Defence as a strategic growth engine: Insights from Babcock International

As the UK and its allies navigate an era of heightened geopolitical tensions and economic uncertainty, the government has committed to increasing its defence spending from 2.3% of GDP to 2.5% by 2027. However, this renewed investment isn’t just about building national deterrence. Through the Strategic Defence Review (SDR), the renewed Industrial Strategy and the upcoming Defence Industrial Strategy, the government has positioned defence as a critical engine of national growth.

Delivering on that ambition requires a mindset shift, recognising the defence industry as a strategic partner in strengthening sovereign resilience, regional regeneration, and economic productivity. We recently interviewed Trevor Cayless, Director of International Government Relations at Babcock International, to understand how the organisation is collaborating across sectors and beyond borders to reinforce the UK’s defence posture and provide tangible economic value.

How is your sector interpreting the government’s growth mission following the recent long-term policy announcements, including the Industrial Strategy and the Defence Review, and the upcoming Defence Industrial Strategy?

That's an interesting question, and I think there are two parts to the answer. If you take the Strategic Defence Review (SDR), it won’t be a surprise to learn that the defence sector sees itself as having a critical role in delivering that vision. It is our job to ensure the Services have the capabilities they need, where and when they need them, so they can get on with the job of safeguarding our national security. If you take Babcock as an example, we are the second-largest supplier to the UK Ministry of Defence, providing service and product solutions across all domains, and working side-by-side with the armed forces on submarines, satellites, and everything in between. So, when the SDR sets out a vision of a “move to warfighting readiness”, the defence sector needs to be sure we are in a position to help realise that vision. That is particularly true for UK-headquartered companies like ours. When global supply chains are more vulnerable, we need to ensure that we invest in our people, infrastructure, technology, and partners, so that we can deliver that sovereign capability in and from the UK.

The second part of the answer relates specifically to our role in the growth mission. In his introduction to the SDR, the Prime Minister talked about a “new partnership with industry …creating jobs, wealth, and opportunity in every corner of our country”. This concept of a ‘defence dividend’ was expanded in the Modern Industrial Strategy, and we expect to see even more emphasis on this when the Defence Industrial Strategy is published later this year.

We welcome the recognition of the sector's role in driving economic growth. Last year, for example, Babcock’s UK operations directly supported 25,400 jobs and indirectly supported a further 40,000, contributing a total of £4.3 billion to our national GDP. As public spending on defence increases, we will work with our partners to make an even more meaningful contribution to the communities we work in.

Can you please share some practical examples of how Babcock collaborates with government, local authorities, and other partners to spur innovation and deliver growth?

We are primarily a people business, and our people are critical to delivering sustained growth, so I’ll start there. Our customers need us to have highly skilled colleagues, equipped to deliver innovative solutions to the complex engineering challenges of the future. At the same time, the UK faces a shortage of students choosing STEM subjects. Therefore, we need to provide more young people from diverse backgrounds with opportunities to consider and pursue careers in engineering. No single organisation can achieve this alone, so we work closely with many partners.

In the South West, for example, we have worked in partnership with City College Plymouth and the National College for Nuclear to develop the groundbreaking Engineering & Nuclear Skills building, opened last year by the Minister for Defence Procurement. We have also collaborated with Plymouth City Council to create age-appropriate and inclusive content for a STEM outreach programme, delivering hundreds of targeted activities to students from primary school through to apprenticeships and graduate programmes.

In Devonport, Walsall, and Rosyth, we run various programmes to attract people from a range of backgrounds and experiences, including those not currently in education, employment, or training. We have created roles for them to support and learn from time-served tradespeople, with many completing their studies in local colleges, gaining valuable skills and qualifications and joining the workforce. These initiatives are delivered in collaboration with local colleges, councils and the Department for Work and Pensions.

In your experience, what are the key enablers, or barriers, to making cross-sector collaboration work?

I have worked in both the public and private sectors, often in roles that require collaboration between the two. Defence exports are the most recent example. Our customers are typically overseas governments, and when buying from or partnering with a UK company, they consider several key factors. The quality and cost of the product or service are paramount. Still, at the same time, they may be seeking closer strategic ties with the British government, opportunities for greater interoperability with the UK military, and support with financing through UK Export Finance, among other benefits.

So, a successful campaign cannot be delivered by the public or private sector alone. It requires wider collaboration to enable not only commercial success but to achieve broader geopolitical objectives, from security partnerships to regional stability. However, the parties usually come from different cultures, have different motivations, levels of investment in the outcome, and rewards for success. Collaborative leaders are able to acknowledge these differences, agree on a clearly defined shared goal, and make a sustained effort to build and maintain trust between the partners.

For anyone interested in this subject, I can highly recommend WIG’s Advanced Collaborative Leadership Programme (ACLP). I was fortunate enough to join their inaugural course this year. It offers a compelling blend of academic and practical case studies, but more importantly, the opportunity to work closely with other leaders from the civil service, NGOs and industry.

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