In a decade or two, the industry may be unrecognisable from its present form.

The global defence industry is at an inflection point that is characterised by flat budgets, limited current platform life and the potential of emerging, disruptive technologies (i. e. new technological innovations, products, or services that eventually overturn the existing dominant technologies or products in the market).

Technologies with the potential to radically reshape the aerospace industry are: directed energy, hypersonics, nanostructured materials, leveraging the Global Information Grid (GIG) and, most importantly, the human/machine interface.

Innovation in the aerospace industry is currently vested in the boundary layer between pure engineering and IT. Much of that innovation is taking place with Tier 3 companies/SMEs. Companies that get disruptive innovation right will prosper; others will wither and perish.

The A&D industry therefore needs a new model for innovation.

The introduction of competition into UK MoD research programmes allows an opportunity to rekindle the UK SME base, but there is a danger that spiral innovation controlled by primes and Tier 1 & 2 companies, may preclude access to SMEs.

New models such as Defence Ventures UK, led by FAC, have emerged that give alternative opportunities to reach the most innovative and gifted part of our supply chain, i. e. the SMEs, close coupling them with academia, and deploying them in support of UK MoD and industrial projects from UK and offshore companies.

Ross Bradley, chief executive of FAC said: "The goal of the report was to reflect the changes in the global market place for the products and services provided by the UK's A&D industry and to identify the changes necessary for the UK to address these markets in the future - transforming our globally recognised strength in innovation into economic success."

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