10/15/2015 1 AIAA Delta Forum AIAA Engineering & Technology Management Federal R&D Reductions, Market Share, and Aerospace Information Usage AIAA Paper

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AIAA Engineering & Technology Management

Federal R&D Reductions, Market Share, and Aerospace Information Usage

AIAA Paper 2001-0134

JoAnne RockerJoAnne Rocker

AIAA Technical Information CommitteeAIAA Technical Information Committee

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Overview

Reductions in federal R&D spending means U.S. companies must capitalize on any resource that will help them compete in the global aerospace market

Foreign competitors, like the Europeans, are gaining in market share without spending as much on R&D as U.S. One reason is that they make effective use of scientific and technical (STI) literature.

There are reasons to believe that the U.S. could and should make better use of its STI.

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Declining R&D funds and market share

Funding Levels¹

Carter 15 %

Reagan >20%

Clinton 8 %

¹Source: Aerospace Industries Association (AIA). Implement A National Strategy for Aerospace R&D Funding, White Paper.

Market Share

U.S. aeronautics market share fell from over 70% in mid-80s to 55% in 1997²

Out of the four science-based high-tech groups -

computers, pharmaceuticals, communications

equipment, and aerospace - aerospace was the

only industry that saw a loss of market share and

the 80’s and 90’s³

² Source: National Research Council. Recent Trends in U.S. Aeronautics Research and Technology. (Washington, DC: National Academy Press, 1999).

³ Source: National Science Foundation. Science and Engineering Indicators 2000. (Washington, DC: U.S. Government Printing Office, 1998).

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Federal funding and market share relationship?

There seems to be a relationship between federal funding and market share. Federal outlays factor into the kinds of research performed and result in spin-off technologies that invigorate the economy.

Market economies are complex. Other factors impact economic success. Innovativeness, government intervention in the market place, and technical competence play roles.

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In the past, economic success was due to superior manufacturing processes and physical resources. Now the world’s economies are based on knowledge-based systems and services. STI is important in the information age and economies because research knowledge is communicated via articles and reports. Utilizing STI helps create new concepts and processes and spurs innovation.

Aerospace is a knowledge driven industry

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Competitiveness based on technology

“What makes technology unique as a strategic variable is its considerable power to change the competitive rules of the game. Technological change can be a great equalizer that nullifies the advantages of incumbents and creates opportunities for newcomers and followers. Technological change is perhaps the single most important source of major market share changes among competitors for this reason, and is probably the most frequent cause of the demise of entrenched dominant firms.”

Source: Michael E. Porter, “The Technological Dimension of Competitive Strategy.” Research on Technological Innovation, Management and Policy, v. 1, pp. 1–33. 1983.

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Europeans spend less on R&D than the U.S but effectively compete with aerospace companies.They had to overcome language, government, and cultural differences for effective management of projects and research.

Example: Airbus has steadily gained market share

R&D expenditures in 1995*

U.S. $16.9B

European Union $6.7B

Europeans doing more with less

* Source: Organisation for Economic Co-operation and Development, Analytical Business Enterprise R&D Database (Paris, April 1999) as found in the NSF’s Science and Engineering Indicators – 2000, Appendix Tables 7-9 and 7-11.

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Why are the Europeans so successful?

According to the Confederation of European Aerospace Societies (CEAS), the Europeans have many strengths:

• Diversity of European R&T community

• Strong collaborative ties among scientists and technologists

• Highly skilled workers and cutting-edge research facilities

• Researchers and technologists awareness and use of “pre- competitive” information available from scientific and conference literature

Source: CEAS. Aeronautical Research and Technology - A Strategic Imperative for Europe. Position Paper. (Spain: Confederation of European Aerospace Societies, June 1997).

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U.S. supplying world’s STI

The U.S. R&D infrastructure with its federal laboratories, university systems, and research institutes -

• Publishes more STI than any other country

• Is cited more often than any country

Source: Institute for Scientific Information, Science Citation Index and Social Science Citation Index; CHI Research, Inc., Science Indicators database; and National Science Foundation, Division of Science Resources Studies (NSF/SRS), special tabulation as cited in the NSF’s Science and Engineering Indicators 2000, Appendix Table 6-63.

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This table shows numbers for science and engineering articles. The U.S. lead in other subjects such as chemistry, physics, earth and space sciences.

Science and Engineering Articles by Country

Country/Region 1995-97

World 515,708United States 173,233Japan 43,655United Kingdom 39,670Germany 35,294France 26,455


U.S. leads world in STI publishing output

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% Citations to U.S. STI in 1997

Country Earth/Space Science Engineering Technology

Japan 58.3 45.8

United Kingdom 53.8 40.8

Germany 50.8 37.1

France 50.5 38.2


U.S. STI cited more often than any other country

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One could conclude from the high usage of U.S. sci/tech research output …

• It means the research information is valuable

• U.S. is supplying its foreign competitors with research information and it’s being used to compete with the U.S.

• Aerospace industry companies need to be aware of what’s happening in other countries and within the U.S.

U.S. STI in demand

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Are there problems with information usage in the U.S.?

• Information seeking patterns of engineers

• Government information dissemination barriers

• Overabundance of information on the web

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Studies of information usage by engineers found that engineers prefer informal modes of information gathering such as colleagues versus more formalized modes like technical literature or consulting information specialists.¹

The engineers preferred using their own personal experiences or asking colleagues before going to the technical literature.²

¹ Source: Pinelli, Thomas. NASA/DoD Aerospace Knowledge Diffusion Research Project. The Relationship Between the Use of U.S. Government Technical Reports by U.S. Aerospace Engineers and Scientists and Selected Institutional and Sociometric Variables. Report Number 6. NASA-TM-102774. (Washington, DC: National Aeronautics and Space Administration, July 1991).

² Source: Rosenbloom, Richard S. and Francis W. Wolek. Technology and Information Transfer: A Survey of Practice in Industrial Organizations. (Boston: Harvard University, 1970).

Information usage studies

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Information usage studies

Engineers choose information sources based upon accessibility. Engineers rank technical quality or reliability before relevance; however, accessibility is the main selection criteria even if source is not useful.

Source: Kaufman’s study (1983) of the Factors to the Use of Technical Information in Engineering Problem Solving

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Government information

The Office of Technology Assessment

• Absence of an overall effective science and technology policy for the dissemination of STI

•Lack of centralized authority gives rise to varying degrees of effective STI distribution.

Source: U.S. Congress, Office of Technology Assessment. Helping American Compete: The Role of Federal Scientific and Technical Information, OTA-CIT-54. (Washington, DC: U.S.Government Printing Office, July 1990).

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Government information

OTA’s recommends improvements in four key areas:

• Implementing technical standards for databases and documents

• Indexing databases and documents for better retrieval of information

• Funding for STI activities in agency budgets to ensure appropriate storage and dissemination of STI

• Including end-user involvement in the development of products and services

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World Wide Web

The Internet compounds the problem of locating information.

Search engines operate differently and results vary depending upon which search engine is used.

Web search engines tend to rank hits by relevancy. Relevancy ranking uses algorithms to weigh word usage to come up with an order of importance. Relevancy may not find the most relevant hit however because the overall content of the site might make one result more relevant than another. Ranking by relevancy is not as accurate as one would be lead to believe.

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World Wide Web

Source: Lawrence, Steve and Giles, Lee. “Accessibility and Distribution of Information on the Web.” Science, v.400, pp.107-109, 1999.

The size of the web is enormous. Estimates place the size of the web at 800 million pages. There are a lot of out-dated and defunct pages.

Current search engines do not index every page of the web. They index approximately 16% of the public pages so valuable information may not show up in a results set.

Subject coverage breakdowns indicate 83% contain commercial content and 6% are scientific or educational.

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Things need to change

Information collection, storage, and access needs to be given more attention in the U.S. The Web needs more organization to make it better. The government needs to do a better job of providing its information. Finally, users need to invest the time into finding the right information. Barriers or not, STI is a valuable resource for our country’s R&D efforts.

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Conclusion

The U.S. aerospace industry is in a struggle to maintain its market share. At risk is the U.S. technological and economic role as a global leader. Why the competition is making gains should be of concern to aerospace policy makers and industry leaders.

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The level of expertise and quality of products of U.S. competitors account for their success in the marketplace. The foreign competition is catching up to the U.S. One reason they are so successful at competing is that they make effective use of aerospace STI. They seek out and utilize available STI literature most of which generates from the United States.

Conclusion

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A preemptive measure for the U.S. to take in lieu of reduced federal funding levels would be to be more aggressive in collecting and using aerospace technical intelligence. Scientific and technical information is a key resource in competing against foreign competition. Sci/tech information plays an important role in the innovative process. Maximizing the use of technical information can only help companies stay abreast of the market place and promote innovation.

Conclusion

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Government clearinghouses for STI information

(1) NASA’s CASI TRS provides citations to NASA technical documents (http://www.sti.nasa.gov/RECONselect.html)

(2) DOD’s STINET site allows searching and ordering of DOD reports (http://www.dtic.mil/stinet/)

(3) NTIS is a general repository of documents from all the government agencies (http://ntis.gov/)

Appendix A: Gov’t Sites for Aerospace Information

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Appendix B: Using Organization Resources

Institutional information centers

• Focus collection on STI databases, journals, and books

• Organize information in useful manner

• Offer specialized subject searching

Documents

10/15/2015 1 AIAA Delta Forum AIAA Engineering & Technology Management Federal R&D Reductions, Market Share, and Aerospace Information Usage AIAA Paper