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- 1. new report,Securing Prosperity – A strategic vision for the UK Defence Sector,has recently been launched with the aim of identifying the sector’s core strengths and indicating how government and industry can work together to maximise the UK’s global competitive advantage to boost jobs, trade and growth.This strategic vision for the defence sector has been developed by the Defence Growth Partnership (DGP) – a forum set up by the Prime Minister in 2012 in which the Government,the UK’s top defence companies and some of the sector’s major trade associations plan to work together for the greater good of national growth. The DGP has identified areas with significant growth potential,including air capabilities,which has delivered 82 per cent of UK defence export success over the last ten years;and intelligent systems,which embraces the electronics,software and systems integration found at the core of many military capabilities.The partnership is charged with growing international business,value chain competitiveness, technology and enterprise,and establishing more effective ways of creating and exploiting the intellectual property of the future.In the area of skills,the partnership aims to develop the next generation of apprentices,technicians,engineers and other sector professionals. The Securing Prosperity initiative has established eight joint senior teams with clear objectives to identify and develop enduring propositions within a number of key areas.These teams are:Air Capabilities Team;Intelligent Systems Team; International Business Team;Technology and Enterprise Team;Skills Team;Value Chain Competitive Team;Engagement Team;and Strategy Team. The DGP was established to engage with key stakeholders across wider government, academia, trade associations and industry. Operating as a joint initiative between government and industry is seen as key to a successful outcome.Securing Prosperity begins to put flesh on the bones of how this partnership will work together to achieve its goals. Paul Everitt is CEO of ADS,the trade association dedicated to advancing the UK aerospace,defence,security and space industries globally.Attending the recent Defence Security and Equipment International (DSEI) showcase at ExCeL, London,he commented:“I think the Defence Growth Partnership is a very significant development for the sector.There are a number of pieces to it; clearly the Government over the last two or three years has created a series of industrial strategies and they have been very successful both in the aerospace and automotive sectors,and a number of other areas.So this concept of industry and government working together to try and create a more successful business environment is a key theme. “Thedefencesectorisslightlymorecomplex andIthinkwhatmakesitimportantforusisthat whilewehaveindustryandtheDepartmentfor Business,intheMinistryofDefencewealsohave ourprimecustomeraspartoftheteam.Itvery muchisagenuinecollaborationbetweenthose threesetsofplayersinordertotryandaddress thechallengesthatweface.” The UK defence industry is a significant player in the national economy, contributing more than £22 billion of annual revenues,of which £5.4 billion is from exports,and directly employing more than 155,000 people.As well as supplying equipment,services and support to the UK Armed Forces and other militaries around the world,it is a vital driver of opportunity and employment across the country, supporting well over 100,000 highly skilled jobs in companies large and small throughout the supply chain. It seems,however,that the hard work is only just beginning for the industry;there is no room for competitive complacency.With the global defence market changing,the Government has said it is committed to creating the conditions that industry needs to continue to generate the innovation,well-paid jobs and high-value exports that are critical to long-term,balanced economic growth.The DGP is its vehicle for driving that ambition. Mr Everitt said: “I suppose the core of what the partnership is about is anticipating and responding to the challenges that the customer faces – so that in the first instance we are able to deliver the capability that the Armed Forces are going to need here in the UK at a price the country can afford,but in doing that we are also preparing ourselves to be more effective and more competitive in those global export markets where we need to win business. F E A T U R E 18 MOD DCB :: 2 October 2013 :: Vol 11 No 19 :: www.contracts.mod.uk1818 “The core of what the partnership is about is anticipating and responding to the challenges that the customer faces – so that we are able to deliver the capability that the Armed Forces are going to need here in the UK at a price the country can afford” Paul Everitt,Chief Executive Officer,ADS Securing prosperity: DGP sets out a new strategic vision for defence Following the publication of ‘Securing Prosperity – A strategic vision for the UK Defence Sector’ by the Defence Growth Partnership, MOD DCB reporter Paul Elliott spoke to Paul Everitt, CEO of defence trade association ADS, to discuss what this vision holds for the future of the UK defence industry. A Paul Everitt
- 2. “I think there’s a broad recognition that defence budgets in the UK,as in most of the major countries where we operate,are under pressure yet in every one of those domestic defence industries there’s a belief that they are going to win business in foreign markets.So there’s a growing intensity to international defence market competition and the best way for us to win is by meeting the requirements of our domestic customer.” Domestic success is exceptionally important but exports success is equally vital to growing the UK’s economy.Currently, the UK is the world’s second largest defence exporter and the challenge for the DGP is to maintain the UK defence sector in that position of strength.This is one of the cornerstones of Securing Prosperity. Mr Everitt stated:“We know that there’s a fixed domestic market and it’s about how we equip ourselves to be more competitive.It’s looking at what we can do together – industry and government – and about giving ourselves a competitive edge.We’ll be looking at business models as well to see how we can ensure we are best positioned to meet customer needs and requirements. “When you look around the UK there are relatively few areas where we are globally competitive.We unquestionably are in aerospace,we unquestionably are in automotive,and I would argue we unquestionably are in defence.We are the number two player in global defence exports so we are strong,and part of the strategy is to ensure that where we are strong we are taking the necessary action to retain and grow that market.” It is clear the defence industry is very important to UK growth,with the industrial strategies that are being developed very strongly focused on rebalancing the economy,moving from an over-reliance on services,particularly financial services,into the designing,development and sale of goods worldwide. The Government,working closely with industry,has said it is determined to support the defence sector.It wants to look at how links between civil and military technologies can be better exploited.In addition,it will look at the skills required for the sector and how there can be more flexibility in the workforce between the defence sector and advanced manufacturers. As well as promoting defence exports it is important that the work of the DGP encourages engagement with innovative smaller enterprises.Will Securing Prosperity provide SMEs an opportunity to become more deeply involved in the industry? Mr Everitt believes so.He said:“Absolutely. DSEI is a great example – you can see the SMEs that have embraced the challenges that the customer faces are being successful.There is no doubt that it’s a tough market but if you put your energies and investment into innovating,developing new products, improving your own skills and training your own people,engaging with your customer whether it’s a prime contractor or the MOD directly,to better understand what they’re looking to try to achieve – those companies that are able to respond and come forward with the ideas are the ones that are prospering and who will be embraced and held close by their customers.” It will not have escaped notice that there are a lot of prime contractors represented in the DFG partnership so another challenge is bound to be filtering success throughout the supply chain.It is undoubtedly important that the success of the partnership is shared and spread and that there are not just one or two big winners.Mr Everitt recognises that this is a challenge but is upbeat that the focus of the partnership, and Securing Prosperity,is set firmly on the greater good of the UK defence sector. He said:“I think the fact that you’ve got a large number of primes is of itself a challenge as they will be competitors as well as collaborators in various different environments.But this is an industry-level activity.What’s really special about what is happening is that the companies as well as the governmental participants are very much focused on what this means for the UK,and this activity is about giving the UK the best long-term prospects in the defence market. “I’m not claiming everyone is saying we can put aside our company interests,but this is about a piece of work where companies are looking to ensure that what comes out of it is a stronger and more competitive UK defence sector as opposed to a stronger and more competitive individual company. “That sort of collaboration across industry is quite new,and challenging as well,but I think we do recognise we work in an international environment and it’s important that those large companies are able to present to their international boards a compelling case for their continued,and in some cases we hope increased,investment in their UK operations.” Securing Prosperity is expected to lead to a joint action plan with industry,to be unveiled in time for Farnborough International Air Show next July. 19www.contracts.mod.uk :: Vol 11 No 19 :: 2 October 2013 :: MOD DCB Further Information For more information,visit: www.defencegrowthpartnership.co.uk and:www.adsgroup.org.uk