The UK government has announced a new Defence Industrial Strategy aimed at driving economic growth, creating jobs, and enhancing national security through targeted investment in British defence firms. Defence Secretary John Healey unveiled the strategy at a London Defence Conference on December 2, 2024, setting out plans to strengthen the sector in response to global threats and evolving geopolitical challenges.
The strategy prioritises long-term investment in UK-based companies, focusing on innovation, resilience, and integration to ensure the Armed Forces remain equipped and prepared to deter adversaries. A key objective is to grow defence sector jobs in “every nation and region of the UK,” with Healey describing the defence industry as “the foundation for a decade of national renewal.”
New measures and industry investments
The strategy introduces initiatives such as enhanced supply chain resilience, increased funding for research and development, and streamlined budgetary processes. A unique “wargame” exercise has also been launched to explore how the Ministry of Defence (MOD) and industry can maintain frontline operations during supply chain disruptions.
Several major industry investments were announced alongside the strategy:
- Helsing, Europe’s largest defence AI company, plans to invest £350 million in the UK over the next five years to mass-produce thousands of AI-enabled drones.
- BAE Systems will recruit thousands more workers and make significant investments in skills development.
- Babcock is creating 1,500 new early-career roles through graduate and apprenticeship opportunities.
- Rolls-Royce has opened a new office in Glasgow, creating 120 jobs to support submarine programmes and regional growth.
These investments reflect a renewed confidence in the UK defence sector, which already supports 434,000 jobs, with 67% based outside London and the Southeast.
Strategic priorities
The strategy identifies key areas for domestic development, including semi-conductors, steel, shipbuilding, and artificial intelligence. It also emphasises the importance of collaboration with industry to accelerate innovation, integrate emerging technologies, and grow the UK’s share of the defence export market.
Healey stated, “Our defence sector should be an engine for jobs and growth, strengthening our security and economy. That requires a defence industry that is better and more integrated—one that can keep our Armed Forces equipped, innovating at a wartime pace, and ahead of our adversaries.”
The strategy seeks to address longstanding challenges, including skills shortages, inefficient spending, and a lack of focus on exports. It proposes the appointment of a National Armaments Director to oversee procurement and ensure the Armed Forces are properly equipped.
Industry response
Kevin Craven, CEO of ADS Group, welcomed the strategy’s focus on the defence sector as a high-priority area for growth. He noted, “Industry greatly appreciates the opportunity for deep involvement with these processes. To deliver the right capability to support the UK’s ability to deter, it is pivotal that we continue to contribute to military planning activities.”
The government has committed to spending 2.5% of GDP on defence and aligning the strategy with the upcoming Strategic Defence Review. The Defence Industrial Strategy, set to be published in early 2025, is part of the government’s broader mission to achieve sustained economic growth, create high-quality jobs, and enhance the UK’s industrial and defence capabilities.
A renewed vision for UK defence
The strategy represents a step-change in the government’s approach to defence, aligning with its goal to position the UK as a leader in innovation, resilience, and global security collaboration. By strengthening domestic supply chains and fostering investment, the government aims to ensure the UK defence sector remains a cornerstone of national and economic security.
You can read the full January 2025 issue below:
