The security-policy Zeitenwende is no longer merely a political slogan. It has become a structural reset for significant parts of German industry, with direct implications for capacity build-up, supply chains, innovation velocity and, above all, the labour market. Defence capability today is inconceivable without industrial scale—and scale, in turn, is impossible without the right leadership and highly specialised talent.
The market is shifting away from broad, generic transformation roles towards clearly defined operational capability—across operations, regulation, technology and culture. Financing and demand are politically anchored and secured for the long term. Two developments are particularly relevant for the labour market:
1. Multi-year budgets and procurement as growth drivers
For 2026, the Federal Ministry of Defence has announced a defence budget at a historic high. Combined with the special fund, more than EUR 108 billion are available for procurement and personnel. In addition, at the end of 2024 the Federal Government published a National Security and Defence Industrial Strategy, providing an industrial-policy framework focused on resilience, delivery capability and sovereignty.
2. European industrial policy for defence
At EU level, the European Defence Industrial Strategy (EDIS) supports the industrial ramp-up. Its objectives are to reduce fragmentation, strengthen joint procurement and production, and decrease dependencies on non-European suppliers. Short-term bottlenecks—such as ammunition shortages—are being addressed through programmes like ASAP, which aims to increase production capacity to two million units per year by the end of 2025.
In current roadmaps, “Skills & Talent” are explicitly treated as a distinct transformation pillar. The primary bottleneck is therefore no longer capital or demand, but execution capability: people, processes and suppliers have become the limiting factors.
The labour market is responding—but not in a linear fashion. The simplified assumption that skilled professionals can move seamlessly from automotive into defence does not hold. In practice, the transition is far more complex. While defence contractors are expanding headcount, transfers from automotive remain limited.
The reasons are structural:
- Security clearances and access requirements
- High regulatory complexity (export controls, dual-use regulation)
- Specialised system expertise (e.g. mission systems, sensors, safety-critical software)
- Cultural fit, governance and documentation requirements
Similar skills are not sufficient. What is required are proven capabilities, including a demonstrable compliance track record and robust experience in regulated environments. In addition, Germany’s automotive industry pays the highest salaries within mechanical engineering. This results in elevated salary expectations among candidates moving from automotive into defence—levels that many defence start-ups, in particular, are unable to meet.
Dual-Use as the Key Accelerator—and a Driver of Complexity
The real game-changer is dual-use. Rather than traditional platforms, it is the convergence of civilian and military technologies that is shaping the market: sensors, AI software, drones, cyber, satellites, communications and semiconductor-adjacent value chains. This development is both politically and economically intended.
At the same time, complexity increases significantly. Companies must reconcile the logic of civilian product markets (time-to-market, scaling, short cycles) with military procurement (tenders, qualification, formal verification), while also managing export controls and end-use regulations. The ability to orchestrate these requirements is becoming a critical competitive factor.
Dual-use companies therefore require not only technological excellence, but must also treat compliance as a business-critical core capability. Export control, regulatory management and governance ultimately determine whether products can be commercialised and scaled.
Scarce Role Profiles During the Ramp-Up
Based on ongoing market practice, several particularly constrained role profiles can be identified:
- Leadership roles for industrial scaling
Experienced operations leaders who have delivered major capacity expansions and are familiar with safety-critical systems and formal certification requirements. - System architects and technical leaders
Especially for software-defined defence systems at the intersection of software, sensors, cyber security and mission systems, with a focus on highly reliable, validated and production-ready solutions. - Procurement, bid management and programme leadership
Executives who manage complex tenders, contracts and long-term programmes directly influence the speed of industrial ramp-up. - Export control and compliance
Roles such as Export Control Officers or Compliance Directors are now business-critical, as no revenue can be realised without robust approval processes. - Change and people leaders
HR and organisational leaders who can combine scaling, transformation and new talent sources, while credibly addressing ethical considerations.
European Competition for Scarce Talent
The challenge is pan-European and is exacerbated by demographic trends. Despite rising budgets, the supply of talent remains limited. Studies by McKinsey and BCG show that financial resources alone are insufficient. What matters is whether organisations and individuals can translate these resources into operational performance. Competition for key profiles takes place across Europe, with additional outflows of certain technology roles to the United States.
What Companies Must Do Differently Now
- Talent strategies must be approached systemically. Critical roles need to be identified early, dependencies reduced and succession actively managed. Instead of reacting to vacancies, organisations require continuous market and candidate mapping.
- Time-to-productivity must be shortened. Lengthy security clearances, onboarding and IT processes consume valuable time. Standardised pre-screening, clear compliance processes and well-designed role models are decisive.
- Transitions from automotive into defence or dual-use succeed only with clear skill translation, realistic upskilling programmes and active cultural integration led by management.
- Established industrial players must integrate defence tech more decisively: through partnerships, investments, faster development cycles and stronger software and systems capabilities—and thereby access to new talent pools.
Actively Managing Employer Value Proposition and Ethics
Many candidates explicitly ask about end-use, purpose and the societal legitimacy of products. Companies without a clear stance risk losing talent, particularly in software and AI.
Defence, aerospace and dual-use are therefore not a short-term boom, but a structurally defining industrial sector for the coming decade. The central challenge lies less in capital availability than in leadership, specialisation and regulatory capability.
Mastering the Zeitenwende
The true operational test for leadership teams is not found in concepts or declarations of intent, but in whether strategic decisions can be executed effectively under real-world market, time and resource constraints. This can be distilled into three core questions: whether growth can be achieved without compromising quality, safety and compliance; whether dual-use innovations can be industrialised while realistically assessing and controlling regulatory, technological and operational risks; and whether organisations can attract, effectively integrate and retain the required talent over the long term, despite high governance, security and regulatory demands.
Those who can answer these questions convincingly will secure not only contracts, but sustainable competitiveness in a newly reordered industrial landscape.
