This is a best prospect industry sector for this country. Includes a market overview and trade data.
Last Published: 8/1/2019
Overview

The  Defence Equipment Plan of the Ministry of Defence (MOD) forecasts expenditure for 10 years from 2018 at approximately $237 billion.  However, according to a report from the UK’s National Audit Office, the MOD’s ten-year Equipment Plan is not affordable and does not provide a realistic forecast of the costs the MOD will have to meet over the next 10 years.  To bring spending under control and to identify strategic national priorities, a Modernising Defence Programme (MDP) was initiated in January 2018 and findings delivered from the report did not provide clear direction on UK defense spending. A new Strategic Defence and Security Review will most likely be initiated when a new Government is formed.

The UK has the world’s 6th largest defense budget and, on a rolling 10-year basis, the UK is the second largest global exporter of defense equipment.  Although the UK is a major exporter of defense equipment, the UK continues to be a major importer of defense equipment and the majority of this equipment is either advanced equipment from the U.S. or weapons systems won on a competitive tender awarded to overseas firms.  In addition to its sourcing of materials from the U.S., the UK also sources significant quantities of equipment from suppliers on the European continent.

The UK remains committed to innovation and has committed $1 billion over a ten-year period.  The UK Secretary of State for Defence launched the Innovation Initiative to deliver innovation in defense through the Defence and Security Accelerator and the $1 billion Defence Innovation Fund.  It will take forward the best proposals, from inside and outside of the MOD, in an open competitive process.  It will not seek to favor specific areas of innovation (for example technological, procedural) but will enable as broad a scope of innovation as possible.

Leading Sub-Sectors

Specific equipment opportunities exist in:

Ships                                
$23.4 billion (£19 billion) will be spent on surface ships over the next 10 years.  This includes the completion of the two Queen Elizabeth class aircraft carriers, design and development of the Type 26 Global Combat Ship, four Tide class tankers and three Offshore Patrol Vessels. 

Submarines
$54 billion (£44 billion) will be spent on submarines over the next 10 years.  This includes support to in-service submarines, delivery of seven Astute class submarines, Successor class submarine design, and the Trident missile system with the US and the British-French collaborative project.

Land Equipment
$25.6 billion (£20.1 billion) will be spent on land equipment over the next 10 years.  This includes the Warrior Capability Sustainment Program, the Challenger 2 Life Extension Program, and the Scout Specialist Vehicle and Utility Vehicle programs, which will replace a range of tracked armored vehicles reaching the end of their visible lifespan.

Weapons
$16.6 billion (£13.4 billion) will be spent on weapons systems over the next 10 years.  This includes the Common Anti-Air Modular Missile (CAMM), the manufacture of the maritime variant of CAMM, and delivery of a new Future Anti-Surface Guided Weapon, which will be fitted in the Royal Navy’s new Wildcat helicopters.

Combat Air
$22.1 billion (£18 billion) will be spent on combat air over the next 10 years.  This includes Typhoon enhanced capability, delivery of the F-35 Lightning II project and Unmanned Air Systems.

Air Support
$22.4 billion (£17.6 billion) will be spent over the next 10 years.  This includes the procurement of 9 Boeing P-8A Poseidon Maritime Patrol Aircrafts, the A400M future generation of strategic air transport, continuation of the Voyager transport and air-to-air refueling aircraft program, and the New Airseeker/Rivet Joint aircraft.

Helicopters
$13 billion (£10.3 billion) will be spent on helicopter capabilities over the next 10 years.  This includes upgrades to existing airframes, investment in new airframes and longer-term rationalization to four core helicopter fleets – Chinook, Merlin, Apache and Wildcat.

ISTAR
$6.4 billion (£5 billion) will be spent on ISTAR over the next 10 years.  This investment includes spend on intelligence networks and applications; CBRN detection and countermeasures; operational surveillance systems and electronic countermeasures; air traffic management and tactical data links.

In addition, four technologies are emerging that have disruptive capability with the MOD, which are already starting to create an impact in the commercial world and will have an equally big impact on the way the MOD does business in the future:

Autonomous unmanned vehicles
Although autonomous unmanned vehicles have been used by the MOD for a number of years, the MOD is looking to dramatically increase its use of autonomous unmanned vehicles for a variety of uses in the air, land, surface and sub-surface domains.  Trials using autonomous vehicles for parcel delivery suggest they have the potential to provide logistical support in hostile environments or disaster-relief situations.  The MOD and the UK Security Services have held several competitions with industry to evaluate the future use of autonomous unmanned vehicles. 

3D printing and additive manufacturing
The use of 3D printing is moving from one-off production and prototyping and is now transitioning into mainstream manufacturing and production with the establishment of 3D printer farms.  A key advantage of manufacturers equipped with 3D printing is the ability to quickly re-program machines to respond to frequent demand changes.  The MOD is encouraging engineers to explore ways to 3D print different materials together to produce cost-efficient and sustainable parts for the aerospace and defense industry.
 
Virtual Reality
Virtual Reality (VR) is another technology that has been around for a number of years; flight simulators and shooting/gun houses are a prime example.  However, what is different now is that VR systems are now available to anyone with a smartphone.  As a result, innovation in VR has dramatically increased while the cost of VR technology has dramatically decreased.  The MOD is looking to take advantage of the advancements in VR technology as well as the reduction in the cost of VR systems to modernize its training programs.  

Artificial intelligence and big data
The MOD is studying the use of artificial Intelligence (AI) and big data for its use in a variety of defense and security applications.  The increasing availability of big data matched to intelligent systems has the ability to revolutionize the way the MOD operates.  While intelligent systems evolve, however, cyber security concerns will become ever more important.  Since most intelligent systems are currently networked, their susceptibility to cyber-attack remains a risk. Therefore, in the future these systems may operate more autonomously within a closed environment to minimize the vulnerability to attack.

Opportunities
 

The UK defense industry is sophisticated and mature.  Defense suppliers looking to export into the UK can expect to find a highly competitive environment and they must demonstrate a clear competitive advantage.  A company with non-British ownership or without a presence in the UK is not necessarily at a competitive disadvantage compared with British firms seeking MOD business.  However, a U.S. company must expect to commit both time and resources to enter or expand within the UK defense market.  Selling through an established UK company is the least risky market entry strategy for most U.S. defense providers to enter into the UK defense supply chain. 

Through the Defence and Security Accelerator, the MOD frequently holds industry engagement days and competitions to evaluate equipment and technology.  The best way for U.S. companies desiring to engage in meaningful dialogue with the MOD is through these MOD sponsored industry days and competitions. For announcements on MOD events relevant to a particular defense sector, suppliers should consistently monitor announcements on the Defence and Security Accelerator website.      


Web Resources


MOD Doing Business with Defence Team

The Doing Business with Defence team facilitates the entry of new, innovative and non-traditional businesses into the defence supply chain. The team provide advice and guidance to companies on how to become a defence supplier and access MOD tender and contract opportunities through a variety of channels. To contact the Team, sned an email to dbscs-ecfinanceteam@mod.uk or call +44 151 242 2000.

Defence Contracts Online

MOD DCO is the official source of UK MOD contracts - giving you instant access to all of its contract opportunities in one place. Access to DCO is completely free.

Defence Science and Technology Laboratory

The Defence Science and Technology Laboratory (Dstl) ensures that innovative science and technology contribute to the defense and security of the UK. To contact Dstl, send an email to centralenquiries@dstl.gov.uk or call +44 198 095 0000.
 
DVD
September 16-17, 2020
Millbrook, UK
DVD2018 is for those involved in equipment and support for the UK’s Land Forces.  It will showcase the equipment and technology that can support a British Army that is fit to meet future challenges and embrace the need for continuous adaptation.

Defence Procurement, Research, Technology & Exportability (DPRTE)
April 1, 2020
London, UK
DPRTE provides a platform for both MOD and industry to connect in order to explore the key challenges, programs and future opportunities that exist within the defense acquisition supply chain.

DSEI
September 12-15, 2019
London, UK
One of the world’s largest defense exhibitions, with 1,500 international exhibitors from 54 countries including 180 U.S. companies.

Farnborough International Airshow (FIA)
20-24 July 2020
Farnborough, UK
One of world’s largest aerospace exhibitions, with 1500 exhibitors from 40 countries of which around 300 exhibitors are expected from the U.S.


For further information, please contact:
PJ Menner
Commercial Specialist
U.S. Commercial Service
Tel: +44 (0)20 7891 3470
Email: PJ.Menner@trade.gov
 

Prepared by the International Trade Administration. With its network of more than 100 offices across the United States and in more than 75 markets, the International Trade Administration of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.