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| Sector | Defence |
| Gross Value Added (£bn)/Contribution to UK GDP (%) | £10–12 billion (2023), c.0.5% of UK GDP |
| Number of workforce jobs | 164,000 direct jobs (2023) |
| Business investment, 2024 (£bn) | £842 million R&D (2022, latest available) |
| Key projects | Dreadnought-class submarines, Future Combat Air System (Tempest), Type 26/31 Frigates, Lightning II (F-35), Ajax vehicles, Skynet 6 |
| Key UKRN regulators | Single Source Regulations Office (SSRO), MOD (for competitive procurement) |
| Regulatory approach | SSRO regulates non-competitive (single-source) defence contracts; MOD applies public procurement rules to competitive contracts. Both focus on value for money, transparency, and fair returns. |
The UK defence sector is a strategically significant part of the national economy and security framework. It provides essential military capability to the British Armed Forces and underpins the UK’s ability to meet NATO commitments and respond to global security challenges. The sector is characterised by a small number of large prime contractors, a network of mid-tier suppliers, and hundreds of highly specialised small and medium-sized enterprises (SMEs).
Defence is capital-intensive and research-driven. In 2022, UK defence companies invested £842 million in R&D, with industry-funded R&D rising to £171 million. Government-funded R&D remains dominant, reflecting the strategic nature of defence technology. Innovation priorities include autonomy, artificial intelligence, advanced propulsion, and space systems.
Defence activity is concentrated in key industrial clusters. The South West hosts major naval facilities and aerospace hubs, accounting for the highest per-capita MOD spending (c.£1,190 per person in 2023/24). Other significant centres include Barrow-in-Furness (submarine construction), Lancashire (combat air), and Glasgow (warship building). These clusters anchor regional economies and sustain long-term employment.
The Government’s commitment to raise defence spending to 2.5% of GDP by 2027, combined with the Defence Industrial Strategy’s emphasis on sovereign capability and exportability, signals sustained demand for defence products and services. Long-term programmes such as Dreadnought-class submarines, Future Combat Air System (Tempest), and Type 26 frigates provide multi-decade revenue visibility for prime contractors and their supply chains.
The UK defence sector is a strategically significant part of the national economy and security framework. It provides essential military capability to the British Armed Forces and underpins the UK’s ability to meet NATO commitments and respond to global security challenges. The sector is characterised by a small number of large prime contractors, a network of mid-tier suppliers, and hundreds of highly specialised small and medium-sized enterprises (SMEs).
Defence is capital-intensive and research-driven. In 2022, UK defence companies invested £842 million in R&D, with industry-funded R&D rising to £171 million. Government-funded R&D remains dominant, reflecting the strategic nature of defence technology. Innovation priorities include autonomy, artificial intelligence, advanced propulsion, and space systems.
Defence activity is concentrated in key industrial clusters. The South West hosts major naval facilities and aerospace hubs, accounting for the highest per-capita MOD spending (c.£1,190 per person in 2023/24). Other significant centres include Barrow-in-Furness (submarine construction), Lancashire (combat air), and Glasgow (warship building). These clusters anchor regional economies and sustain long-term employment.
The Government’s commitment to raise defence spending to 2.5% of GDP by 2027, combined with the Defence Industrial Strategy’s emphasis on sovereign capability and exportability, signals sustained demand for defence products and services. Long-term programmes such as Dreadnought-class submarines, Future Combat Air System (Tempest), and Type 26 frigates provide multi-decade revenue visibility for prime contractors and their supply chains.
The UK defence sector is a strategically significant part of the national economy and security framework. It provides essential military capability to the British Armed Forces and underpins the UK’s ability to meet NATO commitments and respond to global security challenges. The sector is characterised by a small number of large prime contractors, a network of mid-tier suppliers, and hundreds of highly specialised small and medium-sized enterprises (SMEs).
Defence is capital-intensive and research-driven. In 2022, UK defence companies invested £842 million in R&D, with industry-funded R&D rising to £171 million. Government-funded R&D remains dominant, reflecting the strategic nature of defence technology. Innovation priorities include autonomy, artificial intelligence, advanced propulsion, and space systems.
Defence activity is concentrated in key industrial clusters. The South West hosts major naval facilities and aerospace hubs, accounting for the highest per-capita MOD spending (c.£1,190 per person in 2023/24). Other significant centres include Barrow-in-Furness (submarine construction), Lancashire (combat air), and Glasgow (warship building). These clusters anchor regional economies and sustain long-term employment.
The Government’s commitment to raise defence spending to 2.5% of GDP by 2027, combined with the Defence Industrial Strategy’s emphasis on sovereign capability and exportability, signals sustained demand for defence products and services. Long-term programmes such as Dreadnought-class submarines, Future Combat Air System (Tempest), and Type 26 frigates provide multi-decade revenue visibility for prime contractors and their supply chains.
The UK defence sector is a strategically significant part of the national economy and security framework. It provides essential military capability to the British Armed Forces and underpins the UK’s ability to meet NATO commitments and respond to global security challenges. The sector is characterised by a small number of large prime contractors, a network of mid-tier suppliers, and hundreds of highly specialised small and medium-sized enterprises (SMEs).
Defence is capital-intensive and research-driven. In 2022, UK defence companies invested £842 million in R&D, with industry-funded R&D rising to £171 million. Government-funded R&D remains dominant, reflecting the strategic nature of defence technology. Innovation priorities include autonomy, artificial intelligence, advanced propulsion, and space systems.
Defence activity is concentrated in key industrial clusters. The South West hosts major naval facilities and aerospace hubs, accounting for the highest per-capita MOD spending (c.£1,190 per person in 2023/24). Other significant centres include Barrow-in-Furness (submarine construction), Lancashire (combat air), and Glasgow (warship building). These clusters anchor regional economies and sustain long-term employment.
The Government’s commitment to raise defence spending to 2.5% of GDP by 2027, combined with the Defence Industrial Strategy’s emphasis on sovereign capability and exportability, signals sustained demand for defence products and services. Long-term programmes such as Dreadnought-class submarines, Future Combat Air System (Tempest), and Type 26 frigates provide multi-decade revenue visibility for prime contractors and their supply chains.