With the release of the new Strategic Defence Review the country is now looking forward to the upcoming Defence Industrial Strategy paper that will follow. It is therefore timely for the release of The Research & Development Society's report on leveraging innovation in emergent markets for defence industrial strategy. After our two workshops on the subject online and at Westcott Innovation Centre, we are glad to finally release our conclusions the input we received and surrounding conversations. There are still large gaps between the theory and implementation of the government's new vision of industrial strategy and we believe this can serve to fill some of them.
Summary
The R&D Society seeks to be an authoritative voice for voice for S&T innovation enabled companies in the government’s mission to develop a sustainable industrial strategy for the UK that can drive economic and social growth in regions across the nation. We advocate for a data driven approach that focuses on key market sectors and geographical clusters to develop evidence-based insights that support the growth and seek to link the micro, meso and macro factors that influence the growth strategy and agenda at corporate, regional and national levels. With this objective in mind and recognising the on-going government defence review, we sought to consult with key stakeholders in the defence sector, with a particular focus on the innovation linkage to industry strategy. We chose to focus on the drone sector as an important case study, given the rapid development of drones and related technology in this space and its growing application in defence.
Our research and consultation identified several issues of concern that require critical attention. Technology-enabled SMEs in the drone sector raise regulation, procurement practices and access to infrastructure as primary areas of concern. Outdated regulatory hurdles continue to create unnecessary delays for companies that often rely on limited financial runways. SMEs continue struggle to access government procurement contracts, whether from low visibility or limited engagement from government. Access to testing and manufacturing facilities are also highly dependent on geography and sometimes monopolised by large players. While not as critical, concerns were also raised with regards to talent availability, funding and geopolitical uncertainty. Talent shortages remain in key areas. While low investment is an ongoing issue, there is optimism given recent and expected budget increases. Finally, firms are now facing difficulties in assessing the risks posed by shifts in relations with allies and competitors.