The central argument is that the UK risks becoming an "IP Farm," with critical defence technology and innovative Small and Medium-sized Enterprises (SMEs) being acquired by foreign entities, particularly American firms, due to a lack of patient capital and a risk-averse procurement culture. The contributors propose a comprehensive set of reforms, including conducting a Sovereign Capability Audit, reforming procurement processes to favour domestic suppliers, and increasing public investment to protect "technological crown jewels" in fields such as AI and Quantum technologies. Overall, the report stresses that bolstering the domestic defence industrial base is crucial for national security, global credibility, and regional economic growth.

1. Introduction: What is Defence Sovereignty?

Imagine the navigation system of a Royal Navy warship being switched off at the whim of another country. This scenario highlights the core idea behind Defence Sovereignty: the ability for a nation to independently develop, produce, and maintain its own critical defence systems.

This principle is not about isolating the UK from its allies, but about ensuring the country has ultimate control over the tools it needs to protect itself. The risk of losing this control is starkly illustrated by the following warning:

"Imagine HMS Queen Elizabeth having its navigation being turned off at the whim of a foreign power. This is a clear and present risk if we do not invest in and protect our defence industry."

This concept is crucial for two fundamental reasons that impact every citizen: it is the foundation of our national security and a powerful engine for our economic prosperity.

The importance of this concept becomes clearer when we examine the direct benefits that a strong, sovereign defence industry brings to the country.

2. Why Defence Sovereignty is Crucial for the UK

A robust domestic defence industry provides the UK with significant advantages in both security and economics, ensuring the nation can protect its interests while fostering growth at home.

For Our National Security

The primary benefit of defence sovereignty is maintaining freedom of action. This allows the UK to act decisively and independently during a crisis, without being dangerously dependent on international allies or vulnerable to disruptions in global supply chains.

Even our "strongest and closest partners" could have different national interests that might prevent them from supplying critical parts or technology at a crucial moment. Having a strong domestic industry provides the national resilience needed to stand on our own. As NATO Secretary-General Jens Stoltenberg has emphasized, industrial capability is the foundation of military strength:

"Without industry there is no defence, no deterrence and no security".

For Our Economy

A sovereign defence industry is a major driver of economic growth and high-skilled jobs across the United Kingdom. It provides stable, well-paid employment and stimulates innovation that benefits the wider economy.

The key economic contributions include:

• Jobs: The industry supported an estimated 463,000 direct and indirect jobs in the 2023/24 period.
• Economic Contribution: It contributed £9.5 billion to the UK economy in 2022 alone.
• Regional Growth: The sector is a vital source of employment outside of London, with major hubs providing tens of thousands of jobs in the South West, South East, North West, and Scotland.

Despite these clear benefits, the UK's defence sovereignty is currently facing a series of significant and growing challenges.

3. The Core Challenge: The "Sovereignty Gap"

The central problem facing the UK today is that its ability to defend itself increasingly relies on technologies it no longer fully owns or controls. This has led to the UK being described as an "IP Farm" or "Britain the Lab, the World the Landlord"—a place where brilliant ideas are invented, only to be "plucked and scaled overseas" by foreign entities.

This "sovereignty gap" is driven by two primary threats that undermine the UK's industrial base.

To counter these challenges, a clear path forward has been proposed to rebuild and protect the UK's position.

4. How to Strengthen UK Defence Sovereignty: A Path Forward

The report outlines a clear strategy for rebuilding and protecting the UK's defence industrial base, focusing on a combination of strategic planning, smarter investment, and technological foresight. The key recommendations can be grouped into three core themes.

Define What's Critical and Protect It

The first step is to conduct a "Sovereign Capability Audit" to strategically decide which technologies the UK must "own" outright, which it can "collaborate" on with trusted allies, and which it can simply "access" from the global market. This audit is the essential first step to reversing the "IP Farm" trend, allowing the UK to strategically identify its "crown jewels" before they can be "plucked and scaled overseas." Alongside this, the government should sharpen the National Security and Investment Act to better protect these identified assets.

Invest in and Support UK Companies

Government procurement processes must be reformed to prioritize and nurture UK businesses, especially Small and Medium-sized Enterprises (SMEs). This is critical because SMEs are "the front edge of innovation," developing the next generation of dual-use technologies. Failing to support them means they will "either be acquired or fail and with them Britain loses both its sovereign defence options and its chance to lead the next wave of global industrial transformation." Breaking large contracts into smaller, faster competitions would allow these innovative firms to survive and grow.

Prioritize Future-Proof Technologies

To maintain a strategic edge, the UK must invest in the next generation of emerging, dual-use technologies that have both civilian and military applications. The key areas identified for priority investment are:

• Artificial Intelligence (AI) (to maintain a strategic edge and enhance decision-making)
• Advanced Manufacturing (to build supply chain resilience and ensure the UK can produce vital equipment in a crisis)
• Quantum Technologies (such as quantum navigation, which offers resilient timing and positioning for operations in GPS-denied battlespaces)

These strategic actions lead to a fundamental choice about the future direction of the UK's national security.

5. Conclusion: The Choice to Defend or Depend

Defence Sovereignty is not an abstract concept debated by policymakers; it is the bedrock of national resilience, security, and the UK's ability to shape its own destiny. Retaining sovereign control over the UK's defence industry is essential for its freedom of action in a crisis, its economic strength at home, and its credibility as a leading global partner.

Ultimately, the situation presents a clear and urgent choice. As the report's title suggests, Britain can either drift into dependency, becoming a nation reliant on systems it does not own, or it can seize this moment to protect its industry, secure its sovereignty, and build its own future.