For the third consecutive year, Singapore has been awarded the overall winner of fDi’s Aerospace Cities of the Future ranking. The south-east Asian country also topped the study’s Economic Potential and FDI Performance categories.

According to greenfield investment monitor fDi Markets, Singapore attracted 39 aerospace FDI projects between 2015 and 2019, the highest out of all 50 locations analysed. US-based companies were responsible for about 40% of the total projects during this period, followed by investors from France (15.4%) and Germany (12.8%). 

Chart 1: Top five source countries for aerospace FDI in Singapore, 2015 – 2019

Source: fDi Markets (www.fdimarkets.com)

When Netherlands-based aircraft leasing company TrueNoord established a representative office in the city-state in May 2019, it stated that Singapore was “the ideal location” since it has “so many regional airlines, original equipment manufacturers and other aviation stakeholders close by”.

Other recent investors include Germany-based MTU Aero Engines, which opened a new office for its MTU Maintenance business unit in September 2019, and Collins Aerospace, a subsidiary of US-based Raytheon Technologies, which established an innovation centre in June 2019 that will create 40 new jobs. 

Transport hub

London has held on to second place in this year’s ranking, coming first in the Aerospace Connectivity category and second in Innovation & Attractiveness. The UK capital reinforces its reputation as a transport hub, with investors benefiting from six international airports, serving 343 international destinations, and six ports within 100 kilometres. 

London is also home to more than 100 aerospace companies and 10,000 engineering companies, as well as five of the world’s top 300 mechanical, aeronautical and manufacturing universities, according to Quacquarelli Symonds 2020 ranking. In July 2019, US-based L3Harris Technologies, a global aerospace and defence company, opened a new $100m training centre for commercial airline pilots near Gatwick Airport, creating 350 jobs.

Bangalore, the capital of India’s southern Karnataka state, came third in fDi’s 2020/21 ranking, up from fourth place in the previous study. An estimated total of more than 7000 aerospace FDI jobs were created in the city between 2015 and 2019, the highest out of all locations analysed. Notable investors include UK-based Rolls-Royce Holdings and Liebherr Aerospace, part of Switzerland-based Liebherr. In September 2018, US-based multinational Boeing announced plans to set up a $156m electronic manufacturing and avionic assembly facility in its Bangalore tech hub, creating 2600 jobs.

FDI Strategy – the winners

Greater Montreal in Canada tops the FDI strategy category in fDi’s Aerospace Cities of the Future 2020/21 ranking, followed by Toulouse, France and Brazil’s São José dos Campos. Naomi Davies reports.

Greater Montreal has placed first in fDi’s Aerospace Cities of the Future 2020/21 ranking for FDI Strategy. A globally recognised aerospace hub, Greater Montreal is home to more than 200 aerospace companies including industry giants Airbus, Bombardier, Pratt & Whitney, CAE, Bell Textron and Mitsubishi Aircraft. There are over 42,000 highly qualified aerospace staff in the metropolitan area, including 13,000 engineers and scientists. According to research from AeroDynamic Advisory & Teal Group and Flight Global, companies can access over 80% of the global aerospace market from Greater Montreal.

In May 2016, the government of Québec unveiled a 10-year aerospace strategy, which aims to strengthen and diversify the industry structure, foster growth, support small and medium-sized enterprises in their development and promote innovation. As part of the plan, the government committed to invest C$510m ($362.1m) in the sector by 2021. In addition, Aéro Montréal, Québec’s aerospace cluster, groups together all major decision-makers in the region, including companies, education and research institutions, and unions to bolster the sector’s global reach and encourage growth.

Toulouse, the capital of France’s Occitanie region, came second in the FDI strategy ranking. Inward investment agency Invest in Toulouse has a team of six providing daily support to the local aerospace sector, which employs 80,000 staff across 450 companies. The city is home to the headquarters of multinational aircraft corporations Airbus and ATR, as well as numerous aeronautical manufacturers and contractors such as THALES Avionics, Collins Aerospace, Latécoère, Stelia, Daher and Safran.

The Aerospace Valley, a French cluster of aerospace engineering companies and research centres, is headquartered in Toulouse and focuses on funding collaborative projects and stimulating growth. Toulouse’s aerospace sector also benefits from the support of several research facilities including the national aerospace laboratory ONERA and the Institute of Technology Saint Exupéry.

São José dos Campos, located in south-east Brazil, ranks third in the FDI strategy category and serves as a hub for the country’s aerospace institutes, research organisations and universities. The city is home to the Brazilian Aerospace Cluster, which brings together over 100 aeronautical and space companies to establish partnerships, encourage integration and promote economic and social development. In addition, it has cooperation agreements with aerospace clusters in Canada, France, Sweden, England, the Netherlands, as well as two Chinese technology parks, government institutions and the European Aerospace Cluster Partnership.

Methodology - fDi’s Aerospace Cities of the Future 2020/21

To create a shortlist for ‘fDi’s Aerospace Cities of the Future 2020/21, the fDi Intelligence division of the Financial Times collected data using the specialist online FDI tools – fDi Benchmark and fDiMarkets as well as other sources. Data was collected for 50 locations, under five categories:
Economic Potential, FDI Performance, Cost Effectiveness, Innovation & Attractiveness and Aerospace Connectivity. Locations scored up to a maximum of 10 points for each data point, which were weighted by importance to the FDI decision making process in order to compile the subcategory
rankings.
In addition, surveys were collected under a sixth category, FDI Strategy, for which there were 14 submissions. Locations that ranked in the top five in this category were given bonus points, which contributed to their overall score. Together, the data subcategory rankings and the FDI Strategy
ranking make up the overall ‘Aerospace Cities of the Future 2020/21’ ranking.

List of data points:

Economic Potential
 Population
 UE rate
 Inflation rate
 GDP
 GDP per capita
 Average annual GDP growth rate (2014-2018)
 Projected average annual GDP growth rate (2020-2024)
 Exports in Aircraft, spacecraft and parts thereof (trade values $ - 2014-2018) per capita
 Imports in Aircraft, spacecraft and parts thereof (trade values $ - 2014-2018) per capita

FDI Performance
 Outward FDI (2015-2019)
 Outward FDI per 100,000 (2015-2019)
 Outward FDI in aerospace sector (2015-2019)
 Inward FDI (2015-2019)
 Inward FDI per 100,000 (2015-2019)
 Inward FDI in aerospace sector (2015-2019)
 FDI in Research and Development (2015-2019)
 FDI in Advanced Manufacturing (2015-2019)
 Number of mega projects by capex in the aerospace sector (over $100m) (2015-2019)
 Number of mega projects by capex in the aerospace sector (over $100m) per 100,000 people (2015-2019)
 Number of mega projects by jobs in the aerospace sector (over 1000 jobs) (2015-2019)
 Number of mega projects by jobs in the aerospace sector (over 1000 jobs) per 100,000 people (2015-2019)
 Number of jobs created in the aerospace sector by all inward FDI (2015-2019)

 Number of jobs created in the aerospace sector by all inward FDI per 100,000 people (2015-2019)

 Number of expansion/co-location projects in the aerospace sector (2015-2019)
 Number of expansion/co-location projects in the aerospace sector per 100,000 people (2015-2019)

Cost Effectiveness
 Annual rent for prime Grade A office space ($ per m2)
 Annual rent for prime Grade A industrial space ($ per m2)
 Cost to import ($ per container)
 Cost to export ($ per container)
 Average salary ($) for semi-skilled worker
 Average salary ($) for skilled worker

Innovation & Attractiveness
 Number of patents in aerospace sector (2003-2019)
 Number of patents in aerospace sector (2003-2019) per 100,000
 Number of top 300 universities in Engineering - Mechanical, Aeronautical and Manufacturing (QS University Rankings) 
 PwC 2019 global aerospace manufacturing attractiveness index
 Number of companies in the aerospace sector 2020
 Number of companies in the aerospace sector 2020 per 100,000 people
 Number of aerospace companies as a percentage of overall companies 2020
 Number of companies in the engineering sector 2020
 Number of companies in the engineering sector 2020 per 100,000 people
 Number of engineering companies as a percentage of overall companies 2020

Aerospace Connectivity
 Number of airports within 50 miles (80 kilometres) of the city
 Number of international destinations served
 Quality of overall infrastructure 2019
 Number of ports within 100km (medium)
 Number of ports within 100km (large)
 Number of ports within 100km (very large)
 Number of ports within 100km (medium+)