UK launches Defence Industrial Strategy with £250m growth deals and 50,000 jobs forecast
September 8, 2025
The UK government has unveiled a landmark Defence Industrial Strategy (DIS) that aims to strengthen national security while driving economic growth across the regions.
Announced today (8 September 2025) by Defence Secretary John Healey at a defence tech facility in Bristol, the plan includes £250 million of Defence Growth Deals, a £182 million skills package, and long-term spending commitments designed to transform the role of defence in the UK economy.
Industry body ADS welcomed the strategy, releasing new data showing that a rise in defence spending to 3% of GDP by 2035 could create 50,000 additional jobs and boost the sector’s economic contribution by more than 50%.
Defence growth deals: regional clusters of innovation
The headline initiative is the creation of Defence Growth Deals: partnerships between central government, local authorities, industry and academia. The first five deals, worth a combined £250m, will focus on:
- Plymouth – a national centre for marine autonomy, with £4bn investment over 10 years.
- South Yorkshire – specialist R&D for submarine and land system components.
- Wales – UAV development and testing, building on facilities such as the Snowdonia Aerospace Centre.
- Scotland – investment in space systems, maritime innovation, and university-linked technology hubs.
- Northern Ireland – advanced defence technology development, with details to follow.
The government said the deals are designed to ensure defence acts as an “engine of growth,” spreading investment beyond the South East and supporting UK supply chains
The Defence Industrial Strategy includes £182m skills boost and five new colleges
To underpin the strategy, ministers confirmed a £182m skills package. Central to this are five new Defence Technical Excellence Colleges, set to open in 2026, specialising in submarine engineering, cyber, aerospace systems and other high-demand fields.
Other measures include:
- £80m of university investment for defence-relevant research.
- A new Defence Skills Passport, supporting career mobility between the Armed Forces and industry.
- Expanded apprenticeships and a graduate clearing scheme.
Healey said the aim was to “unlock talent across every part of the UK,” ensuring industry has the workforce required for modern defence capabilities.
Economic impact of DIS: 50,000 jobs and £23.5bn GVA
Analysis from ADS, which represents more than 1,600 businesses across aerospace, defence, security and space, suggests the economic impact could be significant.
- Raising defence spending to 3% of GDP by 2035 could create 50,000 additional jobs on top of the 181,500 already in the sector.
- The sector’s gross value added (GVA) could reach £23.5bn, up from £15bn in 2024 — a rise of more than 50%.
- If spending were to rise further, to 3.5% of GDP, the number of direct defence jobs could increase by 85,000.
“The primary purpose of defence and security is to protect and deter – but in the process, the value we provide to the economy is increasingly critical to innovation and prosperity,” says Kevin Craven, CEO of ADS.
“An increase in spending of this magnitude delivers on the long-term demand signal that helps the defence sector to do what we do best: deliver capabilities that are needed to uphold our security, in a way that delivers value for money to the citizens we are here to protect.”
From peace dividend to defence dividend
The new strategy builds on the June Strategic Defence Review, which committed to lifting defence spending to 2.6% of GDP by 2027, and 3% in the next Parliament. Ministers framed the change as a pivot from a ‘peace dividend’ to a ‘defence dividend,’ harnessing military spending to fuel economic growth and innovation at home.
For aerospace in particular, the focus on UAV development in Wales, space in Scotland, and skills in cyber-aerospace integration points to new opportunities for investment and capability development.
The Defence Industrial Strategy represents the UK’s most ambitious attempt in decades to tie national defence priorities directly to economic development.
With industry projecting tens of thousands of new jobs and billions in added value, the government is betting on defence not just as a guarantor of security, but as a driver of regional prosperity and industrial resilience.
