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Is this the news that SMEs have been waiting for? The UK Ministry of Defence (MoD) has announced a major step forward in broadening defence-sector opportunities for UK small and medium-sized enterprises (SMEs), launching a dedicated team to cut red tape and streamline procurement processes.
The new Defence Office for Small Business Growth (OfSBG) aims to simplify the historically complex pathways into defence contracts and unlock greater innovation across the UK industrial base. It is vital that our country can support and grow talented agile and innovative SMEs.
Strategic shift to empower SMEs
The OfSBG has been created as part of a wider government ambition to increase defence spending with SMEs by £2.5 billion and grow SME participation by 50% by 2028. This marks a meaningful policy shift toward embedding SMEs more deeply in the supply chain at a time when national security priorities increasingly depend on agility, technical innovation, and rapid development cycles - areas where SMEs often excel. The Defence Readiness and Industry Minister Luke Pollard MP has stated that the aim is to "break down barriers and open new avenues for innovation."
Supporting growth, innovation and regional diversity
The initial cohort includes 30 "pathfinder" SMEs, selected to represent a broad cross-section of sectors and UK regions. These businesses will receive direct support to navigate procurement requirements, improve cash flow, and ready themselves for future contract opportunities.
The OfSBG's remit includes:
- Simplifying commercial processes, cutting unnecessary bureaucracy and shortening contracting timelines.
- Improving transparency and knowledge-sharing across the defence ecosystem, enabling SMEs to better understand upcoming opportunities.
- Encouraging private investment through clearer, long-term procurement pipelines.
- Providing targeted advice and support so SMEs can more effectively prepare bids and scale operations.
This approach places emphasis not just on increasing SME participation, but also on ensuring these businesses are equipped to sustain growth, innovate confidently and expand their role in supporting the UK's defence and security mission.
Driving innovation through collaboration
The new team was launched during Minister Pollard's visit to the National Manufacturing Institute Scotland, alongside meetings with SMEs working in high-tech defence innovation, including Viper::Blast, a company specialising in advanced simulation technologies.
This reflects the MoD's increasing recognition of the value SMEs bring to advanced capability development, from AI-driven modelling and simulation to autonomous systems, specialist materials, and cyber resilience technologies.
The move also complements the Government's wider agenda to strengthen the UK's industrial resilience, support high-skilled jobs, and foster innovation clusters across the country.
What this means for the defence industry
For large primes, the OfSBG introduces greater expectations to integrate SME suppliers into their own delivery ecosystems. For SMEs, the long-standing concerns are being addressed.
Key impacts include:
- A more level playing field for companies seeking to enter defence markets.
- Reduced cash-flow pressures caused by lengthy contracting processes.
- More predictable and transparent procurement cycles, which will help SMEs plan and invest with confidence.
- Accelerated pathways for innovative technologies to reach the MOD and armed forces.
The launch of the Defence Office for Small Business Growth marks a significant moment in the UK's defence industrial strategy. By cutting red tape and actively backing SMEs, the MoD is not only opening the door to more diverse suppliers but also investing in the innovation and technological competitiveness that will shape the UK's future defence capabilities.
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