It’s a pleasure to be here in Farnborough this morning and I want to start by thanking you all for all you do for our forces.
In my view, the defense sector is the crown jewel of our nation’s economy – sustaining hundreds of thousands of jobs, developing rich skill bases and strengthening our global influence.
And although your immense contribution is often overlooked, the world has been reminded of this value in recent months in the wake of Putin’s illegal and unprovoked war.
The UK, as you all know, has been at the forefront of efforts to support Ukraine and, as the Prime Minister announced in the Ukrainian parliament on Monday, we will be providing an additional £300 million of military aid in the next few days, which will make us the number one supplier in Europe.
But delivering and maintaining this equipment was a huge logistical feat and it wouldn’t be possible without an agile and resilient supply chain.
This is where you all come in.
Companies like yours have helped build, maintain and transport the thousands of anti-tank and anti-aircraft missiles that have helped protect Ukrainian cities.
Of course, this is just one of many recent supply chain successes.
You came to the fore during Op PITTING, providing the logistical backbone and equipment for the largest peacetime airlift ever.
And you’ve shown courage throughout the pandemic, from building ventilators to establishing Nightingale hospitals.
But as you know, the challenges we face in defense procurement are rapidly increasing in this new era of constant competition and rapid technological advancements.
The current cost of living crisis has put an emphasis on value for money for the taxpayer like never before.
And those reminders of the failures of Russian hardware — tanks stuck in the mud for days, soldiers’ cheap portable radios scrapped — underscored the need for resilience.
This doesn’t just mean building equipment to last, but ensuring we have access to the specialist parts needed to maintain and repair these rigs at all times.
But more than anything, we need to make the entire procurement process simpler and faster, so we can spend less time wading through red tape and more time delivering what matters.
So how do you respond to these multiple challenges?
Well, a year ago we released DSIS, the Defense and Security Industrial Strategy, which aimed to transform the way we do business while attracting the best suppliers to our supply chains, including enterprises non-traditional and smaller.
Today, I want to take this opportunity to remind you of these key DSIS pillars that we believe will help transform procurement.
First, in this age of rapid technological advancement, we inject pace and clarity into our processes so that we can deliver capability at the speed of relevance.
We are reforming the Sole Source Contract Regulation and Defense and Security Procurement Rules, making them more flexible and agile to buy the right capability.
And we’re telling the industry more in advance what kit we’ll need, so you have time to hone your skills and invest in the right areas.
Shipbuilding is one example – we have just announced a new strategy that will create jobs and boost skills with a 30-year pipeline of 150 government ship purchases, backed by £1.7bn a year specifically for Royal Navy shipbuilding.
Meanwhile, we are rolling out a category management system that will take a pan-Defense approach to procuring goods and services instead of MOD organizations operating at an individual level – reducing costs and delivery times.
But we recognize that the best way to improve sourcing is to improve our relationships with those we do business with.
That’s why we’ve also strengthened the Defense Supplier Forum by broadening and deepening the membership of industry.
That’s why we use our National Security Technology and Innovation Exchange to provide industry and academia with the world-class facilities they need to succeed.
And that’s why we’re making it easy for you to export, developing our government-to-government frameworks to better support defense exports while removing bottlenecks in our own system.
The second pillar of DSIS, an essential pillar, is innovation.
This government is determined to reverse the long-term decline of R&D in this country.
So we’re allocating £6.6 billion to defense R&D to produce game-changing capabilities that will help the UK become a global science superpower. We are already seeing success in all areas and in all corners of the UK.
The Army BattleLab in Dorset enables Defense personnel to work with academic institutions and private sector companies to test cutting-edge technologies.
The new Newcastle AI Center – which I had the pleasure of opening a few months ago – has a team of scientists harnessing the latest developments in the use of Defense AI.
While Lancashire’s National Cyber Force will bolster our already significant capacity in the digital realm.
But to truly succeed, we need to tap into the talents of our SMEs – the backbone of our economy. Last month’s inaugural report from the Joint Economic Data Hub showed that more than a fifth of defense procurement spending went to SMEs.
We believe we need to further increase this contribution if they are to help us lead our innovation revolution.
That’s why, in January, we released the SME Action Plan, which sets out plans to improve engagement with SMEs in the defense supply chain by accelerating technology diffusion and providing targeted investments to support innovation.
We also created an SME-specific working group within the Defense Supplier Forum, which increases access to opportunities and improves how we measure and report SME engagement.
And our Defense and Security Accelerator (DASA) helps turn private sector innovation into military capability, with defense innovation loans to SMEs to help bring their products to market.
These relationships are further strengthened at the local level through our new network of regional defense and security clusters that enable industry and government to share ideas and work together, driving collaboration and commercialization across the supply chain. ‘supply.
And the pilot center of the South-West is already a hit with 140 registered organizations, including 90 SMEs, 45 of which have never worked with Defense.
Importantly, successful innovation will also help strengthen leading UK companies in export markets, where the demand for defense services in an increasingly competitive world is growing.
The third pillar of DSIS that is fundamental to our procurement approach is social value.
At the beginning of this speech, I mentioned the enormous benefits that Defense brings to all regions of the country.
We need to make sure that with every Defense purchase we ask the larger strategic question of what we can gain as a country on top of great kit.
We recognize that our defense industry ashore has strategic value in itself.
To ensure that we get the most out of our new model, we have created a Social Value Center of Expertise, which will generate added value for defense and the wider economy by integrating social value into the acquisition.
So these are three pillars of the DSIS that are designed to make our supply and supply chains faster, more innovative and more socially useful. But since today’s theme is about building back better together, let me end by reversing the tables.
After all, I’m sure many of you in the room have enterprising and innovative solutions to some of the challenges I’ve outlined. And maybe even more answers to the ones I don’t have.
So as you go and make the most of today’s conference, please consider how you would get the most out of your partnership with the government.
What more can you do to collaborate on research and development with us?
How can we encourage companies with niche skills that might not be part of the existing defense supply chain to join us?
How could you contribute to a defense and security cluster on your territory?
What additional support would you like to see from the government when it comes to exporting?
How can we keep manufacturing lines open throughout the life of a rig so we can ramp up production when needed?
These are just a few questions that we will be tackling in the years to come and I would love to hear your answers.
If recent events have taught us anything, it’s that success, from the battlefield to the boardroom, depends on working together.
So thank you for coming and listening today and I look forward to working with you and continuing to keep our country safe.