The defense boom is real, but it is not evenly distributed. Recent surveys show that the defense sector has made its way into Germany’s small and medium-sized enterprises. However, many companies are still on the sidelines. To properly assess the opportunities and challenges, you need the right figures. The Institute for SME Research (IfM) in Bonn surveyed approximately 1,370 companies (April 2026): Currently, 6.8 percent of the manufacturing sector is actively involved in the defense sector. The DIHK Business Climate Survey puts the figure at 17 percent when the entire value chain is taken into account. The key factor is the size gap: only 4.5 percent of micro-enterprises with fewer than ten employees are involved, compared to 13.2 percent of companies with 250 or more employees.
The untapped potential is considerable: According to the IfM, 40 percent of companies not yet active in the sector can envision entering it. Those already active in the sector are significantly more optimistic about the future than the rest of the industry. The DIHK reports a business expectations balance of +11 points for defense-related companies (the difference between the proportion of optimists and the proportion of pessimists among respondents) compared to -9 points in the rest of the industry. This 20-point gap is no coincidence; rather, it reflects structurally secure demand.
More than half of the businesses that are interested but not yet active cite a lack of networks in the procurement sector, as well as security certifications and regulatory requirements, as key barriers. The Procurement Acceleration Act (BwBBG), which has been in effect since February 2026, is changing market access: It speeds up procurement procedures and mandates that the interests of small and medium-sized enterprises be given priority. At the same time, requirements regarding EU-based operations and supply chain transparency are increasing. The timeframe is clear, as individual regulations will expire as early as the end of 2030. For entrepreneurs considering a sale or succession, the sector’s outlook is becoming increasingly relevant to enterprise value. Strategic buyers and financial investors are specifically seeking suppliers with defense-related technology, a stable market position, and resilient supply chains. Aligning a company with these priorities can significantly increase its enterprise value. Datasite expects 2026 to be a record year for European defense deals.
For us, developments in the defense sector are not merely a matter of market observation, but a topic that we can assess very well based on our own entrepreneurial experience and many years of work in industrial and security-related fields. Therefore, please feel free to contact us at any time—with no obligation and, of course, in complete confidence—if you would like to discuss this topic in greater depth.
