If, like me, you’re settling down today with a mountain of unread emails, stack of business cards to follow up on, and a worn out pair of show shoes to take to the cobbler, you’ll perhaps forgive me a somewhat self-indulgent update following the mammoth week that saw DSEI take over the ExCel.
From an ADS perspective, our Pavilion welcomed over 180 businesses – with a floor plate equivalent in size to a Type 23 Frigate – and was a bustling hive of activity the week through. From engagements with Secretaries of State, a visit from the National Armaments Director, political and official tours, delegations from across the globe, and the business-to-business engagements we know are crucial for supporting our smaller enterprises, it was a privilege to see you all in the North Hall.
The highlights of our week can be seen across our website – in truth, events like DSEI and Farnborough International Airshow are the culmination of all of the work that goes in by and on behalf of our members throughout the year. I am frequently astounded and humbled by the strength of our team and their ability to deliver a tailored experience to our 1600+ members – each with their own challenges and opportunities.
Of course, we mustn’t forget that last week also saw the long-awaited publication of the Defence Industrial Strategy, a remarkable moment on that journey, and for the 180,000+ people driving our sector forward. Defence businesses are at the heart of local communities: our sector drives social mobility and prosperity through the high proportion of jobs we offer people from all walks of life. Significant investment in wider skills packages, alongside the £250 million investment in Defence Growth Deals will be critical to maintaining both our defence posture and the talent that delivers it. Exports from the UK’s defence and security sectors have doubled in the last decade. UK-made capability is in demand, and any way that government and industry can work together to speed up this process is welcomed. The full ADS member briefing on this was delivered by our policy team within just three hours of the publication being launched – a new record. You can read it via our member’s area via the login in the top right hand corner.
Effective delivery of the Defence Industrial Strategy will deliver a whole-of-society benefit. Industry stands ready to play our part, but assertions earlier this year of significant increases to defence spending are both welcome and bittersweet. The deteriorating international environment we find ourselves in, coupled with a domestic environment fuelled by a so-called cost of living crisis, mean that every penny must be spent wisely. Of course, the defence industry will always say it needs more investment – like any pillar of the public purse, we must justify what, why, when and how. Value to society must drive all that we do.
The primary purpose of defence and security is to protect and deter – but in the process, the value we provide to the economy is increasingly critical to innovation and prosperity. With a deteriorating security environment, the government’s acknowledgement of the need to immediately to bolster our defence is hugely welcome. An increase in spending of this magnitude delivers on the long-term demand signal that helps the defence sector to do what we do best: deliver capabilities that are needed to uphold our security, in a way that delivers value for money to the citizens we are here to protect.
But just what will we do with an additional 0.5% of defence spending? In real terms, spending 3.0% of GDP on defence by 2035 will see a £12 billion investment in our sector, according to the latest ADS statistics. Critics will argue it is not enough, but no one can deny that to your average person, it’s an eyewatering sum.
The returns?
According to ADS data, more than 50,000 direct jobs will be created – in employment that is highly skilled, well rewarded, and ultimately, keeps our society safe. These gains will be observed throughout the nation – let’s not forget that 80% of jobs in defence and security are found outside of London and the South East.
Notably, in my humble opinion, our model also highlights a more than 50% increase in the Gross Value Added (GVA) to the UK economy from the sector. GVA could reach £23.5 billion by 2035 under the new outlines, up 50% on the £15 billion added by the defence industry to the UK economy in 2024.
Catalysing industrial production is paramount to our collective security. Recent government proclamations recognise that a whole of society approach is needed for effective defence and deterrence. Our data highlights just how much it could deliver.
