Written evidence submitted by Professor John Louth (DIS0028)

MILITARY SHIPBUILDING, SKILLS, COMPETENCIES AND THE TECHNOLOGY CHALLENGE

I am interested in the concept of defence capabilities being viewed and deliberately constructed as a complex, amorphous, interdependent public-private enterprise of which the technologies, competencies, supply chains, capital and knowledge found in the industrial base are of equal significance to national security as the women and men of the armed forces. To think of one without the other makes little sense. Yet, we seem to have strategies generated by central and national governments that flow into specific military or industrial stovepipes without deliberate reference to each other. That is before the tricky question is considered of turning strategies, designed and championed by non-specialist politicians, supported by special advisers who lack specific subject-matter expertise, and a broadly generalist civil service, into actionable programmes of work.  For instance, the touch-points between the Integrated Review, Defence and Security Industrial Strategy and National Shipbuilding Strategy are interpretive, rather than deliberate and obvious. That this situation lacks credibility seems obvious to many, especially if you sit on a Board seeking to understand, for example, where a company’s capital expenditure and research and development budgets should be committed. Much of my publications to-date explore these challenges.

Assuming that the Committee is familiar with the concept of Technology Readiness Levels (the maturity and applicability of system, component and sub-component technologies to a capability), my recent research demonstrates that large, established businesses in the UK can struggle with the insertion of early-year technologies – those at TRL 1-3. This research will be published by Routledge later in the year. Rather, large and traditional OEMs are much more comfortable with the design, assembly and integration of known and proven technologies. Of course, this should not be a surprise as the maturity of systems in many ways help to de-risk the generation of intended capabilities.  But it suggests, also, that the latest, emerging technologies do not feature always in that solution. For the operator, this might suggest that the ship, for instance, is not as “next generation” as the brochure would have folk believe.  Given that the commanding officer to be appointed in the scheduled final years of HMS Queen Elizabeth has not yet been born, the currency and insertion of technologies applied to maritime capabilities is a hugely significant subject.  Moreover, for recruitment and retention in shipbuilding’s industrial base, there is a suggestion that many young professionals take advantage of excellent corporate graduate schemes to hone their engineering and scientific skills, then leave at an early opportunity to explore more entrepreneurial leanings rather than being trapped in conventional, non-cutting-edge design, build and maintenance bureaucracies.  Retention, therefore, of a generation of people possessed of applicable knowledge, an inquisitive mind and an aptitude of learning through trial and error – the life-blood of technological development – is far from easy.

There was a myth for many years in defence that corporate skills’ leakage from a particular company was irrelevant as these people and their functional competencies would be absorbed elsewhere in defence businesses or their respective supply-chains. Such a view seems nonsense.  From research undertaken between 2007 and 2014, published by RUSI as a Briefing Paper, it was established that skills within the defence industrial base, including shipbuilding, do not self-regulate. Of those people exiting a relevant business before their normal retirement date, only 20 percent returned to the sector. Of the 80 percent of personnel lost to the sector as a whole, 45 percent of this cohort were engineers, technical project managers and information technology specialists, possessed of core competencies essential to shipbuilding and the development of a regional hub of world-leading capability.

In addition, the work established that just over a third of personnel leaving a large defence business before retirement relocated to find other work. This had a measurable impact on local authority revenues, housing prices and income to local consumer-facing businesses. The impact on national/regional pride and confidence was less measurable but surely significant.

As my co-authors and I wrote at the time:[1]

The case can be made…that without government sponsorship and intervention, defence skills do wither when left to the free market. This has to be taken into account when defence and security strategies and policies are developed…Government should be aware of the impact of such policies on national skills and competencies.

There are two significant issues here, it seems to me, for shipbuilding. First is the subject of government sponsorship. It is pointless to have a government policy and derived strategy if there is no sponsored, multi-decade programme of work to execute this strategy, embracing the capital markets, local government, the education sector and international partners. This should be a deliberate and planned schedule of work, generated by people in government with the skills and experience to deliver – not people who write and staff policy options, in other words. Such an approach requires public money to pump-prime critical activities and a long-term commitment by the state to, effectively, strategically programme manage a critical sector.  Second, relying on private businesses to regulate the sector through supply and demand dynamics simply won’t work. “Winner takes all” competition practices will, likewise, lead to wastage from the sector and a sub-optimal solution being generated.

The final thought, in conclusion, is that government needs to understand better the challenges faced by championing shipbuilding, especially in the context of a unique and complex defence enterprise located as a critical component of such a proposition. We need to understand and acknowledge that there are capability gaps in the industrial base that might inhibit an ability to mature and sustain a world-class global hub. These gaps can be identified and known but we generally fail to measure, meaning that private sector workforce competencies, for government, remain a strategic vulnerability.

Author Profile:

Professor John Louth was a senior research fellow and director of defence, industries and society research at RUSI between 2011 and 2019. He is a specialist adviser to the House of Commons Defence Select Committee, a non-executive director of Subsea Craft Ltd, a strategic adviser to IBM Aerospace and Defence, a strategic adviser to Pagefield Ltd and a strategic adviser to Redstone Risk.  His views are his own and not knowingly representative of those to whom he is affiliated.

May 2022