A Key Driver of Growth and International Competitiveness?
Chapter 14: Future prospects
Predicting the future of the aerospace industry and the role of public policy over the next 50 years is fraught with difficulties and is well-nigh impossible. The future is characterised by unknowns and unknowables. At best, speculations rather than predictions can be made about possible general trends and their potential influence on aerospace industries. No one can predict accurately the future. Austrian economists focus on the role of uncertainty and the impossibility of predicting accurately future changes in demand and supply in domestic and world markets. Consumer preferences are not static and are always changing. In the past, for example, horses and carriages were replaced by motor cars, air travel replaced some surface travel, mobile phones have replaced landline phones and computers have replaced secretaries. Supply side changes are caused by new entrants, lower-cost sources of supply and new technology. Examples include the emergence of new aerospace industries and new firms, the development of international supply chains (globalisation) and technical progress reflected in the introduction of jet engines, UAVs and space exploration. As a result, the comparative advantages and disadvantages of a nation’s industries are not fixed in perpetuity. Aerospace is no exception. Austrians view competition as a rivalrous process with private sector entrepreneurs seeking to outperform each other. With this approach, competition is both innovative and destructive: it is about producers who discover new lower production costs or identify new demand opportunities.
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