The UK government’s recent commitment to increase defence spending to 2.5% of GDP by 2027 is set to provide a significant boost to small and medium-sized enterprises (SMEs) across the defence sector. With a new government-backed support hub and SME spending targets in place, thousands of smaller businesses will gain better access to the defence supply chain, unlocking opportunities for growth, job creation, and innovation.
While this investment presents a huge opportunity, it also brings challenges—particularly in securing the right talent. As SMEs prepare to scale up their workforce, having access to specialist skills will be key to meeting demand and ensuring long-term success.
What This Means for SMEs in the Defence Sector
Historically, much of the UK’s defence spending has been concentrated among larger firms, with SMEs receiving only 4% of this funding in 2023-24. The government’s new strategy aims to change this by ensuring more defence investment directly benefits smaller businesses. This initiative will help SMEs:
- Gain easier access to defence contracts through the new support hub.
- Secure funding and resources to develop cutting-edge defence technologies.
- Grow their workforce to meet increasing demand from the Ministry of Defence and prime contractors.
- Contribute to a more resilient UK defence industry, reducing reliance on international suppliers.
However, while the financial backing is there, the ability of SMEs to scale up quickly will depend on their ability to attract and retain skilled professionals.
For more details on the government’s announcement, you can read the full news release here.
Workforce Challenges and Opportunities
As defence investment increases, the demand for highly specialised skills in areas such as cybersecurity, aerospace engineering, AI, robotics, and manufacturing will grow. SMEs will need to build strong teams quickly to take advantage of new opportunities and compete in the evolving defence landscape.
An Expert View from Matt Johnson, Director at Jonathan Lee Recruitment
“The government’s latest initiative marks a pivotal moment for SMEs in the UK defence industry. By creating clearer pathways into the supply chain, small businesses now have a real opportunity to bring their innovation and expertise into major defence projects. However, this expansion brings hiring challenges—finding people with the right technical expertise, security clearances, and cultural fit is essential for success.
SMEs that plan ahead and develop a robust hiring strategy will be in the best position to seize these new opportunities. At Jonathan Lee Recruitment, we are deeply committed to the defence sector. We hold Silver Award status from the Defence Employer Recognition Scheme (ERS) and have been supporting the industry for over 45 years. As the sector evolves, we continue to engage with businesses to help them navigate this period of growth.’’
Looking Ahead
With the right talent strategies in place, SMEs can play a crucial role in strengthening the UK’s defence sector while driving innovation and economic growth. As businesses explore new opportunities arising from this investment, having access to experienced professionals will be key to success.
At Jonathan Lee Recruitment, we specialise in defence recruitment, helping businesses find the right talent to support their growth. Whether you need highly skilled engineers, project managers, or technical specialists, we have the expertise to support your hiring needs.
Get in touch with Matt Johnson on 01952 987033 or learn more about how we can support your defence recruitment needs here.
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