Defence and security manufacturing in need of a radical rethink

Industry leaders and policymakers often look back fondly on the UK’s golden era of manufacturing, which thrived until the 1960s, driving up living standards, economic growth and opportunities. Since then, however, the UK’s manufacturing capabilities have declined, allowing countries like Italy, France and Germany to surpass the UK in manufacturing output.

In fact, this year marks the first time the UK has fallen out of the top ten global manufacturers, sparking calls to reassess the country’s long-term manufacturing strategy. Here, defence and security manufacturing could play a pivotal role, but only if the sector considers the adoption and application of deep tech innovations. Steven Wood, Aerospace, Defence and Security Lead at Digital Catapult explains.

Digital Catapult works with industry leaders, including those in security, defence and manufacturing, to explore how deep tech innovation and new solutions can transform operations and address complex market challenges. With a decade of experience providing technology and innovation consultancy to partners across the UK, we’ve seen that the long-term success of manufacturing in defence and security will largely depend on the effective adoption of new solutions, including those that enable agile manufacturing operations.

The need for more agile manufacturing operations

In the UK, the defence and security budget is predominantly directed toward large, long-term projects that can span decades, for example the development of new platforms such as submarines or new frigate classes. These initiatives require substantial time and resources, often leaving limited capacity for the government and defence organisations to respond to short-term or urgent needs.

This focus on lengthy programmes can hinder innovation and flexibility, with some assets potentially becoming outdated before they are fully operational. To address this, a shift toward more agile capture, design and manufacturing approaches is needed, enabling the defence sector to adapt more swiftly and effectively to emerging challenges.

Deep tech innovations, such as artificial intelligence (AI), IoT-driven smart factories and digital twins have the potential to transform defence and security manufacturing by making it significantly more versatile. Digital twins for example, which are virtual replicas of physical assets, systems or processes, enable manufacturers to simulate, monitor and optimise operations in real-time.

By providing a dynamic model of the production environment, digital twins allow for predictive analysis and scenario testing without disrupting actual manufacturing lines. This means that adjustments can be made preemptively, helping to identify potential issues, streamline workflows and adapt processes to meet immediate demands.

The strategic value of digital twins is also why Digital Catapult launched the UK Digital Twin Centre this year, to accelerate the application of this deep tech within specific industries including defence and security. By embracing deep tech, the defence sector can build a more flexible, responsive manufacturing ecosystem that is capable of addressing both immediate operational needs and long-term strategic goals.

Facilitating more flexible manufacturing operations

In addition to agile manufacturing, the UK’s defence and security manufacturing industry needs to become increasingly flexible to meet the demands of the modern security climate. The sector must actively identify and support emerging start-ups with innovative ideas, equipping them with the tools and opportunities to enter the defence market, enabling these deep tech companies to scale faster.

To support this goal, Digital Catapult delivers start-up accelerator programmes and innovation support initiatives designed to help agile small businesses to scale their solutions to solve complex market challenges, including those in defence and security. Through these programmes, start-ups developing immersive technologies, AI solutions and other advanced digital capabilities are given the resources, guidance and partnerships they need to refine their offerings for dual-use applications.

For example, start-ups in the immersive space are supported on accelerator programmes and consulted on how they may adapt virtual and augmented reality solutions into powerful tools for training.

These accelerator programmes not only help start-ups navigate the complexities of the defence sector but also provide them with strategic connections, reducing barriers to entry in a heavily regulated industry. By nurturing this type of innovation, Digital Catapult enables the defence and security manufacturing industry to tap into a steady pipeline of adaptable, cutting-edge technologies that can enhance both defence and security capabilities, making UK defence manufacturing more resilient, responsive and innovative.

Solidifying a strong skills pipeline

Critical to the success of UK defence and security manufacturing is the ability not only to build capabilities domestically but to safeguard and sustain them over the long-term. Currently, the UK faces a significant shortage of STEM skills, costing the economy an estimated £1.5bn annually. This skills gap not only stifles growth within the defence manufacturing sector but also impacts the wider manufacturing landscape, leaving the UK less competitive as other nations actively invest in developing STEM talent and strengthening their workforce pipelines.

To address this challenge, encouraging partnerships between government, academia and industry could play a vital role here, including accelerator programmes, initiatives and services that nurture talent. One example of this is an innovation programme delivered by Digital Catapult which is centred on the principles of digital security by design, offering UK-based companies exclusive access to an Arm designed Morello evaluation board, to consider how they can use such technology to mitigate cyber threats.

Start-ups receive consultancy, technological support and mentorship from experts to develop solutions that have applications across key sectors and this extends to defence and security.

This level of specialised training in areas such as advanced manufacturing, cyber security and AI-driven engineering will equip the next generation with in-demand skills, providing them with real-world experience in critical sectors. Deep tech innovation is thus allowing the UK to not only strengthen its defence manufacturing base but also future-proof its broader manufacturing industry, establishing itself as a leader in both innovation and workforce development.

In a rapidly changing global landscape, the UK’s defence and security manufacturing sector faces both significant challenges and exciting opportunities for transformation. Once a powerhouse of global manufacturing, the UK now finds itself needing to reinvigorate its industry to remain competitive. Embracing deep tech innovations will be instrumental in creating a more agile and flexible manufacturing ecosystem, allowing the sector to respond to urgent demands and foster a dynamic environment for continuous innovation.