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The paper is a report including three papers and the discussion at an TEE Colloquium. The first paper reviews the scale of the UK defence research and development (R&D) by comparison with major international activity, and considers several arguments about the positive and negative effects on the electronics industry. The second paper considers the quality and quantity of the supply of engineers to this industry, in the context of potential competition between the defence and civil sectors. The final paper stresses the importance of manufacturing industry to the UK economy, and how the civil sector can take greater advantage of defence-sponsored R&D. Several myths are dispelled, and a number of policy issues raised, vital to the UK's future. In particular, it is concluded that unless a substantial increase in funding is secured for both civil and military technology, we are faced with an awkward choice. If we neglect our military strength we may not be able to defend our economic strength, but, if we neglect our industrial base, then in time we shall have no economic strength worth defending.