From Local SME to Global Supplier: How to Approach Entering the Defense Sector
Since defense investment moved into the media spotlight, I keep hearing the same question from entrepreneurs and executives in other sectors: how can an SME break into this market? The opportunity is real, no question about it—but let’s not fool ourselves: the door is not wide open. Defense is a demanding and, to a large extent, closed ecosystem. At ACORDE we have walked that path from local SME to global supplier, and perhaps someone can benefit from us sharing what we have learned along the way.
The first barrier—and the one almost nobody wants to hear about—is technological excellence. Defense programs demand performance that is often at the cutting edge of the state of the art, and sustaining it is not a matter of a one-off project. It requires sustained investment in R&D, qualified teams, measurement infrastructure and, above all, years—not months—before a product is mature. In our case, getting to the point of manufacturing RF subsystems for electronic warfare, satcom or datalinks meant more than a decade building technical capabilities that cannot be improvised. That said, the context is changing fast. The geopolitical tension of recent years has put enormous pressure on timelines: agility is rewarded, development cycles are shortened, and time to market is starting to look more and more like that of the civilian world. Twenty or twenty-five years ago, entering defense was a marathon lasting a decade or more; today, while still a demanding sector, programs accept—and even seek out—suppliers capable of delivering operational capabilities within timeframes that would once have been unthinkable. The window of opportunity now opens far sooner than it did a generation ago.
The second is certifications and security clearances. Without a facility security clearance, without cleared personnel, without processes to handle classified information and, in many cases, without the specific accreditations to work with certain technologies or countries, you simply do not get into the major programs. These are lengthy procedures that demand an internal structure most SMEs do not have to begin with, and that cannot be delegated.
On top of this come the configuration management systems imposed by the major programs, capable of guaranteeing the traceability of every component, every change and every version throughout the entire life of the system. And it is worth remembering that this service life typically ranges between 15 and 40 years: the commitment to after-sales support and obsolescence management goes far beyond anything the civilian world is familiar with. You have to be prepared to maintain documentation, spare parts and repair capability for decades.
Cybersecurity, moreover, has become a cross-cutting requirement. Not only in the delivered product, but also within the organization itself: we are audited, we are required to comply with specific frameworks, and a single incident can leave you out of the program. And above all, there is a cultural shift that many SMEs underestimate: the weight of processes. Working for defense means documenting, reviewing, qualifying and auditing practically everything you do. Good engineering is no longer enough; you have to be able to prove it in writing.
So how do you tackle all of this without dying in the attempt? My recommendation, from our own experience, is not to go it alone. There are several sources of support worth mobilizing from day one. The Ministry of Defense itself—through the DGAM, the Subdirectorate General for Planning, Technology and Innovation—offers frameworks for funding, qualification and innovation support that remain underused by the SME sector. DIGEID, CESTIC and many other units within the Ministry are keenly interested in learning about new capabilities that could serve our Armed Forces. Reaching out and asking costs nothing, and there is almost always someone on the other side willing to listen and advise on the next steps to take.
The major contractors (Indra, Airbus, Navantia, GMV, Sener, Escribano and a long list of others) need specialized suppliers and, in many cases, would rather work with agile SMEs than with rigid corporations. The key is to identify the niche where you bring clear differential value and knock on their door with a concrete proposal, not a generic catalogue. The same applies to the mid-sized players already established in defense, which are often the fastest route onto a value chain.
And finally, an option I particularly advocate: collaborating with other SMEs that have already spent years in the sector. At ACORDE we frequently receive enquiries from companies wanting to make the leap, and whenever there is a technical fit we explore ways to cooperate, subcontract or jointly integrate into programs. It is probably the most efficient way to acquire your first references, learn the sector’s codes and build a track record that opens other doors. Defense rewards those who have already delivered to defense; the first time is the hardest, and it is worth leaning on someone who already knows the way.
By way of conclusion, I would like to leave one clear idea: without technological SMEs there is no strategic sovereignty, but accessing this sector with a minimum chance of success demands preparation, patience and, above all, alliances. The ecosystem will remain closed as long as everyone approaches it on their own. If your company is thinking about taking the step, let’s talk. That’s what we’re here for too—to collaborate.
MANUEL LOBEIRA
CEO, ACORDE
