A 21st century defence industry needs innovation and entrepreneurship – not just government funding. Chris Taylor, Jon Carter and Paul White at Ridge outline three things that the private sector can do now, to create defence clusters and stimulate investment.
The UK’s Defence Investment Plan (DIP) was already long overdue before the resignation of defence secretary John Healey last week. The continuing delay is frustrating for the military, and companies gearing up to provide equipment and facilities. But it shouldn’t have come as a surprise to anyone that government funding is constrained, and that the MOD and the private sector will be expected to deliver more with less, faster.
As an industry, we have to be realistic about the threats facing the UK, and the challenge of equipping our Armed Forces to respond after decades of underinvestment. We also have to be pragmatic about how much the government can do on its own, and prepared to think differently to stimulate outside investment. We don’t need to wait for the DIP: there is much that the private sector can do to support innovation in defence, and it is all of our interests to do so.
Overshadowed by last week’s resignations was a very positive announcement: the MOD opened Europe’s largest drone-testing facility in Swindon, adding to the momentum in this emerging cluster. Innovators and startups are vital to evolving the UK’s defence capability, and to improving value for money. Warfare is changing, and disruptive new entrants are demonstrating that they can often supply equipment at a fraction of the cost of the primes. The super-sized impact of industry clusters has been demonstrated in the UK’s world-leading science and automotive factors – Ridge has worked for Formula 1 teams in Motorsport Valley and science clients in the OxCam Arc for many years, and we’ve seen how these ecosystems develop their own momentum. Now we need to apply this model to defence, to support homegrown innovations and attract others to relocate.
When a company secures an equipment contract to supply the MOD, they need to scale up rapidly. The private sector can take advantage of this demand, and help to stimulate it, by identifying sites, developing MOD-compliant facilities, and providing support services to help defence suppliers navigate complex procurement processes.
Defence clusters step 1: identify potential locations
For landowners with vacant lots on science or business parks, or disused industrial sites, the anticipated demand for defence facilities will be welcome. It’s not only startups or new entrants to the UK that will be looking for space – the primes are also expanding into agnostic sites, because their pipeline exceeds their current capacity.
Locations near existing science and automotive clusters will be very attractive, because they provide access to deep, relevant talent pools. The UK also has hundreds of disused airfields that are strategically well placed for the sector, and some of them already have the infrastructure that defence equipment suppliers need. Government could support with tax breaks for businesses locating to defence clusters to help stimulate early-stage growth.
Defence clusters step 2: Develop ready-baked compliant facilities
Setting up a defence facility in the UK is not straightforward. Suppliers to the MOD will often need to comply with complex design standards to ensure a site is resilient to evolving threat levels.
We find that startups and new entrants to the UK need additional support throughout the project cycle, from understanding which standards apply to their operation, to assembling the right team and keeping delivery on track. Developers could reduce a lot of this friction by working with sector experts to provide sector-compliant facilities, so there is a ready supply of scale-up space when companies need it.
A serviced office-type model could be developed for early-stage businesses to cluster together. In some cases, these facilities will need additional security enhancements – early planning and engagement with designers can support viable solutions.
Defence clusters step 3: Support innovators to scale up
Someone who comes up with a brilliant invention doesn’t necessarily know how to commercialise it or make 10,000 units a week. We find startups need help to rationalise manufacturing and assembly processes, and to wrap a building around them as efficiently as possible. They will need advice on defence building design standards as well as cyber accreditation standards.
A successful defence cluster should provide additional support to help tenants navigate the many challenges of scaling up. This is an area where the defence primes could get involved – helping SMEs will ultimately benefit them too. This is a well-established strength of science clusters, where campuses offer specialised support for growing tenants, and sector giants take collocation space with startups in the hope that ideas will cross-pollinate and seed new business opportunities. We have a model that works to deliver commercial success – now we need to apply it to national security.
The government has made big promises on defence, followed by radio silence on how they will be delivered. This is especially damaging for the smaller companies that every industry depends on for new innovations and disruptive ideas. But it’s also an opportunity for the private sector to fill the vacuum, and lay the groundwork for a thriving defence ecosystem. Top-down funding and strategy is important for the UK’s national security, but so is grassroots entrepreneurship – and that’s never been about waiting for government announcements.
Chris Taylor, Jon Carter and Paul White are Partners at Ridge. Chris is head of our defence and security team, Jon is design lead for defence and security projects, and Paul leads the Manchester architecture team, specialising in advanced manufacturing and defence sector projects.
Contact them at christaylor@ridge.co.uk, JCarter@ridge.co.uk and PWhite@ridge.co.uk
