How private capital can accelerate the UK’s defence, security, and dual-use innovation capacity

The United Kingdom is entering a period of strategic redefinition. In an increasingly uncertain global environment, the UK Government has committed to strengthening national defence, cybersecurity, energy resilience, and supply chain security.

This is not merely about military readiness; it is about ensuring the long-term stability of the systems that underpin the nation’s prosperity. For an investor such as Foresight Group, which has built its reputation on sustainability and purposeful capital deployment, the UK’s defence and resilience agenda presents a clear thematic opportunity - one that aligns with environmental, social, and governance principles and supports the broader goal of human flourishing.

The capacity gap

The UK is now implementing a multi-decade reinvestment programme across defence and security sectors. The Defence Command Paper Refresh (2023) and the Defence and Security Industrial Strategy (DSIS) both commit to maintaining defence spending above two percent of GDP, with increased allocations to procurement, innovation, and industrial modernisation. This includes renewed focus on munitions production, cyber defence, space infrastructure, and advanced research. Programmes such as AUKUS and the Global Combat Air Programme (GCAP) underline the UK’s commitment to technological sovereignty and allied interoperability.

Much like Europe, the UK faces the challenge of ensuring that industrial capacity can meet these new ambitions. While government budgets have expanded, private investment has not kept pace. The result is a clear gap between strategic intent and delivery capacity - an investment opportunity ideally suited to private capital.

The investment gap

Across the UK’s defence industrial base, there is a growing need for capital to fund production expansion, digital transformation, and technological innovation. From advanced manufacturing in aerospace and naval systems to secure communications and cyber infrastructure, the investment requirement significantly exceeds available public funding. Traditional debt markets remain cautious, and ESG policies have constrained institutional allocations to the sector. This has created a funding gap that responsible investors can help close, accelerating national resilience while generating attractive long-term returns.

A wide spectrum of investment opportunity

The scale of the UK’s defence and resilience modernisation creates opportunities across the full spectrum of private capital:

•      Buyout - Consolidation of mid-cap suppliers and manufacturing assets offers opportunities to create scale platforms capable of delivering to MOD and allied programmes. Private equity can drive operational efficiency, modernisation, and exports through long-term ownership models.

•      Growth - The UK’s emerging defence technology ecosystem is expanding rapidly, from cybersecurity and autonomous systems to energy storage and secure data solutions. Growth capital can accelerate commercialisation, workforce expansion, and internationalisation.

•      Venture - Early-stage, dual-use innovation represents a frontier of investment opportunity. UK research institutions, catapult centres, and Innovate UK-funded projects are producing world-leading capabilities in AI, quantum sensing, advanced materials, and space technologies. Venture investment can provide the bridge from prototype to production.

Dual-use innovation and the UK’s technology advantage

Many of the technologies underpinning modern defence have deep civilian relevance. Artificial intelligence, robotics, cybersecurity, and satellite communications are not purely military assets; they are enablers of safer, more sustainable societies. Investing in dual-use innovation strengthens both national security and civilian industries, from disaster response and infrastructure protection to clean energy and autonomous logistics. The UK’s commitment to science-led growth positions it as a leading market for such innovation, particularly when supported by patient private capital.

Sustainable security

The concept of sustainable security reframes defence as a foundation for societal wellbeing. Investments that protect energy systems, supply chains, and digital networks contribute directly to human flourishing by safeguarding the conditions under which communities can thrive. Far from conflicting with ESG principles, responsible defence and resilience investments are an extension of them – promoting peace, stability, and technological integrity.

For Foresight Group, this alignment offers a meaningful opportunity. By supporting innovation across the UK’s security, cyber, and dual-use technology sectors, investors can reinforce the Group’s mission of building a safer, more sustainable economy. Through long-term partnerships with industrial leaders, research institutions, and entrepreneurs, private capital can help deliver the infrastructure and innovation needed to ensure Britain’s security and prosperity for generations to come.

Conclusion: a strategic role for private capital

The UK’s defence and resilience transformation is both a national imperative and an investable theme. It offers consistent policy support, predictable demand, and opportunities for innovation-led growth. Private capital – from buyout to venture – will play a defining role in bridging the investment gap, modernising industrial capacity, and enabling the technologies that underpin secure, sustainable societies. For investors committed to long-term stewardship, this represents not only a financial opportunity but a contribution to Britain’s collective resilience and human progress.