Four levers are crucial for Europe to strengthen its industrial base and increase its defense readiness:
Digitization for scaling
End-to-end digitalization of the entire product lifecycle is a key productivity driver in the defense sector. Consistent virtualization in planning and development enables early testing of software and hardware before physical prototypes are built. This accelerates the validation of complex systems and reduces costs and risks. Even with small production runs, efficiency potential can be realized using modern industrial principles. In European submarine production, Capgemini achieved output increases of 50 to 100 % through digital solutions for tool availability, quality control, and safety monitoring, as well as lean methodologies. For new production facilities, the full potential should be utilized, and investments should be made in scalable factories: Digital factory simulations enable robust production design, integrated production platforms control and optimize production using real-world data, and AI automates processes and improves quality. In a European defense project, Capgemini was able to identify planning deficiencies during the ramp-up phase using data analysis and define measures to ensure the targeted production rate.
Resilient supply chains
The defense sector is characterized by a high degree of product variety and low production volumes for complex systems and platforms. This often results in highly specialized (sub)products manufactured by individual players. In its design, it is crucial to balance the tension between sovereignty and resilience on the one hand, and economies of scale and international cooperation on the other. A successful industrial ramp-up is only possible if supply chains are viewed holistically and developed strategically. Reorganizing resilient supply chains and developing suppliers will be core tasks during the ramp-up phase. Industry and end customers must create transparency along the entire supply chain to identify and address critical bottlenecks, such as raw material shortages, at an early stage.
Securing skilled workers
The shortage of skilled workers remains a key challenge. While many experienced engineers are approaching retirement and critical know-how could be lost, new skill sets are emerging with software-defined defense and AI. Digital technologies such as virtual trainers can build skills and safeguard knowledge. The industry is characterized by a high degree of vertical integration and strong in-house expertise, which can lead to employee overload. Strategic partnerships – even in non-core activities – help to free up capacity and develop skills in a targeted manner.
Digital Cooperation
Programs like MGCS require coordinated collaboration across company and national borders. A Collaborative Working Environment (CWE) is more than just a toolset or cloud storage. It forms the digital backbone of cooperation—a secure, sovereign platform where nations, governments, and industry partners can jointly develop and operate complex systems throughout their entire lifecycle. The underlying technology is available, but the real hurdle lies in regulation: Harmonizing and recognizing standards, IT security requirements, and data classifications complicates collaboration. Therefore, properly setting up and managing a CWE is a critical success factor that has so far only been implemented sporadically in Europe.
Strengthen the defense sector
Budgets alone do not guarantee security – rapid implementation is crucial. Key levers here are digitalization, resilient supply chains, skilled workers, and collaboration platforms. Procurement and industry must also view the development of efficient structures as a shared, nationwide responsibility. New models such as efficiency partnerships can accelerate programs and free up resources. Investments in modern facilities remain essential.