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The Sky`s No Longer the Limit for Start-Ups

David ZIEGLER | Vice-President Aerospace & Defense Industry, Dassault Systèmes

Issue 98

In recent years, the aviation and space industry has become extremely attractive to start-ups and small businesses. The boom of start-ups in the aerospace industry began in 2010 with new initiatives from Elon Musk (SpaceX), Jeff Bezos (Blue Origin) and Bertrand Piccard (Solar Impulse) – all of them being successful entrepreneurs. With a gleam in their eyes, they demonstrated that smaller companies can take to the skies on par with huge, established corporations. And the trend continues.  Today, the aircraft industry is rife with opportunities for start-ups. New players not only offer innovative solutions, but also radically change the nature of the entire market. Now, the industry is flooded with new players. According to recent research conducted by NewSpace Global, the number of start-ups in the industry has grown almost tenfold since 2013 - from 120 to more than 1,000 today. In tandem, in 2018 alone, £25.6 billion was invested in aerospace start-ups, according to the British venture fund Seraphim capital. 

However, the aerospace industry has many hurdles to overcome in order to compete. The tightly regulated and safety critical industry is understandably meticulous but slow to adopt new technology. Arguably, this is leaving the door wide open for start-ups. Unlike the state-owned companies or large international corporations, start-ups use their “no fear of failure” approach. They strive to reduce the final cost of their products and services to make them accessible to a wide range of customers. To do this, they have to work faster, generate more new ideas and use a number of cross-sectoral technologies and solutions. For example, it took SpaceX five years and £307 million of investments in order to develop the carrier rocket Falcon 9, while NASA would have spent about £1.0 billion for a similar task, according to the agency’s own calculations. 

Start-Ups Take to the Sky 

Over the past few decades, the quality of technologies and various components has improved while their manufacturing costs have dropped. As a result, start-ups are now present in almost every segment of the aerospace industry. The fastest growing trends in the industry are unmanned aerial vehicles, satellites, space communication systems, various services for maintaining space and aviation infrastructure, and finally, suborbital tourism. 

For example, Chinese start-ups Space Transportation and Linkspace have recently launched their reusable rockets – an affordable alternative to Falcon 9. In the UK, OneWeb is already launching miniature satellites into the low Earth orbit. By 2021, the company intends to use it to provide high-speed Internet access throughout the world. Orbex, is preparing the commercial release of its Prime rocket, which is specifically designed to launch ultralight satellites. By 2023, it should put into orbit the nanosatellites of Swiss start-up Astrocast, which plans to deploy a global support network for the Internet of things. Elsewhere, the Canadian company LEO will launch a service that monitors the chemical composition of the earth's surface and track space debris by 2021. 

The list of start-ups doing innovative work within the industry could go on. Each example highlights that start-ups are moving from just talking about projects to actioning them, and at a rapid pace.

Agility within Startups

Start-ups are not afraid to experiment, and as a result, new types of transport, new markets, and new categories of consumers are born right in front of our eyes. Dassault Systèmes works with many aerospace and defense startups including AeroMobil, a company creating a prototype of a roadable aircraft, the first vehicle of its kind, due to be released in 2020. The AeroMobil vehicle will make it possible to move around in any terrain and in any weather. As they say in the company itself, developing such a project required a multitude of cross-sectoral interaction. After all, in order to successfully pass certification, such a flight-and-ground apparatus should meet the requirements of regulators of both industries at once. But the emergence of this type of transportation will give impetus to the development of new related types of business – schools for drivers/pilots and even flight-car service.

So, how do start-ups manage to compete on equal terms with big companies? First, by using the same engineering and marketing tools as established market leaders. In fact, start-ups have an advantage when implementing new technology such as cloud computing, computer vision, big data, as well as business intelligence and digital IT platforms. Much like Boom Supersonic, that uses the 3DEXPERIENCE platform to help accelerate the design and development of its Overture airliner, a commercial aircraft achieving the speed of Mach 2.2, which in turn will make supersonic flights ubiquitous and accessible. Boom uses the same platform for its ideation, production and certification that industry leader Airbus uses to develop and build its aircraft. 

Furthermore, start-ups have an advantage in terms of having greater flexibility and mobility. The use of agile principles in product development, and the ability to find and occupy new niches in the market. This gives start-ups a great advantage over large companies. With the 3DExperience platform on the cloud, they can scale without having to own a huge IT infrastructure network – a true recipe for speed.

What’s Next? 

Of course, market leaders won’t be quick to give up their positions to new players. Traditional players also seek the advantages innovative technology offers. To achieve that, aerospace and defense companies are acquiring startups, setting up corporate venture funds and developing “skunkworks” projects and partnerships to support develop new products. For example, Airbus now has its own startup accelerator, Airbus Bizlab, which has helped 72 external and 54 internal projects over the four years. 

Dassault Systèmes too has its own international network of 3DEXPERIENCE Labs and Centers that help start-ups and large companies alike to improve products and develop the concepts for next-generation air transport. Two startups that have brought projects to the 3DEXPERIENCE Lab are, Xsun and Zero 2 Infinity. Xsun is developing new types of long-range unmanned aerial vehicles powered by solar energy. Zero 2 Infinity is building an inexpensive and environmentally friendly platform for launching small-sized satellites using stratospheric balloons.  

Large players also see the value in rapid innovation projects. One collaborative project with Dassault Systèmes and the National Institute for Aviation Research at Wichita State University resulted in Airbus successfully developing a new thrust reverser prototype. Northrop Grumman, Lockheed Martin and Raytheon all work closely with satellite start-ups. For example, Lockheed Martin has a stake in Terran Orbital, which offers satellite surveillance services to various government departments. Tighter collaboration between large and emerging players will bring more innovation to the market and help it transform further. 

Although start-ups embrace new ideas and technology, they often face a much bigger threat than large players: they cannot afford to fail in this highly regulated industry. They need to pass long and complex certification processes before launching their product despite being both cash-strapped and time-constrained. 

Online, cloud-based virtualization and product innovation platforms offer new ways for ideation, design, manufacturing, testing, certification and operation, helping start-ups optimize their processes and keep their activity focused on their products. These platforms automate routine operations, streamline business and engineering processes, reduce time spent on administrative tasks and vastly improve strategic and routine access to information. As a result, start-ups can accelerate their programs and be the first to bring their prototypes to market. Investments in digitalization can pay off in as little as 6 to 18 months, fast-tracking the start-up’s journey to profit. Providing young companies with the resources to centralize all their operations helps start-ups focus on what they do best: devise creative ideas to complex issues and challenge the big players. This creates a much more vibrant industry that pushes the boundaries of the atmosphere