ADS’ Facts and Figures 2017 guide highlights the ongoing contribution the UK Defence industry makes to our country. Not only does the sector provide our Armed Forces with the equipment and support they need to effectively tackle the growing number of national security challenges we face, it also makes a significant contribution to our national prosperity.
In 2016, the UK’s Defence industry generated a turnover of over £23 billion – growth of 10% since 2010 and 20% more productive than the economy as a whole over the same period. With thousands of companies distributed throughout the length and breadth of the country, the industry directly sustains around 142,000 jobs. This includes some 4,300 apprentices and trainees – roughly 3% of the total jobs in the sector.
The sector’s impact is evident at every stage of the value chain – from design and development and advanced manufacturing, to tailored support solutions. Sustained investment in S&T and R&D enables the UK to stay ahead of rapidly evolving threats to our national security. It also strengthens the UK’s global competitiveness, generating high-tech exports and high-skill jobs. Indeed, some 30,000 British R&D and design and development jobs depend on the UK Defence industry.
The UK is a world-leader in the production of defence platforms, including the Queen Elizabeth-class aircraft carriers, the dreadnought-class submarines and the Typhoon aircraft and its radar systems. Production and assembly jobs number 35,000 in the sector, while the complex supply chains of these programmes indirectly sustain thousands more.
Finally, whether its managing infrastructure, offering in-equipment support or military training, the UK defence industry ensures operational requirements can be met when it matters most. The fact that the UK has been chosen to be a global repair hub for F-35 avionic and aircraft components is testament to the sector’s ability to consistently deliver on time and to the highest standard in this regard.
In addition to the UK defence industry’s contribution as an employer, a significant portion of the £8.7 billion gross value added the sector delivered in 2016 resulted from defence exports. Even as domestic budgets around the world have been cut over the past decade, UK defence companies have achieved growth in exports. This has helped to sustain the UK’s industrial base, in turn delivering to the UK the operational advantage it needs, and the freedom to act where, and when, the national interest required it.
Defence exports also play a key role in the UK’s security relationship with strategic allies across the world. They can strengthen the UK’s security relationships and provide partners with the capabilities required to address common threats. Furthermore, they benefit the UK Armed Forces by improving interoperability, reducing the cost of UK programmes by increasing production runs and reducing unit costs through economies of scale. Exports help the industry by levelling out peaks and troughs of domestic demand. Crucially, they sustain key industrial capabilities for use by the UK Armed Forces that might otherwise be lost.
Through the Defence Growth Partnership (DGP), industry and government are working together to build on the UK’s export success to date, establishing long-term relationships to boost our share of the global defence market and working to attract and focus investment. In support of this, the UK Defence Solutions Centre and a strengthened DSO have analysed export market opportunities and developed strategic market plans, identifying overseas customers’ needs and bringing the best of UK capability to the international market. Similarly, through Innovation Challenges, the Systems Engineering Masters Programme and the Dual-Use Technology Exploitation innovation cluster, the DGP is ensuring the right skills, capability and supply chains are in place for UK industry to win export orders.
Looking ahead, the DGP will be developing a collaborative framework which seeks to implement a ‘Team UK’ approach to export markets. In doing so, Government will help industry form a consortium of companies and identify supply chains for appropriate overseas opportunities so that it is able to place its full support behind a single ‘Team UK’ bid or campaign. In the context of Brexit and with sustained pressure from overseas competitors, it is imperative that government and industry work together to enhance the UK’s competitiveness and grow our share of the global defence market.