• Targets Innovation, Skills, and SMEs
  • UK Defence Spending to Hit 2.6% of GDP by 2027

By Sangeeta Saxena

London. 08 September 2025. Amidst palpable excitement of DSEi 2025 all set to open UK launched its new Defence Industrial Strategy (DIS), a landmark initiative backed by GBP250 million over the next five years, aimed at driving innovation, strengthening regional growth, and embedding defence as a key engine for the national economy, on the eve of the show.

Defence Secretary John Healey launched the Defence Industrial Strategy (DIS) during a visit to defence technology firm Rowden in Bristol, where he opened the company’s new facility. The veteran-founded firm, which produced critical sensing and decision-making capabilities for the Armed Forces, had experienced significant growth in recent years and by then boasted an engineering and production footprint of more than 20,000 sq ft in Bristol.

The strategy was officially unveiled on today at Rowden’s facility in Bristol, with government leaders, industry stakeholders, and academics in attendance. The plan builds on the UK Government’s wider ambition to position defence as both a pillar of national security and a driver of economic prosperity.

Regional Investment and Collaboration

Funding will be channelled into five regions across the UK – England, Scotland, Wales, and Northern Ireland – creating new opportunities for collaboration between industry, local and national government, and academia. The approach seeks to replicate the successful Team Barrow model, which is delivering more than GBP200 million over ten years to regenerate Barrow-in-Furness. That initiative, supported by BAE Systems and Westmoreland and Furness Council, is already helping improve transport connectivity, support local businesses, and alleviate skills shortages.

Support for SMEs and Supply Chains

A key part of the UK’s economic strategy remains the empowerment of small and medium-sized enterprises (SMEs). Under the new plan, the previously announced SME Hub has been renamed the Defence Office for Small Business Growth, which will launch in 2026. Its mission will be to improve small firms’ integration into the defence supply chain, ensuring greater opportunities for innovation and participation at every tier of industry.

Investing in Skills and Education

Recognising the central role of human capital, the DIS sets aside GBP182 million to boost defence skills. This includes the establishment of five defence technical excellence colleges by 2026, designed to cultivate the next generation of highly skilled defence professionals.

Additionally, the government is developing a new UCAS defence portal, which will provide early-career professionals with clearer pathways into defence careers, raising awareness and accessibility for students and young jobseekers alike.

National Security and Economic Growth

The launch of the DIS follows the UK’s recent decision to increase defence spending to 2.6% of GDP by 2027, underscoring the country’s commitment to strengthening its armed forces and industrial base in an increasingly complex security environment.

The DIS 2025 states, “ Our Defence Industrial Strategy will make defence an engine for growth, backing British jobs, British industry and British innovation. The UK has one of the most advanced and innovative defence industrial bases the world over, but we are in a new era of threat, which demands a new era for UK defence. To move to warfighting readiness to deter threats and strengthen security in the Euro-Atlantic, we will reform procurement, innovate at wartime pace, and grow our industrial base.”

It added that the Defence Industrial Strategy will strengthen the security and grow the economy. With a clear plan backed by the largest sustained increase in defence spending since the end of the Cold War, this strategy outlines how the government and industry will now combine around a clear set of priority outcomes:

  • Making defence an engine for growth.
  • Backing UK-based businesses.
  • Positioning the UK at the leading edge of defence innovation.
  • Developing a resilient UK industrial base.
  • Transforming procurement and acquisition systems.
  • Forging new and enduring partnerships.

With GBP250 million in targeted funding, a sharpened focus on skills, and stronger support for SMEs, the new strategy aims to transform the UK defence industrial ecosystem into a global leader, while ensuring that defence investment continues to deliver economic dividends across the nation.