Good afternoon. It’s great to be back at here, I was here only yesterday, and it is great to be back here this year as we start to get back to normality.
I have just enjoyed a tour of some of the most innovative companies in the business and if there’s one takeaway, it’s that we can’t afford to stand still in Defence, especially in this age of increasing global competition.
Our adversaries have studied our strengths and weaknesses. And, over the past few decades, they’ve been progressively whittling down our western edge.
Today they are not only challenging us in the traditional domains. They are becoming masters of the sub-threshold.
No longer limited by geography or lines on the map, they are using bots to disseminate misinformation, hackers to break into global systems and UAVs to target their deep artillery fire.
In other words, the threat has moved on and we must move with it.
That, in turn, demands a step-change in the relationship between Government, industry and our international counterparts.
So six months ago, alongside our Defence Command Paper, my Department published its Defence and Security Industrial Strategy (DSIS).
Why is that as important, in my view, as the Defence Command Paper?
First, because it increases our resilience.
We’re rejecting the short-termism of the past. Creating instead a new framework to develop long term strategic plans. A framework which cuts our long term costs, bolsters our ability to sustain prolonged conflict and reduces our reliance on others.
DSIS identifies these areas where we need to retain critical elements onshore for our strategic, operational, and supply chain resilience.
That’s a supply chain that sustains everything from our nuclear submarines to ground combat systems, from cryptology to offensive cyber. DSIS seeks to understand and secure the entire pipeline for our long-term requirements. And, where we back an industrial capability, DSIS will enable us to provide it with sustained support.
Above all, DSIS keeps industry in the loop. Providing Defence firms with greater transparency and clarity about the technology we seek. Arming them with insight long before we launch into the market – so they can research, invest and upskill to deliver those future technology and productivity requirements.
Notably, the MOD has recapitalised the UK Defence Solutions Centre so that – working alongside the Department for International Trade – we can make sure our judgements are based on objective data, rather than subjective calls and personal opinions.
And our forthcoming shipbuilding strategy refresh is a prime example of the new long-term approach. It will provide a major clearer demand signal about what we are trying to achieve with our procurement programmes.
Not least by releasing, for the first time, a 30-year pipeline of all Government vessel procurements. Critically, the National Shipbuilding Office that I launched only on Monday, will oversee all of Government’s interests in UK shipbuilding – from coordinating the long-term pipeline of government vessels to ensuring skills and priorities are aligned across the enterprise.
But this barely scratches the surface of the activity going on across the department. We have a raft of competitions and programmes coming up, ranging from Skynet satellites to Single Synthetic environments, from Combat Cloud capabilities to counter battery radars, from unmanned mine hunters and mobile fires platforms to novel space sensors and our new National Flagship.
Secondly, DSIS challenges industry to aim higher.
For instance, as we look to grow our digital backbone, seamlessly linking systems, domains and data, it’s time for the Defence sector to start creating the open architectures and digital interfaces that allow us to make decisions at the speed of relevance.
As we look to level up our Union, it’s time for our suppliers to think more about the social value of their work – those wider benefits such as skills creation and supply chain resilience which enhance our local economies.
Significantly, social value is now a key element in our tender evaluations. To all firms, whether UK or foreign, the message is clear – ‘you invest in our people and our skills, and we will invest in you’.
And, as Global Britain looks to increase our prosperity, our Defence sector must do more to prioritise its exports. We must become even more competitive on the global stage.
It would be easy at an event like this to sit back and bask in the success of our defence industry. After all, the UK is a world leader in the sales of defence and security equipment, but DSIS is designed to help you, our colleagues in industry, go further.
We’re making it easier for you to get an export licence by unblocking the approval bottlenecks – often caused by a lack of resource or lack of expertise – that led to frustrating delays.
We’re transforming our acquisition system, focussing on setting new programmes up for success and improving and streamlining our decision-making processes.
And we’re reversing the long-term decline of Defence R&D investment. DSIS seeks to finally overcome that infamous “valley of death” that stops great ideas turning into great products.
Rather than spread our bets we’ve made the tough choice to commit some £6.6 billion to R&D over the next 4 years including investing in space, lasers, multi-domain drone swarms. Areas where we believe we can gain a competitive edge.
But we know it’s no good investing in R&D if you don’t have a robust approach to protecting U.K. intellectual property from external malign activity and influence.
So the MOD is also piloting a personnel security assurance process for our Defence supply chains. It will ensure companies have the right policies and the right systems in place to trigger the alarm and prevent a security breach. Once the pilot ends we will expand our approach to the whole of Government.
But DSIS doesn’t just reset our strategic partnership with our colleagues in the UK.
My third point and final point is that it also refines our relationship with our international partners.
Our updated policy now recognises the sophisticated considerations of our national security requirements and the complex international markets in which they operate.
Instead of thinking in capability silos it regards the whole of our Defence industry as a strategic capability in its own right.
We know we are much better off when working collaboratively with our allies both in terms of economies of scales and in terms of interoperability. We know too that often, those ground-breaking transformational capabilities only come through international collaboration.
While sometimes others are better placed to produce a capability. So in some areas we will partner with others to sustain a capability. In some areas we will look to be a meaningful part of the supply chain.
And in other areas we will take the lead. We’re calling time on the glossy but ineffectual “pop-up shops” of the past.
DSIS’s partnering principles spell out exactly what we expect from our global partnerships. I won’t exhaustively run through the list.
Suffice to say, our future relationships will be built on the industrial and technological expertise of nations. They will be flexible enough to evolve over time – allowing for modification and spiral upgrades.
Above all, they will be underpinned by robust accountability and always put the needs of the customer front and centre.
This partnership principle is already embedded deep within Defence. You see it through the immense contribution of the UK to the F-35 stealth fighter – with the aft fuselage, horizontal and vertical tails of every F-35 built in Lancashire.
You see it with our ongoing investment in Typhoon with our European partners. And you see it with our collaboration on our Future Combat Air System.
Not just a sixth-generation system with a virtual brain embracing artificial intelligence, deep learning, novel sensors and communications technologies.
But a partnership where £2 billion of Government investment is leveraging hundreds of millions from industry, training 2,000 apprentices and galvanising an entire sector.
Similarly, our approach to complex weapons shows how adaptable the model is. Working with MBDA and its supply chain, the MOD has taken a portfolio-based approach underpinned by the principles of commonality, modularity and re-use.
This has led to fewer bespoke components, subsystems and products and helped reduces the costs of platform integration.
Critically, our joint approach to long-term engineering, scientific and technical skills has enabled the integration of Shadow, Brimstone and Meteor onto the Typhoon. It has also led to investment in a town like Bolton where MBDA has set up a new factory.
And earlier today the Prime Minister made a statement to the House of Commons on another major international partnership that we are setting in motion. The AUKUS trilateral agreement with Australia and the United States will first and foremost support Australia in acquiring new nuclear-powered and conventionally armed submarines.
But most significantly it’s a means to share our deep expertise, bolster our national bonds with even deeper partnerships, building on the unique relationships we have within the Five Eyes. And in doing so we will both promote the future security of the region and enhance our mutual prosperity.
Because that is ultimately what DSIS is all about. In a more uncertain and anxious age, we must redefine Defence’s future.
Drive a stronger, more competitive industry.
Procure the right equipment for our people at the right price at the right time.
And achieve export success with the Government’s full endorsement and active support.
It’s a virtuous circle. One that will guarantee people continue flocking to DSEI, decades from now, to marvel – as I did earlier – at an ever-expanding area of British designed or made or British collaboration, on world-beating technology, across air, sea, land, space and cyber-space.