In 2015, the UK Ministry for Defence (MoD) was asked to make ‘promoting prosperity’ one of its formal objectives for the first time in its history.
The Ministry has since begun fleshing out how that might be achieved, and has recently released a report into the contribution of Defence to the economic prosperity of the UK.
The report, put together by MP Phillip Dunne on behalf of Defence Minister Gavin Williamson, takes a broad definition of prosperity - “the broad economic wellbeing of the United Kingdom.” It also uses an unconventionally broad definition of ‘Defence’, using the term to “capture the whole effort from the Ministry, Armed Forces and industry.”
The use of broad definitions sets the tone for a report that attempts to quantify the unquantifiable – what exactly is Defence worth to the British taxpayer?
The most conventional measure is by contribution to GDP. The report notes that the MoD and industry (what it together calls Defence) contributes £44 billion to Britain’s GDP - £37billion from the Ministry and £7 billion from average annual exports.
Yet the report itself notes that this is a simplistic measure: “Defence’s role as a customer and industrial partner with high growth sectors in the economy generates more growth. It is hard to quantify.”
In addition, the Armed Forces protect shipping lanes, undersea cables, the UK’s exclusive economic zone, maintain Britain’s nuclear deterrent, and conduct operations around the globe in the interests of stability and the rules-based global order. It is impossible to quantify the cost to the British people should the military fail in any of those functions. The report’s reference to Syria losing US$200 billion between 2011 and 2016 as a result of civil war is a flawed attempt, and is also inconsiderate given the unmentioned human cost of that conflict.
Numbers aside, the report makes a number of recommendations that fall into three basic themes.
First, the MoD should “embed prosperity as an explicit objective into its decisions,” meaning considerations of economic impact should be key in procurement decision-making.
Second, procurement should be more agile. The report notes that procurement results have been “process-heavy, focused more on upfront capital cost than driving value through life of the capability.”
Third, the report points to the historic correlation between defence research and technological advances across society. It argues that this still occurs but Defence is not the player it once was in this space as commercial concerns expand, particularly in terms of data.
Amongst these three overarching themes, the report makes some interesting specific recommendations. For example, it argues that the Armed Forces should be incentivised to provide strategic support for exports. Specifically, export promotion (testing and evaluation, for example) needs to be incorporated into Defence leadership objectives and the benefits shared with participating units.
It also argues for a more ‘Team UK approach’, and for Defence to “adopt a culture more focused on finding the right procurement solutions and less on defining and avoiding obstacles.”
ADM Comment: The report’s call for ‘Team UK’ echoes loudly in Australia, with the Team Australia brand well recognised when it comes to organising trade missions. Major procurement decisions, including the Boxers and Hunter-class frigates however, were beset by state infighting. The culture is often one of state competition, not national collaboration when it comes to individual projects.
Perhaps that is because the arguments revolve around visible numbers – direct employment statistics, for example – that are politically expedient in the short term. Numbers look good in press releases and are an easy reference, but often fall short of measuring the true value of Defence to the wider economy.
The numbers must be accounted for –we’re talking about the business of Defence after all, a significant taxpayer dollar outlay. Yet there’s something to be said for thinking beyond a zero-sum numbers game when defining ‘prosperity’. The report’s indifferent reference to Syria’s lost GDP is an example of this tendency to try and quantify the unquantifiable. Not everything can be measured in dollars or pounds.