“People are punished for failure, while success often brings little personal reward”


“For companies with sensitive technology, China isn’t viable, which is why British companies look to the USA, where funding depth and commercialisation pathways are stronger.” The result is a familiar UK problem.


Technology may be conceived and developed in the UK, but the company, intellectual property or manufacturing opportunity is eventually drawn elsewhere.


Part of the issue is the longstanding


policy of allowing the market to decide which ideas should be backed and where products should ultimately be manufactured. But Moffat also argues that the UK is structurally risk-averse. “People are punished for failure, while success often brings little personal reward,” he said. “That creates very little incentive to take a risk or pursue a better outcome.” Innovation inevitably brings some


failure. In defence, where battlefield experience is driving an exceptionally rapid cycle of development and obsolescence, policymakers need to distinguish between experiments that produce useful lessons and


programmes that simply waste time and money.


Joining the dots The Burnham government has placed devolution and sovereign manufacturing at the centre of its economic agenda, including a stronger emphasis on domestic defence capability. The challenge will be ensuring that those ambitions reinforce rather than complicate one another. Devolution could help regional technology clusters respond more quickly, with local authorities better placed to understand the companies, skills and facilities in their areas. But without a clear national framework, different approaches to funding and support risk adding another layer of fragmentation. Sovereign manufacturing also


requires decisions that extend beyond local growth. Government must determine which capabilities are important enough to national security to justify sustained domestic support, even where the market alone might favour overseas production.


That need to connect policy to


industrial scale is echoed by Matt Foster, CEO of Callen-Lenz.


“Building a sustainable uncrewed


systems economy requires investment in people, supply chains and manufacturing capacity,” he said. Callen-Lenz sources a significant proportion of its components from


UK suppliers and is developing engineering talent through apprenticeships and links with academia. Backing from BAE Systems also provides access to secondments and additional support to scale manufacturing as demand grows. Foster also argues that investment alone will not determine whether the UK’s £5 billion commitment to uncrewed systems succeeds. “Success depends not only


on investment, but on adopting a rapid spiral development approach that can respond quickly to operational requirements.” Delivering that at scale requires


coordination between defence procurement, industrial policy, regional investment, research funding and commercial support. The UK already has many of the individual policies needed to support a successful drone economy. It funds research, backs innovation, supports regional growth and increasingly recognises the importance of sovereign manufacturing. The problem is that these policies


remain distributed across institutions with different priorities, timescales and appetites for risk. For Moffat, delays have commercial consequences. “This increases the risk that would-be customers of mine may go elsewhere seeking alternative solutions in the time between now and when my product eventually gets to market. Start-ups like us can’t shoulder this risk indefinitely.” Unless government can connect


Photo credit: Callen-Lenz


research, investment, testing, procurement and commercial scale, the UK may continue to develop valuable drone technology only to watch other countries turn it into successful businesses. Winning the drone economy will depend less on announcing another initiative than on building a clear route from laboratory to production line, and providing the leadership needed to keep UK innovation in the UK.


Autumn 2026 | Advance 51


POLICY


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