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Aerospace SMEs in Europe: An industrial policy perspective
.’Aer~~pbce SME~ in Europe: An Industrial Policy Perspective Giovanni
SYLOS LABINI
Some years ago a top executive of a mujor European space group stated thaf there was no room for Small and Medium industries in Space. The statement WCYS based on fhe grounds that Space needs visibilify, to achieve public visibility you need large progrummes, to exploit large progrummes you need large industries. The aim of this article is to show that This need not be fhe case, that Space SMEs have an important role to play, and that Associations grouping SMEs are the way ahead. v::‘&t ome years ago also there was :z>*.I1*qf;t .$f concern for the concentration “‘i’7:&~ process on going a that time on :Q +&the west side of the Atlantic @j$k*’ Ocean and the urgent need to establish a credible counterpart on the European side. Since then the positive experience in other high-tech fields suggested both to the entrepreneur and to Government that SMEs could play a strategic role in the consolidation of space industry, reduce the rigidity of the sector, introduce true innovation and contribute seriously to employment. This will be achieved not by exploiting competition between SMEs and large industries, but on the contrary, by favouring cooperation and clustering within these different size industries. In the following, together with a characterisation of Space SMEs, there is also a brief analysis of the opportunities and threats for these companies. Finally some hints are offered on the main action undertaken by Space Agencies in support of SMEs and the role of the Associations is discussed.
Aerospace
and SMEs
Although several similarities exist between the production processes for the
Aeronautics Industry and the Space System market, demand organisation and supply chain architecture leads to a deeply different industrial structure. As the more mature sector, the Aeronautics Industry has already gone through several cycles of evolution, and presently presents a strong vertical integration of the production chain. Europe successfully defined a continental commercial aircraft system integrator, the Airbus consortium, and several European wide projects compete on an equal, or near equal footing with United States competitors. Smail and Medium Enterprises in the Aeronautics chain have very strict and rigid interfaces with system integrators, and a poor autonomy which seriously limits the strategic vision of SMEs.
well-organised company, with good strategic views and high capabilities of innovation of product and processing. As an example, all these companies use, since a long time ago, geographical networking (i.e. internet), operate consolidated quality systems, control and configure consistent pieces of software or hardware, and in some cases produce end to end systems, even if these are of reduced size (e.g. micro-satellites). In several cases SMEs occupy new niches in production fields such as software development. The growth of the role of SMEs in software development has been also favoured largely by the steady lowering of computational hardware cost, which has dramatically reduced the level of investment and, proportionally, the balance sheet break-even point.
Characterisation The Space Sector, although in a rapidly evolving phase, is still characterised by a more flexible industrial structure. Moreover Space Companies are more prone to international cooperation also thanks to the industrial policy of the main Space Agencies, among them the European Space Agency (ESA). The net result is that a Space SME is generally a
Together with this positive industrial context, the profile of the demand side also shows in teresfing prospects for ShEs in space. Since the early 1990s customers buying in various markets demanded space
The Evolution systemswhich are easier to build, launch and maintain. These are requests for smaller systems, with relatively easier integration processes,with definitively lower requirements on the industrial capabilities in term of facilities and resources. This virtuous circle also compelled the constructor industries to widen the use of standard components in the framework of space projects, increasing the opportunity for medium size industries to enter the business. Another positive aspect for SMEs, on the demand side, is the need for the growth of servicesin the Spacebusiness. Strong, established businesses, such as telecommunications, as well expanding ones such as Navigation and Earth Observation report a steady increase in service demand. Now it happens that SMEs are generally very competitive in service supply with respect to larger firms. The reason for this advantage must be found into the fundamental capabilities that SMEs have demonstrated in services in other fields. Being small, and generally with strong local relations with prospect customers, an SME can adapt to customer needs better then a larger enterprise can. Being truly close to he cusfomer; SAKS are also good ot snifting out potential and unexpressed user needs and requirements. This capability is particularly useful in exotic technology exploitation, where normally the user cannot understand completely the application possibilities of new devices and the weight of the technology push of the supply side must fill the gap. Large firms are generalfy not so good at this job. Limited by impressive general costs, strained by a global scale competition, large industries cannot spend much attention developing a deep understanding of user’s special requirements; on the contrary, for sake of large scale production, delivery schedules, and products designed to be not disliked by too many people, make nobody really happy.
of the EuroDean
An example A particularly good example of this case is the Space Earth Observation field. In previous years only SMEs in the socalled Value Added sector, or following the most recent, and perhaps most appropriate definition of Downstream Industry, successfully delivered useful applications of Earth Observation data. In this case the User may find it hard to understand the relation between the data gathered from space systems and real world problems, and, what is worst, sometimes the disgusted customer will finally remove this source from his shopping list. On the other hand, successful application deployment starts from a careful user requirement analysis and a complete adaptation of the product specification in order to satisfy user needs. Cooperation between SMEs and research teams In many fields, but this is particularly true in Space activities, SMEs have very good relations with universities and research institutions. Governments can create favourable framework conditions, such as for intellectual property rights, and enhancecooperation betweengovemment researchersand industry in order to stimulate innovation and the adoption of advanced technology by SMEs. Technology-based and high-growth SMEs have a strong interest in researchcooperation with public universities and research institutes. Such SMEs may not have sufficient equipment, institutional infrastructure and personnel for inhouse research activities. On the other hand the research institution can also benefit from this interaction in terms of the testing of applications, and sometimes in terms of work organisation and management. Technology and other integrations As mentioned above,SpaceServiceexploitation represents a sector with very good market opportunities for SMEs. In data communication the development of multimedia tools for applications ranging from telemedicine to education is a steadily growing area. For Earth Observation the emergence of new AIR & SPACE
SDace lndustrv types of sensor and the increasing interest of the private sectorin the results, permit the start-up of commercial applications and new service developments. SMEs have already demonstrated in several casesexceptional capabilities in terms of flexibility and proximity to the end user. Also, space navigation system development, putting aside large consumer application developments which demand large industry intervention, is still full of niche markets where, again, space SMEs could be winners. However, perhaps the most promising opportunity is in the mastering of the integration of these space technologies. Single SMEs or proper cluster of companies of this size can produce a truly innovative service that real matches private and public user needs in several fields. But is the Space business made of opportunities, or are there some fhfeafs menacing a financially fruifful development of Space SMs? Unfortunately the latter is the case. Firstly, although Space SMEs are free from some of the structural limits on SMEs in other sectors,several others are present. One of these is the difficulty SMEs have in interacting with large organisations, public or private, such as large National or International R&D government Agencies, and obviously the interaction with big industries as potential customers. The light organisational structure of an SME generally hardly interacts with large (sometimes huge) organisations which require a lot in terms of decision taking time, bureaucratic procedure, etc. This sometimes represents an insurmountable obstacle for accessingR&D funds, or for self-promotion to the larger industries. In this last case other menaces are present for the successfulintegration between SME and large industrial capabilities: the integration process and the spreading of large Private Public Partnership (PPP) schemes. In absence of a far looking corporate government policy, the processof continental (and global) integration of the
EUROPE
l
VOL.
2
l
No
6 - 2000
Space Industry will lead to a progressive internalisation of capabilities, and a reduction of redundancy, ‘with, in the end, the tendency of removing any risk of over-running costs caused by subcontracting and external procurement of services and goods. This attitude can produce devastating effects on an SME that, in the best case, will find itself competing with an internal branch of a large conglomerate, with little or no hope of success. If this policy could be profitable in the short term, mainly for the large industries, the seeds of three serious problems can be seen: 9 a reduction of competitiveness in the fields affected; l a lack of choice for the end customer; l a loss of flexibility in the production chain. Generally in PPP funding, these problems are foreseen for very large projects where the role of SMEs is not always protected. This type of scheme, proposed for example in the case of the GALILEO navigation system development, has the objective of rising private funds in order to implement large infrastructures of public interest. Thus, in order to avoid the establishment of monopolies that prevents market growth, the Public side of the venture should apply case equilibrium.
OECD initiatives Against these risk in all sectors several organisation try to raise the attention of government. As an example the OECD initiated several activities in order to support a more focused industrial policy from governments in support of SMEs in high-tech. In a recent report, the OECD suggests that vigorous initiatives should be devoted to fostering public-private partnerships and small-firm networks and clusters, This grouped system of production of SMEs can often be more flexible and responsive to customer needs than large integrated firms can be. They can pool resources and share the costs of training, research and marketing. Clustering facilitates the exchange of personnel and the diffusion of technology, and creates new possibilities for efficiency gains. Importantly, these networks and support
systems can help SMEs meet the challenges of globalisation. Whether alone or in clusters, SMEs are seeking international opportunities through strategic alliances, franchising and joint ventures.
Space SMEs and the Agencies Several Space Agencies have taken measures in support of Space SMEs. These actions are oriented to addressing the main difficulties of SMEs in space activities, and range from financial support to R&D and to education and training activities. There follows, as an example, some of the initiatives of ESA and the ASI, the Italian Space Agency.
personnel training on standards, machinery, software, and normally this can be very costly for a SME, who can ill afford to loose a key person for several weeks because of specific training purposes. In this, besides the current, traditional initiatives on training undertaken by ESA, there could be some interest for SMEs to have available remote courses based on advanced telecom technologies. On the side of specific projects for SMEs, there does exist a number of technologyoriented initiatives where involvement of SMEs is favoured by ESA. The number of projects with this aim is still limited, but generally the activity is in line with the competence of space SMEs.
The ASI initiative ESA/SMEs support
programme
The European Space Agency in recent years has developed some actions targeted in favour of SMEs. One common lack of information is statistics about SMEs. Information on available industrial resources is fundamental in the setting-up of specific industrial support action. ESA activated a specific service that circulated a questionnaire among SMEs in Europe in order to estimate the industrial strength of the sector and the financial fundamentals. The service was also linked to EMITS (the Internet based invitation to tender system of ESA) making it possible for the SMEs to qualify explicitly. Another action performed by ESA in the SME support scheme refers to Education and Training, and favours the participation of these companies to relevant R&D initiatives of the Agency. This is particularly relevant for SMEs. In space industrial activities there are several aspects that claim for training: quality standards, software design tools, testing procedures, etc. Recently ESA organised several courses reserved to SMEs on some of these topics; this initiative, even if per se valuable, can be improved. As mentioned above SMEs are normally receptive to new opportunities offered by new technologies and generally procure know-how through effective cooperation with research centres and Universities. However, interacting with large Agencies and firms also requires
in favour of SMEs
In the last two years AS1 (the Italian Space Agency) has initiated an ambitious space SMEs support activity. Several specific reasons motivated this special attitude: l Italy is known as one of best examples of a large role of SMEs in Industry; l a conscious decision of AS1 top management in widen the national space industry’s private base; l in Italy there exists AIPAS (the Italian Aerospace SME Association), which is a unique example of an association dedicated to Aerospace SMEs support. This has produced several initiatives, some in line with that of ESA and the EU, but others with an interesting original content. ASI defined an a priori target level of involvement of SMEs in one of the most ambitious space projects, the so-called Cosmo SKYMed system. The contract to the system’s prime contractor requires a minimum involvement for SMEs of 25% of the overall qualified work packages. Two specific ‘calls for proposal’ (for a total amount of about ++Z10 million) have been launched for Technology research on shared cost actions reserved to SMEs in the year 2000. AS1 also developed the MITA platform, the first Italian micro-satellite which was successfully launched in July 2000, where the overall mission has been lead by Gavazzi Space, a Milan based SME.
The Evolution of ............ the .... European Space............... Industry ................... ........ ........ .......... ........ ................. ......... ........ ....... ................... ....... ............ ...... ........ ........................ ........ ..-..........................
Figure 1. One of the most effective ureas of operation of Space SMEs is the integration of new technologies and their exploitation in new services. This image shows a high resolution satellite image, displayed as the live background of the output of a GPS based fleet control and navigation system. (Dot. Planetek ltalia s.r.0
Specific support schemes for the participation of Space SMEs in the 5th Framework Programme of the European Union have been put in place. Residesthesepositive actions in favour of SMEs, ASI should adopt several other improvements. Suitable areasof intervention arethe contractprocurement structure, where long time delays are still risky and unclear for SMEs, the government of corporate relations, the definition of an industrial observatory and the establishment of a support desk for space SMEs.
The role of the Association On the 2 April 1998,in the ACER Centre, Via of villa Patrizi, 11 in Rome, the Italian Small and Medium Enterprise Aerospace
Association (AIPAS) was founded; the promoting Committee and nearly thirty companies in the aerospacemarket were in attendance.Representativesof Scientific and Technological Parks, of research centres and some large enterprises with small aerospace divisions were also present; they will be entitled to participate in the social activities as observers. The Association is non-profit-making, and aims at: l promoting the general interests of the AerospaceSMEs in the various national and international centres, by means of suitable contacts with the Private/l%blic agencies of competence; l tackling the fundamental problems of the Aerospace market by elaborating, monitoring and observing activities in the field; AIR & SPACE
l
l
l
l
l
promoting and examining the legislative, administrative, economical and financial provisions that are of interest to its Associates; promoting and organising collective participation in industrial and commercial fairs, carrying out the associated actions of press and public relation; promoting actions with larger enterprises and Public Agencies, so that the potentiality and the capability of SMEs become adequately valued from a market point of view; joining other Associations or Agencies in the interest of its Associates; supplying an information service to interested external Agencies, about general matters related with the aerospace field.
EUROPE
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The Association acts internally in performing these tasks, i.e. among the space SMEs, as a facilitator in teaming among the Associates, and externally, as a stimulus for Public Administration and Large Enterprises for a better understanding of SME needs and capabilities.
Conclusions A diffuse awareness exists in large companies of the potential role of SMEs, since this is the case for hi-tech industries. Governments, and their Agencies, have deployed several support activities, having in mind the opportunity that these companies represent for the wider, private, space industrial base in Europe. However, several interventions are still needed in order to remove the threats and to catch the opportunities offered by space SMEs. All possible efforts should be put in place to benefit of the capabilities of SMEs in the field of niche technology development, and in favouring the cooperation with larger firms. This goal should be clearly perceived also by the big space conglomerates, which will
find precious partners in SMEs for large project development. These recommendations are capital in the case of space system exploitation, through the deployment of new services in Telecommunication, Navigation and Earth Observation, where a critical role can be played by SMEs in global competition. SMEs in the end are privately funded initiatives, and base their survival and growth on the exisfence of a fair and established free market Moreover, with the help of Space Agencies, the experience of Public Private Partnership for implementing large programmes can accommodate, in appropriate roles, Space SMEs. This can be achieved by implementing, on a continental basis, an observatory of space SMEs, with the goal of monitoring the fundamental indicators of the sector and, afterwards, evaluating the effectiveness of measures taken. In this, toge-
ther with National and International Space Agencies and governments, a great part of the work can be carried out by the associations of space SMEs, helping these companies in their competition on a global scale and enabling their serious contribution to European Space n Industry consolidation.
About
the-cigft)or:
Giovanni SYLOS LABINI is President of the Italian Aerospace SME Association (AIPAS), and CEO of Planetek ltalia s.r.1,
For further iflformafion, pk$gse confcjcf: Plonetek #alia s.r.1. c/o Tecnopolis 70010 Valenzano @A), Italy Tel.: + 39 080 46 70 611 Fax: +390804670610 or AIPAS Via del Tempio 1 00100 Roma. Italy. aipaspmiQtin.it
SYLOS LABINI
Some years ago a top executive of a mujor European space group stated thaf there was no room for Small and Medium industries in Space. The statement WCYS based on fhe grounds that Space needs visibilify, to achieve public visibility you need large progrummes, to exploit large progrummes you need large industries. The aim of this article is to show that This need not be fhe case, that Space SMEs have an important role to play, and that Associations grouping SMEs are the way ahead. v::‘&t ome years ago also there was :z>*.I1*qf;t .$f concern for the concentration “‘i’7:&~ process on going a that time on :Q +&the west side of the Atlantic @j$k*’ Ocean and the urgent need to establish a credible counterpart on the European side. Since then the positive experience in other high-tech fields suggested both to the entrepreneur and to Government that SMEs could play a strategic role in the consolidation of space industry, reduce the rigidity of the sector, introduce true innovation and contribute seriously to employment. This will be achieved not by exploiting competition between SMEs and large industries, but on the contrary, by favouring cooperation and clustering within these different size industries. In the following, together with a characterisation of Space SMEs, there is also a brief analysis of the opportunities and threats for these companies. Finally some hints are offered on the main action undertaken by Space Agencies in support of SMEs and the role of the Associations is discussed.
Aerospace
and SMEs
Although several similarities exist between the production processes for the
Aeronautics Industry and the Space System market, demand organisation and supply chain architecture leads to a deeply different industrial structure. As the more mature sector, the Aeronautics Industry has already gone through several cycles of evolution, and presently presents a strong vertical integration of the production chain. Europe successfully defined a continental commercial aircraft system integrator, the Airbus consortium, and several European wide projects compete on an equal, or near equal footing with United States competitors. Smail and Medium Enterprises in the Aeronautics chain have very strict and rigid interfaces with system integrators, and a poor autonomy which seriously limits the strategic vision of SMEs.
well-organised company, with good strategic views and high capabilities of innovation of product and processing. As an example, all these companies use, since a long time ago, geographical networking (i.e. internet), operate consolidated quality systems, control and configure consistent pieces of software or hardware, and in some cases produce end to end systems, even if these are of reduced size (e.g. micro-satellites). In several cases SMEs occupy new niches in production fields such as software development. The growth of the role of SMEs in software development has been also favoured largely by the steady lowering of computational hardware cost, which has dramatically reduced the level of investment and, proportionally, the balance sheet break-even point.
Characterisation The Space Sector, although in a rapidly evolving phase, is still characterised by a more flexible industrial structure. Moreover Space Companies are more prone to international cooperation also thanks to the industrial policy of the main Space Agencies, among them the European Space Agency (ESA). The net result is that a Space SME is generally a
Together with this positive industrial context, the profile of the demand side also shows in teresfing prospects for ShEs in space. Since the early 1990s customers buying in various markets demanded space
The Evolution systemswhich are easier to build, launch and maintain. These are requests for smaller systems, with relatively easier integration processes,with definitively lower requirements on the industrial capabilities in term of facilities and resources. This virtuous circle also compelled the constructor industries to widen the use of standard components in the framework of space projects, increasing the opportunity for medium size industries to enter the business. Another positive aspect for SMEs, on the demand side, is the need for the growth of servicesin the Spacebusiness. Strong, established businesses, such as telecommunications, as well expanding ones such as Navigation and Earth Observation report a steady increase in service demand. Now it happens that SMEs are generally very competitive in service supply with respect to larger firms. The reason for this advantage must be found into the fundamental capabilities that SMEs have demonstrated in services in other fields. Being small, and generally with strong local relations with prospect customers, an SME can adapt to customer needs better then a larger enterprise can. Being truly close to he cusfomer; SAKS are also good ot snifting out potential and unexpressed user needs and requirements. This capability is particularly useful in exotic technology exploitation, where normally the user cannot understand completely the application possibilities of new devices and the weight of the technology push of the supply side must fill the gap. Large firms are generalfy not so good at this job. Limited by impressive general costs, strained by a global scale competition, large industries cannot spend much attention developing a deep understanding of user’s special requirements; on the contrary, for sake of large scale production, delivery schedules, and products designed to be not disliked by too many people, make nobody really happy.
of the EuroDean
An example A particularly good example of this case is the Space Earth Observation field. In previous years only SMEs in the socalled Value Added sector, or following the most recent, and perhaps most appropriate definition of Downstream Industry, successfully delivered useful applications of Earth Observation data. In this case the User may find it hard to understand the relation between the data gathered from space systems and real world problems, and, what is worst, sometimes the disgusted customer will finally remove this source from his shopping list. On the other hand, successful application deployment starts from a careful user requirement analysis and a complete adaptation of the product specification in order to satisfy user needs. Cooperation between SMEs and research teams In many fields, but this is particularly true in Space activities, SMEs have very good relations with universities and research institutions. Governments can create favourable framework conditions, such as for intellectual property rights, and enhancecooperation betweengovemment researchersand industry in order to stimulate innovation and the adoption of advanced technology by SMEs. Technology-based and high-growth SMEs have a strong interest in researchcooperation with public universities and research institutes. Such SMEs may not have sufficient equipment, institutional infrastructure and personnel for inhouse research activities. On the other hand the research institution can also benefit from this interaction in terms of the testing of applications, and sometimes in terms of work organisation and management. Technology and other integrations As mentioned above,SpaceServiceexploitation represents a sector with very good market opportunities for SMEs. In data communication the development of multimedia tools for applications ranging from telemedicine to education is a steadily growing area. For Earth Observation the emergence of new AIR & SPACE
SDace lndustrv types of sensor and the increasing interest of the private sectorin the results, permit the start-up of commercial applications and new service developments. SMEs have already demonstrated in several casesexceptional capabilities in terms of flexibility and proximity to the end user. Also, space navigation system development, putting aside large consumer application developments which demand large industry intervention, is still full of niche markets where, again, space SMEs could be winners. However, perhaps the most promising opportunity is in the mastering of the integration of these space technologies. Single SMEs or proper cluster of companies of this size can produce a truly innovative service that real matches private and public user needs in several fields. But is the Space business made of opportunities, or are there some fhfeafs menacing a financially fruifful development of Space SMs? Unfortunately the latter is the case. Firstly, although Space SMEs are free from some of the structural limits on SMEs in other sectors,several others are present. One of these is the difficulty SMEs have in interacting with large organisations, public or private, such as large National or International R&D government Agencies, and obviously the interaction with big industries as potential customers. The light organisational structure of an SME generally hardly interacts with large (sometimes huge) organisations which require a lot in terms of decision taking time, bureaucratic procedure, etc. This sometimes represents an insurmountable obstacle for accessingR&D funds, or for self-promotion to the larger industries. In this last case other menaces are present for the successfulintegration between SME and large industrial capabilities: the integration process and the spreading of large Private Public Partnership (PPP) schemes. In absence of a far looking corporate government policy, the processof continental (and global) integration of the
EUROPE
l
VOL.
2
l
No
6 - 2000
Space Industry will lead to a progressive internalisation of capabilities, and a reduction of redundancy, ‘with, in the end, the tendency of removing any risk of over-running costs caused by subcontracting and external procurement of services and goods. This attitude can produce devastating effects on an SME that, in the best case, will find itself competing with an internal branch of a large conglomerate, with little or no hope of success. If this policy could be profitable in the short term, mainly for the large industries, the seeds of three serious problems can be seen: 9 a reduction of competitiveness in the fields affected; l a lack of choice for the end customer; l a loss of flexibility in the production chain. Generally in PPP funding, these problems are foreseen for very large projects where the role of SMEs is not always protected. This type of scheme, proposed for example in the case of the GALILEO navigation system development, has the objective of rising private funds in order to implement large infrastructures of public interest. Thus, in order to avoid the establishment of monopolies that prevents market growth, the Public side of the venture should apply case equilibrium.
OECD initiatives Against these risk in all sectors several organisation try to raise the attention of government. As an example the OECD initiated several activities in order to support a more focused industrial policy from governments in support of SMEs in high-tech. In a recent report, the OECD suggests that vigorous initiatives should be devoted to fostering public-private partnerships and small-firm networks and clusters, This grouped system of production of SMEs can often be more flexible and responsive to customer needs than large integrated firms can be. They can pool resources and share the costs of training, research and marketing. Clustering facilitates the exchange of personnel and the diffusion of technology, and creates new possibilities for efficiency gains. Importantly, these networks and support
systems can help SMEs meet the challenges of globalisation. Whether alone or in clusters, SMEs are seeking international opportunities through strategic alliances, franchising and joint ventures.
Space SMEs and the Agencies Several Space Agencies have taken measures in support of Space SMEs. These actions are oriented to addressing the main difficulties of SMEs in space activities, and range from financial support to R&D and to education and training activities. There follows, as an example, some of the initiatives of ESA and the ASI, the Italian Space Agency.
personnel training on standards, machinery, software, and normally this can be very costly for a SME, who can ill afford to loose a key person for several weeks because of specific training purposes. In this, besides the current, traditional initiatives on training undertaken by ESA, there could be some interest for SMEs to have available remote courses based on advanced telecom technologies. On the side of specific projects for SMEs, there does exist a number of technologyoriented initiatives where involvement of SMEs is favoured by ESA. The number of projects with this aim is still limited, but generally the activity is in line with the competence of space SMEs.
The ASI initiative ESA/SMEs support
programme
The European Space Agency in recent years has developed some actions targeted in favour of SMEs. One common lack of information is statistics about SMEs. Information on available industrial resources is fundamental in the setting-up of specific industrial support action. ESA activated a specific service that circulated a questionnaire among SMEs in Europe in order to estimate the industrial strength of the sector and the financial fundamentals. The service was also linked to EMITS (the Internet based invitation to tender system of ESA) making it possible for the SMEs to qualify explicitly. Another action performed by ESA in the SME support scheme refers to Education and Training, and favours the participation of these companies to relevant R&D initiatives of the Agency. This is particularly relevant for SMEs. In space industrial activities there are several aspects that claim for training: quality standards, software design tools, testing procedures, etc. Recently ESA organised several courses reserved to SMEs on some of these topics; this initiative, even if per se valuable, can be improved. As mentioned above SMEs are normally receptive to new opportunities offered by new technologies and generally procure know-how through effective cooperation with research centres and Universities. However, interacting with large Agencies and firms also requires
in favour of SMEs
In the last two years AS1 (the Italian Space Agency) has initiated an ambitious space SMEs support activity. Several specific reasons motivated this special attitude: l Italy is known as one of best examples of a large role of SMEs in Industry; l a conscious decision of AS1 top management in widen the national space industry’s private base; l in Italy there exists AIPAS (the Italian Aerospace SME Association), which is a unique example of an association dedicated to Aerospace SMEs support. This has produced several initiatives, some in line with that of ESA and the EU, but others with an interesting original content. ASI defined an a priori target level of involvement of SMEs in one of the most ambitious space projects, the so-called Cosmo SKYMed system. The contract to the system’s prime contractor requires a minimum involvement for SMEs of 25% of the overall qualified work packages. Two specific ‘calls for proposal’ (for a total amount of about ++Z10 million) have been launched for Technology research on shared cost actions reserved to SMEs in the year 2000. AS1 also developed the MITA platform, the first Italian micro-satellite which was successfully launched in July 2000, where the overall mission has been lead by Gavazzi Space, a Milan based SME.
The Evolution of ............ the .... European Space............... Industry ................... ........ ........ .......... ........ ................. ......... ........ ....... ................... ....... ............ ...... ........ ........................ ........ ..-..........................
Figure 1. One of the most effective ureas of operation of Space SMEs is the integration of new technologies and their exploitation in new services. This image shows a high resolution satellite image, displayed as the live background of the output of a GPS based fleet control and navigation system. (Dot. Planetek ltalia s.r.0
Specific support schemes for the participation of Space SMEs in the 5th Framework Programme of the European Union have been put in place. Residesthesepositive actions in favour of SMEs, ASI should adopt several other improvements. Suitable areasof intervention arethe contractprocurement structure, where long time delays are still risky and unclear for SMEs, the government of corporate relations, the definition of an industrial observatory and the establishment of a support desk for space SMEs.
The role of the Association On the 2 April 1998,in the ACER Centre, Via of villa Patrizi, 11 in Rome, the Italian Small and Medium Enterprise Aerospace
Association (AIPAS) was founded; the promoting Committee and nearly thirty companies in the aerospacemarket were in attendance.Representativesof Scientific and Technological Parks, of research centres and some large enterprises with small aerospace divisions were also present; they will be entitled to participate in the social activities as observers. The Association is non-profit-making, and aims at: l promoting the general interests of the AerospaceSMEs in the various national and international centres, by means of suitable contacts with the Private/l%blic agencies of competence; l tackling the fundamental problems of the Aerospace market by elaborating, monitoring and observing activities in the field; AIR & SPACE
l
l
l
l
l
promoting and examining the legislative, administrative, economical and financial provisions that are of interest to its Associates; promoting and organising collective participation in industrial and commercial fairs, carrying out the associated actions of press and public relation; promoting actions with larger enterprises and Public Agencies, so that the potentiality and the capability of SMEs become adequately valued from a market point of view; joining other Associations or Agencies in the interest of its Associates; supplying an information service to interested external Agencies, about general matters related with the aerospace field.
EUROPE
l
VOL.
2 - No
6 - 2000
The Association acts internally in performing these tasks, i.e. among the space SMEs, as a facilitator in teaming among the Associates, and externally, as a stimulus for Public Administration and Large Enterprises for a better understanding of SME needs and capabilities.
Conclusions A diffuse awareness exists in large companies of the potential role of SMEs, since this is the case for hi-tech industries. Governments, and their Agencies, have deployed several support activities, having in mind the opportunity that these companies represent for the wider, private, space industrial base in Europe. However, several interventions are still needed in order to remove the threats and to catch the opportunities offered by space SMEs. All possible efforts should be put in place to benefit of the capabilities of SMEs in the field of niche technology development, and in favouring the cooperation with larger firms. This goal should be clearly perceived also by the big space conglomerates, which will
find precious partners in SMEs for large project development. These recommendations are capital in the case of space system exploitation, through the deployment of new services in Telecommunication, Navigation and Earth Observation, where a critical role can be played by SMEs in global competition. SMEs in the end are privately funded initiatives, and base their survival and growth on the exisfence of a fair and established free market Moreover, with the help of Space Agencies, the experience of Public Private Partnership for implementing large programmes can accommodate, in appropriate roles, Space SMEs. This can be achieved by implementing, on a continental basis, an observatory of space SMEs, with the goal of monitoring the fundamental indicators of the sector and, afterwards, evaluating the effectiveness of measures taken. In this, toge-
ther with National and International Space Agencies and governments, a great part of the work can be carried out by the associations of space SMEs, helping these companies in their competition on a global scale and enabling their serious contribution to European Space n Industry consolidation.
About
the-cigft)or:
Giovanni SYLOS LABINI is President of the Italian Aerospace SME Association (AIPAS), and CEO of Planetek ltalia s.r.1,
For further iflformafion, pk$gse confcjcf: Plonetek #alia s.r.1. c/o Tecnopolis 70010 Valenzano @A), Italy Tel.: + 39 080 46 70 611 Fax: +390804670610 or AIPAS Via del Tempio 1 00100 Roma. Italy. aipaspmiQtin.it