Little forces, big opportunity
Smaller businesses, the key to recession recovery, need the Government to make helpful decisions on defence, says Robin Fox.
THE global defence, security and aerospace industry today generates around £2bn annually in the North of England and secures more than 20,000 jobs there.
NDI, a business development company based in Newcastle, matches the supply capability of member companies to the needs of this industry.
Working with the Ministry of Defence and global partners like Lockheed Martin, BAE Systems, Boeing, General Dynamics, Finnemechanica and Thales, NDI works to engage small and medium size enterprises (SMEs) in the supply chain, to harness the wealth of world quality, experience and innovation present in this often overlooked section of business.
Recently NDI and Lockheed Martin UK co-hosted their second annual Land Domain conference to highlight business opportunities for current and future suppliers. The event, staged at Billingham, showcased Lockheed Martin’s involvement in the Warrior Capability Sustainment Programme and Operational Utility Vehicle System competitions.
These will both need significant input from the UK’s defence industrial base. The event showcases how Prime contractors like Lockheed Martin are re-evaluating the approach to their supply chain, and the importance they place on the role of SMEs.
A £53m Ministry of Defence contract with ANP shipyards, to build five Royal Navy support ships, is just one instance of the importance of the defence industry to the regional economy.
NDI’s subsidiary company, the Marine Design Centre (MDC) is a critical conduit allowing large companies and SMEs to come together and demonstrate regional capability. The MDC itself is about bringing research and expertise together, and utilising the skilled workforce of the region.
Especially in these times of economic unrest, it often falls to NDI too to be also the voice of the defence industry supply chain. In the next 12 to 18 months we shall be lobbying ministers and MPs with defence responsibilities to take the long-term view on defence spending by the Government.
Despite the apparent signs of those “green shoots of recovery” talked about we are still not yet out of the woods. For the current government, and whichever party wins the next general election, it would be an all too easy option to cut the defence budget for short-term financial gain while under economic pressure.
The Government must make fundamental choices, which will determine just how resilient business in defence, security and aerospace will continue to be for the sector as a whole and SMEs in particular; it could make some significant choices enabling the SME community to play a key role in what is now a process of economic recovery for the UK.
There has to be a national debate on whether or not this country should remain a player on the world stage. Do we intend to maintain the level of influence we hold across the globe and provide military interventions as we have traditionally done?
If the answer to this is Yes, then we must invest more than the 2.5% of GDP that we do and consider a greater investment in the mechanisms that protect our national interests home and aboard.
Greater investment by the Government will flow from the MoD to Primes then to SMEs, which are the key to pulling the country out of recession, and a catalyst to economic regeneration. We should encourage the entire supply chain, from Primes down to SMEs, to help sustain jobs and revenues, and grow the regeneration process.
There is also a serious challenge to the size of our market in the UK. The Ministry of Defence must re-examine how it thinks about new equipment, and not just consider the needs of the UK armed forces at the concept stage. By considering the export potential for a project from the outset, bigger production runs and greater economies of scale could result.
Robin Fox is managing director of Northern Defence Industries (NDI)
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