New survey from White & Case finds companies intend to spend an average of £79m over the next 12 months, focusing on cybersecurity, sensors, space and air-defence/counter-drone systems.
Air-defence and counter-drone systems are the leading applications (68%).
76% of firms plan to expand their UK presence over the next year, ahead of Europe (55%), the US (27%) and Middle East/APAC (26%).
# What the survey measured White & Case surveyed UK defence companies and defence-technology start-ups about investment and growth plans. Respondents reported planned capital deployment, technology priorities and geographic expansion intentions for the next 12 months.
# How much firms plan to spend More than a quarter of firms (27%) expect to invest over £100 million in the coming year. Two-thirds (67%) expect between £50 million and £100 million. Averaging those responses gives a planned spend of £79 million per firm.
Motivations named by respondents were concrete: 50% cited maintaining competitiveness, 42% cited demand for next-generation defence technologies, 38% pointed to export opportunities, and 33% to rising government defence spending.
# What firms will spend on Just over half of firms (56%) plan to invest specifically in defence technology. Among those, 46% are investing to develop new technologies and 44% aim to increase production capacity.
Top technology categories prioritised for increased investment:
Leading applications for those technologies are air-defence and counter-drone systems, cited by 68% of firms.
# Where companies plan to grow Surveyed firms are bullish on the UK as an investment destination: 97% said the UK is the leading European destination for defence technology investment. That confidence translates into expansion plans: 76% plan to expand their presence in the UK in the next 12 months. By comparison, 55% plan expansion in Europe, 27% in the US, and 26% in both the Middle East and APAC.
# What law firm spokespeople said Patrick Sarch, Head of UK Public M&A at White & Case, framed the findings as evidence the UK attracts capital and talent for defence technology. He flagged the immediate challenge as ensuring companies can access appropriate funding on suitable terms to scale and compete internationally.
Angus Nunn, Growth Capital and Technology M&A Partner at White & Case, described a shift in demand toward affordable, scalable air-defence capabilities—particularly systems to intercept drones and missiles at lower cost than legacy systems—and the growing application of AI across defence systems. He also noted a broadening pool of capital as previous restrictions relax, which should support fundraising, investment and M&A.
# Immediate implications for the UK defence sector Planned investment levels and expansion intent point to near-term increases in R&D spending and production capacity for technologies linked to modern conflict: cybersecurity, sensors, space, and counter-UAS/air-defence. The survey suggests the private sector sees commercial export opportunities alongside domestic defence demand.
# Bottom line UK defence firms signal substantial, concentrated investment into next-generation defence technologies with a clear emphasis on air-defence and counter-drone capabilities, digital and sensor systems, and an intent to expand operations in the UK over other regions.
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