High value manufacturing key to Kingdom’s sustainable economic wealth
26/Jan/2010
Sir John Rose - Arab News
The Global Competitiveness Forum in Riyadh is a symbol of the how seriously economic development is taken within Saudi Arabia. This event has become a focal point for international debate and discussion of global development issues, and I am honored to be asked to participate.
The issue I have chosen to address, and which I believe is of high relevance to Saudi Arabia, is the importance of the development of a balanced economy which embraces the benefits of high value manufacturing. High value activity is, I believe, a key to economic success, and those countries which invest in high value activity reap benefits which will drive long-term economic success.
High value manufacturing includes activities that involve what I call “deep knowledge”. There is not one straightforward way the value is created, but there are a number of key components, which help organizations drive value through manufacturing. These include utilizing research and technology and exploiting scientific and experiential intellectual property. High value activity requires a profound understanding of the customer and solutions which are developed to meet customers complex requirements. All in all, it is difficult to do well.
By way of illustration, let me take just one small component that is key to the success of Rolls-Royce aero engines. This component is a “single crystal turbine blade” manufactured by Rolls-Royce.
There are 66 single crystal turbine blades in the Rolls-Royce Trent 1000 engine, which powered the Boeing 787’s first flight last month. Each blade is grown in a vacuum furnace from a single crystal of a proprietary Rolls-Royce alloy. It must survive in a gas stream hotter by 350؛ Celsius than its melting point. It develops the same power as a Formula One racing car and endures a force equivalent to hanging a double decker London bus from its tip.
It requires the skills of material scientists, metallurgists, mathematicians, aerodynamicists, combustion engineers, aero thermal engineers, stress engineers, manufacturing engineers, process engineers, procurement specialists and logisticians, to name but a few. And it is just one of over 2,500 different parts in a typical aero engine.
High value manufacturing is important for any economy because, first and foremost, it creates wealth. It is a slightly congratulatory statistic but pound for pound an aircraft engine is six times more valuable than silver. Whereas using on the same comparison, pound for pound, a motorcar has the same value as a hamburger. It is no coincidence that the top three national economies in this year’s Global Competitiveness Index — Switzerland, the US and Singapore — share many of the same characteristics: High levels of R&D investment, strong collaboration between industry and academia, the successful translation of research into marketable products and services, and flexible labor markets.
26/Jan/2010
Sir John Rose - Arab News
The Global Competitiveness Forum in Riyadh is a symbol of the how seriously economic development is taken within Saudi Arabia. This event has become a focal point for international debate and discussion of global development issues, and I am honored to be asked to participate.
The issue I have chosen to address, and which I believe is of high relevance to Saudi Arabia, is the importance of the development of a balanced economy which embraces the benefits of high value manufacturing. High value activity is, I believe, a key to economic success, and those countries which invest in high value activity reap benefits which will drive long-term economic success.
High value manufacturing includes activities that involve what I call “deep knowledge”. There is not one straightforward way the value is created, but there are a number of key components, which help organizations drive value through manufacturing. These include utilizing research and technology and exploiting scientific and experiential intellectual property. High value activity requires a profound understanding of the customer and solutions which are developed to meet customers complex requirements. All in all, it is difficult to do well.
By way of illustration, let me take just one small component that is key to the success of Rolls-Royce aero engines. This component is a “single crystal turbine blade” manufactured by Rolls-Royce.
There are 66 single crystal turbine blades in the Rolls-Royce Trent 1000 engine, which powered the Boeing 787’s first flight last month. Each blade is grown in a vacuum furnace from a single crystal of a proprietary Rolls-Royce alloy. It must survive in a gas stream hotter by 350؛ Celsius than its melting point. It develops the same power as a Formula One racing car and endures a force equivalent to hanging a double decker London bus from its tip.
It requires the skills of material scientists, metallurgists, mathematicians, aerodynamicists, combustion engineers, aero thermal engineers, stress engineers, manufacturing engineers, process engineers, procurement specialists and logisticians, to name but a few. And it is just one of over 2,500 different parts in a typical aero engine.
High value manufacturing is important for any economy because, first and foremost, it creates wealth. It is a slightly congratulatory statistic but pound for pound an aircraft engine is six times more valuable than silver. Whereas using on the same comparison, pound for pound, a motorcar has the same value as a hamburger. It is no coincidence that the top three national economies in this year’s Global Competitiveness Index — Switzerland, the US and Singapore — share many of the same characteristics: High levels of R&D investment, strong collaboration between industry and academia, the successful translation of research into marketable products and services, and flexible labor markets.