The UK defence sector sits on a wealth of world-class innovation but is challenged with a system that prevents good ideas being developed, scaled at pace and implemented effectively, according to a new report by EY-Parthenon and the University of Sheffield AMRC. 

The Unlocking strategic advantage in the dynamic UK A&D landscape report was launched by EY-Parthenon at the Defence and Security Equipment International (DSEI) global trade show in London. 

The report’s findings deliver a clear message: the UK defence sector has ‘pockets and strength across the UK’, ‘doesn’t lack ingenuity’ and there is significant, untapped potential.

It outlines the systematic shifts that are needed to overhaul the current approach, which sees initiatives such as Team UK and the Defence and Security Industrial Strategy laying solid foundations - but these now need to be joined up into a coherent system that can deliver at scale and unlock resilience and growth in the defence industry. 

With UK defence sector spending set to rise to 2.5 per cent of Gross Domestic Product (GDP) by 2027, and three per cent by 2030, the report says the country is at a critical turning point and the funding increase presents ‘a unique opportunity to forge new investment pathways’ and ‘build a modernised industrial capability’ fit for the future. 

Jonathan Bray, the senior sector engagement manager for defence at the University of Sheffield AMRC, who supported the development of the report, says defence is both a national and an economic priority, and the AMRC has a central role in helping the UK to overcome innovation, capacity and capability challenges.

He said: “At the AMRC, our mission is to bridge the gap between cutting-edge research and industrial application. This report underlines the critical role advanced manufacturing will play in delivering the UK’s future defence capability.” 

Melissa Conlon, commercial director of AMRC North West in Lancashire, who was also involved in the report’s development, added: “This report is groundbreaking in determining why scaling the UK defence capacity and capability remains a challenge –  with the defence spending set to rise, it is crucial that the UK can find innovative ways to address these challenges.”  

Drawing on interviews, case studies and data from industry-leading original equipment manufacturers (OEMs), primes and small and medium-sized businesses (SMEs), the report is intended to be a blueprint for change that can start now; identifying that the UK has the potential to deliver a more robust, connected and agile ecosystem which can become a powerful national asset. 

Four core drivers underpin the report which it says are critical in the bid to scale the UK defence industry. These are:

• Capability: building the right things, in the right places – from sovereign platforms to the sub-systems and components that enable them; 
• Capacity: the ability to produce at scale – having the skilled workforce, infrastructure and supply resilience to meet demand and surge requirements;
• Innovation: enabling the transition from idea to impact – driving efficiency for more capacity or unlocking new capability and operational advantage;
• Funding: encompassing incentives through grants, co-investment and/or targeted support that de-risks investment and accelerates delivery. 

It is these areas, according to the report, that reinforce the challenges holding back industrial performance today. But rather than showing signs of terminal decline, the research uncovers problems which can be solved through a clear set of actions; mobilising the sector's ingenuity, while transforming it into sovereign capability and economic strength. These are: 

• Improving visibility: deploy earlier planning and increase supply chain transparency to identify the bottlenecks to scaling;
• Speeding up setup: use a joined-up planning approach across operational, financial and people aspects to fast-track scaling; 
• Scaling faster – opening up prototyping and infrastructure: co-invest with government-funded research and development centres in test-beds, make SME access simpler and target future platform gaps; 
• Reducing delays and frustration – digitalising innovation and qualification: pilot modular training and digital-first qualification with end-user input upfront to accelerate ideas into deployment;
• Unlocking funding – doing more with the same system: map the grant/incentive landscape early and build internal capability to apply and deliver. 

With more than two decades of experience working with the manufacturing sector to deliver cutting-edge processes and products, the AMRC is primed to support defence companies with the practical solutions and deployment capabilities needed to scale the sector faster.  

Melissa said: “The AMRC plays a significant role in enhancing the UK defence sector by solving challenges in operational capabilities, ensuring technological advancement and implementing production efficiencies. 

“Advancing manufacturing is vital to the UK defence sector for spearheading novel initiatives,  improving performance and enhancing the quality of defence systems –  ultimately positioning the defence sector to meet current and future challenges."

Jonathan said: “We work hand-in-hand with global primes, SMEs and the government to accelerate innovation, strengthen supply chain resilience, and deliver the skills needed for tomorrow’s workforce. By doing so, we not only secure sovereign capability but also drive growth and opportunity across our regions.”

Read the full report and discover how the AMRC can help here: https://bit.ly/4p2J1gl