This piece originally appeared in the Oxford Emerging Threats Journal.
The Ukraine War has triggered a sharp acceleration in defence tech that Western Europe is struggling to keep pace with. American and European aid has given the Ukrainians the ability to test and experiment with drones and autonomous weaponry on a massive scale and with impressive results. Drones have been deployed on the frontline and to penetrate deep into Russian territory, even going as far as Moscow. They can attack tanks, fighter jets, missile launchers, and critical infrastructure. This is the birth of truly modern warfare.
Anduril, a defense tech startup, is an essential supplier of AI-enabled drones for the Ukrainians, providing them with a technological edge in battle. The UK Government has formed a partnership with Anduril and the company is looking to open a factory in the UK following the announcement of Arsenal-1 in Columbus, Ohio. Plenty of defence tech startups have sprung up in the United States, as showcased by the recent American Dynamism Summit at which Vice-President J.D. Vance spoke. But growth of this sector in the UK has been much more modest. Why?
Smaller capital markets and complex regulation hindered growth, not just in defense tech. ESG rules and activist shareholders remain firmly against increasing private defence investment. But the Labour Government, by geopolitical necessity, is pushing back. Around 100 Labour MPs wrote a public letter to the Financial Times demanding that defence be listed as an ethical investment. Ministers are committed to increasing defence spending to 2.5% by 2027 as well as measures to spur defence innovation. But to ensure this money is well spent and that defence tech startups can truly thrive, the Ministry of Defence (MoD) needs to put in place the right institutional framework for autonomous weaponry.
