Companies trying to break new ground in defence still find it very difficult to get into the government market, a former senior Royal Air Force officer who now advises across the industry told the Apex Europe conference in London on Wednesday.
Air Vice-Marshal (Retired) Gary Waterfall, senior defence advisor at Clarion Defence and Security, speaks into DSEI UK and also runs a portfolio business of around ten companies, none of which he would describe as being on the front line in the way some of his fellow panellists are.
He placed himself deliberately outside the part of the market that is currently getting all the attention, and did it with some relish. “I’m very much sat in the rear echelon, from primes through SMEs into small businesses, all of which are trying to get a worthwhile foothold in the market without having maybe the lure of the sexy dish of the day, very much in that drone environment, yet with a lot to contribute,” he said.
Recent work with a private equity company has sharpened the point for him, and he said the gap between the rhetoric about private investment and what actually happens is wide. “Defence talks about intended growth. Let’s go out, let’s get some private investment in to actually get the gears moving and working,” he said. “The reality is, when you’re trying to break new ground, it’s very difficult to get into government and defence in terms of marketplace. So I see that from an investor perspective. I also see that across all of the SMEs that I’m working with.”
His second argument was that defence companies have more to learn from outside the sector than they generally admit, and he reached for motorsport to make it. “Formula One technology is a real classic, where they raced last weekend, they’re racing next weekend, and they’re going to win, and they’re iterating through rapid cycles the whole time,” he said. “I’m involved with one of those companies, and it’s fascinating to watch them outstrip the pace of defence thinking, as they’re always thirsty for information.”
He also asked the panel to look further ahead than the current reaction cycle. “What we’ve heard is a lot of reacting to what the threat’s doing, and then iterating away. But let’s think beyond that. Let’s think beyond to where we might be going with degrees of certainty, the further out you go, and look at how you best advocate your technologies to meet that threat,” he said.
In Ukraine the loop is closed and innovation is happening in contact, he said, and companies there are doing an extraordinary job of it. The harder question is what firms outside that fight are doing to make themselves better at innovating, and his answer was that defence-based companies still have a great deal to learn.
Air Vice-Marshal Waterfall retired from the Royal Air Force before moving into advisory and investment work, which gives him a view of the industry from both the customer and the supplier sides. The panel was chaired by Lieutenant General (Retired) Stuart Skeates, chairman of Apex Europe.
MoD’s policy of direct engagement with SMEs demands a serious number of extra staff to liaise and handhold, numbers they don’t have. They might be better off setting up liaison groups inside the primes, who are used to talking to the SMEs and can lean in.