‘We are at the top of our game’– Airbus boss
THE managing director of Airbus Defence & Space, Colin Paynter, said the aerospace giant was on “top of its game,” but had to counter balance that “good momentum with the bad effects of inertia.”
And addressing a meeting of Cardiff Business Club, he said the business was “committed to supporting the Welsh economy,” including Airbus’ wing-making facility in Flintshire which employs 5,000.
He said that the late Rhodri Morgan was hugely supportive of Airbus during his time as First Minister and recounted several occasions when the two had met to discuss the role of the aerospace sector in bringing high-value jobs to Wales.
Mr Paynter said: “Airbus remains committed to supporting the Welsh economy. We employ 6,500 staff in Wales, making Airbus one of the country’s largest employers.
“But while we may be a big company at the top of our game with momentum, we also have inertia – we have to counterbalance that good momentum with the bad effects of inertia.”
“In other words, the company needs to ensure it isn’t slow to develop or to react to changing market forces. Airbus, he said, must ensure it avoids its own ‘Kodak moment’.
He added: “Kodak lost its way – not because it didn’t know that the technology was coming, but it didn’t react fast enough until it actually came. As a result, it collapsed.
“If the aerospace sector wants to avoid its own Kodak moment, we must balance incremental progress with true disruption. But it’s not easy, and the question is – how can organisations tackle this?”
Airbus itself employs 120,000 staff worldwide and within a company of that size that is judged on performance by its shareholders on a quarterly basis, there “is inertia that is difficult to change,” he said.
“However, it is essential and there are three things that are needed to ensure this happens: invention, disruption and evolutionary innovation.
“Innovation,” he said, “is a much over-used word. It is often used to mean ‘invention’ or ‘idea’.
“But in industry the word innovation is about the process – the way in which you take an idea and create value from it.”
And he said that Airbus is looking at its own evolutionary and disruptive innovations.
He said: “We spend 85-90% of our R&D budget on evolutionary innovation, the rest on disruptive technology. This may be the right balance although we don’t know with any real certainty, time will tell.
“We are learning all the time from the likes of Elon Musk and others but it is impossible to replicate the same fire and drive with everyone in an organisation as large as ours.
“So we have sought to segregate this by creating smaller companies within companies. Innovation doesn’t just exist in SMEs, as the UK government alludes. Big companies can also be innovative and disruptive.
“But we have to develop the culture to do that and isolate that element away from the rest of the business.”
Airbus has set up a £200m venture capital fund (Airbus Ventures) specifically to invest in those start-ups that will enable the business to focus on developing the 10-15% of its R&D budget set aside for disruptive technology.
As for how he sees the sector in a post-Brexit future, he remains optimistic. Mr Paynter added: “Airbus as a business is pro-European. The impact that Brexit will have is unknown and it will be some time before we see how it will be manifested.
“That said, I am confident in our ability to remain competitive and efficient and to ensuring we continue to develop our presence here in Wales and elsewhere.”
The meeting by sponsored by the University of South Wales.