European Aerospace, Defense Firms Advance Modernization

ISG’s 2026 Provider Lens report for Europe finds that aerospace and defense firms are accelerating digital modernization—driven by defense restocking, reindustrialization and AI for operations—while pursuing greener aviation and next‑generation systems. The study (published 14 May 2026) evaluates 41 providers across four quadrants and highlights increasing demand for integrated, outcome‑focused services (digital engineering, condition‑based logistics, performance‑based contracting). Providers with engineering depth and supply‑chain capabilities are best positioned to capture renewed funding and program spend. Market implications: greater contract and services demand should benefit European defense and technology suppliers and could support performance in European equity benchmarks such as Europe 50, especially for firms exposed to digital transformation and defense programs.