- New economic report reinforces value of defence sector to the
UK
- Thousands of organisations paid for defence work and 5,000
apprentices employed
- Over a fifth of defence procurement spending is with SMEs
The report has been published by
the Joint Economic Data Hub (JEDHub), 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).
Key stats 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
Minister for Defence Procurement, 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.
Based in the UK Defence Solutions Centre, the JEDHub is designed
to provide better, consistent and impartial data to help inform
decision-making processes. The JEDHub is supported by government,
industry and academia. Fresh insights from the report include:
- 37% - Number of the surveyed jobs supported by overseas
sales, showing the contribution of defence exports to sustaining
jobs in the UK
- 4.6% - 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
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.
Apprenticeships
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.
Small businesses
The report follows the recently refreshed SME Action Plan –
designed to further improve engagement with Small and Medium
Sized Enterprises, 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 accounts for 21.3% of procurement spend that
year and shows procurement spending with SMEs continues to grow,
with the intention of procurement spending with SMEs reaching 25%
by 2022.
Research & Development
Research and development (R&D) is central to our Armed Forces
being able to stay ahead of our adversaries for 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.
JEDHub next steps
The JEDHub’s report is an important deliverable of the 2021
Defence and Security Industrial Strategy, building on the
Dunne Report which
highlighted the crucial contribution of the defence sector to UK
prosperity.
In the coming year, the JEDHub aims to provide more data about
the economic contribution at a national, regional, and local
level.
