At Farnborough International Airshow, Leonardo has published a new report by independent analysts at Oxford Economics. The report highlights the continued contribution of Leonardo to the growth of the UK economy and the increase in investment in research and development over the last five years.
The report showed that R&D spend by Leonardo UK had more than doubled since 2018, with the company spending nearly £500 million on R&D activities in 2023 alone. The company also conducted £1.4 billion of R&D activity over the five preceding years. This has included major investment in digital and data technologies and capabilities, which Leonardo expects to become central to its business as it continues to grow in the UK.
Cutting-edge onshore research includes Artificial Intelligence (AI) and data fusion, autonomy and advanced manufacturing, modelling and simulation technologies. These advances are underpinning Leonardo UK’s involvement in major international programmes such as the Eurofighter Typhoon and Global Combat Air Programme (GCAP), as well as its ability to design and develop new offerings in cyber security and uncrewed rotorcraft.
Based on the report, with eight major sites around the UK - including its new Newcastle site which was opened in October 2023 and is currently recruiting for high-quality jobs - Leonardo contributes £2.5Bn to UK GDP, meaning that for every £100 contributed to the economy directly by Leonardo, a total of £310 in GDP was generated across the economy.
The focus on high-value innovation extends to the company’s workforce, which the report reveals now comprises 50% highly-skilled engineers out of a total 8,200 direct employees, including approximately 2,800 at the company’s Yeovil-based helicopter design and advanced manufacturing facility and nearly 2,500 at the company’s electronics site in Edinburgh. These skilled employees design and manufacture highly-exportable combat air technologies, new military helicopters and advanced cyber security services. Leonardo workers contributed £99,000 a year to GDP in 2023 on average, compared to the UK average of £63,000 that year. The company’s workers are highly productive, generating 57% more in GDP contributions per job than the UK average in 2023.
This sustained innovation and investment facilitated Leonardo exporting £930 million of products and services from the UK in 2023. The company also generated a further £4.4 billion of exports in the five preceding years. By continuing to build on this strong performance in export markets, Leonardo will be able to contribute to sustained economic growth in the UK.
According to the research, Leonardo also spends £960m with its UK supply chain, with nearly 1,700 suppliers across the country of which 75% are small and medium-sized enterprises. Leonardo UK’s supply chain purchases supported a £830 million contribution to UK GDP in 2023. The company’s economic activity supported nearly 31,700 jobs around the UK in 2023, of which 12,900 were as a result of supply chain spending.
Wage and salary payments made by the company to its UK employees in 2023 were just over £450 million. The wages and salaries paid to Leonardo employees, as well the salaries of workers in the company’s supply chain, helped to support a further 10,600 jobs around the UK in 2023.
Leonardo also contributes to upskilling the UK workforce through its training schemes. In 2023 the company had more than 700 people on early careers schemes, including 310 graduate trainees, 360 apprentices, and 60 industrial placement students. Such high quality training drives social mobility by enhancing earning potential all around the country, improves productivity and will help lay resilient foundations for the UK economy.
Commenting on the headline increase in R&D spending by Leonardo, Chairman, Stefano Pontecorvo, said: “I am proud of the forward-looking projects that our UK business is already implementing when it comes to cutting-edge research and exploiting the benefits of digitalisation. Research and development is at the heart of Leonardo’s 2024 – 2028 Industrial Plan and underpins our success internationally, including at our successful UK-based business. Focused R&D expenditure on innovative technologies, including Artificial Intelligence, Cloud and Supercomputing, as well as a massive use of digitalisation, will strengthen our core and pave the way to the future of Leonardo.”
Clive Higgins, Chair and CEO, Leonardo UK, commented: “Data and software is a core onshore capability at Leonardo UK, informed by substantial experience of how our products are used by military operators. Targeted R&D will help us innovate on this foundation through a variety of activities, including in the fields of digitalisation, data fusion and AI. As well as enabling growth through the provision of information-age products and services for UK and allied Armed Forces, this investment in the long-term future of our business will provide high-quality jobs, drive social mobility around the country and keep vital skills onshore for the future."