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New report shows ‘defence dividend’ is already taking affect

Posted on 03 Jul 2025. Edited by: John Hunter. Read 148 times.
New report shows ‘defence dividend’ is already taking affectResearch by Oxford Economics has revealed that the UK Government’s ambition to deliver a ‘defence dividend’ is already taking effect, with the nation’s biggest defence company, BAE Systems, contributing £13.7 billion to national GDP in 2024, accounting for one in every £200 of the country’s economic output.

The BAE Systems Contribution report comes soon after the UK’s Strategic Defence Review was announced at BAE Systems’ site in Glasgow, where the Prime Minister outlined a plan to create “a defence dividend – that will be felt in the pockets of working people and the prosperity of the country, securing growth for generations to come”.

Charles Woodburn, chief executive at BAE Systems, said: “We work at pace, every day to deliver the advanced, technology-led capabilities the UK’s armed forces need to defend our freedom and strengthen national security, but this report shows that our industry delivers so much more than that. We fuel economic growth, creating jobs and prosperity, with the impact extending far beyond BAE Systems to the thousands of companies we work with right across the UK, helping to support growth and a robust, resilient and innovative UK defence industrial base.”

Engine for growth

Through its Industrial Strategy, the UK Government has made it clear that defence is central to both national security and economic growth, aspiring to harness innovation and industrial power to make defence a new engine for growth. This encompasses a broad range of positive economic outcomes, including jobs, exports and lasting productivity gains.

BAE System’s report outlines some of the ways BAE Systems is already delivering by: supporting over 159,000 full-time equivalent jobs, including almost 50,000 in its UK business; driving economic activity through a UK-wide supply chain, with 5,800 UK suppliers and £5.8 billion spent, supporting jobs across the country; and creating opportunities where they are needed most, with over 40% of its UK workforce living in the most deprived fifth of local authority areas, and £1.3 billion spent with businesses in those areas.

The report also outlines how BAE Systems is intensifying its commitment to skills development. In 2024, the company invested £230 million in education and training, including more than £150 million for 4,650 apprentices and almost £50 million for graduate training. This significant investment directly supports the UK Government’s vision to create new jobs, create skills and opportunity and drive huge growth in industrial capacity.