2016 has proved another difficult year
Speaking to Mönch during Indo Defence in Jakarta today, Alexis Hammer, Regional Director, Americas, East Asia and Australasia for the Defence & Security Organisation (DSO) – a unit of the UK’s Department for International Trade, explained how important Indonesia is as a market for UK Limited.
“Indonesia is a really strong emerging market, and is our fastest growth area, in fact, for defence, security and cyber. In a recent exercise with the Defence Solutions Centre we benchmarked a total of 87 countries with the 16 big prime contractors in the UK and Indonesia came in the top five,” he told Mönch.
That is a serious statement from somebody whose role it is, in part, to identify and scope the next big market for the British defence industry. As the UK exist the European Union, industry is receiving a great deal of encouragement to spread its wings further afield – with a lot of practical assistance thrown in for good measure. The big question is “where is the next Saudi Arabia?” Where indeed – and who for, within UK Limited.
Small and medium enterprises (SMEs) make up 99% of the total number of companies in the UK and within the defence and security industries the number, while maybe not exactly replicating the national average, is still well over 95%. As such, it is incumbent on Hammer and his colleagues to encourage SMEs and nurture them in approaching markets that are at best difficult and at worst daunting for them. “SMEs are the lifeblood of the big primes – without their [innovation and agility] the primes would find it more difficult to succeed in quite a number of the markets they address,” he told Mönch.
DSO is leading an inward mission to Indonesia in December that already features 12 SMEs seeking to enter this important market. “Indonesia is moving up the ownership scale and looking to sustain better capability into the future,” Hammer explains. He goes on to point out that the bilateral relationship is just that: “This is very much a two way street – we have Indonesian companies registering as suppliers to UK MoD and there is the possibility of inward investment also,” he says.
With a UK government target of adding 100,000 new exporters to the nation’s record, Hammer and his team have determined that SMEs form a critically important sector on which to target their efforts. “They need to develop strategic patience [in view of the long gestation periods of defence acquisition programmes] and recognise they cannot simply sell capability and walk: all parties need to recognise that success comes through partnership.”
That partnership needs to have tangible and realisable benefits to both sides, of course. And Hammer cites an example that confirms that is exactly what is likely to happen. “The Thales STARSTREAK missile has been a success here and the way in which Indonesian industry is reacting and contributing could drive real benefit for the [UK] MoD,” he concluded.
Indo Defence has truly come of age, judging by the 750+ companies exhibiting in Jakarta. The national pavilions and widespread presence of companies large and small from every corner of the globe show just how important the Indonesian market has become. It is not only the UK that recognises this – so, British SMEs – now is your opportunity to get support and encouragement to develop a foothold in one of the strongest international growth markets for British defence and security products, services and expertise. Carpe diem!