Monday, 2 August 2010

Macro Level Trends - UK Autos plc - "Future-Scoping" from a Convincing Double Act.

In a very timely manner, Julia Banner's current exhibition at Tate Britain highlights the danger of UK's engineering sector plunging to earth; in an age of hyper competition from supposedly 'advanced' and nominally 'emerging' nations.
In a prosaic metaphor she hangs a de-commissioned Harrier Jump Jet from the ceiling, its nose centimetres from the floor, whilst in an adjoining space, a paint-stripped and mirror polished Jaguar Fighter lays belly-up on the floor, as if downed fowl - resting on canopy, wing-tip and tail.

The best of art has always been a pertinent comment of the era, and whilst an overly obvious metaphor for the eyes of more profound minds, it is undoubtedly a powerful juxtaposition, citing the UK's industrial fragility within the backdrop of a building literally built from Tate & Lyle's proceeds of trade and industrial might of the Victorian era.

The innate message is clear to the masses

In sync comes (ex-BP) Lord Brown's call - as President of the Royal Society of Engineers - to the Department for Business, Innovation & Skills.

A call for a National Science Review that looks at the necessary measures required to re-balance the £4 billion per annum public expenditure, his assertion that the current funding ratio between far horizon 'Applied' versus near-horizon 'Pure' must be altered.

This call has been lambasted as short-sighted and reactionary by certain quarters of the financial press, and rebuked by Lord Rees - President of the Royal Society: known for its 'blue-sky' thinking; (where Lord Brown is also a Fellow). * Please see Post Script.

But Lord Brown is absolutely correct in this assertion....realistically "there is no alternative"...and realism must at this time prevail over esoteric ambitions.
Given not only the state of the nation's fiscal woes, but that of its relatively declined knowledge and advanced capabilities base in the face of fast-track BRIC+ nations.

PM Cameron's (ostensibly trade) visit to India highlighted that such nations can now licence and build UK designed aero-structures, as seen with Hindustan Aero's deal to construct India's own Hawks to BAE specifications. The (admittedly high-value) avionics and engine packages have still been sold direct from the UK by BAE Systems and Rolls-Royce, providing £500m & £200m programmes respectively. Whilst in the private aircraft realm we see only this month the launch of Brazil's Embraer small jet plane, and of course in China ambitions to match Boeing and Airbus in the mid and large commercial plane segment.

So the progress made by what were once seen as automatic – indeed desperate - recipients of UK aero-tech, highlights the changed world the west must now address in its own industrial policy-making.

Under greater pressure still is the UK Auto-sector, given its lower order technological demands. In a similar call to Parliament's Automotive Industry Reception, Ron Dennis (Chairman of McLaren) requested additional government assistance, his solution comprising of:
1. Education: additional effort to attract would be students to STEM subjects (Science, Technology, Engineering & Maths)
(plus extra curricula activities such as the Formula Student 600cc race car competition)
2. New Tax breaks for R&D efforts
3. The idea of 'collective achievement'
4. Cultural change in schools toward 'courageous experimentation', not 'fear'

Now this 4-point plan may be simplistic, arguably far too lightweight (in its current presented guise) to be taken seriously as a 'Vision for Britain' but it highlights some of the basic elements that are undoubtedly required. In his own words, it is not "rocket science".

[NB With all due respect, although Dennis partially decries the student shift to the 'social sciences' (media etc etc), the reality is that ultimately a marriage of STEM subjects and the Arts is required, with moreover an injection of a 3rd disciplinary mentality: namely Business & Finance methods and processes.

At the educational level investment-auto-motives whole-heartedly believes that "Renaissance (wo)Man" needs to be re-born in the UK to propel the capability of its knowledge-base. This has always the central philosophy of Turan Ahmed's and a central USP of investment-auto-motives].

However, ultimately the discussion of exactly how the UK progresses to generate future industrial value-creation is at long last being tabled.
It may be seen by some purveyors of the more esoteric sciences that it all smacks of picking winners and losers. Such a blinkered approach undoubtedly will not prevail, whilst positively a better and stronger value chain can be created between (public & private) investment, academia and industry.

To sum-up, in a reversal use of the overtly coarse phrase "its all about the economy, stupid!"

At present such truisms presented so harshly are desperately required.

Post Script*
One presentation at the London School of Economics last year was given by a New York University lecturer, the supposed contributing originator and part-backer of (to quote) a "Chug Chug" machine - that had supposedly gained Royal Society interests.
Supposedly designed to extract CO2 directly from the atmosphere (presumably in a tree-like manner, as opposed to Carbon Capture & Storage of power-stations**), no explanation of the machine's mechanicals were presented even at theoretical level. The young yet 'savvy' student audience saw the proposition as advanced as ludicrous.
It did the Royal Society no favours either, potentially seen by the LSE audience as a 'crack-pot' body, which is far from the truth given its illustrious origins and members. However such presentations only serve to assist the cultural chasm between science and economics – the very last thing needed.

The issue of CCS is presently being discussed by the House of Lords