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Introduction

It鈥檚 great to be back in the United States for the third time this year; a place that always feels like home.

A place that was my home for 2 years in the 1980s.

And I鈥檓 grateful for the chance to speak to such a varied and knowledgeable audience, on a theme of defence innovation in a country that can rightly claim to be global pioneers in defence technology.

Britain too is proud to share a similar heritage of innovation.

You鈥檝e given the world 鈥� GPS, stealth planes, cloud computing, email鈥�not to mention duct tape.

We鈥檝e given the world鈥�radar, jet engine, the World Wide Web, the military tank, the jump jet鈥�not to mention the Christmas card.

Between us we鈥檝e got an impressive record of innovation.

UK shares commitment to science and technology

And what鈥檚 absolutely clear, on both sides of the pond, is that in defence, exploiting technology and innovation, will matter even more in the future than it has in the past.

Only through technological advantage can we meet, head on, the kaleidoscope of global threats and challenges that we face. In the past year alone we鈥檝e seen鈥�the rise of ISIL, Russian aggression in Eastern Europe, Iran鈥檚 machinations, the spread of Ebola鈥�

We鈥檝e watched complexity replace old Cold War clarity.

We鈥檝e seen the boundaries between international and domestic threats, military and non-military affairs, blurring.

This is an era in which the threats we face are not merely to national security but the international stability on which our trade resources and technology depend, threats to the 鈥榳orld order鈥� that Henry Kissinger has so eloquently described.

And despite all the advantages that technology has bestowed on our modern world, we have to face the flipside.

Weapons proliferation, the relentless advance of cyber warfare, non-state actors pedalling an expansionist global ideology, rogue states, and traditional military advantage being undermined by disruptive technologies.

So, in this era it will be our attitude to innovation that defines us.

That allows us to face the unpredictable threats of the future.

That gives us that battle winning edge.

Just as it will be innovation that delivers greater bang for our military buck, as defence budgets in Western economies are squeezed tighter.

Innovation at the heart of UK thinking

So, as you can imagine, we in the UK have been watching the US defence innovation initiative with more than a passing interest.

Because we are on a similar journey.

As we approach our strategic defence and security review, next year, it goes without saying that innovation is at the front and centre of our thinking鈥�

鈥�touching on everything we do; from high level strategy and policy, cutting-edge science and technologies to business change and, of course, our people鈥�

But, fortunately, we have some momentum behind us.

Since coming into office over 4 years ago, we鈥檝e been relentlessly championing innovation鈥�driving through change across the defence machine鈥�

鈥�rooting out poor and outmoded practices鈥�redesigning and reinvigorating鈥�

鈥�transforming the whole department into a leaner and more efficient engine鈥�

鈥�ensuring we can build resilience, retain our operational superiority and be ready to face the future.

Innovation in defence transformation

To do that we sorted out our balance sheet in the UK Ministry of Defence鈥�with 拢38 billon worth of inherited unfunded commitments, more than 100% of our annual budget鈥�

We made some tough calls鈥�

Cutting old platforms鈥�

Reducing our manpower, with administrative roles reduced at twice the rate of the frontline.

And getting to grips with our big ticket procurement projects, curbing delays and cost overruns.

Once we鈥檇 got the legacy of out of control procurement out of our system, we turned our attention to the problems that had caused it鈥�and started the painstaking process of building a better future for defence.

Then we restructured our forces鈥�creating a scalable, modular, and fundamentally joint approach to provide us with the flexibility and agility that our volatile world demands.

And we devolved budgets to the single services鈥�ensuring the men and women who really understand what鈥檚 required took responsibility, and with that accountability, for spending decisions鈥�.

Finally, we overhauled our infrastructure and equipment organisations鈥�injecting them with much needed private sector expertise.

They now adopt a more commercial approach鈥�ensuring we are a more intelligent customer; one able to get high quality equipment at best value for the taxpayer.

There鈥檚 no denying it, it鈥檚 been a long and arduous journey, but we are starting to reap benefits, improving procurement performance in getting more equipment delivered to time and cost parameters.

But we recognise that to guarantee we鈥檙e in the best shape to face the challenges of tomorrow, much more progress is required.

Collaboration: the key to innovation

We also recognise that, when it comes to driving innovation, we can鈥檛 go it alone鈥�collaboration is the future.

That鈥檚 why we in the Ministry of Defence are so keen on what we call the 鈥渨hole force concept鈥濃��ensuring that defence uses the most expedient mix of talents from the military, defence civilian and commercial worlds to achieve the best possible effect鈥�

鈥�something we are able to do by virtue of our smaller size.

We鈥檝e seen it with the introduction of private sector skills in defence procurement and infrastructure services鈥�

We鈥檝e seen it with cross government and third-sector collaboration on international defence engagement

Above all, we鈥檙e seeing it when it comes to technological innovation鈥�.

鈥�because in a world of exponential technological advance it鈥檚 often in the civilian sphere that latest innovation is to be found. We need to tap that talent鈥�and we need to do it in a timely fashion.

That鈥檚 why the UK is doing its utmost to support technological innovation.

Firstly, by avoiding what I believe they call in Texas: 鈥淎ll hat no cattle鈥濃��

鈥�putting our money where our mouth is鈥�investing in world class science and technology鈥�protecting our annual investment in science and technology鈥�so it remains at least 1.2 % of the defence budget鈥�

鈥�a figure that, I know, won鈥檛 sound like a big deal to you all鈥�but one that鈥�in a time of fiscal retrenchment鈥�reflects the seriousness of our intent.

And our Centre for Defence Enterprise鈥�is already developing novel high risk, high potential benefit innovations on everything from complex weapons to sensor navigation and guidance.

Our investment in defence technology comes on top of our government鈥檚 wider existing investment in science and technology as part of its long term economic plan鈥�

鈥�including $425 million in quantum technologies鈥�

鈥�$370 million on a new advanced materials research centre鈥�

鈥�$515 million on Space technologies to take the leading role in Europe

鈥�and $470 million on cutting edge projects such as the European spallation source, a powerful neutron microscope that will allow us to observe the universe better鈥�bringing with it the potential to discover materials for faster planes, new and better computer chips and feather lightweight kit for our military.

This is priority investment and it means the UK can continue to call itself one of the most productive science nations in the world鈥�publishing 16% of the world鈥檚 top quality research, despite being home to just 1% of its population.

Secondly, we鈥檙e supporting technological innovation by encouraging defence primes to open up their supply chains

Smoothing the path for the SMEs that are the lifeblood of the defence industry鈥�

Providing the niche capability, the groundbreaking ideas and the enterprise that gives us the edge.

And, thirdly, through a new initiative called the defence growth partnership, we鈥檙e providing a collaborative environment for the collective effort of industry, government and academia to focus on making the UK defence industry more sustainable and more competitive鈥�

鈥�able to provide leading edge capability for our armed forces and international customers.

In short, it鈥檚 about bringing the best brains in the business together鈥�

So we can foster a UK supply chain and create a UK centre of excellence recognised as such by defence customers鈥� and other defence supply chains around the world.

International collaboration

So collaboration鈥�is the key to innovation.

But鈥�on a domestic scale, it only takes us so far鈥�

If we want to stay at the very forefront of global innovation鈥�

鈥�and if we鈥檙e to remain ahead of our adversaries鈥�

鈥�we must pool our resources more widely鈥�.

And collaborate on an international scale.

Our countries can point to the individual achievements of great Americans and Great Britons.

Yet it is often the melding of our experience and expertise that produces the unique fission to turn the tide of world events, whether in World War 2 or the Cold War.

Which is why, we want to be part of your discussion on innovation.

And it鈥檚 my firm conviction鈥�and I hope yours too鈥�that we have much to offer, if you鈥檒l let us.

Rich history of collaboration

As the Minister responsible for Defence Equipment, Support and Technology, of course I would say that.

But, you don鈥檛 need to take my word for it鈥�

Because the US and the UK have a rich history of collaboration on military technology and capabilities鈥�something I鈥檝e already alluded to.

Fittingly, the UK had a role in the first US offset strategy and our relationship on the nuclear enterprise is based on the 60 years of collaboration that stemmed from it.

Today, our collaboration is unmatched across a broad spectrum of capabilities including intelligence, force protection, airborne ISR, and the interoperability of our force structures.

Sometimes we鈥檙e equitable partners, working hand-in-glove to develop the same capability, such as on the common missile compartment.

Sometimes the UK is a priority partner, such as on F35, where our involvement helps to save long term costs.

Sometimes we utilise US off the shelf equipment and develop new and innovative ways of operating it, such as on rivet joint.

And when we do collaborate on capabilities, it鈥檚 easy to see the benefits of operating them alongside each other鈥�

it鈥檚 the basis for a much deeper and richer collaboration鈥�

one that exists between our respective services鈥�

and the way they work and operate together.

The future of our carrier operations and maritime power projection will have UK/US interoperability at the heart of it鈥� not just on the equipment鈥�

but on the training of our people and the way we operate the capability in the future.

And we continue to collaborate extensively on science and technology.

Whether it鈥檚 our joint work on land based electronic counter-measures鈥� where together we鈥檙e working to stay ahead of a complex and rapidly evolving threat鈥� and which has saved countless lives and limbs over the past decade of joint operations鈥�

鈥�or our work on infra red counter measures for aircraft.

Encouragingly, the science and technology communiqu茅 that I signed with Frank Kendall at the start of this year鈥�to accelerate our joint programmes of research in disruptive technologies鈥�is already paying dividends.

There are currently around 100 distinct research and development arrangements underway between the UK and the US. And an increased number of US exchange scientists and engineers in the UK鈥�as well as a new scheme for short-term exchanges between UK and US scientists.

We鈥檝e established joint work initiatives in game changing technology鈥�including a DOD-MOD sponsored workshop in the New Year on Quantum technology.

And the value of the communiqu茅 has been affirmed by the development of co-operation into potential new areas including quantum technology鈥�and expanding current areas of co-operation such as autonomy and directed energy.

So we work better together and there鈥檚 more we can do

So we have a good track record in collaboration and innovation鈥�one we can and must build on if we are to even start meeting our full potential鈥�before others meet theirs鈥�

And there is so much we can do across the spectrum of engagement鈥�

Be it working jointly on cutting edge scientific projects鈥� 鈥�Sharing access to critical technologies and test facilities鈥�

..Exchanging ideas on modernising our business processes or attracting talent into defence鈥�

鈥�Co-ordinating the division of effort and the concentration of national resources鈥�

Or increasing joint war gaming on common areas of interest.

Challenging the status quo

But it鈥檚 not just about exchanging new ideas鈥�

It鈥檚 about challenging old ones too鈥�

Breaking down the barriers to collaboration鈥�

Smashing through the bureaucratic ceiling鈥�to accelerate the path from concept to capability鈥�

鈥�Ensuring we can align acquisition, access each other鈥檚 markets鈥�and see capability collaboration for what it really is: a force multiplier and a pooling of the market; not a mechanism for eroding competition or reducing profits.

We need to collectively recognise the importance of strong defence on both sides of the Atlantic, particularly a strong industrial and technical base.

It鈥檚 in all of our interests.

At the NATO summit in Wales, member countries reaffirmed their commitment to spend, or aim to spend, 20% of their defence spending on major new equipment.

We meet our obligations; but not all do.

If European defence industries are prevented from cooperating or partnering on new equipment programmes, their governments will stop investing in defence.

And that will affect all of us.

Collaboration is a 鈥渕ust have鈥� not a 鈥渘ice to have鈥�.

Conclusion

So 鈥�if we鈥檙e to meet the onslaught of emerging and evolving threats in a coherent and credible way鈥�we must collaborate鈥�across industry鈥�and across continents鈥�to draw out the best innovations from our nations. I hope to work closer with the United States to make this happen, and look forward to meeting with the Deputy Secretary this afternoon to take forward our discussions on just how we might do this.

And while we can reflect on a great shared history, it鈥檚 my staunch belief, that if we capitalise on our past鈥�and seize the opportunities of the present鈥� 鈥�we can look forward with confidence to the future鈥�

A future where we will maintain our capability advantage

A future where we will increase our innovation.

And a future where we will strengthen our already special relationship.

And where we will build on success, to succeed.

Thank you.