Guest columnist Ros Kruger, marketing director for the military/aerospace business at distributor TTI Europe, writes that with the DSEi military system exhibition opening next week in London it is timely to comment on just how important the defence sector is for UK electronics companies.
Despite widespread reports of cuts, the defence market still represents about 10% of UK manufacturing.
The UK has the fourth largest defence budget in the world and is the second largest exporter of defence equipment.
Also, while the government had been planning a 15% cut in UK defence spending over the next four years, this has now been reduced to an 8% reduction in real terms by 2014.
As recently as this July, plans were announced to increase the ground force equipment budget by 1% over inflation.
The government also remains fully committed to spend 2% of GDP on defence in line with NATO’s target for member countries.
Well, words and statistics – as devotees of BBC’s 1980s political satire ‘Yes, Minister’ (currently enjoying a stage revival on London’s West End) must surely remember – are always open to question, but there can be no doubt that the defence market is still healthy – especially if we widen the definition to include non front-line applications in security and anti-terrorism.
Defence provides many jobs – especially if one considers the numbers of secondary companies that support the major companies.
One of the key trends we are seeing in the mil/aerospace sector is that the five or six main players have restructured to maximise efficiency.
Increasingly, design teams are working across national borders designing modular systems based on a common platform. In this way, real cost savings can be achieved.
Another move is the use of CEMs or sub-contract manufacturing to reduce vendor base, and we are seeing a growing number of UK CEMs that are highly capable of undertaking mil/aerospace programmes and which are approved to military quality standards and signed up for continuous quality improvement programmes.
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