Centre for Defence Enterprise Marketplace

This speech was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

Speech by Philip Dunne, Minister for Defence Equipment, Support and Technology.


Good morning to everyone, and thank you Richard [Brooks] for that kind introduction. I am very pleased that so many people have been able to make it here today.

This is an exciting moment for the Centre for Defence Enterprise (CDE).

Launched by the previous government in 2008 as a delivery mechanism for allowing better access for technology SMEs (small and medium enterprises) to defence research and ultimately the wider defence market, I see the CDE now as helping the Ministry of Defence achieve 2 principle goals:

  • firstly to act as the entry point for new science and technology innovation bringing new thinking and ideas to defence

  • and secondly to act as a key bridge linking SMEs to the main defence suppliers, as well as investors and wider government, as part of the MOD’s priority to raise participation by SMEs in defence procurement

CDE calls for, receives and assesses research proposals. It then funds, supports and promotes projects that it regards as plausible with potential to meet defence needs.

It encourages innovative companies to address defence issues through face-to-face surgeries, unclassified and open conferences, and through its innovative electronic contracting portal.

All of this activity is run from a small base in a commercial office block at the Harwell Science and Innovation Campus in Oxfordshire. One of CDE’s strengths is its fleetness of foot, born of a lean and efficient structure.

CDE was set up:

  • to provide visibility of the MOD’s requirements
  • to inform and support new supply networks that widen the MOD’s supplier base
  • and above all to get the best and most innovative ideas into MOD’s science and technology programme

Today marks another important milestone of the CDE. A new turn in CDE’s evolving journey to discover innovation, and then help in the realisation of those ideas into defence and security capability.

And what innovation has been discovered. In the last 4 years the CDE has received nearly 4,000 proposals for funding, resulting in some 600 contracts, worth around £35 million.

A few projects have made it directly into the hands of users, but that is an exception for most research work.

Now we want to see those SMEs and universities who have successfully demonstrated innovative technology, to have the chance to present their capabilities to our prime contractors, boosting their prospects of being taken into the supply chain. And that’s what today’s marketplace is all about.

There are some amazing ideas and technologies which have been developed by the innovators we have funded. I hope you will be able to stay and hear the details today, some of which are also on view in the exhibition downstairs on the second floor.

Exhibition examples

I am looking forward shortly to going round this exhibition, and to meeting the people who are working to deliver innovative battle-winning capabilities which support the front line. And I encourage you all to look around if you have the opportunity to do so.

One example, on display downstairs is Blue Bear Systems Research and their morphing wing for small unmanned air vehicles based on the dynamics of a bird wing. This project exploits the design work already done by Mother Nature, to help ensure our next generation of UAVs can be both faster and more agile, as well as having greater endurance when required.

Another example is the compact, high performance heat sensing video camera developed by Dreampact, which can be hand-held or rifle-mounted for surveillance or gun sight use in conditions of total darkness, fog, smoke or dust.

Our universities are also represented today with ingenious electronics and autonomously learning logic.

All of the projects featured demonstrate the ingenuity and practical focus of the SMEs and universities that we are working with.

Encouraging this technological innovation to flourish is vital to our national security and our prosperity, contributing to export-led recovery.

Wider S&T policy

In my new role I have responsibility also for defence exports as well as procurement, so encouraging responsible defence exports is a particular priority for me.

And it is partly to stimulate this growth which is why the MOD has protected its annual investment in science and technology at 1.2% of the defence budget, over £400 million a year.

Why is protecting this budget so important? Well, in a future that is so unpredictable, defence science and technology provides insurance against the future threats and conflicts we may face; and supports the MOD’s ability to be an intelligent customer.

As our defence transformation programme transfers responsibility for primary equipment procurement to the commands, each will need to build capability to look forward to its future needs. This will better align our science and technology spend to the research and development priorities of our front line commands.

The Ministry of Defence is about developing armed forces and defence capability that can deal with a broad range of tasks.

Our blueprint for agile, adaptable armed forces is Future Force 2020.

To be effective, Future Force 2020 must have the best equipment available: class-leading platforms, complex weapon systems and supporting ISTAR assets. Our personnel need the best training and personal equipment.

The private sector and our world class academic institutions will be central to deliver this Future Force. The complexity of much of these platforms needs, by necessity, substantial industrial capability.

From cyber, to space, to nanotechnology, Britain has world-leading companies underpinned by world-leading scientific research; some of which I have already seen helping our armed forces.

A profitable and high tech British defence and security sector is essential to achieving all of this.

Although many of the platform projects will be managed through large system level contracts by our prime contractors, there will be numerous participants in the supply chain, from large companies, to academia, to SMEs.


SMEs make an enormous contribution to the economy and in particular to innovation. And I want to take a moment to emphasise their role.

I know that SMEs are not the only source of original thinking in our sector, but they often provide the niche expertise which can lead to breakthroughs in defence applications.

And, I know that the Centre for Defence Enterprise has already done some excellent work in supporting SMEs in this area, helping them to commercialise their high tech ideas.

I thank my predecessor, Peter Luff, who I am delighted to see is with us today. Peter did much to champion science and technology, the crucial role of small and medium-sized enterprises to delivering innovation, and to starting the conversation that led to this event today.

I, like him, am a champion of the SMEs doing innovative work in the defence and security sector. They are the lifeblood of any sector. In defence they deliver innovation, flexibility, efficiency and agility, when responding to our requirements.

It is essential that SMEs, whose issues are often very different from those of primes, have their own platform within the defence industry to engage with the department.

And that is why I chair a dedicated SME forum, which addresses the concerns of smaller companies, and why the MOD is taking a significant number of steps, alongside wider government to work to ensure SMEs can reach their potential when responding to defence requirements.

The MOD has a detailed action plan, led by our SME champion, Les Mosco, who will be talking to you later today, to drive forward SME involvement in defence.

We have addressed some really important issues, such as the treatment of IPR for example.

We identify issues that MOD needs to address and which the SMEs themselves need to think about too.

We are encouraging our prime contractors to inform us of the part SMEs play in their own supply chain and I have personally invited the chief executives of our top 20 suppliers to attend today’s event, and I am particularly pleased to see some of them here today and I am grateful for the leadership they are showing at the senior level in support of CDE.

Our approach to SMEs, even to a business as small as a one-man band, is to support, not stifle.


A final word about CDE. Since its launch the CDE has established a reputation for reaching out across a very wide spectrum of the engineering and scientific community.

In particular CDE has worked closely with the technology strategy board and benefited through working with its ‘knowledge transfer networks’ and ‘small business research initiative’ and I am glad to see that Mark Glover from TSB is here today to see the blossoming fruits of this collaboration.

But above all else, it is you, the defence and security community, that shaped the advances that we see within in the CDE today. Thank you for your strong support of the CDE principle.

CDE started off as pilot scheme, and 4 years on it has become a going concern.

But innovation never stops, there is always something new to try, something that can be improved.

So now an exciting new phase has begun.

Our White Paper ‘National security through technology’ committed government to broaden CDE’s remit to cover both the defence and security domains.

On 3rd October, here in this building, CDE held its first event for GCHQ and MI5. This attracted over 300 SMEs and resulted in over 170 proposals.

‘National security through technology’ also committed CDE to provide more support to SMEs in understanding:

  • how MOD and national security operates
  • the development of routes to market for potential defence and security products; and
  • to enhance exploitation mechanisms between CDE, the wider MOD and our suppliers

Recognising fears expressed by SMEs in the consultation, we committed to keep CDE small and agile.

And I am most grateful that Richard Brooks, the Programme Director for MOD’s science and technology programme who is here organising this day, is ensuring that CDE is not distracted or inhibited by bureaucracy.

And whilst staff numbers have grown, CDE remains small and agile with only 12 staff, yet now able to run more research calls, more seminars and more workshops.

It also means that CDE can hold more regular surgeries, ‘one-to-ones’, where individuals and companies can get personalised guidance on what the MOD is looking for, and practical help on how to pitch an idea to us.

CDE was set a target of 150 one-to-one appointments for this financial year. This figure will be passed before the end of this month and CDE now expects to hold more than 200 such appointments by the end of the financial year.


Through our science and technology budget, we fund SMEs to work on specific projects for us. They keep the intellectual property rights for their work, and can develop them however they want, once they have completed their project.

Most of the effort so far has been focussed on the engagement of SMEs and universities and supporting the best ideas with proof of concept funding.

Now we want to help more, which brings us, finally, to today’s marketplace.

First of all this event is a start, and I look forward to seeing this idea develop and innovate rapidly like all the best CDE proposals.

I am grateful for those of you, SMEs, universities and prime contractors, who have contributed already to the thinking of how today’s marketplace will work.

Our aim is an MOD facilitated initiative whereby CDE gives SMEs and universities, who have successfully demonstrated their credibility and capability, the opportunity to present their innovations and capabilities to the UK’s key defence suppliers.

By providing this opportunity, the MOD is seeking to ensure that these SMEs will have an increased probability of development funding and mentoring, so that they can fully develop their ideas into products suitable for the defence, security or other civilian markets.

My view is that the MOD does have an important role to play in helping to maintain a dynamic pool of innovation which can drive defence applications forward and lead to economic benefits for the whole nation, beyond the immediate defence objective.

But we will only get this by leaving companies free to innovate.

And free to work together. So today is all about bringing people together. Then it is up to you.

Welcome to the marketplace.

I am happy to take a couple of questions before we move downstairs.