RESEARCH REPORT
Closing the defense delivery gap
How defense firms can innovate with agility and ramp up at speed
3-MINUTE READ
June 10, 2026
In brief
- Global defense acquisition spending is forecasted at 12% CAGR between 2025 and 2030.
- More than 70% of executives consider meeting growing demand as a top challenge over the next three years.
- The gap between demand and delivery is widening due to supply chain disruptions, shifting customer requirements and rising demand.
Demand is surging, but delivery is falling behind
Global defense acquisition spending is on track to reach US$1 trillion by 2027, up 90% since 2022. As governments ramp up purchasing, they are also demanding faster delivery. Speed is now a key competitive differentiator, increasingly influencing which suppliers win new business. But production is failing to keep up. The gap is widening for three main reasons: supply chains built for peacetime volumes are buckling under surge demand; military requirements are evolving faster than industrial processes can respond; and order volumes are outstripping delivery capacity across every major defense system category.
We understand that our products are critical to national security. And I can tell you across the organization, we absolutely feel the responsibility and urgency to deliver more and to deliver it faster.
Christopher Calio / Chairman and CEO, RTX
Where execution breaks
Pressure points in production, sustainment and innovation are driving the delivery gap, and closing it requires addressing all three together rather than in isolation.
Production
Executives cite both internal and external barriers to scaling output. Externally, supplier bottlenecks, extended lead times and raw-material shortages are slowing programs. Internally, delayed digital modernization is holding back performance, as many facilities still rely on outdated drawings and enterprise systems despite plans to scale with AI and automation. Unclear governance and shifting requirements between suppliers and customers compound the delays.
Sustainment
Although sustainment accounts for approximately 70% of total defense system life cycle cost, it is still not funded or managed well enough. Governance is split between acquisition and maintenance budgets, making coordination difficult. Repair doctrine remains misaligned with operational reality, particularly when peacetime logistics models are applied in contested settings. Limited data sharing between industry and government is slowing maintenance planning. Obsolescence is also increasingly becoming a serious readiness risk.
Innovation
Most executives in our survey expect faster development of new products to be among their top challenges over the next three years. They cite talent shortages, shifting requirements, complex funding cycles and short-term capital allocation as major barriers to innovation. They also point to governance and coordination challenges across R&D partnerships as a persistent challenge in moving development faster.
When programs are able to move faster, it is often because requirements are stabilized and the government can clearly communicate what is needed.
Science and Technology Advisor / US Department of Defense
Closing the delivery gap
Within the organization, defense firms can focus on two things: build a right-first-time production system anchored in skilled talent, connected digital systems and robust quality control, and use agile methods, modular design and AI to move faster from design and testing to production.
Across the ecosystem, defense firms can do more to close the gap between identifying demand signals early and responding to them. They can deepen ecosystem partnerships so suppliers can respond faster, with clearer signals, shared data and a broader local base. They also can strengthen external R&D partnerships to bring in targeted capabilities, align on interoperability earlier and accelerate co-development.
Neither set of actions works in isolation. Companies that scale production without accelerating innovation will fall behind on capability, while those that innovate without fixing throughput will struggle with delivery.
The key is to create constant demand. Changing the financial approach and the way large companies place orders with suppliers could benefit the entire value chain and enable higher, more stable production levels.
Senior Executive and Board Member / Major European Defense
About the International Defense Insight Report
Launched in 2024, the Accenture International Defense Insight Report is an answer to the growing need for data-driven insights on changing dynamics in the defense environment globally. For this third annual report, we combined analysis of primary and secondary research on the business response to growing defense ambitions from governments for both existing products and new innovative capabilities.
We surveyed 80 defense industry executives across Europe, North America, Asia-Pacific and the Middle East and North Africa. Respondents include C-suite leaders and Vice Presidents responsible for supply chain, technology, manufacturing, R&D and operations. We supplemented the survey through in-depth interviews with 18 experts from defense organizations along with a review of publicly available program, procurement and policy data, third-party reports, data sets and trade media articles.
These findings reflect conditions in the second quarter of 2026. With geopolitical conditions still in flux, industry sentiment will likely continue to adjust.