For the first time in a decade, the Strategic Defence and Security Review (SDSR) brings into focus the importance of global prosperity to national security, and the role that defence and security plays in bringing prosperity to the UK.
Building on the previous good work of many including the Defence Growth Partnership, it sets out an approach which provides Industry and Government with the opportunity to work together to further deliver innovation and growth. It sets out a range of initiatives and shifts in policy spanning innovation, Industrial Policy, openness, export and skills. Taken together these provide a helpful framework for the development of a vibrant and successful Defence and Security sector. However those involved will recognise the practical challenges of implementing these aspirations and the role all parties must play.
Innovation is a central tenet of the SDSR - recognising the need to think differently and leverage ideas and technology from the commercial sector in order to meet our Defence and Security needs in a highly resource-constrained environment. The establishment of a Defence Innovation Initiative is a great step forward with a mandate to incentivise and remove obstacles to innovation. It also helps to create the necessary foundations to foster a new, more enterprising culture, and take a new approach to risk, investment planning and project management. Industry, which has become increasingly wary having seen many innovative proposals stopped in their tracks by the practicalities of the procurement process, can help identify the barriers clearly and develop practical alternatives.
The new cross-government Emerging Technology and Innovation Analysis Cell seeks to draw on the advances made by the private sector that is now clearly driving the rapid pace of technology development across defence and wider industry as a whole. The challenge for this cross-government cell is how to bridge the chasm and find ways of pulling through this technology into new procurements, particularly from non-traditional defence companies. This may be helped by the proposed Defence and Security Accelerator, however effective engagement and application remains key.
Refreshing defence industrial policy
Clear Defence Industrial Policy has been viewed as an important gap over the last five years, with many seeing the answer of 'Global Competition' being insufficient to underpin long term investment requirements for the UK. The commitment to refresh industrial policy to embed consideration of how UK investment contributes to a more dynamic and prosperous economy will be welcomed and Industry must now be ready to articulate this clearly from the early stages of the procurement process.
Driving openness and competition
Openness is set out as another key tenant of prosperity with the clear message that the UK is open for business and explicitly seeking foreign investment. This combined with a commitment to welcome new entrants and SME's to the Defence and Security sector and to broaden opportunities to a wider range of suppliers poses a challenge to the traditional prime contractors. However it could provide an attractive opportunity for many to access the £178Bn planned Defence and Security spend over the next 10 years. Practical steps proposed to improve transparency, enable partnering and simplify procurement processes will also be welcome. Parallel to this, there is an opportunity for Primes to take steps to help the Government achieve these aspirations through improvements to their own procurement processes and management of their supply chains.
Greater support to increasing exports in a highly competitive international market will also be welcome to Industry, which has rightly or wrongly long considered that UK procurements and the level of Governmental support has constrained its success overseas. Making support to driving export growth a core task of the MOD, establishment of a new UKTI team, consideration of export potential in procurement decisions and engagement of foreign customers in trials and demonstration are all positive steps forward. SDSR15 is clear however that it expects a similar level of commitment from Industry and effective co-operation will be required both between Industry and Government and across Industry itself to ensure priorities are identified, requirements are shaped effectively (both at a platform and system level), and commercial models established that provide equitable return for all parties. This activity will be supported at a national level by a stronger focus on strengthening international relations with emerging markets, many of which present important Defence and Security export opportunities.
Developing people and skills
Underpinning all of this is a commitment to invest in skills and people to develop the next generation of engineers, scientists and cyber specialists through schools, apprenticeships and career frameworks. Both traditional and non-traditional Defence and Security companies have the opportunity to support and benefit from this, developing capability for the future and demonstrating a commitment to long term prosperity.
The combination of these changes and initiatives sets a positive tone. However those engaged in the sector may feel that much of this - such as the need for innovation, engagement of SME's and support to export - has been heard many times before. In a fast-changing defence and security environment implementing such changes successfully, and within Departments already under pressure, will not be straight forward. The prize is significant however, and by working together to get it right there is a real opportunity to enhance National Security and build an ever more prosperous Defence and Security sector for Government and Industry alike.
PA's Defence and Security experts have analysed SDSR 2015, distilled its key themes and present a set of insights. These insights will help public and private sector bodies across the UK Defence and Security sector put the Strategy into Action.