Airpower Conference July 2014

Airpower and the Economy

Professor Trevor Taylor

Two aspects of the issue

� Security supports investment and economic activity

� UK as a trading nation� Uses of airspace

� Surveillance� Communication

� Not just a sea power consideration� UK as a tourism destination and hub for air travel

� The impact of airpower capabilities on the protection of the UK and its assets

� airpower: � Capability to protect airspace� Capability to use airspace

� Communication� Threatened and actual damage� Transport

Japan and France in a similar position

Surveillance and electronic warfare

increasing in importance?

Two aspects of the issue

� Security supports investment and economic activity

� The (growing) costs/opportunity costs of airpower

Combat airpower as increasingly expensive

Rising costs at the platform level

procurement

Norman Augustine in USNorman Augustine in US

Pugh and Kirkpatrick in UK

MoD team led by Neil Davies

2012

Combat airpower as increasingly expensive

� Rising costs at the platform level� procurement� support

� The costs of capability integration, involving multiple assets

� Surveillance� Communication� Strike/weapons� Sustainment and reach (tankers)

Combat airpower as increasingly expensive:

consequence

� Context� 1993 RAF Bruggen alone had four squadrons of combat aircraft:

� 60 GR1 Tornadoes60 GR1 Tornadoes

The results of combat air costs

Combat

aircraft 2013

No. of

countries

European countries 2566 35European countries 2566 35

Average aircraft per country 73

Median number of aircraft 42

Countries with less than 50 aircraft,

17

Of which, countries with no aircraft

10

Source: IISS, The Military Balance 2014

The serviceable

number?

The results of combat air costs

Combat

aircraft 2013

No. of

countries

Combat

aircraft

2023?2023?

European countries 2566 35

Average aircraft per country 73

Median number of aircraft 42

Countries with less than 50 aircraft,

17

Of which, countries with no aircraft

10

Source: IISS, The Military Balance 2014

The economics of defence

� Work done at home sweetens the costs for the government

�Tax revenues

� Preference for domestic suppliers and contracts can increase costs

�Japan and its F.15s�Tax revenues� Multiplier effects� Reduced foreign exchange risk�Technology and management learning?

�Japan and its F.15s� UK Apaches

However, building an aerospace sector

� Hard, time consuming and expensive to re-constitute

� Germany� Germany� Japan� Italy

� Hard, time consuming and expensive to build up

� India� South Korea� China

UK competent aerospace industry

� Evidence from the amount of international civil and military work �15% of JSF (but avionics/electronics)� Airbus wings

• 17% of world market

� Suppliers to Boeing and Airbus� The benefits of

� Relative continuity in defence� But current uncertainty

� French/European vision in the civil domain� Government bail-out in the engine domain

� Has helped the UK in the past to secure significant economic benefits from the generation of airpower

market• 75% of output exported• c.50% defence

Looking forward: the half full glass

� Aerospace Growth Partnership� Defence Growth Partnership� Government stance on

� National Security Through Technology� R & D spending levels� Government stance on

manufacturing� Economic growth as a formal Ministry of Defence objective� National Security Through Technology� Procurement choices

� e.g. Complex Weapons

� Procurement choices� Rivet Joint� C.17� Reaper

Biggest single challenge

� Making collaborative projects among peers work better� NATO Europeans and Japan constitute a large market

� What is the alternative? What is the alternative?

Conclude: the need for affordability

� The Western world must address affordability� perhaps through unmanned� cheap and cheerful aircraft beginning to appear from beyond Europe and the big US firms ?beyond Europe and the big US firms ?

� Proposition for debate: � UK public readiness to support defence expenditure will decline if more is spent on ‘off-the-shelf’ equipment from overseas?

� Except in dire times, people care more about the economy than about defence