Small Business Advocate at Presidential Academy in the Ural Region: "State procurement now serves as a potent instrument for boosting small and medium-sized enterprises"
In the first half of 2025, the volume of government procurement from small and medium-sized businesses (SMEs) in Russia reached an impressive 3.8 trillion rubles, according to official data. However, a significant increase in government procurement from SMEs in 2024 remains unconfirmed, despite several factors that could have potentially influenced state purchasing behavior.
One such factor is the Russian government's focus on domestic technology. In May 2024, the government announced a programme to reimburse companies 50% of the costs incurred in adopting domestic industrial and engineering software. This initiative, managed by the Ministry of Industry and Trade, aims to encourage import substitution in key sectors and could benefit Russian SMEs in the tech sector.
Another factor is the surge in military and industrial spending. Government expenditures surged in 2024–2025, driven by a 21% increase in advance payments for military contracts. While large state-owned enterprises dominate defence procurement, some subcontracting opportunities may have arisen for SMEs, especially in components, logistics, and services.
SMEs already account for over a fifth of Russia’s GDP, making them natural participants in government procurement, especially if policies favor domestic suppliers. However, no direct statistic shows an increase in government procurement from SMEs in 2024.
The state procurement system has become an effective tool for supporting SMEs. Major state-owned companies, such as RZD, Aeroflot, Rosseti, Rostelecom, Sberbank, Rosatom, Russian Post, and others, have been integrated into the system of state support for SMEs. The digital transformation of the state procurement system, with the portal "MSP.RF" as its central element, has played a significant role in supporting SMEs.
In conclusion, while the search results do not confirm a significant increase in government procurement from SMEs in Russia during 2024, several factors—including new subsidies for domestic technology, potential preferential financing, and a surge in military-industrial spending—could have created a more favorable environment for SME participation in government contracts. However, without explicit procurement statistics or policy reports focusing on SME-targeted increases, any connection remains indirect and inferential. The available evidence points more to structural support for domestic industry and a militarized economy, which may have secondary benefits for SMEs, rather than a direct, documented procurement surge.
As of the first half of 2025, the pace of development of Russian small businesses has been accelerating, with over 428,000 contracts signed for government procurement from SMEs. Nearly every fourth ruble of newly created value by small and medium businesses in Russia in 2024 was earned through government contracts, according to Alexander Pobedinin, Head of the Economics and Management Department at the Presidential Academy on the Urals. The share of government procurement from SMEs in Russia's national economy was nearly 4.8% of GDP in 2024. State support for Russian small businesses includes unhindered access to preferential financing, tax breaks, and other benefits, as established by Federal Law No. 223-FZ of July 18, 2011. The integration of major state-owned companies has created a powerful and diversified demand, allowing enterprises of almost any profile to find their niche.
Small and medium-sized businesses (SMEs) in Russia's technology sector may have received financial support from the government's initiative to reimburse companies 50% of the costs incurred in adopting domestic industrial and engineering software. The surge in military and industrial spending might have led to subcontracting opportunities for SMEs in the defense sector, particularly in components, logistics, and services.
