Why the next strategic advantage may already exist inside companies that do not consider themselves defence companies
D3 Foresight | September 2026
Europe’s defence-industrial challenge is changing.
For several years, the dominant question has been how to accelerate defence innovation: identify startups, develop new technologies, shorten procurement cycles and connect innovators with military users.
That remains important.
But a second challenge is becoming more significant:
Europe’s next defence-industrial advantage may depend less on discovering new technology than on recognising where existing industrial capability can be translated into operational value.
A Structural Shift in Board Responsibility
This is a different problem.
Across Europe, major new defence and resilience investments are now being mobilised. NATO is simultaneously increasing demand signals, strengthening industrial cooperation and focusing more explicitly on manufacturing capacity.
The issue is therefore no longer simply whether demand will exist.
It is whether industry can identify, adapt and mobilise the right capabilities fast enough.
And many of those capabilities may already exist inside companies that do not consider themselves part of the defence industry.
The hidden industrial base
Modern defence capability depends on far more than traditional weapons platforms.
It depends on energy systems, batteries, power electronics, sensors, communications, software, advanced materials, industrial automation, manufacturing equipment, mobility, logistics, repair infrastructure and resilient supply chains.
Much of this capability already exists in civilian industry.
A company serving mining, automotive, energy, telecommunications or advanced manufacturing may possess technology, production expertise or intellectual property with substantial defence relevance without ever having responded to a defence procurement.
This means the traditional question:
Which companies manufacture defence products?
is increasingly too narrow.
A more useful question is:
Which companies possess capabilities that could solve emerging defence and resilience problems?
That shift in perspective reveals a much larger potential industrial base.
A thermal-management system developed for one commercial application may solve a constraint in an autonomous platform.
A manufacturing process developed for automotive production may enable scalable production of unmanned systems.
A materials company may possess a capability that becomes strategically important when weight, heat, durability or supply security becomes the limiting factor.
The technology may not be new.
What changes is the context in which its value is understood.
The emerging translation gap
Finding a potentially relevant capability is only the first step.
A civilian industrial capability rarely moves directly into operational use.
The mission requirement must first be understood.
The technology may need adaptation.
Interfaces may need modification.
Cybersecurity and certification requirements may change.
Supply chains must be assessed.
Production capacity has to be understood.
Industrial partners or system integrators may be required.
Capital may be needed before manufacturing can scale.
And eventually, the capability must connect to a credible procurement pathway.
This creates what D3 believes will become one of Europe’s most important industrial bottlenecks:
The translation gap between industrial capability and operational requirement.
Europe has invested heavily in discovering innovation.
The next phase will increasingly be about translating those discoveries — together with capabilities already residing inside established industry — into deployable, scalable and sustainable solutions.
There are already signs of this shift.
NATO is making requirements more accessible to industry and creating new mechanisms intended to connect defence demand with manufacturing capacity across the Alliance.
The direction matters.
The system is beginning to search not only for innovation. It is searching for capability and capacity.
Industrial readiness is becoming strategic
Ukraine has reinforced another important lesson.
Technological sophistication alone is not enough.
Systems must be manufacturable.
They must be produced at scale.
Critical components must remain available.
Equipment must be repairable.
And products must be capable of rapid adaptation as operational conditions change.
This changes how strategic value should be assessed.
The most important company may not necessarily possess the most novel technology.
It may possess something less visible:
a mature manufacturing process;
specialised engineering competence;
qualified suppliers;
proprietary materials;
existing tooling;
repair infrastructure;
or the ability to produce thousands of reliable units quickly.
Capabilities regarded as ordinary within one industrial sector can become scarce and strategically important when viewed against a different mission requirement.
For established industrial companies, this creates strategic optionality that may not yet be visible in their existing market strategy.
From product mapping to capability mapping
This is where boards and executive teams may need to change how they assess their companies.
Most companies describe themselves through products and markets.
What do we sell?
Who are our customers?
Where do we compete?
But in a rapidly changing industrial environment, another layer becomes increasingly important:
What capabilities do we actually control?
That may include manufacturing methods, materials expertise, supplier relationships, software architectures, engineering knowledge, production infrastructure, repair capacity or intellectual property.
These capabilities can have value far beyond the market in which they were originally developed.
The strategic task is therefore not simply to forecast where an existing market is heading.
It is to identify where existing capabilities may become valuable in markets that are only beginning to form.
2026–2030 is a positioning window
Industrial structures do not remain equally open indefinitely.
Today, new suppliers can still enter.
Partnerships are being formed.
Production capacity is being allocated.
Procurement mechanisms are changing.
Supply chains are being redesigned.
Standards are still evolving.
Eventually, these structures will mature.
Approved suppliers will become established.
Framework agreements will be signed.
Industrial relationships will deepen.
Supply chains will consolidate.
For this reason, D3 views 2026–2030 as a positioning window rather than simply a defence-spending cycle.
The opportunity is not only to participate in higher defence expenditure.
It is to understand where a company’s existing capabilities could become strategically relevant before future industrial positions become harder to access.
A discovery race has started
D3’s foresight is therefore straightforward:
The next competitive advantage in European defence will increasingly lie in recognising strategically relevant industrial capability before that capability is widely recognised by the market.
For industrial boards, this creates a different question.
Not simply:
Where is our current market heading?
But:
Where else could the capabilities we already possess create significantly greater strategic value?
That question sits at the centre of D3’s Industrial Capabilities NATO-Ready — ICNR Program.
The objective is not to turn civilian companies into defence companies indiscriminately.
It is to identify where existing industrial capabilities intersect with emerging strategic requirements — and determine whether that intersection represents a credible opportunity.
Some of Europe’s next strategically important defence capabilities may already exist.
They simply have not been recognised as defence capabilities yet.
Sources: NATO, The Hague Summit Declaration; NATO, The Ankara Summit Declaration; NATO, defence industrial cooperation initiatives; European Commission, ReArm Europe Plan / Readiness 2030 and Security Action for Europe (SAFE).