Page 5 - Five Forces of Americanisation Richard Hooke 04072025 final post SDR1

The UK Defence Industry in the 21 Century
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The Five Forces of Americanisation

Given the scale and diversity of all of our changed circumstances and encouraged by colleagues and
peers, it seemed appropriate to revisit what we found 20 years ago. Having started the research for
this paper in August, 2024, its preparation has been checked many times by the need to absorb and
consider the latest news. Having been exposed to similar disruption, the UK government had to delay
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publication of its Strategic Defence Review (“SDR”), finally issuing its findings on 2 June, 2025.
This paper is primarily aimed at those who shape the industry: politicians; defence company leaders;
senior civil servants; academics; military leaders; politicians; think tankers; financial and business
journalists; employee representatives; senior bankers and institutional investors. It is hoped that the
secondary and primary research on which its findings are based, together with the analytical
techniques used to interpret and present the information, are also of value to defence management,
economics, finance and business students.

It is complementary to the SDR since it addresses industry’s specific role, not only in enabling the
integrated national Defence system that the SDR calls One Defence, but also in establishing the links
between national defence and security, international diplomacy and trade. This role should flourish
within One HMG: a construct also being developed by the UK government within a new Defence
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Diplomacy Strategy to be published by the Foreign, Commonwealth and Development Office .
However, defining industry’s role requires recognition of two fundamental characteristics of defence
as an industry:
i. the central and often crucial role that the sovereign (ie: British-owned) defence industry,
working in concert with the country’s major institutions (from the Monarchy, Parliament and
most of its government departments to its Armed Forces, educational, religious, professional
and, increasingly, its financial institutions) can play not only in national defence but also in
international trade and diplomacy, in wealth creation and in the nation’s general prosperity,
and
ii. the principles, mechanisms and behaviours of global financial markets have increasingly
shaped the defence industry, not only determining its location, scale and scope but also its
ownership, regulation and control. The UK government will need to provide leadership,
direction and oversight across its departments to ensure that the influence of financial
markets is consistent with the aims of One HMG.
One point should immediately become clear. The ownership of a nation’s defence industrial capacity
is crucial. It determines the extent of industry’s ability to support the national interest unilaterally:
without foreign support. In addition, it provides jobs, technology and economic growth. It generates
profits to fund the development of additional or enhanced capabilities and provides support to the
UK’s international development, trade and diplomatic initiatives.
The SDR does not address this point. Indeed, in defining the UK’s “Nationwide Defence Industry”, the
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SDR incudes capabilities owned by American, French and Italian companies, two of which are partly
owned by the French and Italian governments. The use and development of these particular
capabilities, and the use of the profits secured from funding provided by the UK taxpayer, will be
decided in the USA, France and Italy. Not in the UK. The discussions with overseas governments
regarding exports of these capabilities will be held by American, French and Italian business
executives, not British. The intelligence gained from these discussions will, again, exclude the British.
As shown in this paper, this “intel” can be a critical factor in guiding government foreign policy.

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Similarly, in defining “Defence’s Overseas Footprint”, the SDR does not include the nation’s defence
industrial, customer support and logistics footprint developed by its indigenous contractors overseas,
from Scandinavia to the Middle East, and from the USA to South-East Asia. In common with most
businesses, running a defence company requires a detailed understanding of the customer. But in
defence, this means the customer nation’s leadership team: its entire cabinet or ruling body. From
foreign policy and defence to public health, education and transport, all will have a say in what is spent
on major defence programmes. The customer’s regional or state senators and constituency leaders,
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07/07/2025 Richard Hooke 2025