Toby McCrindle, Partner, Mishcon
We've got, um, a missing defence investment plan. Uh, we've got what seems to be a standoff between Treasury and the Ministry of Defence and all of those creating a void, and people don't quite know what to do with that. So where are we, as you see it?
Delighted to welcome, um, the next guest in our series of Future of Defence videos. Uh, today we're joined by James Clark, Director of Defence, Flint Global from Flint Global, Director of Defence. Today we're going to be talking a little bit about the intersection between government policy, funding and defence technology and how those three things interrelate. Um, before we dive into the detail, I'm going to ask James to introduce himself a little bit in more detail.
James Clark, Director of Defence, Flint Global
Thanks, Toby. Uh, thank you so much for inviting me, it's great to be here. Um, I'll try and give you the succinct version, um, but essentially, I've done military and politics side by side for the last 20 years. So I was an infantry officer in the regular army, did 2 tours of Afghanistan. The first one was quite kinetic, um, and was made into a documentary, and the second one was attached to Special Forces, and that was a much more kind of strategic role. So I got a really interesting, very different kind of experience on my second tour. I then left the regulars and became a reservist and did 8 years, um, as a reservist. Politically, uh, I've worked in Westminster on a couple of different occasions. I've worked at Tory headquarters, I've stood for Parliament 3 times, and I was a special advisor to the Secretary of State for Defence in the last government, which was the role I was undertaking until I moved to Flint in January 2025. And I've been there, um, supporting and building the defence practise ever since.
Toby McCrindle, Partner, Mishcon
And just tell us a little bit about what Flint does.
James Clark, Director of Defence, Flint Global
Yeah, absolutely. So Flint as a business, um, does sort of policy analysis, political analysis, regulatory analysis, and econometrics, and delivers that to clients across very broad sectors. So for example, energy or automotive, transport, industrial, defence. Uh, so we have kind of essentially verticals that align with government departments. And what we do is we try to support our clients to understand the regulatory environment they're in, understand the political and policy environment they're in, and how they can take decisions to support their commercial objectives.
Toby McCrindle, Partner, Mishcon
Got it. I will just say, I hope this video is a little bit less kinetic than previous videos you may have appeared in. Um, great. So let's take that as a diving-off point. Um, you've talked about helping companies understand the environment in which they're operating. I've got to ask, what is that environment right now, right? So to set the scene, we're coming at this from a sort of defence tech and slightly more, you know, early-stage company angle, but we've got a missing defence investment plan. Uh, we've got what seems to be a standoff between, and I don't know, but you may tell us, between Treasury and, um, the Ministry of Defence. And all of that is creating a void and people don't quite know what to do with that. So where are we, as you see it?
James Clark, Director of Defence, Flint Global
I think that that is quite a short-term analysis, Toby, and you and I have talked about this at length and in the defence tech ecosystem, you've got sort of people who are, um, who've been around, and there are lots of new entrants. And I think it's really important to actually look at, for example, the, um, the conversations around procurement and spending, between the MOD and the Treasury, like, these aren't new, this isn't new friction. This is friction that happens cyclically, always. I mean, it happens every, every budget, it happens every end of financial year, it happens on major programmes, it happens when there's a Strategic Defence Review, um, and of which the most recent was last year's. So we need to kind of look longer term at the whole defence space and situation. And I think what's really worth bringing to the audience's attention is looking at the moves that the Labour government have done to try to address some of the procurement issues that have existed for at least the last 30 years, if not longer. Um, and by which I mean things like building the Quad, creating UKDI and launching that, um, and of course the SDR and the defence industrial strategy, which kind of has accompanied those last year. And then you do get on to the thorny issue of the Defence Investment Plan. And it's interesting because these sort of investment plans, you know, they've been called by other names previously, they shouldn't really be as important as this has become. They generally lay down where spend is going to go. But the reality of this is that, you know, most of that spending, we can, we can assume, you know, we, we can kind of guess where the bulk of spending is going to go, um, and so I think some of the 'where is the dip' rhetoric is actually more of a kind of howl from the system that defence modernisation and defence technology adoption and capability development needs to be drastically sped up. And there's political rhetoric to say that, there's operator rhetoric to say that, and there are the internal organisational mechanisms that are making that happen. So that, that's, that's a good thing. But I think the dip is also, or that the absence of the dip is also kind of a way for certain people in the MOD and certain budget holders to try and hold at bay, or at least manage the expectations of some very, very, um, forthright, um, uh, you know, entrepreneurs, business owners and members of the defence tech ecosystem who are really trying to force through change and force through capability into a system that is slow and is cumbersome. And, you know, there's this balance of risk, you know, and, and the way that I've described this, I don't want anyone to think 'Oh, well, you know, you've been on the inside of the MOD and you're just another stuffed shirt’. Like, absolutely no way. I, I, you know, champing at the bit. If there's any possibility of getting new innovative capability into the hands of the war fighter, I am 100% behind it. Like, I have, I have seen technological development on the battlefield, I have benefited from lessons learned with my life, like genuinely and so I am one of those people who is very full steam ahead. I am also one of those people who understands how government and politics works, and it frankly just isn't as easy as saying, well, let's spend a load more money on a load of new interesting kit, and my mate Dave's is the best because he said it is. Like, that just isn't how we can operate. I don't mean to be so patronising, but there is an element of, of, kind of, um, you know, we can't steamroller over all process in order to get outcomes we want because we won't get the outcomes we want.
Toby McCrindle, Partner, Mishcon
Yep, okay, there's a lot there.
James Clark, Director of Defence, Flint Global
Sorry, I've really come at you with it.
Toby McCrindle, Partner, Mishcon
So, so what then. So is your take that actually, despite the delays, and as you say, we're in this present cycle of back and forth between Treasury, MOD, etc., do you think it's not having an outsized impact on defence techs and scaling businesses who are looking at demand signals and where the money is going to go? And, and, or am I overstating that?
James Clark, Director of Defence, Flint Global
That's a really complicated question.
Toby McCrindle, Partner, Mishcon
Sorry.
James Clark, Director of Defence, Flint Global
So if the government have committed to spending, uh, £400 million and £2 billion over the course of this Parliament on innovative technology, and they've also promised to spend 10% of total MOD spend on, um, innovative technology, like, that money exists, that money is being made available, they have to spend it. Um, the mechanisms by which they spend it are diverse, complicated, and they're also not always the mechanisms which were intended to be used for that procurement. Um, you know, I'm thinking for the audience's sake about things like Taskforce Kindred, about Asgard, which has kind of morphed a little bit, you know, when we're looking at, um, D-DAD, um, and that framework, you know, there are opportunities that I think are being exploited very well, but which weren't really intended for that purpose. And so I think, I think at the strategic level, which is where I like to operate and think, I think that the government are in a very difficult position on the basis that there is a clear need for higher defence spending. And you can see that from the Prime Minister's comments, you know, particularly off the back of the Munich Security Conference where he came back and said, actually, we're going to try and get to 3% within this Parliament. Now, he was slapped down the next day by the Chancellor. And there is one part of me that, that is quite frustrated that the messaging is so mixed.
Toby McCrindle, Partner, Mishcon
Yeah.
Toby McCrindle, Partner, Mishcon
On such a vitally important issue.
Toby McCrindle, Partner, Mishcon
And that's the key, right? So if there's mixed messaging and therefore a, a kind of confusion in the market. What does that mean if you're a new, relatively new market entrant and perhaps doesn't have a defence background or doesn't have all the experience you've got? Where do you look and what do you make of all of this? So do you think this is opportunity to exploit? As you say, there are gaps maybe, and we know we have clients that are sort of doing actually quite well picking up smaller value contracts, but quite regularly.
James Clark, Director of Defence, Flint Global
Yeah.
Toby McCrindle, Partner, Mishcon
Because there's budget to be spent in this cycle and there's sort of cracks. Or are you going, oh man, this is too much and I'm going to go find another industry that can get itself together?
James Clark, Director of Defence, Flint Global
No, not at all. I think there's a few different plays. I think having a dual-use capability and whether you love or hate that term, like having a commercial mechanism to sell your product versus just the government is really important because the government as a customer is difficult and likes to do chunky payments, uh…
Toby McCrindle, Partner, Mishcon
Late.
James Clark, Director of Defence, Flint Global
…late.
Toby McCrindle, Partner, Mishcon
I got you.
James Clark, Director of Defence, Flint Global
Well, I was going to say late, but also actually over a long, you know, with a long leading time. And that's actually what's really frustrating for small businesses and that's where that commercial side has to come in. But I think that, that there is an acknowledgement within, uh, the MOD, that mechanisms like Commercial-X, J-Hub, um, getting onto some of these frameworks like Asgard is very important. And I think the Defence Office for Small Business Growth, I think there was a lot of, um, I think there is a lot of, uh, emphasis put on this. I don't know whether it's got the support that it really needs to become this kind of front door, but it could become the front door. And to the people who are frustrated, it's better than 2 years ago, for example, or better than 5 years ago. Um, and so I think that's very important. I also think it's really important that with the right kind of advice, and that, whether that's legal, whether that's strategic, um, you know, whether it's, um, sort of operational or programmatic advice, um, I think that there is opportunity for companies to partner with and to work with primes and SIs, you know, and not to feel like they have to do everything on their own. And there are loads of defence accelerators, um, and incubators that, that they can be involved with as well. So I think it's difficult, but one of the kind of rubs is it's such a values-driven, mission-driven environment that really, and you may disagree, but I seldom meet someone who is not in it for the right reasons.
Toby McCrindle, Partner, Mishcon
Yeah.
James Clark, Director of Defence, Flint Global
Um, and of course, everyone wants to make a profit and they want their businesses to be successful. But the fact that defence is about national security is the number one priority of government. I think that's actually really galvanising and I think you can find help if and when you need it. Now, interestingly, Toby, you raised this point about founders who don't have any military experience trying to come into a military environment. That's hard, you know, and I would say, get some expertise, get some advice.
Toby McCrindle, Partner, Mishcon
Get some equity, we say.
James Clark, Director of Defence, Flint Global
Yeah, I think you, I think you need to know what you don't know, and there are lots of people around who can help you. Um, I don't think it's a lost cause, but it isn't easy.
Toby McCrindle, Partner, Mishcon
Yeah. So, just to take you back a bit, um, to, uh, the strategic play again. So, if you are coming to defence as a new founder, you might have a military background, but as a sort of, as a as a founder, where do you tend to send people, you know, early on? If you're looking at the strategic landscape and looking at the capability they're developing, how do you operate with them and how do you sort of model out how they might succeed with their go-to-market, with the MOD?
James Clark, Director of Defence, Flint Global
Yeah, so, so from where I stand, um, there is a kind of a capability aspect and a credibility aspect. And then there is also an element of relationship building and, and kind of your sort of public persona, um, as well as your narrative and how your narrative fits in with what it is MOD and key senior stakeholders are trying to achieve, or, or what the policies are that they have written that they are then adhering to. And I think where, where I kind of come in is trying to advise people on, on how to position themselves in the market to have the best impact for their commercial outcomes. And that, that can be at the very senior strategic level, but it can be at lower levels too. And I think that, you know, you're, you're somebody who I think seen this first hand and probably falls into this category but when you build a network of people who trust you and think that your advice is valuable, then you can leverage that network to support people who you want to support. And I think that a key part of the role that I play is not just adding a sort of a voice in that sort of strategic advisory, but it's also about trying to connect people and trying to plot pathways through what is quite a complex, complicated landscape to try and come out the other end with the results you want.
Toby McCrindle, Partner, Mishcon
Yeah. And so for the viewers that are watching it who are at an early stage of their kind of mission, journey, whatever you want to call it, with their companies. How soon, or is it ever too soon, to start thinking about that strategic positioning? Everything you just described, is it too soon? At what point do you need to start taking this seriously, right? Because I think you're absolutely right, positioning is everything.
James Clark, Director of Defence, Flint Global
Yeah. So I mean, to a certain extent, how long is a piece of string?
Toby McCrindle, Partner, Mishcon
Yeah.
James Clark, Director of Defence, Flint Global
But I have definitely said to, um, potential clients who I've got fairly far down the road with, actually perhaps now is not the time for you to be focusing on this. I think it's when you, I mean, I mean, it's when you realise that you need this, it's when you start wondering how you can make not necessarily marginal gains, but how, how you can flesh out your offer to beyond your product.
Toby McCrindle, Partner, Mishcon
Yeah.
James Clark, Director of Defence, Flint Global
And I think that's the vital thing. And if you've only got one person in the UK, or if you're a team of 4 people, then you probably aren't going to be looking at this at that point. But I think when you perhaps, when you have a small contract, or when you, uh, when you have a bit of investment and you're looking at how to sort of create a real presence in the market, that's when I think you'd look for, for services like my own. You know, we're not, we're not as early stage as like a legal team who you need to like dot the i's and cross the t's from the, from the off, you know, or even your HR team if you're employing staff, whatever. But I, you know, I would definitely say we're in that sort of second phase of that kind of business growth. Um, yeah, I think some of the, the most interesting projects that I've worked on with clients are when they are at a certain size and, or they have a, or they have a, a pipeline of contracts and they, they don't understand why they're not winning more, or why they're not, why they're not getting more traction, or why they're not, you know, being invited to roundtables, or what the, I mean, that's, that's sort of quite tactical, but, and that's where I think we've come in and really had a big impact on some companies.
Toby McCrindle, Partner, Mishcon
Yeah. And what about those companies coming into the UK? So I know you do a lot of that work, and we both do, and we have some clients in common there. Um, is it the same message effectively to use new UK entrants and sort of starting to understand the landscape and coming in early to position themselves from a, you know, both strategic and tactical perspective?
James Clark, Director of Defence, Flint Global
I think there's definitely differences on your narrative based on sort of sovereign capability versus where your kind of country of origin is, or where your, you know, manufacturing base is, or where your founders are from and where your investment is from, particularly. So Flint do a lot of work around the National Security Investment Act and supporting businesses who are navigating investment on kind of due diligence and on how they, how they may be perceived in that kind of national security arena. Um, but I think, I think sort of yes, um, it's different advice, but no, it's part of the same kind of package, which really is how can you position yourself best to get the outcomes that you want.
Toby McCrindle, Partner, Mishcon
Yeah.
James Clark, Director of Defence, Flint Global
Um, and at a certain level, for certain kinds of contracts, like, you want as many friends as you can get. You want as many people who want your advice as you can get. You want as many, um, journalists wanting to cite your paper or your capability. And that's what we help with.
Toby McCrindle, Partner, Mishcon
So we just touched on UK sovereignty briefly. And so when you're talking or helping clients coming from outside the UK, does the focus on UK sovereignty and supply chain security at the minute hinder, or how do you manage that process for clients?
James Clark, Director of Defence, Flint Global
I don't think it hinders if your capability is distinct or your price point is, uh, low enough, if I'm totally honest, you know, the MOD has a responsibility to the taxpayer to, to, um, you know, get value for money. So I think there are ways of pitching your offer, which can gain traction. But I think that this sovereign capability, now, interestingly, on Friday, the, uh, the, um, the National Security Committee's sort of analysis of this was released. And basically, they said, well, the government needs to actually decide what sovereign capability is. Like, how do you define that? Is it like one person in an office in London, or is it, you know, an actual manufacturing footprint, which I think is really important.
Toby McCrindle, Partner, Mishcon
Yeah.
Toby McCrindle, Partner, Mishcon
But, you know, I think that sovereign capability and sovereign capacity is only going to become more and more important over the next 5 to 10 years. And therefore firms, even if you're a UK entrant coming in from elsewhere, I think you will need to prove that you are committed to the UK. And there are, there are some companies who've come in and done that very, very effectively to quite loud fanfare, and there are some companies that haven't done that at all.
Toby McCrindle, Partner, Mishcon
Yeah.
James Clark, Director of Defence, Flint Global
And, you know, I think, I think we'll start to see better outcomes for those in the former category.
Toby McCrindle, Partner, Mishcon
Yeah. We're actually starting to see within, um, ITT documentation or other project documentation, not quite offsetting, but certainly kind of a requirement that you bring in more than just an idea and a capability, that you start to establish yourselves more firmly and deeply into the sort of industrial base.
James Clark, Director of Defence, Flint Global
Yeah, and the offsets policy is really interesting. I was discussing this earlier with a, um, a couple of government relations representatives from one of the UK's primes, and they were talking about the offsets policy and how it would be positive for them, but it would hit some of their competitors and, and that's really interesting and will have an impact. And what I find interesting about it is that, you know, there are like, I think it's 46 other countries that already have that kind of policy.
Toby McCrindle, Partner, Mishcon
Yeah.
James Clark, Director of Defence, Flint Global
And have for years.
Toby McCrindle, Partner, Mishcon
Yeah absolutely.
James Clark, Director of Defence, Flint Global
And there is, you know, a familiar gripe from the sort of defence tech ecosystem is, why does the MOD open up for competitions in the name of fairness when a British company that is sovereign, that has developed the capability in the project phase, is then potentially going to get knocked out by a foreign entrant? How is that in the name of fairness? And so again, i.e., it may, it may be a bit of time coming, but I do think that there's going to be an adjustment on that as well.
Toby McCrindle, Partner, Mishcon
So unfair question, sort of advance warning, but 2026, we're a little way in now. It's been a bumpy start to the year. We've got, from a geopolitical perspective and other perspectives, and obviously what's going on with Iran in the Middle East, what are your predictions, headline predictions, doesn't have to be political, economic, where do you think we're going to end up at the end of the year from a defence tech perspective? Are we going to see a UK unicorn? Are we going to, who knows, right? But what have you got in mind?
James Clark, Director of Defence, Flint Global
Are we going to see a UK unicorn? Yes. I can't, I can’t predict which one, but I can think of 4 potentials.
Toby McCrindle, Partner, Mishcon
Yeah.
James Clark, Director of Defence, Flint Global
So I think that's definitely going to happen. Um, unless, and you could argue that we've already, that they already exist. But yeah, I think we'll see, we’ll continue to see excitement and buzz around defence technology. I think, uh, we may start to see some mergers and acquisitions because I think that some companies with great people and great technology are not going to have the runway to stay in the fight, and there are companies that can recognise that and snap them up. Um, and so there is an interesting issue around capital and investment flows. Um, I think there will be a defence investment plan.
Toby McCrindle, Partner, Mishcon
I'll come back to that.
James Clark, Director of Defence, Flint Global
Okay, we'll come back to that. Um, and I think one of the most interesting issues at the moment for me is how can a Labour government who are committed to spending more on defence and see the value in spending more on defence, spend more on defence when they would rather spend money on other things, for example, welfare? And that's the parliamentary Labour Party voting or putting pressure on the, the government, on the executive. So I don't know how they're going to try and square that circle. I do know that the Treasury are anticipating continued calls for CDEL increases on defence.
Toby McCrindle, Partner, Mishcon
Yep.
James Clark, Director of Defence, Flint Global
But I don't think that they know where that money is going to come from.
Toby McCrindle, Partner, Mishcon
Right.
James Clark, Director of Defence, Flint Global
And I don't know how that's going to play out.
Toby McCrindle, Partner, Mishcon
OK, well, one to watch then.
James Clark, Director of Defence, Flint Global
One to watch and I think it would be really interesting, Donald Trump is firing a lot of shots across the bow and, and his rhetoric is, uh, is so erratic and emotional that I'm not sure how deeply you can read into it. But I think if you start, or if you look across at European capitals, there is growing unease and frustration that the UK is not leading on defence spending, on, you know, capability deployment and acquisition. And I think that that is where I would be looking at external pressure coming into the government.
Toby McCrindle, Partner, Mishcon
Great, thank you very much. Lots to unpick, and we could carry on talking, and we may well do.
James Clark, Director of Defence, Flint Global
Definitely.
Toby McCrindle, Partner, Mishcon
Maybe you can come back and we can revisit your predictions. Thank you for coming in, much appreciated.
James Clark, Director of Defence, Flint Global
Not at all, thanks for having me.