Transatlantic defence, procurement and industrial cooperation

The US-UK defence partnership is being called upon to renew itself as geopolitical tension rises in Europe and the Asia-Pacific and the demands of modern conflicts change.

That was the takeaway when BritishAmerican Business convened experts at our London offices to discuss how the two countries can use the investment capacities of their companies to strengthen the industrial base, innovate at speed on land, air and sea, and develop cutting-edge capabilities across new technological frontiers.

The HSF Kramer Defence and Security team advises contractors, investors and government stakeholders across the UK, US, Europe, Asia and Australia on procurement, regulatory, transactional and disputes matters. Combining sector expertise with a 2,700-lawyer global platform, we support established defence and aerospace businesses, emerging defence technology companies and the investors helping to shape the future of the sector.

Procurement reform: From process to outcomes

A central theme of the discussion was how war in Ukraine and elsewhere has shortened technology cycles and put pressure on procurement strategies.

The UK has responded by setting an ambitious target of cutting procurement timeframes by two-thirds. Meeting this ambition will require a shift in focus from process compliance to outcomes and from a smaller group of established prime contractors towards a more diverse ecosystem of suppliers, including non-traditional and smaller firms. This will require government to engage earlier in the capability lifecycle, co-create solutions and share information where appropriate to allow industry to invest in confidence.

US priorities are similar, with faster innovation, quicker delivery and greater supply chain resilience top of the agenda. Meanwhile, US interest in offshore co-production arrangements could draw allies – particularly the UK – more deeply into supply chain structures.

UK companies and the US defence market

There are significant opportunities for UK companies in the US defence market, with some specialist UK firms already embedded in the US supply chain while the AUKUS framework has helped open doors. Moving forward, the UK can bring strengths in skills training methodologies, which are sometimes more modern and sophisticated than US equivalents.

However, the US market can be difficult to navigate without government support or an established corporate sponsor. There are also concerns around the terms of engagement: large-scale US investment in the UK defence sector can sometimes amount to the acquisition of British companies and their intellectual property, an outcome which serves neither UK industrial interest nor long-term technological sovereignty.

Genuine co-development which preserves UK ownership of innovation – which all attendees agreed is a national strength – must be the aspiration.

From lab to battlefield

One of the most pressing discussions of the day concerned the time it takes to turn technological innovation into deployed capability. The pace of this process is central to deterrence and this lesson must be applied at the alliance scale.

A major issue is over-testing, which often sees proven defence systems in the US re-tested in the UK to “make the wheel rounder”. But this time has a cost – getting equipment to the battlefield that is good enough saves lives and contributes to deterrence.

Procurement rules themselves are over-blamed for lateness when it is often cultural and institutional factors which cause delay. This is partly a mindset issue: in Ukraine, time itself is understood as a front in the war, with lags between the lab and battlefield often decisive in the conflict itself. The lesson of Ukraine is about adapting quickly.

Technology: A new conflict domain

Conventional definitions of defence are being challenged in an era of rapid technological change. Space, quantum computing and data infrastructure must now be understood as a theatres of conflict and defence treated as a whole-economy issue.

The UK's quantum capabilities are an area of genuine strength and strategic potential. However, bilateral technology cooperation frameworks have not always advanced with sufficient momentum and opportunities for deeper collaboration have not always been seized.

Asymmetric warfare and deterrence

Recent conflicts around the world have shown how 'medium powers' have the capacity to withstand more powerful adversaries. While it is new technologies which are driving asymmetric warfare, the lesson for the transatlantic alliance is an old one: deterrence is centred on adversaries believing they cannot achieve their aims at acceptable cost.

However, allied countries will need a new mindset to harness these new technologies – Ukraine accepts risks which peacetime procurement frameworks seldom accommodate.

Adversaries are also aware that western procurement systems often wrap themselves in bureaucratic caution: acting decisively would strengthen deterrence by sending a strategic signal.

The national interest case for defence investment

A recurring theme was the need to reframe defence spending as a national investment rather than a budgetary burden. The prevailing UK Treasury approach – balancing domestic procurement priorities against short-term cost savings – misunderstands the nature of deterrence. By the time the case for defence investment feels self-evident, it is already too late.

The warning from attendees was the UK is posturing to rearm in a world that is rearming and the window for building domestic defence manufacturing capacity is closing.

The US-UK relationship has endured through trust and been the cornerstone of transatlantic security for over 70 years. Renewing it to face new challenges will require operationalising that trust at scale and speed.