The Security Supercycle: Investing in Innovation, Resilience, and Rearmament

Summary

• Global rearmament is reshaping industrial policies & drawing new sectors into the defense economy.
• Geopolitical competition, active conflict, technological innovation, & a widening definition of national security are driving a supercycle of investment.
• Cheap unmanned systems are changing the economics of warfare.
• Capital is flowing to defense tech start-ups alongside established contractors.
• Governments & companies are turning to cross-border partnerships & industrial policy to expand production.
• The focus on security is lifting segments of the industrial economy such as advanced manufacturing & energy technology.
• Dual-use technologies are finding commercial applications beyond the battlefield, including drones for critical infrastructure inspection & distributed power systems for military & civilian users.
• Defense is poised to become a pillar of industrial policy & economic strategy.
• Governments are prioritizing resilience.
• Businesses with scarce capabilities that deliver assured capacity will capture a readiness premium.