HSDG, an association of security and defence companies, has been formed by local Herefordshire SMEs for local SMEs. Whilst it has the support of relevant agencies such as the Chamber of Commerce and UKTI, the project belongs to and will be controlled by the companies participating in the HSDG.
We have created a dynamic Industry Group, where support and collective engagement raise significantly the commercial and industrial capacity of this niche and specialist sector in Herefordshire, for the benefit of Group members and the wider community.
The D&S sector in Herefordshire
There are 9,500 troops based at Credenhill in Hereford.
On leaving military service, these highly skilled and trained specialists usually have families settled in the local area, and given their highly motivated and independent character, look to establish their own businesses in the county, to maximise the potential value of their knowledge, experience and connections. Many former soldiers enter the private security sector – close personal protection and surveillance – where currently there is a lucrative international market, particularly in the Middle East and Africa. Former Signals tend towards defence technology, and develop IT they can sell to domestic and foreign forces.
Given the value of their skills and the potential international market, growth from start-up is often rapid. For example, within 5 years from start up, one such company needed a senior commercial lawyer in-house 5 days per week just to service their international distribution agreements for secure mobile communications technology.
Genesis of HSDG
Collaboration amongst small SMEs in Herefordshire was the original idea of:
Duncan Williams, IA Technology Limited, and
Bruce Fullerton, Antares Defence Systems
latterly supported by:
Richard Morgan, partner at Harrison Clark Rickerbys solicitors (“HCR”), a top 100 UK law firm with 350 staff and offices in Hereford, Ross-on-Wye, Cheltenham, Worcester, Reading and Birmingham.
Duncan and Bruce, in separate conversations with Richard, discussed development of “jamming” technology related to remote triggers for IED’s. Neither Duncan nor Bruce was aware of the other’s work in this area. They were introduced to each other by Richard, as a result of which they developed a hybrid technology which they have successfully sold to new markets. As a result, they jointly approached Richard to discuss their perception that this chance opportunity for a joint venture was potentially the tip of an iceberg, given the extent of the security and defence industry in Herefordshire. With a secure environment in which companies could network and discuss current R and D, a host of other joint venture opportunities might be identified.
It was also envisaged that in combination, rather than working in isolation, companies in the local industry could:
- achieve economies of scale by ordering goods and services once as a group, rather than repeatedly as individual customers;
- tender for contracts as a consortium, where the participants did not have, individually, sufficient resources and manpower to do so.
The latter opportunity is particularly pertinent in an era where Government departments such as the MoD are actively looking to contract with consortia of SME’s, rather than exclusively with prime contractors. Herefordshire currently lacks an equivalent for groups in other counties exploiting this opportunity, such as the Cyber Security Cluster in Worcestershire.
This collaboration highlighted to the participants 2 principal issues:
- That there is a wealth of innovation within Herefordshire, with the possibility for diverse applications for new technology, all of which will not necessarily and immediately occur to the creators working alone, and
- That the most significant hurdle to develop new technology for multiple applications is cost and availability of funding for R and D.
More recently Adrian Blackshaw (retired Investment Banker), and Rear Admiral Philip Wilcocks have been working to create the HSDG using their wealth of corporate, finance, governance and defence experience.
Small SMEs face significant challenges that include:
- Pressures on cash flow & working capital
- Winning contracts both at home and abroad, especially with the bureaucratic tendering processes in place
- Marketing and sales pressures
- Availability of professional networking and advice
- Access to quality support services, especially secure office spaces
- Finding quality staff
What does the HSDG Provide?
The primary goal of the participating companies is to gain information about and identify common interests with other companies in the County involved in the same industry. It is recognised by all those who have participated in the discussions that there is no existing provision of this kind, nor any body or group via which companies in the industry can communicate with each other. As a result, local security and defence contractors are missing the opportunity to work in collaboration and identify partnership and joint venture opportunities.
The group has established a networking group, enabling regular communication and approximately three meetings each year.
In addition to networking and marketing, the HSDG aims to provide:
- Independent Financial Support including multi-member joint grant applications
- Commercial Advice
- Legal Advice
- HR Advice
- Tendering Support, especially for MOD contracts
- Intellectual property advice, protection and development
- Risk management
- Lobbying collectively (strength and depth)
- Joint research and development, potentially in partnership with the New University of Herefordshire (see below).
HSDG sector support
HSDG supports the complete business journey of this sector in the following ways:
Re-settlement programme – with its commercial partners HCR and X-Forces, HSDG is delivering re-settlement programmes to serving military about to leave service and interested in establishing new businesses. Workshops on establishing new businesses have been delivered to Special Forces the RAF and Help for Heroes, and the programme is ongoing.
Herefordshire University – The board of the new Herefordshire University are engaged with HSDG to design courses aimed at delivering industry-ready graduates for the D&S sector, and to secure work placements for undergraduates during their courses.
Enterprise Zone – Hereford Enterprise Zone have an area designated for the D&S sector, enabling companies within the industry to gain the advantage of perimeter security to List X standards, as well as the other benefits of EZ location.
Membership support – HSDG also provides established SME’s and start-ups with a range of benefits and services, including:
- a secure environment for networking and information exchange within the local industry;
- achieving economies of scale, in accessing products and services. For example, if each member bears the cost of retaining lawyers to draft a joint venture agreement, that cost is disproportionately high – when the template JVA is sourced by HSDG, and the individual members can access the same template, the proportionate cost to each company is massively reduced. The same can be achieved across a broad range of products and services.
- Again, the resources necessary to monitor tender opportunities is significant, as defence procurement is an enormous and diverse area. HSDG’s tender monitoring service will make access to this service possible for companies that could not cover this individually.
- Once tender opportunities are identified, many SME’s do not have the resources to meet threshold criteria, but by combining together as a consortium they can reach required levels.
- Also, as a group, they can access critical market information. Commercial officers from key central Government departments and agencies, including UKTI, DSO, MOD, FCO and foreign embassies are willing to share information and provide support in ways which member companies cannot access individually. For example, HSDG events have been attended and addressed by London based personnel on subjects ranging from export control and licensing, selling to the MoD, and export opportunities in Africa.The future meetings will include industry relevant speakers from:
UKTI / DSO on export opportunities in specific world regions, eg the Middle East.
LEP / Business Board speakers on local support for industry.
Legal, professional and commercial information – eg speakers from banks, funders, law firms, accountants etc.
Allied bodies, eg BSIA.