Themen:
Insights October 13, 2026

Defence in a fragmented world

In a more fragmented world where the nature of warfare is being transformed by drones, artificial intelligence, cybersecurity and autonomous systems, governments are increasing their investments in defence. Our latest PERSPECTIVES Special explores the implications for the defence sector and the wider security ecosystem.

Key takeaways 

  • Defence spending around the world is likely to increase further, at a time of profound transformation in the nature of warfare itself.
  • Recent conflicts have exposed significant vulnerabilities within global defence supply chains, including around advanced integrated circuits and rare earth elements.
  • Aerospace and defence companies have rerated in recent years, outperforming broad equity markets. Earnings are expected to keep growing strongly, especially for European companies.
  • Defence spending is increasingly supporting not only traditional defence contractors, but also a broader ecosystem of digital defence capabilities, including AI, cybersecurity, communications, semiconductors and autonomous systems.
  • The sector's outlook depends on continued political support for higher defence spending. Fiscal pressures, shifting government priorities and changes in defence commitments could affect the pace of future expenditure.

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