EY is assessing Spain’s Defense industry at a critical juncture, marked by the opportunity to double its revenue by 2030 and consolidate an investment cycle spanning up to a decade. This is the conclusion of the study “The Spanish Defense Industry: 10 Keys to Seizing a Historic Opportunity”, presented today by the Firm at its Madrid headquarters in an event attended by the Secretary of State for Defense, Amparo Valcarce.
The analysis, prepared by EY Insights in collaboration with Infodefensa, captures the perspectives of 31 companies and sector experts, providing an accurate snapshot of the industry’s current situation. The report systematizes, for the first time, the sector’s consensus and key recommendations to navigate a deeply disruptive yet opportunity-rich scenario.
The document frames this assessment within a context shaped by the new geopolitical landscape, an investment wave in Spain and Europe, and the reactivation of strategic programs. The study concludes that the sector faces an unprecedented investment cycle between 2025 and 2035, with two key milestones—2030 and 2035—and organizes its findings around ten topics that summarize the main opportunities, risks, and priorities of the industrial ecosystem.
Based on this consultation, the analysis shows a sector combining significant innovative potential with possible tensions that could influence its evolution: the potential gap between leading companies and SMEs, production capacity limitations, dependence on critical technologies, and the need to plan and define the strategic capabilities Spain must develop to advance toward a more robust and prepared industry.
This scenario aligns with the Spanish Defense Industrial Strategy and the government’s investment efforts to strengthen national capabilities, as well as the launch of 35 new Special Modernization Programs (PEM). This institutional push supports the strategic transition facing the industry and underscores the goal of consolidating an industrial ecosystem capable of responding to current security challenges. In this context, Secretary of State for Defense Amparo Valcarce highlighted the relevance of the analysis and consultation exercise, stating: “Spain faces a historic opportunity that will not be seized by inertia, but through a defense industrial policy defined with planning, long-term vision, institutional coordination, and close collaboration between the public and private sectors.” Valcarce also emphasized the importance of leading companies, such as Indra or Navantia, “essential for leading major programs and participating in international consortia,” whose strength “depends on a robust, innovative, and competitive supply chain, in which SMEs play an irreplaceable role.”
Federico Linares, Chairman of EY Spain, highlighted the Firm’s role as an ecosystem connector: “EY, and this report demonstrates it, acts as a hub for the entire Defense ecosystem: we connect the public and private sectors, leading companies with SMEs, traditional players with innovators, senior talent with emerging talent, and universities with business experience to consolidate a more cohesive and competitive industry.” He also noted: “Contributing to this transformation aligns with our humanistic approach, because Defense is not only about protecting territories or borders, but also values and a way of life that deserve determined protection.”
In this vein, Chus Escobar, Partner in charge of the Public Sector at EY Spain, highlighted the strategic opportunity this moment represents for the country: “Spain has the chance to position its Defense industry at the center of a far-reaching public transformation. This consolidation is only possible with clear priorities and effective coordination between the public sector and industry. The moment demands state-level vision, stable decisions, and ecosystems that integrate innovation, talent, and territory. When public policies and sector capabilities advance in alignment, the country progresses with greater strength and projection.”
An Industrial Transformation Framed Around Ten Key Issues
The ten key issues identified by EY as transformative levers summarize the changes that the sector believes must be addressed during this transition. Conversations with companies showed clear consensus: the opportunity ahead can only be realized if the factors currently limiting competitiveness, technological autonomy, and responsiveness are decisively addressed.
Ignacio Niño, Senior Advisor for the Public Sector at EY Spain and study director, notes: “The international dynamics are accelerating competition for critical capabilities and redefining security in Europe. Spain needs to position itself in this transition by developing domestic technologies, strengthening supply chains, and actively participating in major cooperative programs. The decisions we make now will shape our strategic autonomy and geopolitical influence in the coming decade.”
Companies agree that the sector’s structure requires greater integration between leading companies and SMEs to strengthen the ecosystem and gain competitive scale. SMEs bring agility and innovation but need real support to be involved from the design stage of major programs and consolidate their role in value chains.
Talent is identified as a key challenge, given the scarcity of qualified profiles and growing competition to attract them. Companies emphasize the need to increase the pipeline of professionals trained in technological areas, strengthen collaboration with educational institutions, advance dual training models, and promote greater inclusion of women and talent retention strategies amid strong demand.
The study also highlights the need to consolidate innovation as a structural pillar of the sector. Companies consider it essential to provide R&D+i with greater budgetary stability and financial agility, as well as to integrate SMEs and technology centers from the early stages of program design, where technological value is defined.
The sector warns of uncertainty regarding financing: it stresses the need for funds to be delivered quickly and effectively and highlights difficulties SMEs face in accessing them due to banking restrictions and administrative delays. It also cautions against resources being concentrated among few operators and calls for agile instruments that guarantee liquidity and balanced distribution.
Furthermore, the sector positions itself as one of the main exporters in the Eurozone, but experts point out the need for greater institutional support to open new markets and strengthen external competitiveness. SMEs specifically require support to internationalize and consolidate export capacity. Companies also agree on the importance of reinforcing Spain’s presence in Brussels to influence European instruments and access new community programs under better conditions.
Finally, the study emphasizes the importance of developing territorial industrial ecosystems capable of integrating companies, talent, universities, and technology centers, as well as fostering a stronger Defense culture to explain the economic, technological, and security value associated with investment to society.
The Central Role of the Ministry of Defense in the New Investment Cycle
The study directly identifies the Ministry of Defense as a key player to ensure that the sector’s opportunity translates into real results. Companies value the Ministry’s effort and path with the Spanish Defense Industrial Strategy and urge continuation, including strengthening staff and capabilities to manage the vast number of planned programs. Likewise, they call for continued efforts toward streamlined procedures and multiannual planning to provide stability frameworks across the industry.
For the full report,visit this link
About EY
EY is a global leader in audit, tax, transaction advisory, and consulting services. The high-quality analyses and services we provide help build trust in capital markets and economies worldwide. We develop outstanding leaders who work together to fulfill commitments to our stakeholders, playing a vital role in creating a better working world for our employees, clients, and society.
Photo: Secretary of State for Defense, Amparo Valcarce, with the Chairman of EY Spain, Federico Linares, and the EY Public Sector team
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