In a week marked by sweeping announcements and a palpable sense of urgency, the United Kingdom has signaled a major pivot in its defense and innovation strategy, unveiling a £250 million fund aimed at turbocharging the nation’s defense industrial base and fostering closer ties between the military, technology, and space sectors. The developments, unveiled around the high-profile DSEI 2025 defense trade show in London, have sent ripples through the UK’s industrial and military communities, underscoring a new era of rapid modernization and integrated defense thinking.
The government’s five-year, £250 million (approximately €289.2 million) investment, announced on September 12, 2025, is designed to spur innovation and job creation across five key regions: Plymouth, South Yorkshire, Wales, Scotland, and Northern Ireland. Each region is set to receive a tailored investment plan, focusing on its unique strengths within the broader defense industrial landscape. According to Payload, this initiative forms the backbone of the UK’s latest defense industrial strategy, with a clear message: defense investment must drive sovereign capability and dual-use innovation, with the space sector now deemed central to that vision.
Historically, the UK’s space industry has been cautious about aligning itself too closely with defense, wary of scaring off private investors and financial institutions. But the ongoing war in Ukraine and shifting global security dynamics have changed the calculus. As Andrew Turner, CEO of Space4Sight and a former UK air marshal, told Payload, "The space industry can do itself a gigantic favor by being more assertive. Rarely are technologies like space seen as dual-use, but they should all be seen as dual-use. The space industry could be talking much more broadly about the width of utility, rather than the narrowness of a particular sector."
This sentiment is gaining traction. Anthony Baker, CEO of SatVu, emphasized in an email to Payload, "The strategy is explicit that defense investment must drive sovereign capability and dual-use innovation, and [that] space is central to that vision. The MOD is engaging with commercial space companies more directly than ever before, and that’s only going to increase. We expect to see growing investment in sovereign space infrastructure."
These policy shifts come as the UK Space Agency prepares to be folded back into the Department of Science, Innovation and Technology, a move intended to create greater alignment across the UK space sector. While some have expressed concern about the loss of independence for the agency, others, like Alice Bunn, president of UKspace and a former senior UKSA official, see it as a step toward a more cohesive national vision. "Fundamentally, space is now increasingly recognized as a key capability that one needs in the defense domain," Bunn told Payload. "Dual used to be something that was always difficult to fund…but I think we’re getting a more mature approach to that."
The hope among space and defense leaders is that the government’s £250 million fund will act as a catalyst, attracting up to £2.5 billion (€2.9 billion) in additional private and public investment. Turner cautioned, however, that the money must be deployed strategically: "I think the danger is we’ll be investing in a relatively minor, nuanced, and unproductive manner. The £250M (€289.2M) could be the catalyst for a £2.5B (€2.9B) investment into the region. That’s, in my view, how it should be seen: as a lead investor, rather than as the investment."
This spirit of urgency and transformation was echoed at DSEI 2025, held September 11-12 at London’s ExCeL Centre. The event, a flagship for the global defense industry, placed technological innovation front and center. In his first address as Chief of the Air Staff, Air Chief Marshal Harv Smyth described the current era as "the most perilous period in the whole of my 35-year military career." Smyth called for a more agile, integrated, and ready air and space defense force, stating, "My prime focus as the new CAS is to meet this pace of change head on by putting more air into air, more agile, more integrated, more ready to fly and fight – today, tomorrow and together." He warned, though, that the military must not be "seduced away from these foundational areas by new shiny equipment programmes," stressing the continued importance of people, infrastructure, and enablers.
Chief of the Defence Staff, Air Chief Marshal Sir Richard Knighton, echoed these themes, emphasizing the need for speed in modernizing the Armed Forces. Drawing on hard lessons from the Ukraine conflict, Knighton told a packed room, "The need for speed – I don’t want to sound too Top Gun – this pace of adaptation will be of critical importance to our Armed Forces and of critical importance to me during my time as CDS."
The DSEI show floor itself was a testament to the UK’s ambitions. Among the innovations on display: the Kraken K3 Scout, a new autonomous unmanned surface vessel boasting a top speed of 55 knots, a 650 nautical mile range, and a 600kg payload, already in service with several allied nations. Fast patrol boats like HMS Example and the Gemini Waverider 1060p (dubbed "the Beast") showcased the Royal Navy’s push toward a hybrid fleet of crewed and uncrewed systems. General Sir Gwyn Jenkins, the new First Sea Lord, outlined a vision of a digitally connected, widely dispersed Royal Navy, with a hybrid airwing and uncrewed escorts joining the fleet by the end of the decade.
Elsewhere, the Army demonstrated its new approach to battlefield medicine, rolling out NATO-standard Tactical Combat Casualty Care training and equipping every soldier with advanced first aid kits, including "combat pill packs" and access to ketamine and dried plasma. Brigadier Huw Thomas, a senior Field Army medic, explained these measures are designed to save lives in the most challenging conditions.
Defence Secretary John Healey, addressing the DSEI audience, brought the realities of European security into sharp focus. He described a recent incursion of Russian drones into Polish airspace as a "dangerous escalation," noting that at least three drones had been shot down by Polish and NATO aircraft during overnight attacks on Ukraine. Healey reaffirmed the UK’s steadfast commitment to both Poland and Ukraine and directed the UK’s Armed Forces to explore options for bolstering NATO’s air defenses in the region.
Speeches at DSEI also highlighted the exponential rise of drone warfare. Admiral Sir Keith Blount, NATO’s Deputy Supreme Allied Commander Europe, remarked, "This [Ukraine] war has seen remote and autonomous of various types operated at a scale not seen before, and that development of that scale has not been linear, it has been absolutely logarithmic." He noted that drones now account for 80% of Russian casualties in Ukraine, but cautioned that traditional forces remain irreplaceable: "Algorithms will not hold ground – infantry are essential."
National Armaments Director Andy Start summed up the mood, observing, "The threats are really sizable but the opportunities for growth are unprecedented." He warned, however, that tough choices lie ahead, and that the UK must be willing to "disrupt our own tech" to stay ahead of evolving threats.
With the UK government’s new investment strategy, the integration of the space sector, and the Armed Forces’ rapid modernization efforts, the country is clearly betting on innovation and agility to secure its place in an increasingly volatile world. The stakes are high, but for now, the message from London is one of determination, unity, and bold ambition.
