Few industries in Europe are expanding as rapidly as defence. According to the European Defence Agency (EDA), defence spending across the European Union reached €418 billion in 2025 and is projected to increase to €454 billion in 2026, a 20% year-on-year increase and the highest level ever recorded. Globally, military spending has now risen for 11 consecutive years, reaching a record $2.9 trillion as reported by the Stockholm International Peace Research Institute (SIPRI).
This unprecedented increase in spending has enabled manufacturers across Europe to expand production capacity, invest in new facilities and accelerate industrial programmes. The objective is clear: turn rising defence budgets into greater industrial capability. Yet behind this renewed industrial momentum lies a visible challenge.

Experienced industrial leaders cannot be developed at the same pace as new production lines. Finding executives capable of scaling production, transforming operations and managing increasingly complex organisations is proving far more difficult. The question is therefore no longer limited to whether Europe is willing to invest in defence; it is whether the industry can build the workforce required to turn that investment into industrial capability.

An Industry Growing Faster Than Its Talent Pool

For decades, Europe's defence industry largely developed its own leadership pipeline. Sector knowledge, experience with defence programmes and familiarity with government procurement were considered essential prerequisites for senior positions. That model is beginning to evolve. In a recent article, Handelsblatt highlighted how German defence companies are increasingly looking beyond their traditional talent pools when recruiting managers. Executive search firms report growing demand for leaders from automotive, aerospace, industrial manufacturing, rail, energy and medical technology, industries that have not historically been viewed as obvious sources of defence leadership. The underlying reason is relatively simple.

Europe's defence industry is expanding faster than it can develop experienced leadership internally. Building a new production line may take months; developing an experienced plant manager, operations executive or supply chain leader often takes years. As production volumes continue to increase, relying exclusively on internal talent development is becoming increasingly difficult.
The same challenge is reflected in a broader European context. Reuters recently reported that defence manufacturers are simultaneously expanding their workforce while investing heavily in apprenticeships, university partnerships and internal development programmes. Despite these efforts, demand for experienced professionals continues to exceed available supply.

The European Commission has reached a similar conclusion. In its Defence Industry Transformation Roadmap, published in late 2025, workforce availability is identified as one of the key constraints on strengthening Europe's defence industrial base. Among the proposed measures is support for the reskilling of up to 600,000 workers by 2030, an indication that policymakers increasingly view talent as a strategic enabler of Europe's defence ambitions. Taken together, these developments point towards a clear conclusion: the industry's future growth cannot depend solely on talent developed within the defence sector itself.

Why Automotive Is Emerging as a Key Talent Pool

If defence companies are expanding their search beyond traditional industry boundaries, one sector stands out in particular: Automotive. And the reason has surprisingly little to do with the products themselves. In fact, passenger vehicles and military systems differ significantly in terms of technology, customers and regulatory requirements. However, many of the organisational challenges facing defence companies today are remarkably familiar to automotive manufacturers.
The industry's priority is no longer limited to developing advanced platforms. It is increasingly about industrializing production, ramping up manufacturing capacity, managing global supplier networks, maintaining quality at higher production volumes and building resilient operations capable of responding to rapidly changing demand.

As recently reported by the Financial Times, companies such as Hensoldt, Helsing and ARX Robotics have all recruited from the automotive sector, reflecting a broader shift in how defence organisations approach leadership hiring. This trend is also unfolding against the backdrop of structural change within Europe's automotive industry. As manufacturers continue to adapt to electrification, changing market dynamics and organisational restructuring, defence companies are finding access to an experienced pool of industrial leaders whose expertise is directly relevant to today's operational challenges.

This does not diminish the importance of defence experience. For roles involving classified programmes, government relations or strategic business development, sector-specific knowledge remains indispensable. However, for many operational leadership positions, transferable industrial capabilities are becoming an increasingly important part of the equation.

Looking Ahead

Europe's defence transformation is often measured in terms of budgets, procurement programmes and production capacity. Ultimately, however, its long-term success will depend on people. As the industry continues to expand, competition for experienced leadership is likely to intensify. Companies that succeed will not necessarily be those with access to the largest traditional talent pools, but those capable of recognizing transferable capabilities wherever they exist.

For executive search, this represents a meaningful shift. Assessing leadership potential will increasingly require looking beyond industry labels and focusing instead on the experiences, competencies and track records that enable executives to lead complex industrial transformation.