The future of the UK defence industry

ADS Group
October, 2016

The UK's defence industry is one of the most innovative in the world and the ever-changing threat landscape means that the sector requires employees with the ability to provide solutions to these challenges

UK defence companies are at the forefront of the most advanced projects and programmes, which makes this a pioneering industry to be a part of. Areas such as cyber security, research and development (R&D), and design and engineering are all key employment priorities across the defence industry.

Rewarding careers

A strategically important sector, the defence industry makes an invaluable contribution to the UK's national security and prosperity. It provides rewarding high-skill, high-value careers - the average salary in the UK defence industry is £39,000, which is 44% more than the national average (approximately £27,000).

Like many other sectors, defence has a growing need for technical and professional skilled workers

The industry directly employs 142,000 people and invests in the skills and development of employees; there are 4,300 apprentices and trainees employed by 69% of UK defence companies. In addition, there are 111,000 indirect UK defence sector jobs, including 30,000 British R&D, design and development roles.

In 2015 the defence sector turned over £24billion, a rise of £2billion on 2014, and it continues to see average year-on-year growth, having risen by 18% over the past five years. The sector has seen a 29% growth in productivity, compared to the overall UK economy's 2%. High productivity increases competition and helps the UK to retain a leading position in the global market.

A large portion of UK defence industry customers are international; during the period of 2010 to 2014, the sector's average exports were valued at £7.7billion. For UK companies, technology is the key differentiator as international customers are looking for leading-edge products and services that deliver military advantage.

Emerging priorities

In a study by defence trade association ADS Group, defence companies said that they were focused on investing in business development, research and development, and design and engineering.

Like many other sectors, defence has a growing need for technical and professional skilled workers. A key priority for defence organisations is access to the next generation of these workers, in design and engineering or R&D, to continue the drive for innovation the industry needs.

Cyber security is rapidly emerging as a key priority area to focus on, across every industry. Every business is under threat of attacks on computer software, which in the defence sector can be controlling vehicles on land and in the air. The defence secretary, Sir Michael Fallon, recently announced funding of up to £265million to boost the defence of military cyber systems. He highlighted the need for innovation in order to stay ahead of the fast-changing threat landscape.

More than half of all UK defence apprenticeships and trainees are within production and assembly functions, reflecting the continued strength of order books of UK defence companies. Meanwhile a significant number of apprenticeships and trainees work within design and engineering and R&D functions, which shows the sector's drive for innovation to boost competitiveness.

Addressing skills gaps

The UK's defence industry is strongly supported by the government through the industrial strategy, The Defence Growth Partnership (DGP). Industry and government are working together to further strengthen the industry by jointly investing in facilities, technologies and skills to improve competitiveness and retain the UK's leading global position.

The DGP is working to close skills gaps identified by defence employers through the Defence Apprenticeship Trailblazer. Addressing the shortfall in systems engineers, the DGP has created the Systems Engineering Masters Apprenticeship Programme (SEMAP), equivalent to a Masters degree, the first of its kind. The apprenticeship programme began in January 2016, with a commitment from employers to provide up to 90 people in the first year.

Ongoing support for the DGP continues to boost the competitiveness of UK industry, ensuring the UK is the preferred partner for international defence collaboration and innovation. This progress is forecast to continue, with nearly half of companies predicting growth of greater than 10% in the coming year.

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