The Defence and Security Industrial Strategy (DSIS): What it means for the defence supply chain
Over the past few months, the Government has published a number of closely related defence documents that outline a new strategic approach to the UK’s defence and security industrial sectors:
- The Defence Command Paper – ‘Defence in a Competitive Age’
- The Defence and Security Industrial Strategy (DSIS)
- The Defence Equipment and Support Strategy (DE&S 25)
The Integrated Review, the Defence Command Paper and DE&S 25 outline a high-level national defence strategy for the next decade, while DSIS provides the framework for industry to achieve the ambitions of these strategies over the next decade.
For those businesses operating in the defence marketplace, it is the DSIS document that will be of particular interest.
The new direction of travel for defence outlined in the other defence strategies means a renewed effort from the Ministry of Defence to enhance engagement with the defence industry supply chain.
DSIS builds on the outcomes of the Integrated Review, the Defence Command Paper and DE&S 25 to provide the framework for industry to achieve those ambitions.
The strategy describes how the Government will support the UK’s industrial base, recognising the challenges faced by its many SME businesses; and recommends changes in the way that Government and industry work together, including policy, process and regulatory changes.
The strategy includes a number of key aspirations:
- Increased transparency on our longer-term security priorities
- Earlier engagement with industry on potential solutions to capability requirements
- Reducing barriers to Small and Medium-sized Enterprises
- The development of new government-to-government commercial mechanisms to sell UK defence and security exports to friends and allies
- Enhanced programme collaboration with NATO nations
- More openness and joint working to provide firms with the confidence to invest in developing new technology, products and services
- Greater efforts to promote innovation through initiatives like the Defence and Security Accelerator
The Joint Security and Resilience Centre and National Security Technology and Innovation Exchange will ensure that the requirements and concerns of this sector are reflected at the appropriate levels of Government.
In a deliberate shift away from a policy of ‘global competition by default’, the MOD will adopt a more strategic and nuanced approach in designing capabilities and acquisition strategies to ensure homegrown skills, enterprise and intellectual talents are fully harnessed.
This move will ensure investments in defence benefit engineers, designers, factory workers, scientists and everyone else across the UK who works in the defence marketplace.
This will allow decisions to be taken on the best acquisition and procurement of a military capability based on the technology required, national security considerations and the economic benefits to the UK.
The greater flexibility provided by DSIS will enable the UK to develop and acquire innovative capabilities faster and more efficiently than ever before, while supporting skills and economic growth across the UK.
Put simply, this means that UK defence companies can expect to win more defence contracts as a result of this approach.
The Government points to the Tempest programme to develop a world-leading new combat air system as a prime example of how this approach can be successful.
The project involved a sophisticated partnership with companies and strategic investment to develop technologies and advanced manufacturing ensuring the industry, and therefore the UK’s future force, remains best in class.
The UK’s combat air sector generates over £6 billion a year and employs over 46,000 people; this approach treats that as a strategic capability in its own right.
DSIS will see a renewed focus and priority on exports with a ‘whole of Government’ approach to driving export success. This will be achieved through investment in the UK’s international partnerships, including ministerial commitment, as well as greater willingness to use Government-to-Government commercial agreements
Following the additional £24 billion being invested in defence over the next four years, and the MOD’s commitment to spend over £85 billion on equipment and support over the same period, the Government believes that the new strategy provides a real opportunity for UK industry to support thousands of high-quality jobs as the UK looks to ‘build back better’ from the COVID-19 pandemic
In their Foreword to the Strategy, Defence Secretary Ben Wallace and Minister for Defence Procurement Jeremy Quin state: “This Defence and Security Industrial Strategy will see industry, government and academia working ever closer together to drive research, enhance investment and promote innovation. We will do so while fundamentally reforming the regulations that govern defence and security procurement and single source contracts, improving the speed of acquisition and ensuring that we incentivise innovation and productivity.
“We will continue to build on the strong links we enjoy with strategic suppliers to ensure we retain critical capabilities onshore and can offer compelling technology for international collaborations. We will bring our allies with us on this great journey, collectively staying one step ahead of our adversaries, and building mutual resilience.”
- MOD to enhance engagement with the defence supply chain
- Builds on the outcomes of the other recent Government defence strategies
- Recognises the challenges faced by the sector’s many SMEs
- Recommends changes in the way that Government and industry work together, including policy, process and regulatory changes
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