In a boost to the defence supply chain, a new economic report recently published by the Joint Economic Data Hub (JEDHub) has revealed the significant value of the defence sector to UK jobs, businesses and exports.
Key statistics in the report include:
- 10,000 – Organisations paid directly by the MOD globally in 2020/21
- 5,000 – Estimated apprentices employed in the UK defence sector
- $4.6 billion – Average of annual UK defence exports between 2016-2020
- 37% – Number of the surveyed jobs supported by overseas sales, showing the contribution of defence exports to sustaining jobs in the UK
- 6% – Increase in graduate and apprenticeships entrants into surveyed companies from 2019 to 2020
- £45,000 – Average full-time salary for surveyed defence roles, over 16% higher than the UK mean average annual full-time salary in 2020
The Joint Economic Data Hub (JEDHub) is a collaborative initiative to improve understanding of the defence sector’s contribution to the UK economy and an important deliverable of the 2021 Defence and Security Industrial Strategy (DSIS).
Chief Executive of ADS, Kevin Craven, said: “Through the collaboration between the Ministry of Defence, UK Defence Solutions Centre and industry, the JEDHub annual economic report published today shows the scale of our defence sector’s activity.
“Employers in this industry are investing heavily in skills and supporting tens of thousands of high value jobs that are essential to the prosperity of communities in all parts of the UK.”
The defence sector continues to invest in developing highly skilled careers for the future, with the report including an estimate from ADS of 5,000 apprentices in employment in the UK defence sector in 2020.
The JEDHub survey also covers recruitment of apprentices and graduate trainees and that figure shows growth of 4.6% from the previous year.
SMEs in then defence supply chain
The report follows the recently refreshed Defence SME Action Plan. The Strategy seeks to further improve engagement with SMEs, focusing on procurement models that are easier to navigate, a recognition of the role the MOD and its major suppliers play in supporting the whole of the defence supply chain and understanding how best to support innovation and exports for UK suppliers.
The latest data shows the MOD spent £1.1 billion directly with SMEs in 2019/20 and a further £3.4 billion indirectly through the supply chain.
This makes up 21.3% of procurement spend that year and shows procurement spending with SMEs continues to increase, with the procurement spending target with SMEs reaching 25% by 2022.
Research & Development
Research and development (R&D) is a critical component to the UK’s Armed Forces being able to maintain advantage over adversaries in combating future threats.
The JEDHub report shows the MOD spent £1 billion on R&D in 2019/2020, noting that UK Research and Innovation estimates every £1 of public R&D investment generates around £7 of benefit to the UK.
Over the past five years, industry’s own private investment in UK R&D has also grown, by 8.9% across 2015-2019 to £464 million.
Minister for Defence Procurement, Jeremy Quin, who will be providing the opening ministerial address at the DPRTE event, said: “The defence sector is driving prosperity, strengthening the economy, supporting jobs and building skills right across the UK.
“The first report from the JEDHub provides new insights on the value of the sector – beyond keeping us safe in times of trouble – and I am delighted to see industry and government working together to help us grow our understanding of that vital contribution.
“I would particularly like to thank the companies in the Defence Growth Partnership and members of their supply chains for their support in this important initiative.”
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