisational structure and culture
Innovation Challenges• Quest Kodiak
• FAR 23 Certification
• Private Investors – Mission Work
• ICON
• LSA Category
• Private investors – phased approach, final phase US $ 60 mill
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Where To From Here?
• Let us work together: Collaborations, Networks
• Compliance is a non-negotiable
• Deep pockets required - Tier 1
• Boost business/commercial/finance skills
• Wide range of innovation sources
• Challenges are opportunities
• Joint Aerospace Steering Committee (JASC) –Industry Forum, R&D Forum
• Engage, debate, share, learn
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A new dawn is inevitable …
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Contact us at [email protected]
Download funding templates & guidelines at www.tia.org.za
Email proposals to [email protected]
Joint Aerospace Steering Committee: Ms. Yolandi Lombaard
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