Smaller Companies Gain Importance in the Global Defence Cycle

Modernisation Smaller Companies Gain Importance in the Global Defence Cycle

2026-06-17 From Brian Angerame, Portfolio Manager at ClearBridge Investments, part of Franklin Templeton | Translated by AI 5 min Reading Time

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Rising global defence spending is reshaping procurement priorities, creating significant opportunities for specialised small and mid-sized companies across defence, aerospace and space technologies.

Specialised small and mid-sized companies are playing an increasingly important role in modern defence, aerospace and space programmes as governments accelerate investment in advanced capabilities.(Source: PIRO 4D on Pixabay) — Specialised small and mid-sized companies are playing an increasingly important role in modern defence, aerospace and space programmes as governments accelerate investment in advanced capabilities.
(Source: PIRO 4D on Pixabay)

Global defence spending is in a sustained upswing. According to the Stockholm International Peace Research Institute (SIPRI), worldwide military expenditure reached USD 2.887 trillion in 2025. This represents a real increase of 2.9% and marks the eleventh consecutive year of growth. From 2016 to 2025, global military expenditure increased by 41%. This underlines that the current cycle is not a short-term reaction but rather a multi-year shift in national security priorities.

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