Small business Saturday: £35 million defence funding boosting innovation across the UK

• As the nation marks Small Business Saturday, MOD reveals innovative ideas across the UK which are being scaled into frontline military solutions, through dedicated defence funding.

• SMEs are expanding, creating hundreds of high-skilled jobs nationwide, strengthening supply chains and making defence an engine for growth.

• £400 million annual ringfenced budget for harnessing commercial innovation, including dual-use technologies. 
  
  

Small and medium UK firms are being supported to bring innovations, from blast protection blocks to laser detection cameras, to market as the Armed Forces strive to be at the leading edge of innovation in NATO. 

The Defence and Security Accelerator (DASA), underpinned by the deep scientific and technical expertise at the Defence Science and Technology Laboratory (Dstl), has today unveiled how their financial backing for smaller companies has helped take innovations from the drawing board to military deployments. Many of the funded technologies have dual-use potential, serving defence needs while transforming sectors like healthcare, transport, and telecommunications. 

These projects have been backed by £35 million funding nationwide since July 2024. This work will be driven forward through the new UK Defence Innovation (UKDI) organisation - created as part of the Strategic Defence Review - which will be focused on harnessing commercial innovation, including dual-use technologies, backed by a ringfenced annual budget of at least £400 million. 

Examples of DASA's impact include: 

• In Scotland, QuickBlock's innovative building block system, which started its life as a civilian product, has been adapted for military use to be a highly effective tool for ballistics and blast protection. 
  
  
• In Wales, Swansea University spin-out Trauma Simulation has developed ground-breaking whole-body training models that transform how Combat Medics and Medical Emergency Response Teams prepare for life-saving interventions. 
  
  

• In the South West of England, Sentinel Photonics has been supported to grow from a founder-led startup of former Dstl scientists to a 20-strong team, whilst their attachments for rifle scopes – which shield users' eyesight from lasers and prevent detection by laser surveillance – have now been integrated into the Armed Forces' KS1 rifles entering service. 

Earlier this year, a new report revealed that companies funded by DASA have generated nearly £1 billion in economic value and created 1,800 jobs across the UK, underlining how defence is an engine for growth. In 2024 alone, DASA-funded firms raised £174 million - defying wider market trends and making defence an engine for growth, delivering on the government's Plan for Change. 

The MOD is a major investor in innovation and technologies through the Defence Industrial Strategy that drives productivity and growth across the economy. The creation of the Defence Office for Small Business Growth will boost opportunities and access, supported by a target to increase spending with SMEs by £2.5 billion by May 2028.   

Minister for Defence Readiness and Industry, Luke Pollard MP said:

“We are backing small businesses up and down the UK that are the backbone of our economy, creating good jobs across the regions and the UK and easing the cost of living. Our government is committed to supporting businesses to grow and prosper – supporting British security and local communities. 

“From advanced satellite systems developed in Oxford to innovative ballistic defence structures in Scotland, defence funding is helping these businesses bring transformative technologies into service. 

“Through our Defence Industrial Strategy, we are supporting local businesses, creating high-skilled jobs and ensuring our Armed Forces have the best tools to keep our nation secure at home and strong abroad.” 

Innovation thrives in every region of the United Kingdom, from established tech clusters to industrial heartlands, historic urban centres to rural communities. Reflecting this, the Strategic Defence Review set out that 10% of the MOD's equipment procurement budget will be spent on novel technologies each year. 
 

By investing across the breadth of the nation, DASA ensures defence and security benefit from the unique perspectives, specialised knowledge, and industrial traditions that characterise different regions. This approach delivers cutting-edge technologies for defence and security while creating high-skilled jobs and strengthening local economies. 

Head of DASA, Anita Friend said: 

“Innovation knows no boundaries, and these case studies demonstrate that breakthrough defence and security solutions are being developed in every corner of the UK. UKDI-DASA is committed to finding and funding the best ideas, wherever they originate. 

“By investing across England, Scotland, Wales and Northern Ireland, we're not only delivering cutting-edge capabilities, but also strengthening local economies and building a resilient, nationwide innovation ecosystem.” 

DASA is part of UKDI and are proud to fund and nurture this nationwide ecosystem of creativity, recognising that breakthrough ideas can emerge anywhere. Today's progress reflects DASA's mission to ‘find and fund exploitable innovations to support UK defence and security quickly and effectively, and support UK prosperity'. 

This year the number of small businesses in the UK grew for the first time since 2020, to 5.64 million.