European Aerospace, Defense Firms Advance Modernization
A new research report published today by Information Services Group (ISG) (Nasdaq: III), a global AI-centered technology research and advisory firm, finds that aerospace and defense enterprises in Europe are pursuing digital programs to modernize defense operations and support lower-emission aviation.
The 2026 ISG Provider Lens® Aerospace and Defense Services and Solutions report for Europe finds that the sector is moving from post-pandemic recovery into a new phase shaped by defense restocking, reindustrialization and investments in AI for operations and autonomous systems. Enterprises are balancing immediate operational demands with broader efforts to strengthen regional industrial capacity, improve resilience and modernize critical systems.
“European aerospace and defense enterprises are investing with greater urgency, but they are also demanding stronger execution discipline,” said Andreas Fahr, partner at ISG. “They are making digital continuity, industrial resilience and faster delivery immediate priorities.”
Across Europe, companies are investing in innovation while building stronger digital foundations for design, production and maintenance. They are accelerating the adoption of digital engineering and model-based systems engineering as they seek to shorten development cycles, improve traceability and support more complex multinational programs. Enterprises are developing next-generation defense capabilities, including AI-enabled target recognition, autonomous logistics and layered air defense.
Commercial and business aviation organizations are pursuing greener operations and new growth opportunities. Organizations are investing in sustainable aviation fuels, low-carbon propulsion and related research and development while exploring urban air mobility and next-generation transport models in markets including France, Germany, Italy, Spain and the U.K. These initiatives are advancing unevenly, but they remain central to long-term competitiveness and regulatory alignment.
As they pursue these initiatives, Europe’s aerospace and defense companies expect providers to support more integrated and outcome-focused operating models. As performance-based contracting and real-time data sharing become more common, providers are expanding capabilities in digital sustainment, condition-based logistics and technology transformation. Fragmented data environments and certification constraints continue to slow execution in some areas, increasing demand for partners that can help deliver interoperable systems, faster delivery and software-first approaches, ISG says.
“Funding increases are revitalizing Europe’s aerospace and defense sector, but enterprises also need to translate complex programs into operational results,” said Harish B, principal analyst at ISG and lead author of the report. “Providers that combine engineering depth, supply chain support and transformation capabilities are helping enterprises turn that momentum into execution.”
The report also explores other trends affecting Europe’s aerospace and defense sector, including workforce transformation and the expansion of small launch ecosystems for low-Earth orbit satellite missions in countries such as France, Germany, Spain and Norway.
For more insights into the challenges faced by aerospace and defense enterprises in Europe, plus ISG’s advice for overcoming them, see the ISG Provider Lens Focal Points briefing here.
The report for Europe evaluates the capabilities of 41 providers across four quadrants: Engineering, Design and Innovation; Maintenance, Repairs and Overhaul (MRO) and Aftermarket; Supply Chain Operations and Logistics Management; and Technology Transformation and Consulting.
It names Accenture, Akkodis, Capgemini, HCLTech, IBM, Infosys and TCS as Leaders in all four quadrants. Cognizant and DXC Technology are recognized as Leaders in three quadrants each. It names Atos, Cyient, Deloitte, EY, LTTS, PwC, Randstad Digital and Tech Mahindra as Leaders in two quadrants each. Genpact, Quest Global and Thales are named as Leaders in one quadrant each.
In addition, PwC, Quest Global and Tech Mahindra are named as Rising Stars — companies with a “promising portfolio” and “high future potential” by ISG’s definition — in one quadrant each.
The 2026 ISG Provider Lens Aerospace & Defense report for Europe is available to subscribers or for one-time purchase on this webpage.
About ISG
ISG (Nasdaq: III) is a global AI-centered technology research and advisory firm. A trusted partner to more than 900 clients, including 75 of the world’s top 100 enterprises, ISG is a long-time leader in technology and business services that is now at the forefront of leveraging AI to help organizations achieve operational excellence and faster growth. The firm, founded in 2006, is known for its proprietary market data and research, in-depth knowledge and governance of provider ecosystems, and the expertise of its 1,500 professionals worldwide working together to help clients maximize the value of their technology investments.
View source version on businesswire.com: https://www.businesswire.com/news/home/20260514444278/en/
Contact
Press Contacts:
Laura Hupprich, ISG
+1 203-517-3100
laura.hupprich@isg-one.com
Philipp Jaensch, ISG
+49 151 730 365 76
philipp.jaensch@isg-one.com
Abstract
Aerospace and defense companies in Europe are pursuing digital programs to modernize defense operations and support lower-emission aviation, ISG says.
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European aerospace and defense enterprises are investing with greater urgency, but they are also demanding stronger execution discipline. They are making digital continuity, industrial resilience and faster delivery immediate priorities.
