Between Tech and Defence: The New Competition for Executive Talent

Hardly any other industry in Germany has undergone such profound change in the space of just a few years as the security and defence industry. What was long regarded as a relatively closed market with manageable innovation cycles is now developing into one of Europe’s most dynamic technology and growth sectors.

The driving force behind this development is far more than just the current shift in security policy. New geopolitical realities, the €100 billion special fund and the political objective of permanently strengthening the defence capabilities of Germany and Europe have reshaped the sector.

According to estimates by McKinsey, defence spending by European NATO member states could rise to around 800 billion euros annually by 2030 – some 300 billion euros more than in 2025. This is not only leading to growth in order books and production capacities. At the same time, there is a growing need for leaders who can combine technological expertise, industrial scale and transformation skills.

It is not just the growth of the defence industry that is noteworthy. Defence companies, software providers and deep-tech start-ups are moving ever closer together, both technologically and economically. Formerly largely separate markets are giving rise to a shared innovation ecosystem in which artificial intelligence, autonomous systems, cybersecurity, sensor technology and software-based platforms are playing an increasingly significant role.

This convergence is also transforming the labour market for senior executives. Just a few years ago, careers in technology and defence generally followed separate paths. Today, software companies, AI start-ups, hyperscale's and defence conglomerates are increasingly competing for the same talent. This is giving rise not only to a new technology market, but also to a new competition for leadership.

The consequences are immediately apparent in the filling of key positions. Many search mandates can no longer be clearly assigned to a single sector. The search for a Chief Technology Officer for a defence company may begin just as easily in the software industry as it might at a robotics firm or a hyperscale. Conversely, technology companies are showing increasing interest in executives who are familiar with regulation, high security requirements and complex government clients.

This development is also reflected in executive search. At Odgers, the Technology and Aerospace & Defence practices frequently collaborate on such assignments. After all, where technologies, business models and talent markets intertwine, a perspective based solely on a single industry is no longer sufficient.

From a surge in orders to industrial-scale production

Rising defence spending marks a long-term structural shift. According to the latest analysis by the Stockholm International Peace Research Institute (SIPRI), Germany’s military expenditure rose by 24 per cent in real terms to US$114 billion in 2025. According to the institute’s calculations, this meant the country recorded double-digit growth in expenditure for the third consecutive year and was the world’s fourth-largest military spender in 2025. At 2.3 per cent of gross domestic product, expenditure exceeded the two per cent mark for the first time since 1990.

Decisions taken in political budgets are increasingly having an impact on companies. Rheinmetall, for example, increased its turnover to just under ten billion euros in 2025. The reported backlog, which comprises both firm orders and framework agreements, reached 63.8 billion euros at the end of the year. This example illustrates the scale that the industrial ramp-up phase has now reached.

However, full order books alone are not enough to tackle the challenge. Companies must build new plants, secure supply chains, digitise production and scale their organisations internationally. At the same time, they must collaborate with government clients, armed forces, technology partners and an often highly fragmented European supplier network.

This requires leaders who can not only manage growth but also implement it at an operational level. Experience in scaling up industrial operations, building resilient supply chains and managing complex programmes is becoming just as important as the ability to navigate political decision-making processes and regulatory requirements with confidence.

The competition for these individuals is not confined to the defence industry. Energy companies, aerospace groups, automotive suppliers and mechanical engineering firms are also seeking executives with experience in production, transformation and international growth. Whilst the additional capital therefore expands the industry’s scope for action, it simultaneously exacerbates the shortage of qualified executives.

When defence becomes a software challenge

In parallel with industrial expansion, the technological focus is shifting. Modern defence capabilities no longer depend solely on platforms, production capacities and mechanical systems. Software, data and artificial intelligence are increasingly determining how quickly information can be processed, systems networked and decisions prepared.

The dual-use principle is not new. Technologies such as satellite navigation, semiconductors and the internet have shaped both the civilian and military spheres for decades. What is new, however, is the speed and direction of technology transfer. Whilst innovations used to frequently find their way from military research into the civilian market, today key capabilities are first developed within commercial technology ecosystems. Advances in cloud infrastructure, artificial intelligence, image recognition, robotics, autonomous navigation and cybersecurity are now emerging from technology companies, universities and civilian applications, and are being further developed for defence and security purposes.

Government and multilateral institutions are also responding to this trend. In 2022, NATO established the Defence Innovation Accelerator for the North Atlantic, or DIANA for short. The network now comprises 16 accelerator sites and more than 200 test centres. It aims to connect start-ups, research institutions, investors, industry and military users, and to accelerate the development of dual-use technologies.

A similar shift in thinking is evident in Germany. The Federal Agency for Breakthrough Innovations (SPRIND) is already supporting projects with both civilian and military applications. In 2025, it also proposed the establishment of an independent military innovation agency designed to accelerate the transfer of technological developments from research to practical application.

This is also changing the relationship between established corporations and start-ups. Traditional defence suppliers possess systems expertise, production capacity and access to government clients. Start-ups, on the other hand, often contribute software architectures, data-driven development methods and shorter decision-making processes. Technological progress is increasingly arising from the combination of these two capabilities.

A new business model is taking shape

The extent of this development can be seen in companies such as Helsing and Quantum Systems. Helsing sees itself as a software- and AI-driven defence company, but is now also developing its own autonomous systems and integrating its software with existing military platforms. The company raised 600 million euros in a funding round in June 2025; it had already raised 450 million euros the previous year.

Quantum Systems, for its part, combines drone technology with sensor technology, software and artificial intelligence. The company explicitly positions its systems for defence, public safety and industrial applications. In May 2025, it raised 160 million euros to accelerate development and international expansion.

Such companies do not fit entirely into the mould of a traditional defence contractor, nor into that of a conventional software start-up. They develop hardware and software in parallel, work closely with government clients and military users, and must continuously improve their products under real-world operational conditions. This gives rise to a corporate culture that combines a passion for technological experimentation with a sense of special responsibility.

For executives, this presents an unusual combination of demands. A CTO must not only build an effective development organisation; he or she must also be able to deal with hardware development, security-critical data, regulatory requirements and industrial manufacturing. A Chief Operating Officer, on the other hand, must reconcile the pace of a fast-growing company with the reliability of long-term government programmes.

As a result, pure specialists from just one field are rarely sought after. Rather, the most successful candidates are those who can bridge the gap between technical disciplines, organisational types and decision-making cultures.

From an image problem to a meaningful role

Alongside capital and technology, society’s perception of the sector has also shifted. Just a few years ago, many candidates found it hard to imagine making the move from a global technology company to the defence industry. Concerns regarding corporate image, social acceptance or future career paths often outweighed the intrinsic appeal of the role itself.

The geopolitical crises of recent years have not entirely dispelled this attitude, but have significantly nuanced it. Today, defence capability is more closely associated with the protection of democratic institutions, European sovereignty and the security of open societies. For some executives, therefore, the shift is no longer of interest in spite of, but because of, this social mandate.

This new openness broadens the talent pool. However, it does not mean that candidates are any less careful in making their decisions. On the contrary: executives from the tech sector, in particular, scrutinise exactly which products and customers a company works for, how it deals with ethical issues and what responsibilities the role in question entails.

For employers, it is therefore not enough simply to advertise high budgets, growth or technical complexity. They must credibly explain what they stand for, the impact a role can have, and how responsible decisions are made within the company. Purpose is no substitute for remuneration or development opportunities. However, it has become an important component of employer branding.

Two sectors – one talent market

The more technologies overlap, the less meaningful the traditional sector-based CV becomes. For a senior technology role in a defence company, experience in robotics, cloud infrastructure, industrial software or working with a hyperscale may be more important than a long career in the defence industry.

The decisive factor is the task at hand. If the aim is to modernise an IT landscape, experience of a large-scale cloud transformation may be relevant. If an autonomous system is to be brought to series production, executives from the fields of robotics, the automotive sector or aviation may be suitable candidates. If the task is to set up an international production organisation, candidates from other regulated industries may have the more suitable profile.

The reverse trend is also becoming more common. Technology companies serving critical infrastructure, public authorities or regulated industries are seeking executives with experience in particularly sensitive environments. They value their understanding of information security, compliance, long-term customer relationships and dealing with government bodies.

The real challenge, therefore, lies not in a formal change of sector, but in bridging the cultural divide. The tech world rewards speed, iteration and calculated risk. In defence organisations, reliability, documentation and security requirements carry particular weight. Successful executives must reconcile the two without pitting the logic of one side against the other.

Executive search must understand both sides

With the emergence of a shared talent market, the nature of executive search is also changing. A search can no longer begin by focusing on a single sector. The first step is to clarify which skills are required for a company’s specific phase of transformation and in which markets these skills can actually be found.

It is not enough simply to compile lists of candidates from related sectors. Anyone seeking to recruit executives from the tech sector for the defence industry must understand their motivations and reservations. Anyone approaching candidates from the defence industry for technology companies must be able to assess which of their experiences are transferable and in which cultural environment they will be most effective.

At Odgers, the Technology and Aerospace & Defence practices therefore work together on such assignments. Both perspectives are incorporated into defining the search scope, assessing candidates and approaching them. The Defence Practice contributes its knowledge of security policy contexts, government clients and industrial structures. The Technology Practice complements this with access to software, AI, platform businesses, digital business models and the relevant talent markets.

This integration not only broadens the pool of potential candidates; it also helps to avoid mis-hires. Professional qualifications alone say little about whether a manager can cope with different decision-making processes, timeframes and accountability structures. Equally important are cultural compatibility, personal motivation and a willingness to engage with the specific characteristics of the other’s world.

The boundaries between tech and defence will continue to blur. Europe’s defence capabilities increasingly depend on technologies that originate outside the traditional defence industry. Conversely, the sector offers technological and leadership talent roles of high strategic importance, considerable scope for investment and the opportunity to help shape new organisations.

The resulting competition will not be decided by salaries alone. The companies that will succeed are those that combine technological ambition, a social mission and a compelling leadership culture. And those that are prepared to look beyond the boundaries of their own sector when searching for the right people.

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What kind of leaders does your organisation need at the intersection of tech and defence?

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