Innovation and Manufacturing: Transforming the Future of Defense

Defense industries worldwide have long relied on established companies with deep technical expertise, strong infrastructure, and trusted customer relationships. Today, however, accelerating defense spending, urgent demand, and the rise of new players are reshaping how equipment is developed, manufactured, and deployed.

Breaking Traditional Barriers in Defense Innovation

Typically, defense industries are dominated by large, well-established manufacturers. These incumbents hold unique advantages, such as, technical know-how, legacy system integration, and resilient infrastructure. Compared to new entrants, they have deep insight into field usage and long-standing trust with customers.

How Industry Incumbents Are Embracing Defense Innovation

The traditional defense industrial base remains essential, but the industry is undergoing major transformation. To meet rising global defense demands, Tier 1 manufacturers are rapidly scaling by adding new assembly lines and expanding production capacity.

However, internal growth alone is not enough. Strategic defense partnerships with consultancies, startups, and Tier 2 and Tier 3 suppliers are reshaping the ecosystem—creating agile, innovative value chains that drive faster delivery, improved efficiency, and greater resilience. “According to NATO’s 2024 Annual Report, a quantum leap in defense spending is required, with national investments rising to between 3.5 and 3.7% of GDP.”

Strategic defense partnerships with consultancies, startups, and Tier 2 and Tier 3 suppliers are reshaping the ecosystem—creating agile, innovative value chains that drive faster delivery, improved efficiency, and greater resilience.

As a result, smaller suppliers and new entrants will be trusted with larger, more complex parts of systems, reshaping collaboration in the defense ecosystem.

Driving Defense Manufacturing Efficiency with Industry 4.0 Technologies

Defense manufacturers traditionally operate with long development cycles and strict regulations. However, the influx of digitally fluent newcomers from sectors like automotive and consumer electronics is driving the adoption of Industry 4.0 practices.

From advanced robotics to AI-driven quality control, these innovations optimize flexibility, improve production, and accelerate time-to-delivery.

Strengthening Defense Supply Chain Sovereignty and Resilience

Rising geopolitical tensions have put supply chains under the spotlight. Safety, efficiency, and re-localization are increasingly prioritized to secure access to critical materials and ensure timely delivery.

Although re-localization increases production costs, it is a critical step toward building national resilience in defense supply chains. High-cost countries must strategically decide which key components should be manufactured domestically to ensure security and sovereignty, and which parts can be reliably sourced from trusted international allies.

How AI, Automation, and MBSE Are Transforming Defense Engineering

New development models are reshaping defense engineering. Tools like Process Automation, DevOps, and Artificial Intelligence are improving speed and adaptability.

Model-Based Systems Engineering (MBSE) is transforming defense projects by enabling teams to collaborate through shared digital models. This approach reduces risks, improves efficiency, and streamlines even the most complex programs. At the same time, System of Systems Engineering is becoming vital in net-centric warfare, ensuring seamless integration across multiple domains and strengthening overall defense capabilities.

System of Systems Engineering for Smarter Defense Networks

From mine-hunting drones to integrated artillery and surveillance systems, System of Systems Engineering enables diverse technologies to operate as unified networks. For example, Akkodis is developing mine-hunting solutions using air, surface, and underwater drones, connected by AI-powered decision systems.

System of Systems Engineering enables diverse technologies to operate as unified networks.

Similarly, Europe’s Future Combat Air System (FCAS) connects fighter jets, drones, and multi-domain weapon systems through a Combat Cloud, ensuring interoperability and adaptability.

Overcoming Real-World Challenges in Defense Innovation

Despite considerable progress, achieving true interoperability faces challenges. Competition, trade secrecy, and national interests often hinder collaboration.

Yet change is underway: the Swedish CV90 armored vehicle platform is unifying multiple systems under a single ethernet-based architecture, reducing weight, simplifying maintenance, and increasing resilience.

Updating Legacy Equipment

Defense innovation is not just about creating future technologies—it’s also about transforming existing systems. By modernizing legacy equipment with advanced sensors, predictive maintenance tools, and secure network connectivity, militaries can extend service life, boost operational readiness, and cut costs.

Akkodis is driving this shift with its advanced Control and Display Unit (CDU) for Fennek II reconnaissance vehicles. Designed with sustainability at its core, the CDU reduces environmental impact, enhances soldier safety, and delivers long-term lifecycle performance for mission-critical operations.