Defense ministries continue to face an innovation readiness gap—the distance between their ambition and their ability to field new capabilities quickly. First identified in 2022 by the Munich Security Conference (MSC) and Boston Consulting Group (BCG), the gap has persisted even as the global security environment becomes more demanding.
This year’s analysis—the fifth in our annual series—considers innovation readiness through the lens of munitions production, an area where innovation is essential to meet demand. Munitions highlight the stark gap in innovative approaches to manufacturing, design, and commercial models necessary to meet surging demand. In our Defense Innovation Survey, 65% of respondents identified innovation as a key priority, but only 26% said they believe that the pace of innovation at their company is sufficient.
Fundamental changes are essential to meet the requirements of ministries of defense (MoDs). Governments and industry must build a sustainable operating system to improve production rates for key munitions. Our report addresses five common myths related to munitions and offers practical steps that will enable MoDs and industry to innovate more effectively and increase munitions production capacity. (See the exhibit.)
Munitions lie at the heart of credible deterrence, but the obstacles that slow munitions production—fragmented architectures, opaque supply chains, stop-start demand, and misaligned incentives—are the same ones that prevent governments and contractors from fielding defense innovation at speed and scale.
This year’s innovation readiness assessment shows that higher budgets and stronger rhetoric alone will not close the gap—a lesson that extends beyond munitions. What matters is whether ministries and industry can convert ambition into an operating system that consistently meets demand.
