Greater government support is needed in both research and development and reskilling to flatten the unemployment curve within the aviation and aerospace industries, according to Lord Karan Bilimoria CBE, DL president of the CBI.
Lord Bilimoria is the founder of Cobra Beer, founding chairman of the UK India Business Council and the Chancellor of the University of Birmingham. He said the disruption of the COVID-19 pandemic on both the health sector and the economy had been felt in all sectors and across the globe.
Lord Bilimoria said: “It’s an amazingly, difficult time anyone living today, anywhere in the world would have experienced, because it’s both a health crisis, and it’s in an economic crisis. It’s a demand shock, it’s a supply shock. The reverberations go right through the supply chain, whatever industry you’re in.”
“And not only that, it’s not only domestic, the domino effect is global. So the effects have been huge and the aviation sector has suffered enormously. I mean by over 90 per cent down – Heathrow Airport alone pays over £100 million of rates per year and has virtually no business.”
Influence and scale of sector is underestimated within the UK
Lord Bilimoria said the UK was home to the third largest aviation sector in the world employing nearly a quarter of a million people and was the second largest aerospace manufacturing sector with almost £50 billion pounds of exports -more than our defence expenditure per year.
Describing the sector as one of the UK manufacturing sector’s “shining jewels of world class excellence” he called on the government to give more aid to the sector to avoid catastrophic unemployment rates. Lord Bilimoria said: “I think the biggest worry is unemployment. And in the way that we flatten the disease curve, we’ve got to flatten the unemployment curve. We cannot look ahead and have 3 million people unemployed.”
High unemployment would have “devastating consequences” for country
Lord Bilimoria said that high unemployment and youth unemployment rates would have devastating long term consequences for the country. He added that as well as helping with measures to rescue businesses through schemes such as loans, measures were also needed to help reskill workers, adding that changing or adapting careers would become normal for this generation. “People today will have to don’t have one career, people often have multiple careers in their life. People have to reskill. In fact now moving ahead many people will have to be still in their jobs.”
Lord Bilimoria said an industrial strategy to get research and development up to 2.4 per cent would make a “huge difference.” He added that aerospace sector and defence could benefit from tighter collaboration between universities and businesses.
Funding for sustainable aviation will help industry adapt
Lord Bilimoria said the government was spending £500 million pounds of public funds over five years to close the funding gap for sustainable funding for aerospace technologies. The funding for development of hybrid and electric technologies and establishment of the Jet Zero Council will help the government to achieve its net-zero emissions commitment to reduce carbon emissions to zero by 2050.
He said business in the current climate faced a stark choice – “adapt or die.” He gave the example of the pivot from Farnborough International Airshow to FIA Connect. “We have adapted,” said Lord Bilimoria, “We’re doing it this way. We’re going to get back hopefully next year to being face to face.”
COVID-19: lessons learned
He said one of the lessons he had learned was from Microsoft CEO Satya Nadella was that, in the midst of the crisis, a new, more remote way of working had taken just two months to adopt what was planned to take well over two years. Lord Bilimoria added this was “because necessity is the mother of invention.”
“The second lesson I’ve learned is, what does not work is when government works alone. What has been top down, it hasn’t worked, whether it’s been testing. Whatever it is, it has been it’s been top down, what has work is when there’s been collaboration.”