Wales is set to benefit from a new Defence Growth Deal that will channel part of a £250 million UK Government investment into long-term defence partnerships, supporting jobs and innovation across the nation. The scheme, announced alongside the Defence Industrial Strategy, is designed to strengthen local economies while reinforcing the UK’s defence industrial base.
The investment builds on Wales’s established position as a leader in unmanned aerial vehicle development and autonomous systems. Companies such as Tekever in Pembrokeshire, alongside test facilities like the Snowdonia Aerospace Centre and academic institutions including the Welsh Centre for Defence Autonomy, are already providing the foundations of a competitive ecosystem. The Growth Deal aims to harness these strengths by bringing together industry, government, and academia to accelerate research, expand production, and align supply chains with the needs of the Armed Forces.
Wales currently supports nearly 4,000 jobs directly through Ministry of Defence industry spending, with a footprint across cyber security, opto-electronics, land systems, and specialist training. The new deal is expected to unlock further potential, enabling SMEs and larger contractors to secure new work as part of high-value programmes. Suppliers will also benefit from increased opportunities to participate in innovation, testing, and production as demand for autonomous systems and advanced defence technologies grows.
The government has highlighted skills development as a priority, with the Growth Deal expected to direct investment into training and upskilling the workforce to meet future capability needs. This will help Welsh industry scale up to deliver at pace, while retaining highly skilled employment in local communities.
Defence Secretary John Healey described the deal as an opportunity to back Welsh jobs and innovators, while Chancellor Rachel Reeves emphasised its role in creating good-quality employment and supporting regional prosperity. Welsh Secretary Jo Stevens said the deal represented a “defence dividend” for Wales, ensuring long-term benefits for its economy.
The Defence Growth Deal for Wales will be finalised in the coming months, with detailed policy proposals developed in partnership with devolved government and industry. Areas of focus are expected to include targeted investment in innovation, alignment of local supply chains with procurement priorities, and partnerships to support sustained growth.
For suppliers, the deal represents a significant opportunity to access new defence programmes and secure long-term contracts in areas where Wales is already showing international strength. By consolidating expertise in autonomy and aerospace, and aligning it with national security requirements, Wales is positioned to play a central role in shaping next-generation defence capabilities for the UK and its allies.
Welsh Government Cabinet Secretary for Economy, Energy and Planning, Rebecca Evans, said: “Wales excels across the defence sector, in areas including cyber security, opto-electronics, land systems, training and testing, so we are well placed to seize the opportunities that lie ahead in developing the defence industrial base here in the UK and in Europe.
“We have worked closely with the UK Government in shaping the UK’s Modern Industrial Strategy and ensuring that Wales is pivotal to its delivery.
“This is a government that is ambitious about Wales’ future prosperity. The Defence Industrial Strategy, and the pioneering Wales Defence Growth Deal, will be key as we strive to drive further economic growth in high value sectors for communities across Wales. I also look forward to promoting Wales’ considerable capabilities in the defence sector at DSEI this week.”
