A.T. Kearney publishes guide for aspiring space nations as UAE aims for Mars

26 March 2018 Consultancy-me.com

As the United Arab Emirates boldly enters the modern space race with plans to colonise Mars, the Middle East arm of global consulting firm A.T. Kearney takes a look at what it takes to build a successful national space programme.

While the UAE’s Vision 2030 project may be one thing in terms of bold aspiration, set to reshape the Middle East along with the range of similar national transformation programmes underway in the GCC, the Emirate’s ‘Mars 2117’ plan is of an entirely other stratosphere.

Last month, the UAE set forth The Mohammed bin Rashid Global Space Challenge, with AED $200 million in seed-funding up for grabs for “new concepts, solutions, and business models for living and working in space, the Moon, and on Mars.”

The call for innovate ‘space settlement concepts’ stems from the nation’s Mars 2117 vision; establishing an otherwise regular city of 600,000 inhabitants on the red planet within a century. Development is already underway on a $136 million Martian simulation-centre in the desert outside of Dubai, while an unmanned Mars orbiter is due to launch before the end of 2020.

A successful national space policy contains three key components

Dubbed Al-Amal (Hope), the probe was named to enthuse the next generation of Emratis. But the nation’s ambitious aerospace endeavours may just have already inspired a team of consultants from the Middle Eastern practice of global strategy and management firm A.T. Kearney, who have together penned a guide for developing a successful, sustainable national space programme; particularly for those nations with shallower pockets.

Not just a simple matter of national pride, the development of a space programme can offer wide-ranging benefits as a whole, with the A.T. Kearney report stating; “A vibrant space sector can lift living standards, diversify the economy, spawn high-skill jobs, and deploy satellite technology to advance a range of national interests, including security, natural resource discovery and management, and environmental protection.”

With the global space industry currently valued at an estimated $300 billion and growing at 8% per annum, the authors of the report note that new trends in the sector have made the prospect more attractive and affordable for nations with less relative capital that might still be considering entry. Aspiring space participants however will need to take a holistic approach to overcome the considerable challenges, which, according to the report, begins with clear guidance from governments on four essential elements; policy, strategy, regulation, and implementation.

A good national space strategy meets five design principles

Regarding the initial policy, the report speaks of three key components; ‘principles’ – linking space initiatives with the nation’s wider economic and social aims; ‘goals’ – targeting capabilities with the greatest potential impacts in these areas, and; ‘capabilities’ – setting out what the government will do to develop the skills, knowledge and resources required to achieve its space ambitions.

With the foundations in place, nations will need to develop a strategy to meet their objectives. The consulting firm considers successful strategies to be ambitious, flexible, focused, collaborative, and aligned with other national economic plans, as well as inspiring participation from the public. With respect to the UAE’s space programme, which has seen over $5.4 billion in sovereign investment since 2014, the nation appears to be ticking all the right boxes – ambitious, flexible, collaborative, and aligned to its national transformation agenda toward economic diversification.

Establishing a colony on Mars is certainly ambitious, while the mission’s programme director, Saeed Gergawi, has also stated the project’s collaborative vision; “We see Mars 2117 as a multinational effort, which would set out to create a coalition of equals working together to fulfill a unified objective." Meanwhile, through its Global Space Challenge, which in its call for submissions states a preference for ‘innovative high-risk, high-reward projects that would be otherwise difficult to fund,” the nation has demonstrated its flexible overall approach to emergent technologies.

Evaluating the strategic options against the criteria

“We are looking to attract the best from every discipline,” Noah Raford, the CEO and ‘Futurist-in-Chief’ of the Dubai Future Fund overseeing the challenge, said. “It's not just engineering solutions. We're looking for social scientists, designers and artists to tackle not just the infrastructural issues around space settlement, but also the business models that are going to help us get off planet. Ideas around agriculture, economics and governance in space are also welcome.”

For nations wishing to emulate the UAE on a smaller scale, the A.T. Kearney report recommends a three-step process, with the most important strategic question being where to focus their efforts. Firstly, nations must ensure that they consider all of their strategic options by segmenting the value-chain, before developing dual criteria to evaluate each of the market opportunities, with one focused on attractiveness and the other on feasibility. Finally, each value chain segment can then be measured against the attractiveness/feasibility criteria to identify segments with the best combination of each.

The consulting firm, which recently established a National Transformations Institute in Dubai to support the widespread reforms underway in the Middle East, concludes; “Disruptive trends reshaping the space sector create opportunities for new nations to enter a market with vast long-term growth potential. A holistic approach covering policy, strategy, regulation, and implementation provides the foundation for a well-coordinated space sector that can achieve strategically important national goals. Countries that establish such a foundation will have an edge over those that take a scattershot approach to space.”

Global Aerospace & Defence sector to undergo a shift in priorities

01 August 2018 Consultancy-me.com

The ‘Aerospace & Defence’ (A&D) industry across the globe continues to grow on the one hand, but must adapt to evolving market needs on the other, according to a new report from US-based strategy and management consultancy AlixPartners. One major trend in the sector is an increasing emphasis on services over products.

The global A&D sector has seen no shortage of revenues recently, posting regular profits on the back of spikes in equipment sales. An undertones of political economic polarisation across the globe has put a number of countries on their guard, which has consequently prompted a bolstering of defence capabilities.

On the other hand, polarisation also represents disruptions of trade relations – examples of which have already emerged between the US and the EU – which poses a challenge to the heavily trade-dependent A&D segment. Spikes in oil prices and shifts in production priorities also serve to disrupt the sector’s otherwise steady performance in the contemporary scenario.

Accordingly, strategy and management consulting firm AlixPartners has carved out three trends that are likely to emerge in the global A&D sector in the near future as it works to navigate these challenges, with the consulting firm stating; “The global A&D industry cannot afford to be complacent in the face of an increasingly dynamic business environment.” 

The first and most prominent of these trends, according to the firm, is a gravitation towards services to drive the major share of revenues rather than products. The four biggest aircraft OEMs – Airbus, Boeing, Bombardier and Embraer – have already devised strategies to more than triple their revenues from services over the next decade, from the current level of $20 billion annually to as much as $60 billion.Global Aerospace & Defence sector to undergo a shift in prioritiesAs services take centre stage, firms in the sector will look to improve customer-supplier relationships in various service domains, such as manufacturing, repair, operations, product development, training and data management. This in turn prompts the search for strategic partners, which brings us to AlixPartners’ second trend – a spike in the sector’s M&A levels.

This trend is already well on its way, given that last year was a record one for the number of M&A deals in the sector, the top ten of which were cumulatively valued at $63 billion – nearly triple the $24 billion generated in 2016. The firm expects this activity to continue into the future, particularly as the private equity sector is demonstrating rising levels of interest.

The third trend – digital transformation – is one that is affecting other equally crucial sectors, from the petroleum and petrochemicals industry to the transport and logistics sector. According to AlixPartners, digital advancement represents significant opportunities for the sector, given that it could produce efficiency gains of as much as 20% over the next three years.

Currently, general neglect of digital enhancements has generated a situation where companies miss out on savings of between 1% and 3%, which could be turned around with absolutely minimal investment in data analytical technology. A number of firms in the sector will now be looking to rectify these inefficiencies.

Commenting on the overall scenario, Global Lead for A&D at AlixPartners Eric Bernardini said, “A new era is coming to this industry, one centred on new business models, an industrial step change on services, on partnerships and on digital transformation. Players in the industry are already moving at maximum velocity, but they can’t afford to be left behind in any of these areas. First mover advantage will be critical to success.”