It is shown, fairly rigorously, that large aerospace projects, with typical periods of 15 years to break even, are unlikely to provide a commercial rate of return on a ‘risk’ investment. However, they can generate enough surplus to meet an alternative criterion, the ‘self-financing ratio’, which emphasises the contribution made by the Project to the future self-financing capability of the company. Until this blessed state is achieved, the industry needs ‘cheap money’ whose main source can only be the taxpayer. The role of the taxpayer as investor is examined with the help of an elementary econometric model. A form of ‘Prospectus to the Taxpayer’ is developed which summarises the quantifiable benefits to the national economy arising from the launch of a project. The same methods are also applied to the formulation of a ‘Home-Purchase Discount’, intended as an aid to government procurement decisions. The concluding remarks emphasise that the paper is relevant primarily to the ‘large scale high R&D sector’ of industry, of which aerospace is a prominent component.

Finally, the views expressed in this paper are my own and emphatically do not reflect those of the Company I have the honour to serve in other fields