The British Formula One economy

By | Sport
The first corner of the malaysian grand prix 2013 credit via ‪en.wikipedia.org ‬

This weekend sees the start of the Formula One season in Melbourne, at the Australian Grand Prix. With 19 races in as many countries this year, it is interesting to note that 8 of the 11 Formula One teams currently operating base themselves at Motorsport Valley. These 8 teams employ more than 5,000 people and deliver £2billion in revenue annually.

UK Motorsport Valley business cluster has reported continuous growth every year, with it now reaching revenues of £9bn. Now almost 3,500 companies associated with motorsport are based within the valley, employing around 40,000 people. That represents around 80% of the world’s high-performance engineers. Almost 90% of those companies export their products and services abroad. As a result Formula One has had a wider impact on the economy, in terms of jobs, skills and innovation.

Companies from other industry sectors, such as defence, marine and aerospace have also learned to turn to the motorsport industry when looking to accelerate the solution of their engineering problems and provide competitive advantages over their competitors.

Motorsport-based businesses spend 30% of their turnover on research and development to stay ahead of the competition. That compares to 4% in engineering, 6% in automotive and 15% in pharmaceuticals. The results are clear to see on the racetrack, with 17 of the 20 races in Formula One last season being won by a British-built car. British-based constructors have won 38 constructors’ championship since F1 began back in 1950.

This year has been a challenge for the British based teams, as the new breed of Formula One cars that line up for the start of the 2014 season in Melbourne are very different to those that raced around the Yas Marina circuit in Abu Dhabi. The task of building the next generation of cars has been influenced by the biggest change to F1 technical regulations for decades. Out will go the 2.4-litre V8 engines, to be replaced by small-capacity 1.6-litre V6 hybrid turbo units, which will generate a far larger proportion of power from energy regeneration. As well as harvesting energy from braking, they will harness power from waste heat from the turbocharger, which is about 160 of the 760-brake horsepower total. The move has been inspired by the need for F1 to reflect the changing attitudes and engineering direction of the wider auto- motive industry.

Also this season after years of possible rumours, a race at Mexico City’s historic Autodromo Hermanos Rodriguez was included in the F1 schedule for 2014. This is a part of a wider trend in the sport to target emerging market venues.

In the late 1960s, a group of British entrepreneurs, including engineer and designer Robin Herd and former FIA president Max Mosley, started March Engineering in North Oxfordshire. They built cars for a range of championships, including Formula 1, which encouraged the good engineers to stay and attracted aspiring ones to the area. Soon enough, teams such as Williams, Brabham and McLaren set up shop close by.

Chris Aylett, the MIA’s chief executive, says Britain’s position at the forefront of F1 is the result of circumstances stemming from the 1950s and 1960s, when the country had plenty of airstrips and aspiring engineers. “After the war, we had very little money and lots of airfields that had survived the war. We had engineers who were experienced in rapid research and development, aerodynamics and competitive engineering and a lot of them turned their hands to automobile engineering.”

In 2008, the government set aside £3.5billion in funding for transport improvements and development of centres of technical excellence. Also in 2013 they set aside another £1billion for the motorsport industry.

Business minister Michael Fallon said “Our motorsport industry represents some of the best of British talent and ingenuity and it is imperative that we provide the right conditions so it continues to thrive. That is why we are investing £1bn jointly with industry to ensure companies across the automotive sector have the support they need to develop the technologies of the future”.

Looking towards the future, in which other areas of motorsport and engineering should the UK invest in to bring new business to an already strong sector?

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