Blog Post

March 30, 2023

Defence innovation at the speed of relevance: How do we get startup-prime collaboration right?

In order to ensure competitive advantage in a rapidly evolving innovation market, defence primes must invest in developing and maintaining collaborative relationships with startups & SMEs. In this blog, we argue that challenge and accelerator programmes can be some of the best tools primes can use to get this collaboration right.

As demonstrated by the conflict in Ukraine, advantage on the battlefield of the future will be secured through agility and the rapid adoption of new technologies and innovations. Historically, defence has struggled to innovate outside of the urgency of operational imperatives, due to its strict regulation and procurement methods, a limited customer base, and an approach that favours long-term programmes delivered at scale. Increasingly, breakthrough innovations and emerging technologies that can transform Defence and revolutionise warfare are being developed by startups and SMEs, often operating outside the traditional boundaries of Defence.

Strategic defence suppliers (“primes”) should invest in sourcing and maintaining dynamic and innovative supply chains to be able to rapidly acquire the latest technologies, capabilities and market knowledge to achieve competitive advantage, whilst mitigating the risk of over-reliance on the same old suppliers.
Additionally, demonstrating the ability to easily access and integrate a pool of small and innovative providers such as startups and SMES is essential for large suppliers to meet government social value targets in the context of large public sector contracts.

For startups and SMEs, primes act as gatekeepers to direct defence sales and are highly valuable allies bringing deep industry knowledge, enabling access to government frameworks and routes to market, and providing security, vetting, and financial warranties often necessary to bid for defence contracts. Additionally, some primes run their own Corporate Venture Capital (CVC) funds, such as Airbus Ventures, and are able to directly invest in, or acquire startups outright.

Whilst we have seen some examples of successful prime/ startup collaboration (for instance the strategic partnership between large defence supplier KBR and leading defence AI startup, Adarga) primes often struggle to effectively communicate their needs and challenges to innovators, particularly those outside of the defence ecosystem, and existing processes for sourcing solutions can be resource-intensive and ineffective.

Finding new approaches, such as challenge programmes or accelerators, to identify, deploy and scale innovative solutions will be critical for strategic defence suppliers to keep ahead of the competition. An accelerator programme can help defence primes rapidly develop a wide view of the best emerging tech solutions (including those offered by startups and SMEs that don’t currently operate within defence) and provide a platform for testing new ways of working and new products in a safe and cost-effective environment - preparing the groundwork to scale what works at pace.

Additionally, the launch of an accelerator programme sends a strong signal to the market that your organisation is at the forefront of innovation, and is a powerful tool to drive new partnerships with the wider ecosystem (including government, academia and third sector organisations). Finally, accelerator programmes help promote new working cultures and the up-skilling of staff internally, by giving teams the opportunity to gain hands-on knowledge about the startup sector and how new digital providers operate.

Below we set out key recommendations on how to run accelerator programmes to ensure effective collaboration between defence primes and startups, based on PUBLIC’s experience delivering 20+ programmes in the UK and internationally, including the AWS Defence Accelerator:

  • Invest in extensive discovery and design activities at the outset to ensure the programme is addressing real end-customer and business needs, and that it effectively speaks to innovators. This can include aligning the programme with the innovation priorities published by the MOD, or challenge areas published by DASA
  • Consider how to pull innovation through to capability by working closely with commercial teams on contracting challenge winners as well as developing longer-term solution integration. It may also be worth incorporating input from defence commercial teams such as the Future Capabilities Group or CommercialX, if the solutions are to be provided direct to defence
  • Get financial and non-financial incentives right for innovators, to help attract the desired range and volume of high calibre applicants
  • Run thorough technical and financial due diligence on the applicants, to avoid selecting high risk, low reward solutions. Support may be required to run background checks, particularly where technologies and data are sensitive
  • Foster innovation culture internally, by investing in innovation training and enabling staff to be directly involved with the programme and startups
  • Provide technical and commercial support to the winning solutions, to enable all participants to rapidly understand the defence context and develop solutions matching the challenge. This is very much the start of their journey in defence, and successful scaling will require ongoing support
  • Ensure that rapid pilot and testing is a key part of the programme, as for early stage innovators operating in complex, highly-regulated markets, being able to test their solution as soon as possible is a key driver for success.

Delivering a more innovative and partner-oriented culture and outlook is not easy; it takes time and commitment, but if done properly it will help fuse the best of the dynamic culture and edge technologies of startups with the deep industry expertise and scaled capabilities of large primes. If NATO, the UK, and her allies are to achieve and maintain strategic and technological advantage, it is critical that the defence industry ecosystem enables this sort of partnering.


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Matthew Long

Former Team Member

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