What’s Next for Aerospace, Defense & Security Leadership?

With defense budgets rising, supply chains being rebuilt and new technologies advancing at pace, the ADS sector faces one of the most consequential years in recent memory.

Our global experts offer boards a distilled view of the current environment across the Middle East, Australia, Germany, Czech Republic, France, Ukraine, APAC, Türkiye, India, U.S., Canada and the UK, exploring the shifting talent market and what organizations must prioritize to plan accordingly.

Defense market spotlight by country

Germany 

The Zeitenwende speech has shifted political priorities, procurement cycles are accelerating and budgets are at unprecedented levels in Germany’s ADS sector.

“Germany’s defense market is entering a new phase of sustained expansion. The Zeitenwende was the political trigger, but execution will determine whether Germany becomes Europe’s most important defense growth market. The market is expected to grow from €17.1bn in 2025 to €18.3bn in 2026, with the potential to approach €30bn by 2031.

Middle East

“The Middle East defense market is still hugely resilient and strategically important, today more than ever as the conflict with Iran continues to evolve. It centres upon constant security threats, sustained state-led investment and a focus on development of sovereign capability. There has been a shift in spending from major flagship platform purchases towards unmanned systems, ISR, integrated air and missile defense and cyber. The ongoing conflict with Iran will mean a sharp increase in spending to replace depleted stocks of air defense missiles and associated systems, as well as a future keen focus on manufacturing localization to ensure increased self-reliance. Middle Eastern defense procurement is diversifying suppliers to mitigate geo-political risk, and also focusing on local content and in-country value,” said Adam Fairbrother. 

Following an average rise in defense spending of around 15% in 2024 across the Middle East, 2025 defense spending saw a more moderate increase showing continuity. For instance, Saudi Arabia’s defense budget of US$78bn in 2025 makes the Kingdom the world's fifth-largest defense spender. 

Australia 

Australia is undergoing a massive investment and industrialization drive. The 2024 National defense Strategy and Integrated Investment Program (IIP) will lift spending toward A$85bn annually within a decade, with major portfolios across nuclear submarines, frigates, long-range missiles and infrastructure. However, there is still significant skepticism that the funds will actually flow through in time for the SMEs to be successful.  

Czech Republic 

The most notable development in Prague has been the successful IPO of the Czech industrial group CSG on the Amsterdam stock exchange, as Jiri Vodicka explained: “This milestone is expected to inspire further growth across the sector, with positive effects not only for prime contractors but also for their supplier networks operating in the region.” 

France 

The sector in France is driven by the presence of large industrial groups such as Airbus, Safran, Thales, Dassault Aviation, Naval Group and MBDA, which hold a central position as prime contractors.  

Ukraine 

The full-scale war became a powerful catalyst for the growth of Ukraine’s defense-industrial complex, evolving into more than 1,000 companies that now supply the army with hundreds of thousands of items every month.  

Despite constant attacks, Ukraine’s defense industry achieved significant output growth throughout 2025 in key segments, primarily unmanned systems and missile weapons. Total industry production capacity increased exponentially from $1bn in 2022 to an estimated $35bn in 2025.  

APAC 

APAC’s aerospace and defense sector is accelerating in investment, capability and ambition, reshaping global industrial strategy. Digital engineering, autonomy, AIenabled mission systems and new sustainment models are already in active deployment, while nations such as Singapore, Japan, Australia, and Korea are prioritizing sovereign capability and true codesign partnerships. 

Türkiye 

Türkiye's defense market continues its rapid ascent, underpinned by strategic autonomy goals. The government allocates about 2.5% of GDP to defense, funding platforms like the KAAN fighter, TBseries UAVs, and indigenous naval systems. Export volume surpassed $6bn in 2025, with new markets across Asia and Africa. Türkiye's defense-industrial model e.g. state-supported primes such as ASELSAN, Baykar, and TAI, is reshaping regional procurement dynamics and creating lasting talent retention challenges, especially in advanced electronics and propulsion. 

India 

India’s 2025–26 defense budget hit a record $75bn, ranking third globally, with strong domestic manufacturing incentives under Atmanirbhar Bharat. Major expansion areas include naval shipbuilding, space-based ISR, and Hypersonic Technology Demonstrator Vehicle programs. Foreign OEMs face pressure to localize production and form joint ventures due to India’s 74% FDI cap. The Defense Acquisition Procedure’s focus on indigenization changes the vendor-partner equation for primes. 

United States 

The U.S. remains the world’s largest defense spender at approximately $890bn in FY 2025. Investment is shifting toward deterrence in the Indo-Pacific, with record RDT&E funding for hypersonics, AI/ML, and advanced sensing. The commercial-defense cross-pollination (e.g., SpaceX, Anduril, Palantir) continues to disrupt legacy integrators, although workforce shortfalls, especially in skilled trades and software engineering, threaten delivery timelines. 

Canada 

Canada’s defense resurgence accelerated post-2024 with its Defense Policy Update targeting 2% of GDP by 2030. Priority domains include continental defense, Arctic surveillance, NORAD modernization, and space resilience. Procurement reforms aim to streamline the country’s historically slow acquisition process. Canada’s industrial base, though smaller, benefits from strong aerospace primes (Bombardier, CAE) and cross-border collaboration with U.S. suppliers. 

United Kingdom 

Driven by the Integrated Review Refresh (2025) and Global Combat Air Programme (GCAP) commitments, the UK defense budget remains robust, around 2.3% of GDP. Sovereign capability and export diversification guide policy, with modernization of shipyards, the Tempest program, and next-gen nuclear deterrence. Labor shortages in cyber, AI, and systems engineering pose constraints even as London focuses on AUKUS-aligned industrial opportunities. 

Disruptors and opportunities 

Germany

With Future Combat Air System, Main Ground Combat System and other European programmes now entering their delivery phases, certification bottlenecks, fragmented data standards and limited interoperability increasingly threaten timelines.

Commented Benedikt Douglas: “Germany’s SME-heavy ecosystem lacks the industrial depth required for sustained production surges, while roles in systems engineering, AI/ML, cyber security and integration remain chronically understaffed.”

Middle East

Geopolitical factors, associated export constraints, increasing localization requirements, battlefield low-cost asymmetric threats and rapid innovation are all major disruptors to the regional defense industry.

“These disruptors also create significant opportunities for local industry players (and select international partners) via the provision on non-ITAR systems, integrated air defense, counter-UAS, enhanced MRO and through-life-support solutions. Organizations that move at pace, manage political risk and deliver real localisation initiatives are well positioned to succeed, assuming that the organisation’s human capital assets are sustainable,” said Adam Fairbrother.

Australia

Opportunities include sovereign industrial uplift, digital first delivery, shared data standards and deeper collaboration with the UK and the sustained presence in the Indo-Pacific. Osborne South is described as one of the most advanced digital shipyards globally, shaping South Australia’s capability for nuclear ship building.

“The geopolitical deterioration and high-tempo conflicts expose the fragility of just-in-time defense supply chains, forcing a rethink toward resilience, surge capacity and rapid adaptation cycles,” added Julia Soutter.

Czech Republic

The fundamental shift in traditional military doctrines and operational approaches have led to increased demand for new categories of military equipment, technologies and systems. 

France

The recently announced launches of major structuring programs including the next generation aircraft carrier, nuclear deterrence, cyber defense, space and drones have created significant opportunities particularly for large industrial groups.  

Debt levels and budgetary instability in France have disrupted decision-making, as Sonia Florenzo outlined: “Announcements of defense sector orders have multiplied since 2022, leading companies to invest and recruit while actual orders were delayed, creating significant uncertainty regarding investment and cash flow management.” 

Ukraine

At present, the defense sector is one of the few segments of Ukraine’s economy that continues to attract strong interest from foreign investors during wartime.  

“A distinct competitive advantage lies in Ukraine’s unique combat data and AI-platform initiatives used to train artificial intelligence systems and improve battlefield effectiveness. Equally important is the constant, direct feedback loop between R&D teams and frontline end users,” added Oleksii Komlichenko.

Türkiye

Export restrictions from traditional partners e.g. engine suppliers, continue to drive intense domestic innovation. Opportunities lie in defense electronics, UAV swarming, and export partnerships with Central Asia and Africa, while risks include over-reliance on state-funded programs and limited access to Western certification processes.

India

The dual track of state and private industry invites both dynamism and friction: increased private sector R&D creates an opening for agile mid-tier suppliers, yet bureaucratic inertia still disrupts procurement cycles. Opportunities include space-defense and AIfusion projects under DRDO partnerships.

United States

The key disruptors are supply chain bottlenecks in rare earths and microelectronics, and industrial aging in shipyards. The opportunity lies in accelerating digital engineering and leveraging commercial practices in agile acquisition.

Canada

Critical opportunities exist in NORAD modernization and Arctic ISR, though domestic shipbuilding cost growth remains a disruptor.

United Kingdom

Programmatic complexity across GCAP, AUKUS, and nuclear modernization creates integration risks, but opportunities in cross-domain command-and-control and green propulsion could yield export dominance. 

“The biggest risk for defense company boards today isn’t disruption itself - it’s treating challenges like AI, supply chain shock and new battlefronts as problems to ‘manage’ rather than inflection points to aggressively exploit,” said Mercedes LeGrand. 

Evolution of defense leadership requirements 

Our experts shared the top five trends in shifting leadership requirements: 

1. Industrial sovereignty will remain central (across almost all countries) altering partnership models. 
2. Digitalization maturity differentiates winners: model-based design and AI-enabled sustainment are setting new baselines. 
3. Talent geopolitics will intensify as nations compete for scarce systems-engineering expertise. 
4. Cross-alliances (AUKUS+, QUAD+, NATO, etc.) will drive shared frameworks but diverge in terms of pace and political bandwidth. 
5. Ethical and AI governance leadership will be the next major differentiator for boards seeking resilience and credibility. 

Türkiye and India emphasize techno-nationalism: leaders must bridge political-industrial ecosystems and navigate export control compliance. The U.S. and UK require ‘digital-mission’ leaders who blend Silicon Valley speed with defense accountability - agile program managers fluent in AI ethics and data fusion. Canada places more value on coalition leadership and bilingual stakeholder management, balancing domestic politics with continental commitments. 

ADS talent landscape 

Germany 

“With persistent skill shortages, demand for digital and safety-critical skills like cyber, EW, software, integration, certification continues to outstrip supply,” said Benedikt Douglas. 

Many technical roles are affected by retirement waves, while newer talent pools are smaller and more digitally oriented. With only six German firms among Europe’s most valuable defense start-ups, Germany’s dual use ecosystem lags in speed, financing and pathways to adoption.  

As a result, organizations increasingly look to improve productivity through better process discipline, digital tooling and stronger first line leadership.  

Middle East  

The demand for talent in the Middle East defense sector across roles such as program delivery, systems integration and cyber remains high, notably in the areas of unmanned-platforms, counter-UAV and integrated missile defense. 

Australia 

There is an acute skills demand in nuclear and AUKUS. ASC, Australia’s submarine company, is targeting approximately 6,500 highly skilled roles over 13 years across trades, engineering, safety, cyber, systems integration and program disciplines.  

“There has been a shift toward strengthening representation and widening the talent pool by investing in future leaders now through targeted development pathways and exchange programs. Workforce expansion remains our most pressing challenge, requiring exceptional leaders who can build both capability and capacity. Success will depend on the ideal balance of technical and operational expertise with strong people leadership,” added Julia Soutter. 

Czech Republic 

The defense industry in Central and Eastern Europe is successfully attracting management professionals, particularly from the automotive sector, however, “shortages remain pronounced in engineering and R&D roles, reflecting a broader challenge across technology-driven industries,” added Jiri Vodicka. 

France 

Talent demand is particularly strong in advanced engineering, cybersecurity, artificial intelligence, space and complex systems. This pressure is further intensified by competition from other technology sectors perceived as more attractive in terms of image, flexibility and in some cases, compensation. 

Ukraine 

The rapid growth of Ukraine’s private military technology market has given rise to a new generation of business leaders and senior executives who previously had no direct involvement in the defence sector, as Oleksii Komlichenko confirmed: “Our analysis of key management and engineering teams within Ukraine’s private defence companies shows that more than 70% of their personnel come from civilian industries.” 

Türkiye 

The government’s surge in indigenous systems has strained talent pipelines in engineering, propulsion, and AI. Türkiye now invests in defense universities and apprenticeship programs to curb brain drain to Europe. 

India 

India’s defense start-up scene - there are nearly 600 firms registered with Innovations for Defense Excellence - is energizing graduate recruitment. However, leadership depth in program management and systems integration remains thin. 

United States 

Competition from commercial tech firms inflates defense labor costs. DoD initiatives like the Defense Civilian Training Corps and DIU expansions aim to bridge skills gaps. Veterans transitioning into digital mission roles remain a key labor source. 

Canada 

Aerospace and defense face demographic headwinds with a retiring workforce. Joint training programs with community colleges and immigration-friendly hiring policies are broadening the talent pool. 

United Kingdom 

Critical shortages in digital, systems, and cyber roles persist. UK primes are accelerating upskilling through apprenticeships and mixed academia-industry “defense STEM hubs,” though retention outside London remains challenging. 

“In aerospace and defense, the next decade won’t be won by the loudest strategy or the largest checkbook, but by leaders who can out-recruit, out-develop and out-retain digital mission talent before their competitors even know it’s gone,” added Mercedes LeGrand. 

The future of aerospace, defense and security leadership is set to be defined by unprecedented momentum rather than uncertainty, as sustained investment, sovereign capability ambitions and rapid technology adoption converge across regions. As defense budgets stabilize at higher baselines, localization, digital engineering, AI-enabled mission systems and new industrial models will reward organizations that can move fastest from concept to fielded capability, turning today’s disruptors into tomorrow’s competitive advantages.  

“For leaders, this represents an extraordinary opportunity: those who can blend ecosystem-wide collaboration, digital fluency and people-centered culture will not only solve today’s capability gaps, but shape a more resilient, innovative and globally connected ADS sector than any we have seen before - making the next decade one to genuinely be excited about,” concluded Mercedes LeGrand. 

Explore our ‘Leading Through Uncertainty’ collection here. 

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