Partner Article

From Certainty to Capability: What Defence Reform Could Mean for SMEs - A shift in approach, not just process 

Jenny Shaw, SMI's CEO, on behalf of small and medium-sized enterprises (SMEs) explores the UK Government’s move towards a 10-year defence plan.

A new procurement model begins to address one of the most persistent and practical barriers to growth: uncertainty. Short-term cycles, changing priorities and limited visibility of future demand have historically made it difficult for smaller businesses to invest with confidence, particularly in sectors where quality, compliance and precision are non-negotiable. The announcement of the Government’s 10-year plan reflects a shift in how defence capability is expected to be developed, delivered and sustained, with longer-term thinking intended to bring greater coherence to investment and planning across the enterprise. 

This longer-term approach has the potential to transform market dynamics with a clearer line of sight into future procurement. With greater certainty comes the ability to plan more deliberately, whether that means investing in people, strengthening processes or developing new capabilities that take time to mature. For organisations like SMI, where high-integrity manufacturing underpins everything we do, that confidence is what allows capability to scale in a sustainable way. 
  
From participation to influence 

While greater certainty is important, it is only part of the picture. The more meaningful shift lies in how and when SMEs are engaged within the procurement process. Too often, smaller businesses are brought in at a relatively late stage, contributing valuable expertise but doing so within parameters that have already been set. 
  
Encouragingly, this is already starting to change. SMEs are increasingly present across every part of the defence enterprise from advanced manufacturing and electronic systems through to medical technologies, space, AI-enabled systems, and energy. We are also seeing more SMEs being included on frameworks, partnering within supply chains and, importantly, securing direct contracts where their expertise offers a clear advantage. 
  
If the new model builds this momentum and creates earlier, more consistent points of engagement, it opens the door for SMEs to play a more influential role in shaping solutions rather than simply supplying them. This is not just beneficial for industry; it strengthens outcomes for defence by introducing a broader range of perspectives at the point where decisions are being made. 
  
Bringing SMEs into the conversation earlier allows programmes to benefit from specialist knowledge, adaptability and a closer connection to emerging technologies - including AI, where innovation is often driven by smaller, highly focused teams. Earlier SME involvement supports more responsive capability development and reduces the risk of solutions becoming overly fixed before the full range of expertise has been considered. 
  
A more connected industrial ecosystem 

This shift also reflects a wider reality across the SME landscape. Many businesses operating in defence do so alongside work in other sectors such as rail, medical, energy, AI-driven applications and space, applying the same standards of quality and assurance in different environments. This dual-use capability is not incidental; it is a defining strength. 
  
At SMI, for example, the same commitment to precision, testing and reliability that supports defence programmes is applied across a range of sectors, enabling knowledge, data and innovation to move between them. As AI becomes increasingly embedded across both defence and civilian applications, that cross-sector experience becomes even more valuable, helping to translate emerging technologies into trusted, deployable capability. 
  
Harnessing that connectivity more effectively offers a clear advantage. It allows defence to draw on innovation that is happening beyond its immediate boundaries while reinforcing the resilience of the supply chain through greater depth and diversity. 
  
Turning intent into reality 

However, the benefits of this shift will only be realised if structural change is matched by practical change. If the system remains complex, difficult to navigate or disproportionately resource-intensive, many SMEs will continue to find participation challenging, regardless of how far ahead planning extends. 
  
Clearer access points, proportionate requirements and a more consistent approach to engagement will be essential in ensuring that SMEs can contribute effectively. Just as importantly, there needs to be a continued shift in mindset that recognises the value SMEs bring - in innovation, their ability to respond quickly, adapt to changing needs and to operate across multiple sectors. 
  
In the current global context, where uncertainty is increasing and defence priorities are evolving rapidly, this kind of adaptability is critical. A supply chain that draws on a wide range of capable SMEs, including those driving advances in areas such as AI, is inherently more resilient, better able to absorb shocks and more responsive to emerging demands. 
  
A stronger, more adaptable future 

The move towards a 10-year plan and a new procurement model is therefore a positive and necessary step, but its success will ultimately be defined by how it is delivered in practice. What matters is not only the intent behind the reform, but whether it enables a broader and more diverse set of organisations to contribute, and whether it brings them into the process early enough to have a meaningful impact. 
  
SMEs are already playing a vital role across the defence enterprise. The opportunity now is to build on that progress to move from participation to true integration, where SMEs are not just part of the supply chain but are recognised as contributors to capability in their own right. 
  
By enabling that shift, the UK can create a defence ecosystem that is not only technologically advanced, but also more agile, more connected and more resilient. In an increasingly uncertain world - with technologies such as AI reshaping how capability is developed and deployed - the breadth of capability will be as important as scale. 
  
The opportunity is clear. The focus must be on ensuring the evolution of the procurement system continues in a way that fully enables SMEs, unlocking their potential as a cornerstone of a stronger, more adaptable defence enterprise. 

This was posted in Bdaily's Members' News section by Moya Galal .