New study examines how AI could unlock productivity in defence industry

A new research project led by the City-Region Economic Development Institute (City-REDI) at the University of Birmingham, will explore the application of AI and how it could improve productivity across the defence sector.

Adoption of AI is happening at a rapid pace across multiple sectors - already transforming the ways we live and work. One area of the economy which has become increasingly crucial for the UK and the wider world is the defence industry. Defence, where national security is involved, is also an area where AI is complicated to implement.

By speaking to those working at the forefront of defence production and manufacturing, as well as AI development and data securitisation, the project aims to inform the investment decisions of firms and government to realise productivity gains in this crucial sector area.

A key issue for the adoption of AI to enhance productivity in defence firms, is the availability of a large volume of specific data needed to train the AI foundational models to perform specific tasks. The need to ‘fine-tune train’ AI models to incorporate knowledge about company or sector specifics is important for realising increases in productivity, but it can be prevented by the often-proprietary data being held by different companies, with firms unwilling to share beyond their organisation.

Restrictions on the sharing of data for details in relation to defence and security are far more stringent than those for data relating to other areas of the economy. However, there are few industrial sectors where capacity of production and productivity are more central to society currently, than in defence.

Professor Anne Green, Co-Director of City-REDI and Principal Investigator on the project, said: “By speaking to the leading experts in the field, our study will seek to understand the parameters of data-sharing restrictions and find ways to overcome them in order to empower firms to safely use AI tools.

“AI technologies have the potential to unleash a wave of increased productivity in the defence sector, which could help the UK maintain or increase its competitiveness globally. If the government and industry are serious about fully mitigating the risks and exploiting the rewards of using AI, then understanding the existing limitations and how they might be overcome will be crucial.”

The study aims to clarify how much access to data, and the possible limits in the sharing of this data across firms, is a barrier to AI adoption. The researchers will also build an understanding of where the industry is in the adoption of AI, and ways in which this could be improved to achieve gains for local economies and national security.

Ian Taylor, a researcher on the project, said: “The significance of the defence industry to the UK's economic and security situation today is undeniable. Working with expert colleagues in government and industry, we are excited to uncover insights into how the AI revolution can inject productivity to bolster both.”

Professor Green and her team will explore how desirable it will be for firms and government to work together on data-sharing collaboration initiatives to create productivity gains through the adoption of AI tools. The research team will be speaking to experts in the defence sector to build a picture of where the sector is, and how it can seize some of the opportunities going forward.

The project has been funded by the Economic and Social Research Council (ESRC) via The Productivity Institute.