On Your Radar

… why the Defence Industrial Strategy matters beyond defence

TL;DR: The Defence Industrial Strategy is one of the clearest recent statements of UK technology industrial policy, even if it presents as a defence document. It creates a new innovation architecture and identifies the frontier sectors expected to carry both military capability and economic advantage. Until however, the Defence Investment Plan settles the funding, it remains an ambitious framework whose credibility depends on whether the money follows.

Some time ago, I was sitting in the pillared hall of ‘Main Building’, the Whitehall home of the Ministry of Defence (MoD). I was drinking a cup of, at best functional, Costa coffee in the company of a former MoD Director-General, discussing matters of strategic import. I expressed, politely, my support for Dominic Cummings’ (then Chief Adviser at Number 10) views on the pace of innovation in technology and how defence could accommodate it. My interlocutor raised an eyebrow. Yes, he said with a wry smile, whenever we have a difficult SpAd (Special Adviser), we simply point them at defence procurement reform; we rarely hear from them again …

That exchange has stayed with me as a telling observation on MoD’s institutional inertia. The UK Defence Industrial Strategy (DIS), published in September 2025, may be different from prior attempts at reform, or it may not. It has regardless the potential to be one of the most significant statements of UK technology industrial policy for some years. The fact that it is framed as a defence document helps to explain why the S&T community has largely missed it.

If you are interested in S&T policy DIS merits, I believe, your attention. Taken together with the Strategic Defence Review (SDR) and the, allegedly, forthcoming Defence Investment Plan (DIP), it forms the clearest recent statement of how the UK intends to link science, industry and national security capability. It also has very current political resonance. @proserious attempts to spare you some effort with this summary analysis.

The DIS is the second major component of the 3-document structure (SDR-DIS-DIP). The SDR, published June 2025, sets out what the UK’s armed forces need to become. The DIS sets out how the country intends to build and grow the industrial and technological capability to deliver it. More on the DIP later.

The framing of the DIS is anchored in the realities of, and lessons from, current conflicts and ongoing geopolitical contest. The war in Ukraine has demonstrated that the pace of military-technological innovation has shifted fundamentally, measured now in days and weeks rather than months and years. Whoever gets technology to the frontline fastest wins. The procurement culture hitherto, in which a decade between requirement and delivery was regarded as unremarkable, is incompatible with that reality.

Ukraine has also taught a hard lesson that sits alongside this innovation observation and further complicates the analysis. Speed of innovation certainly matters, but so does the ability to sustain production at scale under conditions of prolonged attrition. An approach designed around the assumption of short, decisive conflicts, has proved poorly suited to a war of industrial consumption. Shells, missiles and energetics production capacity all fell short of what sustained warfighting required. The DIS commits £6 billion to munitions (in this Parliament), including an ‘always-on’ production pipeline and new energetics factories, but also raises a structural question. A defence industrial base optimised for rapid technology iteration and small-batch production of novel systems is not necessarily one capable of surging to mass output of proven systems when the situation demands it. The requirements pull in different directions, and the strategy is more convincing on the former than the latter.

Prior UK defence strategies have treated the industrial base as a procurement mechanism – a means of equipping the armed forces, evaluated primarily on cost and delivery schedule. The DIS shifts things, at least conceptually. It treats the industrial base as a national strategic asset, simultaneously a security capability, an economic engine and a technology accelerator. Defence spending is in this context repositioned as a strategic demand signal that can shape the technological trajectory of the broader economy as distinct from simply a cost.

This is a key change, and it reflects a wider shift in thinking that has been building globally since the US CHIPS and Science Act set the bar for large-scale state intervention in advanced technology markets.

The most significant structural consequence arising from the DIS is the creation of UK Defence Innovation (UKDI), established during 2025 as the centrepiece of the new innovation architecture with a ringfenced budget of at least £400 million annually, rising in future years. UKDI consolidates what was previously a fragmented, and largely impenetrable, landscape of defence innovation bodies under a single organisation with, supposedly, greater operational freedom from standard MoD procurement processes. It has a dedicated Rapid Innovation Unit explicitly modelled on the US Defence Innovation Unit, and a mandate to fail fast, reallocate funding at pace, and take commercial and capability risks that traditional MoD programmes structurally cannot. The Chief Executive sits on the Defence Growth Board. For a technology firm, a university, or a venture-backed deep tech company seeking to engage with defence, this is a major architectural change to take account of.

From 2026, at least 10% of MoD’s equipment procurement budget is to be spent on novel technologies, defined to include quantum systems, autonomous platforms and AI and related enabling capabilities. This could be important, if honoured in more than letter, and, of course, sustained.

The frontier industries identified in the strategy are likely to be familiar to @profserious followers: quantum technologies, drones and autonomous systems, space, AI, cyber, engineering biology, advanced connectivity and semiconductors. The DIS commits to treating these as industrial development priorities, with dedicated demand signals, regional cluster support, access to test and evaluation infrastructure, and systematic connections to the university base.

On AI specifically, the DIS creates a protected Defence AI Investment Fund, separated from UKDI’s general budget, to accelerate adoption across the MoD. The Defence AI Centre leads this work in coordination with DSIT’s Sovereign AI Unit. The DIS is explicit that ‘transformative AI’ presents risks and opportunities relevant to the broader national security agenda over and above simply procurement. There is a commitment to spend £4 billion on uncrewed and autonomous systems (over this Parliament), with £180 million already announced for AI-enabled digital decision capabilities, giving some substance to the analysis. A critical question the DIS does not answer is how MoD will develop and retain the expertise to be an intelligent customer for AI-enabled systems, a challenge that has defeated more capable organisations than MoD.

Test and evaluation (T&E) is often treated as a side-issue, but is given due attention in the DIS. The strategy commits to a reformed approach with an online T&E marketplace, mobile test technologies to reduce barriers for SMEs, a high-fidelity virtual test range, and a ‘Range of the Future’ programme at Dstl. There is specific acknowledgement that MoD is exploring secure supercomputer capability and connectivity to support testing, recognising a long-standing infrastructure gap.

‘Dual-use’ is handled with more sophistication than previous strategies (though still not wholly satisfactorily). The DIS does not treat military and civilian technology development as separate pipelines with occasional cross-pollination. It treats them as structurally interdependent – defence investment drives civilian innovation, civilian scale-up generates battlefield advantage – and proposes institutional machinery to exploit that interdependence deliberately, including proposals such as a Civil and Military Industries Forum and closer coordination between MoD, DSIT and UKRI. Whether the machinery works in practice is another question, but the idea is right and strongly to be welcomed.

There is one further area the DIS gestures at, but does not resolve, and it matters greatly to anyone with an interest in how science advice operates in government. Obviously, count me in. Dstl is being repositioned – yet again. It is asked to narrow its focus to issues requiring sovereign scientific ownership while acting as a gateway to the broader academic research base, explicitly partnering with ARIA on what the document calls ‘generation-after-next innovation’. The MoD’s R&D budget is confirmed at over £2 billion for 2026–27, rising annually. That is a big number but sceptics, count me in again, may be doubtful about how it will be spent. The account of the governance over how scientific priorities are set within the new architecture is notably thin. The document states that MoD’s Chief Scientific Adviser (CSA) sets the ‘applied science and technology demand signal’, but says next to nothing about how that role operates in relation to UKDI, the National Armaments Director, and the reformed procurement machinery. In a structure that has deliberately separated innovation from procurement bureaucracy, the question of where science sits is critical. The troubled history of defence science advisory structures, characterised by systematic disempowerment, suggests that when institutional authority is unclear, the voice of science tends to lose out to the voice of acquisition. The DIS may well have simply added to that problem.

An international comparative context is helpful, I believe, to understand the DIS. Each major player is attempting procurement reform, though obviously from a different starting position and with different tools. Nevertheless, there is much to learn.

The US published its first-ever National Defense Industrial Strategy (Implementation Plan here) in January 2024, identifying supply chain resilience, workforce readiness, flexible acquisition and economic deterrence as its four organising priorities. That document was a Biden-era product. The Trump administration has overlaid (or perhaps superseded) it with something more assertive but, arguably, less strategic: an April 2025 Executive Order directing a comprehensive overhaul of defence acquisition processes, with an explicit first preference for commercial solutions, a general preference for so-called ‘Other Transactions Authority’ to bypass standard procurement rules, and a ‘ten-for-one’ deregulation requirement (for every new regulation or rule a federal agency proposes to introduce it must identify ten existing regulations to be repealed) for any new internal guidance. Major defence acquisition programmes more than 15% behind schedule or over cost are subject to review for potential cancellation. The workforce is to be restructured, performance metrics rewritten, and risk-taking formally incentivised. The direction of travel is in some ways similar to the UK’s – speed, commercial preference, procurement reform – but the instrument is an Executive Order rather than a strategy document, the timelines are aggressive, and the ideological framing is deregulation rather than industrial development. Whether this produces faster delivery or simply faster chaos is a question we will all too soon learn the answer to.

Germany’s ‘Zeitenwende-era’ strategy (the term denotes the post-Ukraine changes in the European security order), adopted December 2024, is the most explicitly strategically-driven of the European responses. It acknowledges that Germany’s historically constrained approach to defence industrial policy – shaped by post-war constitutional and cultural inhibitions – is no longer adequate, and commits to building a domestic industrial base capable of sustaining collective defence at scale.

The EU’s European Defence Industrial Strategy, published March 2024, operates at a level above member state strategies. It seeks to turn a growth in member state defence spending into durable demand for a European industrial base, pushing for joint procurement, common standards and reduced fragmentation across what remains a collection of nationally siloed defence markets. The European Defence Industry Programme provides financial instruments to incentivise collaborative procurement. Neither the German nor the EU strategy resolves the fundamental tension between ‘buy European’ ambitions and the reality that much of the best technology continues to come from the United States. That tension is currently acute, given uncertainty over US reliability as a supplier.

Canada, arriving late to this conversation with its own strategy in early 2026, has indicated an ambition to award 70% of federal defence contracts to domestic firms within a decade – an unusually specific commitment that reflects the particular pressures of operating in the shadow of an ally whose security guarantees have become, politely, politically contingent.

Against this allied effort sits China’s Military-Civil Fusion strategy (previously discussed in my review of the 5-year Plan), which is worth understanding as the structural challenge that motivates it. China has not published a standalone defence industrial strategy in the sense set out above, because it does not require one. Military-Civil Fusion – embedded across the party-state apparatus – creates an integrated ecosystem in which civilian technological innovation automatically serves military purposes. The institutional separation between commercial R&D and defence application does not exist. Our challenge is to achieve something functionally similar whilst preserving the commercial and institutional pluralism that is, paradoxically, a genuine source of technological advantage. The DIS is the UK’s attempt at that balance.

None of this is without cost, needless to say. The DIS is a strategy document, and strategy documents are arguments about what should, in principle, happen. Whether it actually happens depends on the third document – the Defence Investment Plan (DIP) – which was promised for autumn 2025, missed that deadline, then missed Christmas, then missed the new year, and is now reported to be targeting June with no guarantee even of that. The delay is understood to be driven largely by HM Treasury’s unwillingness to release funding at the pace the MoD needs, leaving little headroom even to deliver the programme of record before any new investment is considered. The National Armaments Director Group – the new institutional centrepiece of procurement reform – became fully operational on 1 April, but widely circulated reports describe an organisation finding its feet slowly and ‘lots of workshops, little meaningful action’, which seems plausible. Meanwhile, without orders and contracts, the defence industry risks a rapid disenchantment.

The institutional architecture described in the DIS is a reality, UKDI exists. The 10% commitment is on the record. The framework is the right one and the frontier industries it names are, if unimaginative, at least the right ones. But architecture requires foundations. Until the DIP is published and the funding settled, the DIS remains the most interesting unfunded technology strategy currently in Whitehall. That is intended as a narrow compliment.