The war in Ukraine has taught the world that technological change in defence is rapid and unpredictable. Unmanned aerial vehicles and drone warfare are now mainstream, reshaping combat. This should be a boon for the defence industry, especially with NATO's commitment to spending five per cent of GDP on security. The UK boasts major defence companies like BAE Systems, Babcock International, Rolls-Royce, and QinetiQ, yet its procurement system is notoriously sclerotic, inefficient, and resistant to change.
The Ajax Debacle
A prime example is the Ajax armoured fighting vehicle. The Ministry of Defence awarded the contract to General Dynamics in 2010, with delivery expected by 2017. However, a series of delays, including trials halted due to excessive noise and vibration causing soldier illness, means full operating capability won't be achieved until October 2028. The programme has cost £5.5 billion so far, and after 15 years, not a single vehicle is in service.
Kelluu: An Accidental Defence Startup
It doesn't have to be this way. Kelluu, a Finnish company founded in 2018 in an old farm shed, originally produced 40-feet-long, lighter-than-air dirigibles with hydrogen fuel cells. Designed for hyper-accurate aerial photography, their military potential quickly became clear. These airships are almost silent, can stay airborne for extended periods, and provide sustained overwatch. NATO's Innovation Fund invested €15 million in Series A funding.
CEO Janne Hietala acknowledges that airships were a tough sell in a world of advanced bombers and destroyers. But Kelluu proved its concept through rigorous testing and NATO military exercises. Based in Joensuu, near the Russian border, the company operates in extreme conditions, including temperatures as low as -40°C.
Lessons for the UK
Think Laterally
Defence ministries must consider unconventional capabilities. No one would have thought of autonomous hydrogen-powered airships for reconnaissance, but Kelluu's civilian use revealed their potential. A data-as-a-service model allows Kelluu to operate the airships and provide data as a product.
Constant Testing
Rigorous testing is irreplaceable. Kelluu used civilian feedback and flew in challenging conditions to refine its product continuously.
Speed is Critical
Defence procurement cycles of 10 years are too slow. In Ukraine, technology has evolved in generations over just four years. Startups like Kelluu find such timelines unimaginable.
Agile Financing
Smaller innovative companies lack cash reserves and cannot absorb long delays. Decision-making must accelerate. For instance, the MoD waited 20 months to award a helicopter contract to the only bidder, Leonardo UK.
The UK faces security threats from Russia, China, and Iran. Confronting them requires a reconception of security across public policy. As a Finnish proverb says, 'Forward', said grandma in the snow. The UK must shed bureaucratic constraints and empower innovation.
