Industry and Commerce

The Key Issues

The defence sector faces many challenges set out in part in the Defence Industrial Strategy (DIS). DIS describes a new approach to the acquisition of military capability; one that aims to optimise the delivery of military effect on a continuous through life basis across multiple strands known as Defence Lines of Development. The strategy also points out the urgent need for industrial capacity and capabilities to be matched to demand to encourage competitiveness and innovation across the sector.

Similarly in the National Security and Resilience sector, Government is a large, fragmented and complicated buyer of technology, services and support. As a consequence this market can be difficult to navigate, unpredictable and risky. Industry and Commerce needs to understand better how Government acquisition activity seeks to underpin its strategy; where the market opportunities are; and how Government decisions are made. Government needs to understand the implications of its actions on market sentiment and investment confidence, and work closely with Industry and Commerce to become a better customer.

Combined, both of these sectors present many new and emerging opportunities and challenges to Industry and Commerce including:

• The need to align Government policy with Industrial capabilities and capacity
• The need, in certain segments, for industrial consolidation to preserve shareholder value and maintain capability through, for example, partnerships and alliances, mergers and acquisitions, and divestment
• The need for new mechanisms to rapidly exploit and effectively transfer technology and innovation between Industry and Government
• The need for partnership based ways of working between Government, Industry and Commerce
• The need to maintain sovereignty of certain strategically important capabilities
• The need for industry to continually deliver shareholder value
• The need for organisational capabilities that deliver value through life together with incentive schemes that are aligned with the delivery of output, e.g. contracting for availability
• The need to develop supply chains that are agile and flexible enough to support the new partnership based ways of working between Industry and Government
• The need to identify and exploit strategically important innovations and technologies arising from small and medium sized companies