PIVOT is a pilot project supported by the West Midlands Combined Authority’s Innovation Programme (WMIP). It’s being run by the Midlands Aerospace Alliance. In the pilot, we are trialling an innovative service delivery system aimed at effectively and systematically transferring technology expertise developed by supply chain companies in one economic cluster (in this case, automotive and energy) into market exploitation opportunities in another (in the pilot, Jet Zero aviation); what the MAA calls crossover technologies.
MAA Chief Executive Dr Andrew Mair explains more.
Regions transition across economic waves – or they don’t
We all know that geographical regions are permanently subject to the impact of long economic waves as new industries emerge to supplant old ones, often driven by more or less disruptive technology change, sometimes by state intervention. In many cases, the new wave favours different places than the last wave. Such changes seem to happen “organically” as new industries emerge unheralded in particular places – think Silicon Valley – and drive economic booms. Sometimes the seeds of new industries are entrepreneurially planted in many places simultaneously, though not all will successfully mature. But when market forces and state intervention fail to shift communities from declining pasts to brighter futures, whole regions, localities and their citizens can get left behind, even struggling to find the strength to recover, to level themselves back up.
So, what if, in a place like the Midlands, we had a policy tool that could fuel and accelerate our region’s ability to build on the huge traditional industry strengths that lie at the very heart of our economy, our manufacturing supply chains, pivot them, and springboard us into the growth industries of the future before decline potentially set in? To some degree this will happen organically, though for many what the economist Schumpeter called our system’s perennial gale of creative destruction may be more destructive than creative. What if we could encourage a smoother transition today and pivot our regional economy towards a greener future by accelerating technology crossovers in our engineering supercluster? Could we do this at scale, by precision-injection of resources and expertise into just the right economic spaces so as to stimulate and mobilise our existing vibrant economic networks – our clusters perhaps — as force multipliers?
There you have one window onto PIVOT.
Let’s translate that into the experience of individual companies for a different perspective.
Pain points for businesses
We’re good at engines in the Midlands, have been since the original Industrial Revolution. But what if your firm has been operating in the automotive internal combustion engine supply chain and is now threatened by the technologically disruptive advent of electric vehicles? Or you’re in the aero engine supply chain making parts for gas turbines, you’re badly hit by the COVID pandemic’s impact on long distance travel and therefore the demand for aircraft, and you’re unsure quite when that market will recover. What if you’re looking beyond the resilience you might enhance by diversifying your markets? What if, in some ideal world, you could find a niche for your hard-won technology expertise, the deeply ingrained technical knowhow of your people, within one of tomorrow’s emerging industries? Then you could ride that emerging long wave, perhaps one of the vaunted green growth industries.
A call to arms is all well and good, but where do you start even understanding what those opportunities to contribute to the Green Industrial Revolution are, who to talk to, what your potential customers are looking for. How can you build the confidence to take the risk of stepping out of your industry comfort zone? And looking down the other end of the telescope, what if the innovators in the green growth industries – whether new entrants or big corporates – are going to have to invent, or reinvent, their own green supply chains? How are they themselves going to create the supply chains of tomorrow?
Can great ideas and technologies from businesses that are experts in one sector be applied to solve problems in another? Yes, in principle, we can all see that. Yet in practice the neoclassical economist’s information market failures, the ones that curse most real markets to be more or less imperfect and therefore slow to react to opportunity, are rife. If we’re frank, that’s often true even within one industry, let alone when we’re talking information flow from one economic sector to another; which can be virtually non-existent. How does a company that possesses a great technology know it may be just what another sector is looking for? How does a company with a problem in one sector look for solutions in another? It’s often hard to know where to start. (This, of course, is where regional cluster networks help to a degree, and I do appreciate there are schemes like Innovate UK’s IX (Innovation Exchange) that attempt to link publicised industry challenges to potential solutions from elsewhere in the economy. But while IX hints at what can be done, it operates on a very small scale and its mechanism tends to limit it to the few challenges companies are willing to admit publicly they can’t solve.)
That’s our second perspective onto PIVOT – real company pain points in making transitions between industries.
Let’s now get a bit closer to PIVOT through our final window.
An unexpected discovery
Several years ago, the Midlands Aerospace Alliance team was busy delivering an aerospace supply chain technology development programme called NATEP, funded by Vince Cable’s AMSCI (Advanced Manufacturing Supply Chain Initiative). We were asked to lead delivery in four regional aerospace clusters across England because we had piloted the model for the NATEP service delivery system in the West Midlands in the RDA days, as the Aerospace Technology Exploitation Programme. Our service delivery system was deeply rooted in our region’s aerospace cluster. We had reached right into its bowels to form collaborations of supply chain companies, many of which had never engaged with the conventional R&D ecosystem yet were jam-packed with often-unrealised ideas based on decades of experience. With some expert help they could turn more of their own know-how and lightbulb moments into viable R&D projects, that could be supported and funded to take the ideas closer to market exploitation, each project guided by customer “end users” like Rolls-Royce.
A funny thing happened when ATEP became NATEP and was delivered at scale with over 100 projects (and AMSCI funding to the tune of £23m). We discovered that NATEP was attracting a number of technology-rich companies from other industries which had a hunch their novel ideas might be applicable in aerospace but didn’t know where to start. And a key lesson was that these companies often valued not just the funding but also – and sometimes even more so — the opportunity to be welcomed right into the heart of regional aerospace clusters, to learn the inevitably subtle cultural differences as well as the technical requirements of a new industry, to get in front of aerospace customers who nodded approvingly, to gain the confidence that reduced their perceived risk. Curious, we thought. But we didn’t do anything else with it.
Until, that is, we were telling these stories to our friends at other cluster bodies like Rail Forum Midlands, Medilink, and the Motorsport Industry Association. It turned out we weren’t alone. We discovered everyone had a story of what we have come to call a crossover technology. Yet while the case studies were stimulating, they seemed to be piecemeal and sporadic exceptions which proved the rule that it wasn’t happening at scale:
- Using sugar cane waste from the food industry to create less hazardous, ecologically sustainable and fire-resistant resins for composite aircraft interiors.
- Technology which protects Formula One drivers in the event of a crash is used to create a safe environment for new-born babies needing emergency transportation.
- A company transformed from a manufacturer of car shampoos to a specialist in infection control products for the healthcare and dental markets.
- Spray-on quick drying polyurea coatings used for the beds of pick-up trucks now provide insulation for the underside of railway bridges, tunnels and railway electrical transformer boxes.
Our own lightbulb moment! What if our ATEP model could work multi-dimensionally, in multiple cross-sector directions? Even from medical to rail, for instance. Could we make the whole crossover technology process systematic and help companies exploit the potential of examples like the above, supporting them to develop their product and process technologies for exploitation in new and emerging markets – perhaps pivoting them towards emerging markets like the coming green industrial revolution?
And that’s our third and final window onto PIVOT – perhaps we had a service delivery system that if deployed widely could mobilise crossover technology ideas at scale.
Now, who would help us try it out?
So what’s it all about?
We were grateful for some initial support to develop the concept from the Midlands Engine, and from the Black Country LEP which looks after aerospace in the West Midlands Combined Authority geography. Consultations we undertook as part of the WMCA Innovation Programme suggested that the same model could potentially be applied effectively to other sectors in the Midlands economy, and therefore to technology transfers across industries. We had the same positive response from the future mobility sectors like automotive and rail that are core to what we call the Midlands engineering supercluster (aerospace is just one strand) and, unexpectedly, we discovered as much interest from a wide range of other clusters — from low carbon energy to construction to healthcare.
Now, the pilot of a PIVOT programme is being deployed in the West Midlands under the auspices of the WMIP.
PIVOT recognises that it isn’t enough to just present big picture diversification opportunities to companies and hope sparks fly. And even if it fulfils a requirement, neither is it enough to teach manufacturing companies how other sectors function through programmes like “fit for nuclear” so they can take on subcontract work. The PIVOT concept is to actively accelerate the transfer or exchange of knowledge and different technologies from one economic sector and cluster to another though serious technology development projects. At full scale, it takes the form of a big portfolio of semi-independent collaborative supply chain — predominantly SME led — R&D projects. PIVOT provides financial and mentoring support for companies that have the kernel of an idea for transferring their technology or innovation from their own sector (the “send” sector) into another sector (the “receive” sector). Vitally, it also provides real “end user” guidance from technology experts and business leaders in the receive industry — who have been matched intelligently as appropriate collaborators and potential end users of the technology — along the whole lifecycle of an R&D project that might last for a year or so.
In this way, the promise of PIVOT is to both harness the growth potential of SMEs in key supply chains, underpinned by the fundamental resilience and competitiveness of the Midlands engineering supercluster, while capitalising systematically on the potential to transfer technologies between different sectors. The vision is that significant segments of the Midlands manufacturing supplier base pivot towards what the European policy makers call the new industrial value chains of our future economy (and the Europeans are also working out how to accelerate their development).
What scale do we need to do this at to make a difference? As above, we ran more than 100 parallel projects in the cross-aerospace-cluster NATEP programme, and we’re currently running more than 100 in the eight-Midlands-LEP Aerospace UP programme with the University of Nottingham’s Institute for Aerospace Technology. We think that delivering innovation programmes like PIVOT at a scale like this generates the economies of scale and scope that can help embed a new regional collaborative innovation ecosystem by mobilising a wide range of actors to sit up, take notice and contribute. The outcome for the region? Long-term strategic benefits to the Midlands economy resulting from better networked and more resilient supply chains, characterised by an accelerated diffusion of new technologies, an enhanced innovation absorptive capacity, and strategic global positioning of the region in the green growth industries of the future. The outcome for the world? Making the Midlands a crucible for the coming Green Industrial Revolution.
Ambitious? Yes. We haven’t got there yet, of course, but that’s the mission; let’s pivot our regional economy towards a greener future by accelerating technology crossovers in our engineering supercluster.
Author, Andrew Mair
Virtual Innovation Team Lead, Aerospace; Chief Executive, Midlands Aerospace Alliance