UK export business models changing to suite new environment

UK is enhancing its cooperation with Australia as work on the Hunter-class frigate starts to ramp up and British companies are changing their business models as a result.

Mark Goldsmith from UKTI said that as the UK has reached out to partners internationally “we are able to identify way of working now that are not the traditional export model.”

He explained that most of the country’s major defence export projects do not rely on manufacturing and exporting large chunks of metal around and whilst there are still elements of this it is recognised that this isn’t the way ahead in the future.

“All of our primes at the moment are modifying the way they do business and how their business models work and understanding how to tune an offer so you get this partnership and investment piece in each other’s economies,” Goldsmith said.

“What we are particularly sensitive to is the need to put genuine investment into the host economy. We are talking about building up the sort of ecosystem that actually gives you IP, that actually gives you design capability and an advanced manufacturing capacity – rather than simple having a clip-together model where you pass lower level construction around the system,” he explained.

Vice Admiral Chris Gordon said that further collaboration involves the UK and Australian governments looking at how governance layers work between the prime contractors’ programmes and their responsibilities up to where governments need to cooperate.

“It is really important that we keep governance as clean as we possibly can. We have AUKMIN [Australian-UK Ministers) relationship management at the ministerial level that sets out the strategic headmarks, then there is the navy relationships that will get stronger with the shared design going forward, then there is the authority-to-authority relationship and industry-to-industry relationship,” Gordon said.

All the nations have delegated programmes to their prime contractors and none of the governments want to get in the way. Goldsmith said it is important the Australian prime contractor [BAE] has its requirements deciding who operates where and has a forward forecast of work. “If we can get that and all the rest falls into place but the knowledge of what needs to happen when and reinforcing the authority of the primes is absolutely paramount”.

Tim Fish