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Introduction

NEED FOR STRATEGIC PLANNING IN AERONAUTICS

As the Aeronautics and Space Engineering Board (ASEB) stated in Aeronautical Technologies for the Twenty-First Century, the U.S. aeronautics industry has been one of the undisputed success stories in global competitiveness throughout the latter half of this century. Since the end of World War II, the United States has been a leader in the global aeronautics industry, and, in most cases, U.S. aircraft, engines, and parts have dominated both domestic and foreign markets for subsonic transports, general aviation, commuter, and military aircraft. The buildup of the global transportation infrastructure (i.e., airports and air traffic management systems) has also been driven by U.S. technology and products. The aeronautics industry, one of the largest positive industrial contributors to the U.S. balance of trade, plays a vital role in maintaining the safety and convenience of air travel throughout the world and provides important contributions to the defense of U.S. interests (NRC, 1992).

However, as of 1992 the U.S. market share in aeronautics had eroded as a result of foreign competitors that brought products to market that have lower total ownership costs than U.S. products (GRA, 1990). Lower total ownership costs can be achieved, for example, through implementation of new technologies that reduce long-term operating costs or through products that enter the market with significantly lower purchase prices. The ASEB report, Aeronautical Technologies for the Twenty-First Century, took issue with a common misconception that aeronautics is a mature industry. Many areas where significant technical progress remains to be made were identified in the report (NRC, 1992). Although the erosion in market share seems to have leveled off in the last few years, it seems clear that advances in technology will continue to be a significant element in maintaining U.S. market leadership and economic competitiveness in the future.

As part of a study completed in 1994, the National Research Council (NRC) Committee on Japan developed future scenarios for the course of the global aircraft industry and United States-Japan alliances over the next decade and beyond. The Committee on Japan concluded that several scenarios contemplating a decline in U.S. market share for aeronautics products and services were plausible if current trends in the aerospace industry continue. Furthermore, the committee concluded that for the United States to maintain its leadership in this critically important



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Maintaining U.S. Leadership in Aeronautics: Scenario-Based Strategic Planning for NASA's Aeronautics Enterprise 1 Introduction NEED FOR STRATEGIC PLANNING IN AERONAUTICS As the Aeronautics and Space Engineering Board (ASEB) stated in Aeronautical Technologies for the Twenty-First Century, the U.S. aeronautics industry has been one of the undisputed success stories in global competitiveness throughout the latter half of this century. Since the end of World War II, the United States has been a leader in the global aeronautics industry, and, in most cases, U.S. aircraft, engines, and parts have dominated both domestic and foreign markets for subsonic transports, general aviation, commuter, and military aircraft. The buildup of the global transportation infrastructure (i.e., airports and air traffic management systems) has also been driven by U.S. technology and products. The aeronautics industry, one of the largest positive industrial contributors to the U.S. balance of trade, plays a vital role in maintaining the safety and convenience of air travel throughout the world and provides important contributions to the defense of U.S. interests (NRC, 1992). However, as of 1992 the U.S. market share in aeronautics had eroded as a result of foreign competitors that brought products to market that have lower total ownership costs than U.S. products (GRA, 1990). Lower total ownership costs can be achieved, for example, through implementation of new technologies that reduce long-term operating costs or through products that enter the market with significantly lower purchase prices. The ASEB report, Aeronautical Technologies for the Twenty-First Century, took issue with a common misconception that aeronautics is a mature industry. Many areas where significant technical progress remains to be made were identified in the report (NRC, 1992). Although the erosion in market share seems to have leveled off in the last few years, it seems clear that advances in technology will continue to be a significant element in maintaining U.S. market leadership and economic competitiveness in the future. As part of a study completed in 1994, the National Research Council (NRC) Committee on Japan developed future scenarios for the course of the global aircraft industry and United States-Japan alliances over the next decade and beyond. The Committee on Japan concluded that several scenarios contemplating a decline in U.S. market share for aeronautics products and services were plausible if current trends in the aerospace industry continue. Furthermore, the committee concluded that for the United States to maintain its leadership in this critically important

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Maintaining U.S. Leadership in Aeronautics: Scenario-Based Strategic Planning for NASA's Aeronautics Enterprise industrial sector, government-industry partnerships for the development and implementation of a long-term strategy are essential (NRC, 1994). Efforts have been under way within the federal government to address the concerns of these two NRC reports that discuss the competitiveness of the nation's aeronautics research and development (R&D) enterprise. In 1995 the National Science and Technology Council (NSTC) released a report that acknowledged the need for action to ensure that the United States maintains a strong and competitive aeronautics industry. Three goals were identified that could be accomplished through a government, industry, and university partnership in aeronautics research and technology development (NSTC, 1995): maintain the superiority of U.S. aircraft and engines1 improve the safety, efficiency, and cost effectiveness of the global air transportation system ensure the long-term environmental compatibility of the aviation system Within the National Aeronautics and Space Administration (NASA), which is chartered by the National Aeronautics and Space Act of 1958 in part to "preserve the role of the United States as a leader in aeronautical science and technology and the application thereof," the Office of Aeronautics has developed a strategic plan for 1995 to 2000 (NASA, 1995) that follows many of the programmatic recommendations in Aeronautical Technologies for the Twenty-First Century (NRC, 1992) and supports the goals outlined by the NSTC. This plan even includes an attempt to characterize aviation in 2020 and lists several types of aerospace systems and technologies that will likely be in use. However, this is only a preliminary vision based on the judgment of NASA aeronautical experts and the extrapolition of current trends in aviation and aeronautics. PRE-WORKSHOP DEVELOPMENT OF THE SCENARIOS Recognizing that a long-term strategic plan for aeronautics requires a broad-based national perspective that includes the needs of users and consumers, the NASA Office of Aeronautics asked the NRC to conduct a workshop that would bring together experts from industry, government, and academia to analyze a number of possible scenarios for aeronautics 15 to 25 years hence. A steering committee was formed under the auspices of the ASEB to plan, organize, and conduct the workshop and report on its conclusions. However, the pre-workshop assignment to develop future 1   For the purposes of this study, the steering committee rephrased this goal as "maintain the superiority of U.S. aeronautics products and services." The steering committee believes that this appropriately broadens the goal to include subsystems of aircraft and engines, manufacturing processes related to the production of aircraft and engines, and research and engineering services related to aeronautics.

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Maintaining U.S. Leadership in Aeronautics: Scenario-Based Strategic Planning for NASA's Aeronautics Enterprise scenarios based primarily on economic, social, and policy factors was performed by a core team of individuals from the NASA Office of Aeronautics, working in collaboration with The Futures Group (TFG), and the Systems Technology Group of Science Applications International Corporation (SAIC). The NASA/TFG/SAIC team, hereafter referred to as the core team, began the process of developing these scenarios by conducting a number of interviews with experts and leaders in the field of aeronautics, including members of the ASEB steering committee and many of the workshop participants. Through a series of questions, the interviewees were asked to identify key issues related to the air transportation system and the worldwide aeronautics industry. They also were asked to suggest critical factors or "drivers" that would affect the future of these industries. These drivers were then used to define a future operating environment that was as inclusive as possible.2 This environment was bound by a subset of the drivers that became the "dimensions" of the operating environment or "scenario space." These dimensions, which were defined by the core team and the steering committee, are as follows: U.S. economic competitiveness—the relative U.S. share of internationally traded products and services in the world economy (strong or weak) Worldwide demand for aeronautics products and services—the level of demand for aeronautics products and services related to civil, military, and access to space applications in local, regional, and global markets (high growth and low growth) Threats to global security and/or quality of life—direct threats to the health and safety of people, and/or the stability and viability of governments, and their implications for the United States (high or low threat) Global trend in government participation in society—the tendency of governments to regulate and/or intervene in key aspects of society and the economy (high or low) Altering four dimensions that each have two values creates a total of 16 possible scenarios. These 16 possibilities are illustrated in Figure 1-1. Five of the scenarios were selected for further analysis at the workshop by the steering committee, the core team, and the senior leaders in NASA's aeronautics enterprise based on the potential challenges or opportunities they may hold for aeronautics. These five were given the following titles: Pushing the Envelope, Grounded, Regional Tensions, Trading Places, and Environmentally Challenged. It is important to note that the workshop participants were asked to accept each scenario as provided rather than challenge their content. 2   A summary of the drivers mentioned during the interviews and the role that each driver played in the development of the scenarios is provided at the end of each scenario narrative in Appendix D.

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Maintaining U.S. Leadership in Aeronautics: Scenario-Based Strategic Planning for NASA's Aeronautics Enterprise FIGURE 1-1 The 16 possible scenarios based on four dimensions. The final step in the pre-workshop scenario development process, providing a descriptive narrative to each of the five selected scenarios that was both plausible and internally consistent, was accomplished by the core team. Figure 1-2 depicts this complete process.

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Maintaining U.S. Leadership in Aeronautics: Scenario-Based Strategic Planning for NASA's Aeronautics Enterprise FIGURE 1-2 The pre-workshop scenario development process.

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Maintaining U.S. Leadership in Aeronautics: Scenario-Based Strategic Planning for NASA's Aeronautics Enterprise THE WORKSHOP The workshop, planned and organized by the ASEB steering committee, took place on September 30 to October 2, 1996 (see Appendix E). Participants were divided into five working groups or ''world teams" that were each led by a steering committee member. Each group focused on one scenario for the majority of the three days. Each answered a series of questions prepared jointly by the steering committee and the core team that were designed to help the team "live in its world" in order to develop a comprehensive view of the role that aeronautics would play in the scenario (see Appendix F). Once this role was defined, needs, opportunities, and their implications for aeronautics were determined for the team's scenario. After the world teams completed this process for their scenarios, each team participated in a round-robin process to determine the applicability of other teams' needs and opportunities for aeronautics to their own scenario. This iterative process also helped each team benefit from unique expertise residing on other teams that would not have been available to them otherwise. Concepts, strategies, and technologies that matched needs and opportunities in a team's own world were added to a final list presented by each team leader in the plenary session on the afternoon of the final day of the workshop. An executive session also was held at the workshop to discuss possible options for the future conduct of aeronautics R&D and to discuss the proper role of NASA in the future. NASA Center Directors and members of the NASA/TFG/SAIC core team were excluded from this session. The steering committee's view on NASA's future role in maintaining the superiority of U.S. aeronautics products and services is based in part on the deliberations that took place during this session. MAINTAINING U.S. COMPETITIVENESS IN AERONAUTICS The steering committee and participants agreed early in the workshop that it is essential for the United States to maintain its superiority in aeronautics products and services by continually improving safety, efficiency, cost, and long-term environmental compatibility. Without leadership, effective strategic planning and subsequent R&D implementation, aeronautics technology and jobs could quickly move to other nations, adversely affecting employment opportunities, trade balances, national security, and the efficiency of our transportation system. Those in attendance at the workshop also agreed that global competitiveness can only be maintained through a strong government, industry, and academia partnership. The NSTC reached a similar conclusion in its 1995 report, Goals for a National Partnership in Aeronautics Research and Technology (NSTC, 1995), as did the Council on Competitiveness in Endless Frontier, Limited Resources—U.S. R&D Policy for Competitiveness (Council on Competitiveness, 1996).

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Maintaining U.S. Leadership in Aeronautics: Scenario-Based Strategic Planning for NASA's Aeronautics Enterprise The process of defining, developing, and deliberating over future world scenarios as a means of long-range strategic planning is most often applied by organizations in both the public and private sectors that have a single-minded purpose (i.e., profit and customer satisfaction) or a singular mission (e.g., protect the borders of the United States). In the case of this workshop, however, a purposely diverse group of experts from government, industry, and academia was asked to participate in the process. For this reason, the members of the steering committee believed that it would be helpful to instill all participants with a common sense of purpose by creating a "virtual" corporation or agency during the three-day workshop. This virtual corporation was called "U.S. Aeronautics, Inc." Once the workshop participants assumed the identity of U.S. Aeronautics, Inc., the group engaged in a strategic planning process that was focused on accomplishing the three goals defined by the NSTC, regardless of what the future may hold in 15 to 25 years. REFERENCES Council on Competitiveness. 1996. Endless Frontier, Limited Resources—U.S. R&D Policy for Competitiveness. Washington, D.C.: Council on Competitiveness. GRA (Gellman Research Associates). 1990. An Economic and Financial Review of Airbus Industries. Prepared for the U.S. Department of Commerce International Trade Administration. Jenkintown, Pa.: Gellman Research Associates. NASA (National Aeronautics and Space Administration). 1995. Achieving Aeronautics Leadership—Aeronautics Strategic Enterprise Plan, 1995–2000. Washington, D.C.: National Aeronautics and Space Administration. NRC (National Research Council). 1992. Aeronautical Technologies for the Twenty-First Century. Aeronautics and Space Engineering Board, Committee on Aeronautical Technologies. Washington, D.C.: National Academy Press. NRC. 1994. High Stakes Aviation: U.S.-Japan Technology Linkages in Transport Aircraft. Office of Japan Affairs, Committee on Japan. Washington, D.C.: National Academy Press. NSTC (National Science and Technology Council). 1995. Goals for a National Partnership in Aeronautics Research and Technology. Executive Office of the President, Office of Science and Technology Policy. Washington, D.C.: National Science and Technology Council.

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