A vital contributor to the UK

BAE Systems plays a critical role in ensuring the security of the United Kingdom. The company is the nation’s largest defence, aerospace and security company and delivers some of the largest and most technically advanced engineering and manufacturing projects in the world, keeping countries, their people and infrastructure secure.

By investing £4 billion in the 8,900 companies in its supply chain, BAE Systems makes a significant contribution to the UK’s national and regional economies, the technology sector and the fabric of UK society by providing unrivalled skills, training and opportunities for social mobility. The company creates highly skilled jobs, invests in research and development and generates significant exports and tax revenues. These benefits are widely spread around the UK. BAE Systems manages sites from Glasgow to HM Naval Base in Portsmouth, and hence directly contributes to local economies across most UK regions.

ECONOMIC GROWTH

The company’s operations supported an £11.1 billion contribution to UK GDP in 2016, which in turn helped to sustain a £2.5 billion tax contribution to the Exchequer. As part of this contribution, BAE Systems exported £4.7 billion worth of goods and services last year, aligning with the UK government objective of reaching the value of £1 trillion for UK exports by 2020. These activities sustained nearly 130,400 full-time equivalent jobs in the UK in 2016, implying that for every 100 jobs at BAE Systems, the organisation supported 380 jobs in the economy as a whole.

PRODUCTIVITY AND SKILLS

Employees are extremely productive: almost 80 per cent more productive than the national average in 2016. This reflects the skills level of the workforce, with some 64 per cent of staff employed in engineering or related roles. The importance of this skills base to the company’s success is reflected in its consistent investment in training. BAE Systems currently employs almost 2,200 apprentices, 500 graduates and more than 100 summer interns. Increasing productivity and delivering the most efficient and cost-effective projects is a key focus.

TECHNOLOGY AND R&D

BAE Systems also makes a substantial contribution to the UK wider economy through investments in technology and R&D, which in 2016 totalled more than £1 billion. Over the past five years, the company’s R&D funding totalled £4.4 billion, underpinning the development of some highly innovative products. The organisation works closely with universities and has in excess of 1,600 granted patents worldwide. In 2016, the European Patent Office ranked BAE Systems as the fourth largest UK applicant.

THE FUTURE

We are proud that our company makes such a major contribution to the economy and safety of the nation. As the UK seeks to expand into new export markets and to grow in the technology sector, BAE Systems will have a major role to play.

REACTION ENGINES LTD

In 2015, BAE Systems made a strategic investment of £20.6 million with UK engineering firm Reaction Engines, taking 20 per cent of the company’s share capital and forming a joint venture to drive forward the development of our revolutionary SABRE™ air-breathing rocket engine. The venture marries the disruptive technology of Reaction Engines with BAE Systems’ extensive aerospace development and project management expertise in order to bring the engine into production and make the next great leap forward in powered space flight.

The SABRE™ engine is designed to work like a conventional jet engine but at very high altitudes (more than 100,000 feet) and at very high speeds (Mach 5 — five times the speed of sound). It does so by making use of atmospheric oxygen (air-breathing), which other jet engines cannot. Once proven, the technology will reduce the amount of fuel that must be carried by the aircraft, making it potentially feasible for smaller vehicles to orbit the Earth, whilst taking off and landing like conventional aircraft.

In readiness for testing in 2020, Reaction Engines Ltd has begun construction of a new test facility where it plans to undertake the first ground based-demonstration of our SABRE™ engine.

PRODUCTIVITY THROUGH PEOPLE

In July 2015, some of Britain’s most senior business leaders, including Sir Roger Carr, chairman of BAE Systems, formed the Productivity Leadership Group. The Group began to explore what could be done to achieve 10 per cent productivity growth by 2019. A focus has been to work with small and medium-sized enterprises (SMEs), which make up 99.9 per cent of private sector businesses and 60 per cent of all private sector employment, but often find it too risky and costly to invest in training and productivity programmes.

The group studied highly productive workplaces and found common themes. Early research and conversations with organisations across the country revealed that poor management and lacklustre leadership are linked with poor productivity. The leaders in the most productive organisations had demonstrated ways to engage their workforces and unleash their energy and the group concluded that the techniques used could be adopted by other leaders, too. This formed the basis of Productivity Through People (PTP) —an initiative that offers a management approach that is teachable and aims to create a nation of brilliant business leaders.

PTP is a collaboration between industry and academia and offers a 12-month programme for leaders within SMEs wishing to ‘work on the business not in the business’. Having undertaken their benchmarking exercises, participants make a series of visits to industrial partners, including BAE Systems, Rolls-Royce and Siemens, as well as participating in workshops and masterclasses.

Two pilot programmes have been created with Lancaster and Bath University Business Schools involving 42 delegates from 34 businesses that together have a turnover of £2.7 billion and a combined staff of 7,000 employees. Plans are in place to launch PTP in Scotland, Birmingham, London, Northern Ireland and Wales. By 2020, PTP is scheduled to run two programmes a year, from seven centres across the UK.

PTP is jointly funded by SMEs, the sponsoring businesses and Local Enterprise Partnerships.