The continent's defence sector is undergoing one of the fastest re-ratings in its history. The budgets are in place. Valuations are climbing. What is missing are the people who can turn this momentum into actual capability.
The Upswing in Numbers
At the 2025 NATO summit in The Hague, allies agreed on a new benchmark of at least 3.5 per cent of GDP for core defence spending. European defence spending could reach around 800 billion euros by 2030. This figure has already doubled since 2019.
PE and VC Are Backing Defence Like Never Before
Capital markets moved early. An equal-weighted index of large, listed European defence companies has delivered a total return of 401 per cent since 2022.
Private capital is following suit. Funding for European DefenceTech start-ups has increased from around 200 million euros in 2021 to an estimated 2.6 billion euros by 2025. That is a thirteenfold increase in just four years. Private equity and venture capital funds that kept their distance for years increasingly recognise security and defence as a cornerstone of Europe's resilience and sovereignty. Driven by this shift in perspective, capital is flowing in at an unprecedented scale, into established suppliers as well as a new generation of DefenceTech companies.
However, the growth is uneven. The Baltics, Germany and the Nordics are progressing more quickly than much of Southern Europe. The gap to the US remains wide, however: American investment in defence technology remains around three times higher.
Where Money Reaches Its Limits
Simply increasing spending does not create readiness. Equipment stocks among European NATO members remain below 2021 levels due to deliveries to Ukraine, the retirement of legacy systems, and long lead times. At the same time, the platform landscape is highly fragmented, more than four times as fragmented as in the US. Whether billions turn into real military capability is decided during industrial ramp-up and the ability to execute programmes effectively.
This is precisely where people become the critical factor.
The Real Bottleneck
Europe's defence industry employs around 581,000 people. Demand for workers has risen sharply since 2022, with the number of job postings now more than 40 per cent above pre-war levels.
An analysis by Kearney illustrates the scale of the additional requirement. Increasing defence spending to 2 percent of GDP would require an additional 163,000 specialists across Europe. At the current figure of 3.5 percent, this figure rises to 760,000. For Germany alone, the estimated additional demand in the direct defence industry is between 55,000 and 75,000 people by 2030.
The shortage extends beyond defence. The EU could face a tech talent shortage of up to 3.9 million people by 2027, with demand outstripping supply by up to four to one. The defence sector itself is projected to grow from around one million to over 1.46 million direct jobs by 2030.
The problem has several layers. The median age in European high-technology manufacturing is between 42 and 44, and there is an urgent need for younger talent to move up. The situation is further complicated by the fact that only around 0.41 per cent of Europe's workforce qualifies as AI specialists, and defence competes directly with civilian industries for these profiles.
Interest Is There, Applications Are Not
A study by the European Commission and the European Defence Agency, conducted in April 2026 and based on responses from over 2,600 students, young professionals, and more than 700 current or former employees in the defence sector, reveals the true extent of the gap. While 58 per cent of respondents found a career in defence attractive, only 6 per cent of jobseekers intended to pursue one actively.
A cultural shift has compounded this issue. As conscription has declined, awareness of defence careers among younger people has also fallen. However, nearly two thirds of young people are drawn to the sector precisely because of its sense of purpose.
This distance between broad interest and actual application argues for an active, direct approach rather than waiting for inbound applications.
A Look at the DACH Region
In Germany, almost a third of industrial companies view collaboration with the security and defence industry as a business opportunity. However, the situation varies regionally: 21 percent of industrial firms in Southern Germany are integrated into the value chain, compared to just 9 percent in Eastern Germany. This density means hard competition for the same people in the Munich area.
What This Means for Leadership Positions
The talent shortage affects leadership positions particularly hard. Many of Europe's most relevant DefenceTech companies have emerged from a growth phase in which they increased their workforce from a few dozen to several hundred employees. To reach the next stage of growth, they require a C-suite that can establish industrial manufacturing, develop programmes for the armed forces, and manage complex hardware and software products.
The shortage is rarely just a numbers problem. According to Germany's Federal Employment Agency, there is no general labour shortage, but rather bottlenecks in 157 occupational categories. Often, the defence industry is not looking for widely available profiles, but rather specific combinations of technological specialisation, experience with complex systems, an understanding of regulated development processes, and sometimes knowledge of the military context of use. On paper, there may be enough engineers or project leaders. In practice, however, almost no one fits the bill.
This tension is evident in current industry research. The Horváth Defence Study 2026 describes how AI and autonomous systems are fundamentally changing what is technologically possible, while skills shortages and insufficient infrastructure investment are limiting progress. And a BearingPoint survey of 151 executives documents a substantial implementation gap between the ambition of digital transformation and reality within organisations.
Our Perspective
There is no standard profile for these decisions. Taking a production organisation from a few hundred to over a thousand systems a year requires more than just the right CV. They need the personality to work well under pressure and in ambiguous situations, to build relationships with procurement organisations and to lead a senior technical team.
At 2P Partners, we fill leadership positions for owner-managed and PE-backed growth companies across the DACH region. We provide one point of contact for each mandate, from initial approach to completion.
Expertise in Filling the Following Positions
- Chief Executive Officer / Managing Director (industrial scale-up)
- Chief Operating Officer / VP of Operations & Manufacturing
- Chief Technology Officer / VP Engineering
- VP/Head of Program Management (armed forces and procurement interface)
- Head of Supply Chain & Procurement
- Chief Financial Officer (growth and PE context)
Europe's rearmament is often discussed in terms of budgets and unit numbers. Ultimately, it will be decided by those who take responsibility.
