Putting Innovation on Hold?

According to a new paper, Deloitte aerospace analysts believe the aerospace and defense industry faces “lean times ahead” as DOD budgets flatten and personnel costs continue to rise. And, they say that RDT&E will receive “an increasingly smaller slice of the pie” and that will lead to “underutilization of the industrial base.” The end result, they say, would be “lower capability to innovate and create technical breakthroughs that have been the hallmark of the industry.” They do predict growing investment in new capabilities such as cyberspace security, anti-improvised explosive device technology, alternative energies, and precision engagement technologies. And the analysts maintain the aerospace and defense industry has “significant long-term potential.” Retired Gen. Chuck Wald, a senior advisor with Deloitte and contributor to the paper, said in an accompanying release, “Companies that can rapidly develop, test, and deploy new technologies will likely be winners in 2010.”