Defence Industrial Strategy 2025:

The UK’s new Defence Industrial Strategy (DIS) 2025 signals a profound shift in how Britain thinks about defence — transforming it from a cost centre into a catalyst for economic growth, technological innovation, and sovereign capability.

Building on the Strategic Defence Review (SDR) 2025, the DIS defines how the UK will become a “tech-enabled defence power” by 2035: one able to innovate, produce, and export at pace. It places small and medium-sized enterprises (SMEs) at the heart of that transformation, targeting an additional £2.5 billion in SME spending by 2028 and simplifying access to procurement, finance, and test infrastructure.

Central to this new approach is the creation of UK Defence Innovation (UKDI) — a single organisation with “radical freedoms” to accelerate innovation across autonomous systems, AI, and advanced propulsion. UKDI’s mission: to deliver capability at wartime pace and grow a competitive defence-tech ecosystem that attracts private capital and global partnerships.

The strategy also reforms export policy through a new Office of Defence Exports, boosts resilience in UK manufacturing, and streamlines procurement via the Procurement Act 2023 and a five-year acquisition pipeline.

For SMEs, this is an unprecedented opportunity — and a challenge. The Government is clear: the next generation of capability will come not just from primes, but from agile innovators with the speed and imagination to meet defence needs head-on.

In this white paper, Rotron Aerospace examines what DIS 2025 means for industry, exploring how the UK can fuse innovation, export potential, and sovereign production to make Defence the Engine for Growth.