Redefining the defense industry: an empirical analysis of new defense firms in Europe

New defense is reshaping the traditional boundaries of the sector. By delivering critical technologies for modern warfare these New defense actors are becoming central to Europe’s strategic autonomy. Yet, they remain for now overlooked in defense industry literature. This article pursues two objectives: first, to define New defense companies in contrast to the traditional defense industrial base (DIB); and second, to provide a preliminary statistical analysis showing how these firms are redefining the structure of the defense industry in Europe. Our findings indicate that New defense is not driven by new entrants alone, but by a diverse ecosystem that includes both small firms and established actors. Instead of being truly disruptive, current market dynamics are largely complementary: new entrants typically position themselves in strategic yet relatively narrow niches with strong growth potential, while incumbents incorporate them through acquisitions or partnerships. We further demonstrate that the new defense ecosystem extends beyond a simple opposition between startups and large firms, encompassing also the strategic repositioning of established SMEs. Recognizing these complementarities, alongside existing structural rigidities, may pave the way for a renewed approach to defense industrial policy.