Stephen Phipson, Chief Executive of the manufacturers’ organisation, Make UK, looks at the potential manufacturers in the defence sector have to support the UK’s growth aspirations, and those of society more widely as their technologies cross over into everyday life.
In these challenging and unprecedented times, the UK defence sector remains among the most dynamic and innovative in the world. Manufacturers within the sector account for a crucial £12billion worth of output, employing over 200,000 highly skilled people. The sector is also a significant player on the global stage, being the second largest exporter of defence products. The sector is also a crucial employer in many UK Regions, which will be critical to the Government’s levelling up agenda, paying its employees an average annual salary of approximately £45k, 27% higher than the average annual manufacturing salary. The sector recruits, trains, and retains the best workforce and offers great and indeed unrivalled career prospects.
Defence manufacturers also have a crucial role to play in delivering the Government’s Plan for Growth ambitions, whether this is accelerating the pace of digital adoption, developing new and more sustainable products that have commercial spin-offs or tapping into new trade markets. This is good news not just for the defence sector but also for the supply chain. Yet, these benefits are not fully understood or appreciated, and there is more work to do to share this wider industry success story.
Looking ahead to the next five years, there are challenges but also huge opportunities. The sector is making great strides in addressing modern industrial issues, understanding the importance of diversity and inclusion, and responding to climate change challenges. In particular, the introduction of social values which are linked to Government procurement will undoubtedly drive forward more positive change, enabling the defence sector to reach its full potential and deliver even more to support the UK’s prosperity.
However, to take advantage of these opportunities, the barriers to further growth and investment must be addressed, supporting the sector to attract and retain the very best calibre of talent, opening the doors to new trade markets and removing the barriers that SMEs in particular face to exporting more of their goods and services. In particular, the Government must restore the support to SMEs to enable them to attend trade shows, which is a valuable route to market and remove the obstacles, which mean the majority of companies still struggle to obtain UK procurement contracts.
As one of the most innovative sectors of the economy spending almost £2bn a year on R&D, the sector is also looking to the future. In a recent Make UK survey, almost three-quarters of companies (71%) said they were investing in digital technologies in the last two years, the pace of which is accelerating, and almost half (46%) in green technologies.
Furthermore, the defence sector is heavily committed to evolving technologies, with more than a third (35%) exploring opportunities in autonomous robotics and vehicles, over a quarter (26%) in clean technologies and propulsion and almost a fifth in Artificial Intelligence and Augmented Reality. Make UK believes that, in the same way, the defence sector invented GPS, which was then translated into civilian use the same can happen with these technologies, which will have benefits for populations that go far beyond purely defence and security.
There are exciting times ahead, and a closer, more collaborative relationship between Government and defence manufacturers can only help maximise the economic gains that can be achieved with a thriving and prosperous defence sector. Given its place as one of the most dynamic globally and its unrivalled ability to adopt and invest in cutting-edge technologies, as the adoption of digital technologies in particular accelerates, we now have a unique opportunity to harness the talents of companies right across the sector.
By working closely with the sector and freeing up the agility and dynamism of SMEs Government can help the process of cross-pollinating the success of the defence sector to maximise economic gains, seize export opportunities and build greater supply chain resilience. This will place an innovative defence sector at the forefront of helping address the many challenges society faces by developing new products that benefit us all.
