As I write, the UK has spent more than six months battling a virus which has led to the greatest upheaval and disruption to our daily lives in modern times. Its course and longevity remains unpredictable, and ominously the full impact on our societies and economy is unknown.
Managing extraordinary events does inevitably force new and innovative thinking, accelerates novel technologies and helps us realise our strengths. In this environment, decisions made now could set the path for the UK’s place in the world and our prosperity for decades to come. We need to think carefully about how best to future-proof and grow our economy for the long-term.
As we consider options for UK policy on security, defence and foreign affairs after Brexit, I believe the UK has a unique opportunity to capitalise on its historically strong and enviable tradition of engineering. We need to consider how government and businesses can work together to help ‘level up’ the UK’s regions and enable the spin-out and transfer of technologies. In contrast to previous decades, engineering businesses also need to be better at exploiting technological advances for commercial gain. Competition is fierce and we cannot afford to be reserved in striving to realise the economic benefits from our innovations.
Those who argue that Britain is no longer a leader in innovation and technology are mistaken. From delivering the Queensferry Crossing – a project that came in at 65 per cent below its original budget and incorporates the world’s longest cantilevered bridge section at 644 metres – to designing hybrid jet and rocket engine technologies and discovering the secrets of mixing new polymer materials, our engineers are world-class1.The quality of teaching and research in British universities remains outstanding. And from an economic perspective, the engineering sector makes a hugely significant and sustained contribution; in 2018 the sector generated 21.4 per cent (£1.2 trillion) of the UK’s £5.7 trillion turnover2.
This economic contribution is reflected in the company I lead through our endeavours to help maintain the UK’s sovereign status and its freedom of action in defence and security matters. We do this by providing the very best defence technologies and equipment for our armed forces and allied nations. BAE Systems’ activity in 2018, for example, delivered £9.3 billion to the UK’s GDP, whilst supporting 124,000 full-time jobs across the UK – with nearly 34,100 at BAE Systems alone, including 2,000 apprentices3. And our network of UK suppliers exceeds 6,000, with whom we spent £3.7 billion in 2018.
Our ability to co-ordinate this engineering supply chain and realise the UK’s most advanced combat aircraft technologies has resulted in export sales of more than 1,000 Hawk aircraft. This has delivered £16 billion to the UK economy to date from an initial government investment of £800 million. In addition, government investment of £12 billion in the Eurofighter Typhoon programme has doubled that return to the UK economy through export sales – with the potential of more to come4. The Global Combat Ship is another example of our success in international markets. While production of the UK variant, the Type 26, for the Royal Navy is now well under way at our site in Glasgow, other variants of the Global Combat Ship have also been chosen by both the Australian and Canadian governments.
As the prime contractor for nationally important defence programmes such as the Astute-class attack submarines, we take our responsibility in developing and coordinating new industrial capabilities extremely seriously. Through strategic partnerships with universities, local enterprise partnerships and seed-corn funding programmes for SMEs, BAE Systems supports an engineering ecosystem which helps preserve the UK’s strategic defence capabilities. This ecosystem is aided by an annual investment of some £1.5 billion in research and development activity by BAE Systems’ global business on behalf of our customers5. This includes developing technologies such as PHASA-35, a persistent solar-electric aircraft for integration with other battlefield management systems and 5G networks to equip the UK with a low-cost and highly sustainable alternative to conventional satellite technologies. We also collaborate with technology-driven organisations in the automotive sector. For example, our exciting work with Williams Advanced Engineering and Rolls-Royce on energy management and battery technologies could meet the energy requirements of future combat air systems.
Fundamental to ensuring the engineering sector remains competitive on the world stage is the adoption of Industry 4.0 principles and digital technologies and skills in manufacturing. These techniques enabled organisations in the sector to collaborate rapidly in the production of ventilators and PPE when our NHS most needed them.
But the requirement to invest in new technologies and skills is not as widely understood by businesses as it needs to be. Here, joint government and collaborative economic growth initiatives such as ‘Made Smarter’ and ‘Be the Business’ have proved to be enormously practical in articulating the requirement, transferring knowledge and providing investment support. BAE Systems’ fully digital and 5G-enabled ‘Factory of the Future’ in Lancashire is a case in point and is part of a high-value manufacturing enterprise zone in the north-west of England where we are working with more than 40 organisations. Together we will manufacture the most advanced combat aircraft systems of the future. This will include Tempest, where the UK is leading the development of the programme.
I sincerely believe that the UK’s engineers and scientists are amongst the world’s best. But we need greater commercial ambition in the sector as well as investment in Industry 4.0 technologies and skills. Coupled with further government support for growth initiatives and technology partnerships, engineering will surely be the key to our economic recovery and long-term prosperity.
1 Royal Academy of Engineering Annual Award Winners 2020
Charles Woodburn is Chief Executive, BAE Systems plc