On 6 December 2025, the Ministry of Defence marked Small Business Saturday by setting out how SME-led ideas are moving from trials to frontline use through dedicated funding. Projects cited range from blast-protection blocks to laser detection cameras now entering service routes.
Since July 2024, the Defence and Security Accelerator (DASA) has directed £35 million across the UK to help smaller firms move from concept to deployment. Future scaling will run through UK Defence Innovation (UKDI), established by the Strategic Defence Review and backed by a ringfenced annual budget of at least £400 million.
UKDI began formal operations on 1 July 2025. Government notices state it brings together DASA, the Defence Innovation Unit and the DE&S Future Capability Innovation function, creating a clearer single route for companies to engage and for defence buyers to procure commercial technology at speed.
The Strategic Defence Review also sets a segmented procurement model: major modular platforms contracted within two years, spiral upgrades within one year, and rapid commercial exploitation within three months. Alongside this, at least 10% of the MOD’s equipment procurement budget is to be spent on novel technologies each year.
To illustrate delivery, MOD highlighted QuickBlock in Scotland adapting civilian blocks for ballistic and blast protection; Trauma Simulation in Wales producing whole‑body training models for medics; and Sentinel Photonics in the South West, whose laser‑protection scope attachments have been integrated on KS1 rifles entering service.
The DASA Impact Report 2025, produced by Beauhurst, records nearly £974 million in gross value added between 2019 and 2023, 1,842 jobs created since 2016, and £174 million raised by DASA‑funded firms in 2024, with £592 million in additional equity secured post‑funding-evidence that defence innovation is feeding through to economic outcomes.
Supplier access is due to widen further. The MOD plans to establish a Defence Office for Small Business Growth by late January 2026 to provide clearer demand signals, export advice and a route to raise concerns. Ministers have also lifted the direct SME spend target by 50% to £7.5 billion by 2028.
Delivery tools are being adjusted in parallel. A QinetiQ test and evaluation innovation gateway is intended to speed smaller firms’ access to facilities, while the Accelerating Commercial Pathways programme applies Procurement Act flexibilities and an SME pathway to move competitions and contracting faster.
Officials frame these measures as part of a wider push to make defence a driver of regional growth. The MOD notes the UK’s small business population rose to 5.64 million in 2025-the first increase since 2020-alongside a growing stream of SME‑originated projects moving into service.
What to watch: the Strategic Defence Review says the segmented procurement approach should be established by March 2026, while the Office for Small Business Growth is scheduled by late January 2026. Together with UKDI’s £400 million budget and the 10% commitment, this sets a clearer pipeline for novel buys into 2026–27.