The UK government has unveiled a bold Defence Industrial Strategy (DIS), designed to transform defence into a driving force for economic growth across the country. At its core, the strategy aims to create high-skilled jobs, foster innovation, and strengthen local economies from Cornwall to the Highlands. Defence Secretary John Healey announced the plan during a visit to Rowden, a veteran-founded defence technology firm in Bristol, where he inaugurated the company’s new facility. Rowden, which specialises in critical sensing and decision-making capabilities for the Armed Forces, has seen significant growth, now operating a 20,000-square-foot engineering and production footprint in the city.
Central to the DIS is the introduction of Defence Growth Deals, a £250 million fund aimed at unlocking the potential of local authorities, businesses, and research institutions. These deals will improve collaboration, drive innovation, and create jobs in areas with untapped potential. Five initial Defence Growth Deals will be established across England, Scotland, Wales, and Northern Ireland, building on the success of the Team Barrow approach in Barrow-in-Furness, the home of nuclear submarine building.
Each deal will combine defence and wider government investment to harness local strengths, drive innovation, and deliver tailored support in areas such as skills, housing, and planning. The goal is to boost local economies, attract private investment, and ensure long-term sustainability. Initial analysis by ADS suggests that increased defence spending could create up to 50,000 additional defence jobs by 2034/35. The Defence Growth Deals will play a crucial role in capitalising on this employment potential.
The five initial deals will be backed by £250 million of defence spending over the next five years, underpinned by the government’s commitment to increasing defence spending to 2.6% of GDP by 2027, with an ambition to reach 3% in the next Parliament. These deals will forge long-term partnerships between national, devolved, and local governments, uniting businesses and research institutions to harness local expertise and resources in defence and dual-use sectors.
Defence Secretary John Healey emphasised the strategy’s role in making defence an engine for growth: “The Defence Industrial Strategy will make defence an engine for growth across the UK, backing British jobs, British industry, and British innovators. Defence Growth Deals offer a new partnership with UK Defence to build on industrial and innovation strengths that regions already hold. Together, we aim to drive an increase in defence skills, SMEs, and jobs across all four nations. We want to make the UK the best place in the world to start and grow a defence firm and will put Britain at the leading edge of innovation.”
Chancellor Rachel Reeves highlighted the strategy’s focus on creating good jobs across the UK: “This is a plan for good jobs paying decent wages in Cardiff, Belfast, Glasgow, Sheffield, Plymouth, and beyond. Through Defence Growth Deals, we will unleash the power of local economies while securing our country—building an economy that works for working people, in every part of this country, just as our Plan for Change promised.”
The first Defence Growth Deals will be established in key regions, each with unique strengths:
– Plymouth: Home to the largest naval base in Western Europe, with £4 billion of investment over a 10-year period. The city has been designated as the national centre for marine autonomy, driving innovation in maritime autonomous systems.
– South Yorkshire: A key region for the research, development, and engineering of high-grade components and materials critical to next-generation maritime, land, and air capabilities, including specialist steel for gun barrels and nuclear submarines.
– Wales: A leader in UAV development and testing, with companies like Tekever in Pembrokeshire, testing sites such as the Snowdonia Aerospace Centre, and academic institutions like the Welsh Centre for Defence Autonomy.
– Scotland: Home to a dynamic mix of growth industries, from a rapidly advancing space sector to next-generation maritime innovation centred around the Clyde and Rosyth, and critical technology superclusters anchored by world-class academic institutions.
– Northern Ireland: Home to a diverse range of defence and dual-use SMEs, recognised as a leading cybersecurity hub, boosted by Queen’s University Belfast’s Centre for Secure Information Technologies and Momentum One Zero. It is also home to Thales and Harland & Wolff, critical to supporting Ukraine and maritime strength.
The DIS represents a long-term investment in both security and high-growth economies. By strengthening the industrial base and preparing for future challenges, it aims to unlock defence’s potential as an engine for growth under the government’s Plan for Change. The strategy underscores the importance of innovation and industrial power in deterrence and decisive factors in war, as highlighted by the conflict in Ukraine, which has shown the necessity for fast replenishment, resupply by industry, and a