This third and concluding article in the series ahead of the 2026 Specialist Defence and Security Convention UK (SDSC-UK) brings together the themes explored in Articles 1 and 2 and focuses on a central tension at the heart of defence acquisition reform. Defence increasingly seeks to work with small and medium enterprises (SMEs) because of their innovation, agility and speed, yet it must ultimately deliver equipment and services at scale, with high levels of assurance, sustainability and endurance – conditions that most SMEs are not designed to meet on their own. Reconciling these imperatives is one of the most complex and least discussed challenges facing UK Defence today.
A structural tension, not a cultural one
This tension is often framed as a matter of culture or attitude: defence is seen as risk-averse and slow, while SMEs are characterised as innovative but fragile. In reality, the issue is structural. Defence operates in a safety‑critical, operationally unforgiving environment where failure carries strategic and human consequences. Assurance, certification, resilience and long-term support are therefore non‑negotiable. At the same time, the pace of technological change – particularly in digital, data, autonomy and space – means that innovation increasingly comes from smaller, more specialised firms operating outside traditional defence industrial models.
The result is a paradox. Procurement systems are increasingly designed to attract SMEs, yet are still optimised for the placement of large, low-risk contracts. SMEs are encouraged to engage early, innovate and demonstrate capability, but are then expected to meet requirements for scale, liability, production resilience and contractual risk that favour much larger organisations. Too often, SMEs are effectively asked to be both small and scalable at the same time.
The scale problem
Scale is not simply a matter of production volume. It encompasses the ability to absorb risk, manage complex supply chains, meet demanding assurance and certification regimes, provide long-term support, and withstand in-year financial volatility. These characteristics are typically associated with prime contractors, not SMEs.
For defence, placing contracts at scale provides predictability, reduces integration risk and simplifies accountability. For SMEs, however, the transition from innovation to industrialisation is where many struggle. Even those with credible technology and proven prototypes may lack the facilities, workforce or balance sheet to scale rapidly without committed demand or external investment. This creates a circular dependency: defence seeks evidence of scalable delivery before committing, while SMEs require commitment in order to scale.
Managing risk across the life cycle
At the heart of this issue lies risk: how it is allocated, when it is transferred, and to whom. Current acquisition approaches often seek to transfer delivery risk to industry too early, disadvantaging SMEs whose value lies precisely in their ability to explore, adapt and iterate.
A more deliberate approach would recognise that risk tolerance should vary across the acquisition life cycle. Early-stage innovation may justify higher technical and commercial risk in return for speed and adaptability. As capability matures, risk can be progressively reduced through modular design, staged contracting and clearer transition points to industrial partners better equipped to deliver at scale. This is not about lowering standards or guaranteeing outcomes, but about aligning assurance, competition and risk with the maturity and criticality of the capability.
Beyond false choices
Importantly, this is not an argument for SMEs over primes, or innovation over reliability. Defence needs both. Large contractors play an essential role in integrating complex systems, sustaining capability over decades and providing resilience at scale. SMEs bring speed, creativity and technological edge. The challenge is designing acquisition pathways that harness the strengths of each without forcing one to behave like the other.
Models that deliberately combine SME innovation with prime-led scaling – whether through structured partnerships, transition frameworks or incentivised collaboration – offer one route forward. Such models were ones implemented via the Special Projects Capability Branch and respective DE&S delivery teams for TIQUILA (UAV project) and CRENIC (Electronic Counter Measures (Force Protection) programme). Equally important is clarity: SMEs need to understand where defence sees their role ending, how and when scale will be introduced, and what success looks like at each stage.
Implications for defence, industry and investors
This tension also has implications beyond procurement policy. For defence, it demands more explicit decisions about risk appetite and where scale truly matters. For SMEs, it requires strategic choices about growth, partnership and investment. For investors, it reinforces the need for acquisition models that provide clearer pathways from innovation to revenue at scale.
This is not straightforward – there will always be trade-offs between speed and assurance, diversity and coherence, innovation and endurance. However, failing to acknowledge and actively manage these tensions risks undermining the very SME participation that Defence is seeking to encourage.
Conclusion: A conversation worth having
If the ambitions of the Strategic Defence Review and Defence Industrial Strategy are to be realised, defence must move beyond slogans about innovation and agility and confront the practical realities of delivering capability at scale. This requires honest discussion about what SMEs are best placed to do, where primes add irreplaceable value, and how risk and responsibility are shared across the acquisition life cycle.
SDSC-UK 26 provides a timely forum for that discussion. By bringing together SMEs, primes, defence users and acquisition leaders, it offers an opportunity to explore how innovation at speed and capability at scale can be reconciled in practice.
Author’s note
These articles are written from a practitioner’s perspective, drawing on experience in defence capability development and engagement with industry. They are intended to stimulate informed debate rather than prescribe solutions, and to support constructive dialogue between defence, SMEs and prime contractors. Key insights and reflections arising from discussion at SDSC-UK 26 will be captured and shared with defence leadership to help inform the ongoing implementation of defence reform.
About the author
Maj Gen (Retd) Robin Anderton‑Brown is a former Director of Capability at UK Strategic Command and Multi‑Domain Integration Programme Director. He is now Director of Allium Associates Ltd, an outcome‑focused consultancy that helps connect industry and defence. Robin is also a strategic advisor and ambassador for SDSC‑UK.
