20 March 2025

Overcoming the Six Unspoken Barriers That Impede Defense Innovation

Matthew Schlueter, Marc Giesener, Lauren Mayer, Laura Key, and Mishaal Hassan

Ministries of defense (MoDs) are not meeting their innovation goals. In 2022, the Munich Security Conference Innovation Board (MSC) and Boston Consulting Group (BCG) first identified the defense innovation readiness gap—the gap between ministries’ aspirations for innovation and their ability to generate results. Since then, the gap has widened. External factors such as heightened geopolitical tensions play a role, as do supply chain disruptions and the complexity of emerging technology. Yet many aspects of the forces responsible for expanding the gap lie within MoDs’ control.

As in prior years, we surveyed leaders at 59 ministries of defense, the European Union, and NATO. We benchmarked the results relative to results from the prior three years, as well as to the innovation capabilities of private-sector counterparts, across 11 key dimensions of innovation. We supplemented our quantitative findings with interviews of key public and private national security leaders worldwide.

The results show that the innovation readiness gap continues to widen. On average, MoDs scored 59 against a threshold score of 80—a 5% decline from the 2022 average. Across most innovation dimensions—including ambition, talent and culture, and project management—MoDs’ scores fell below last year’s average and below top-quartile commercial innovators. (See Exhibit 1.) During the same time period, public defense funding increased by up to 12% annually across the G-7 and China.

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