The Ministry of Defence has highlighted a £35 million investment in small and medium-sized enterprises (SMEs) since July 2024, managed through its Defence and Security Accelerator (DASA).
The announcement, coinciding with Small Business Saturday, showcases how targeted funding is enabling innovative technologies to transition from concept to frontline military capability. This investment is part of a broader government strategy to strengthen the UK’s sovereign supply chain, create high-skilled jobs, and leverage defence as a driver for economic growth. Many of the supported technologies are dual-use, with applications in sectors such as healthcare, transport, and telecommunications.
This funding initiative will be driven forward by the new UK Defence Innovation (UKDI) organisation, established as part of the Strategic Defence Review. UKDI, which incorporates DASA, will have a ringfenced annual budget of at least £400 million to focus on harnessing commercial and dual-use innovations. DASA has provided examples of how its support has enabled SMEs to scale their operations. In Scotland, QuickBlock has adapted its civilian rapid-assembly building blocks for military use as a blast and ballistic protection system. Swansea University spin-out, Trauma Simulation, has developed sophisticated training models for combat medics, while Sentinel Photonics in the South West has seen its laser-protection rifle scope attachments integrated into the Armed Forces’ new KS1 rifles.
The economic benefits of this approach are significant. A recent report found that companies funded by DASA have generated nearly £1 billion in economic value and created approximately 1,800 jobs across the UK. In 2024, these firms successfully raised a further £174 million in private investment, demonstrating the commercial viability of their technologies and the attractiveness of the defence sector for investors. The government’s commitment to growing the role of SMEs in defence is further underlined by the Defence Industrial Strategy.
Looking ahead, the MOD has established a Defence Office for Small Business Growth and set a target to increase its spending with SMEs by £2.5 billion by May 2028. Furthermore, the Strategic Defence Review mandates that 10% of the MOD’s annual equipment procurement budget will be spent on novel technologies. This policy framework signals sustained opportunities for innovative businesses to enter and grow within the UK defence market, ensuring the Armed Forces have access to cutting-edge capabilities developed across the nation.
