Series Introduction
On 8 September 2025 the Government published the Defence Industrial Strategy (DIS) with the objective of strengthening the UK’s industrial capability to deliver upon the Strategic Defence Review. The strategy sets out its plan across six priority outcomes:
- Making Defence an Engine for Growth
- Backing UK Based Business
- 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
Members can read ADS’ initial briefing on the DIS here, which provides an overview of the strategy.
Introduction – Defence Innovation
As technology races ahead of policy, the Strategic Defence Review sets a clear challenge: the UK must deliver innovation at a wartime pace to stay in front. To deliver this, the DIS states that “embracing innovation within the defence sector is not only a choice, but a strategic imperative needed to maintain competitive advantage”. At the heart of its strategic framework is a ‘whole-of-society’ approach which requires government, industry and academia to develop intelligent partnerships with the aim of leveraging collective technology. The DIS plans to deliver innovative solutions for defence and security challenges, from a wider range of suppliers, to achieve rapid innovation.
The Innovation Landscape
The SDR introduced a bold new player to the innovation arena: UK Defence Innovation (UKDI). ADS and industry had long called for a simplification of the defence innovation landscape, including a single-entry point for companies to access innovation funding and collaboration opportunities. The DIS built further on this key announcement.
Backed by an initial £400 million ring-fenced investment, UKDI’s remit is to prioritise pace, and dual-use technologies. Led by a CEO reporting directly to the Defence Growth Board, UKDI will be empowered to take greater commercial risks and act with more agility than traditional MOD programmes.
The introduction of a Rapid Innovation Unit (UKDI RIU) capable of responding swiftly to emerging capability gaps could, if resourced properly, transform how quickly cutting-edge technology reaches the front line. Perhaps most encouragingly, UKDI will develop and maintain a defence innovation portfolio informed by a clear prioritisation of effort. This will be agreed jointly with the Departments for Business and Trade (DBT) and for Science, Innovation and Technology (DSIT), alongside input from the intelligence community and industry. Such an alignment should help focus resources where they can have the most strategic impact and avoid duplication across departments and funding streams. Such cross departmental collaboration shouldn’t be a one-off handshake; it needs to become muscle memory across government.
Yet while UKDI is being positioned as the new driver of pace and agility, it does not stand alone. While UKDI focuses on near-term challenges and rapid technology deployment, Dstl’s mission is to secure sovereign capabilities and nurture the breakthroughs that underpin future defence advantage. Together, the two institutions should look to form a balanced ecosystem; with one driving immediate impact, the other safeguarding long-term innovation.
ADS welcomes this ambition, but our submission argues that the real test will be how effectively an institution like UKDI can knit together what is still a patchwork of R&D initiatives into a single, coherent innovation agenda. Within the aerospace sector there is a coherent technology roadmap and a strong level of collaboration; to mirror this success in the defence sector UKDI will require a problems-based approach, coalescing around core strategic aims. There is also a need for transparency on how UKDI will coordinate with existing defence innovation bodies. Without focus, UKDI risks becoming another well-intentioned institution that solves problems “here and there” rather than driving systemic capability growth.
Increased Technological Advantage
The creation of UKDI, working alongside the Defence and Security Accelerator (UKDI-DASA), NATO DIANA and the NATO Innovation Fund, offers a platform from which to develop and exploit technologies with dual-use potential. ADS’ recent paper on dual-use, which members can read here, makes the case for further investment in early-stage R&D. It also calls for reform to subsidy control regulations and a new model for pre-commercial procurement, driving innovation through a market-led approach.
To deliver the intent of UKDI, a framework is needed to bring about cross-government collaboration, understanding that the greatest benefits are to be gained by co-investing in core capabilities. To complement the cross-government framework for collaboration, ADS would like to see long-term investments in R&D with dual-use potential. This should be further supported by co-funding and collaboration between the research councils, UKDI and the Aerospace Technology Institute (ATI). Taken together, this would support a ‘dual-use by design’ approach whereby technology can be designed once and sold everywhere.
Reformed Testing and Evaluation
Reforming Testing and Evaluation (T&E) will be critical to delivering innovation at pace. In its submission to the DIS, ADS urged the government to streamline what was too often a slow, siloed and costly process. The new commitments are therefore a welcome sign that this message has landed.
The SDRs promise was clear: a 50% reduction in the regulatory burden of Defence Standards and Conditions. The MOD will launch a Defence Efficiency Plan this autumn, setting out a series of regulatory reviews, beginning with Autonomous Systems in 2025.
Further reforms include:
- A Regulatory Solutions Hub (RSH), offering a single gateway for innovators and end-users to navigate T&E systems.
- An online T&E marketplace (from 2026) to connect partners and facilities, alongside investments in mobile test technologies.
- A virtual test range pilot, paving the way for an integrated “test network” and future industry toolkit.
- The ‘Range of the Future’ programme at Dstl, to de-risk T&E technologies and open ranges more widely to industry. With T&E challenges being launched through UKDI-DASA.
These reforms, combined with the shift to problem-led procurement and the promise of flexible shared facilities, are a change in how defence innovation is validated and scaled. Accessibility, security, and oversubscription remain concerns within industry about these shared environments.
Conclusion
On paper, there is much to applaud. The £400 million investment towards UKDI marks a genuine shift toward treating innovation as a strategic asset. UKDI and the broader DIS announcements signal intent to modernise the innovation landscape, from T&E to dual-use exploitation. The blueprints look great on paper, but it’s now time to make the architecture stand firm.
