Munich, Germany (February 14, 2026)—Today, the Milken Institute and Oliver Wyman released a report detailing the current gaps in European military readiness and the barriers to securing the financing needed to address them by 2030. The report comes at a time of intensifying global geopolitical instability, as both the United Kingdom and its European neighbours renew efforts to strengthen their defence posture. It outlines the defence ministry reforms and structural changes required within the United Kingdom and Europe’s defence industries if they are to meet the demands of today’s security environment.
Unveiled by Andrius Kubilius, European commissioner for defence and space, on the sidelines of the Munich Security Conference, the report is based on interviews conducted between November 2025 and January 2026 with defence experts across the UK, European, and broader defence ecosystem. It analyses gaps in UK and European platforms and defence systems, offering recommendations on how governments can collaborate more effectively, how investors can deploy capital in this critical sector, and how industry can partner and scale to enhance Europe’s competitiveness.
Specific recommendations for each stakeholder are outlined in the report:
- For governments: The path forward is to drive greater European coherence, unlock innovation, and accelerate readiness across the entire ecosystem. Recommendations are to:
- Coordinate readiness portfolios at a European level
- Develop national innovation theses and strategies
- Transform procurement pathways
- Accelerate the development of an industrial footprint capable of supporting defence
- For finance and investment: The priority is to unlock scalable, flexible capital that strengthens Europe’s defence ecosystem and supply chains. Recommendations are to:
- Reduce private financing barriers
- Finance contingent capacity
- Consolidate supply chains
- For industry: The imperative is to focus investment, strengthen partnerships, and deliver a defence base that is scalable, innovative, and resilient. Recommendations are to:
- Focus on priority capabilities
- Accelerate collaboration between primes
- Enhance supply chain resilience
- Scale up industrial capacity
Commissioner Kubilius said, “Europe is facing a decisive moment for its defence capabilities. Its ability to deter—and, if necessary, withstand—aggression has been called into question. At the same time, a commitment to increasing Europe’s defence readiness represents an opportunity to strengthen the continent’s industrial base, support high-quality jobs, and deliver long-term prosperity, while safeguarding European security. The recommendations set out in this report are firmly anchored in the European Commission’s ambitious agenda for defence readiness, and I warmly welcome them. They provide clear, practical pathways to translate our strategic vision and roadmap into operational reality by strengthening cooperation among governments, industry, and finance across Europe.”
This report forms part of the Milken Institute’s Investing in European Competitiveness initiative. The initiative is a programme of policy research and convenings that is developing actionable solutions to increase investment and drive growth across three key areas: infrastructure, technology, and defence.
Simon Radford, director of policy and programming for Europe at the Milken Institute, said, “It is clear to see from this report how defence readiness and its knock-on effect on competitiveness depend on cooperation among European governments, investors, and industry. European defence ministries should draw on best practice from corporate innovation strategy, governments need to proactively remove blockages and support investment in defence, and industry must work across national boundaries to address the challenge of siloed European systems.”
Anthony Charrie, partner and head of government and public institutions UK & Ireland, Oliver Wyman, said: "Effective public-private partnerships are essential to unlocking innovation and accelerating readiness across the defence ecosystem. By enabling greater coordination in European governments, we can unlock capital from finance and investment institutions and build a resilient, innovative, and scalable defence industrial base that strengthens supply chains and supports Europe’s strategic autonomy.”
The European Defence Readiness report is available here.
Methodology
This research draws upon insights derived from 26 semi-structured interviews with defence experts across the European and wider defence ecosystem between November 2025 and January 2026. Extensive Oliver Wyman analysis has also been leveraged to provide an evidence base and validate the recommendations of the report.
The expert cohort comprises senior military veterans, entrepreneurs, defence accelerators, subject matter experts, industry associations, policymakers, academic researchers, and asset managers (from venture capitalists to family offices and pension funds), ensuring comprehensive coverage of the defence innovation, financing, and commercial landscape.
The Milken Institute also hosted two events to deepen our analysis and discuss our emerging findings. The first was hosted jointly with Royal United Services Institute in London in November 2025, and the second was hosted jointly with Oliver Wyman in Davos in January 2026. Attendees at these roundtable discussions included major European prime defence contractors, senior military leaders, industry executives, leading asset managers, and senior government officials.
About the Milken Institute
The Milken Institute is a nonprofit, nonpartisan think tank focused on accelerating measurable progress on the path to a meaningful life. With a focus on financial, physical, mental, and environmental health, we bring together the best ideas and innovative resourcing to develop blueprints for tackling some of our most critical global issues through the lens of what’s pressing now and what’s coming next.
About Oliver Wyman
Oliver Wyman is a business of Marsh (NYSE: MRSH), a global leader in risk, reinsurance and capital, people and investments, and management consulting, advising clients in 130 countries. With annual revenue of $27 billion and more than 95,000 colleagues, Marsh helps build the confidence to thrive through the power of perspective.
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