For three years, the French defense industry has returned to the center of strategic concerns. Military budgets are increasing, politicians are talking about a “war economy” and industrial sovereignty has become a recurring theme in public debate. It is in this context that the Richelieu Committee, an association created in 1989 to represent innovative startups, SMEs and ETIs to public authorities (employer innovation lobby), publishes with the Sahar company the first edition of its Defense Observatory. Historically committed to better access for growth companies to public markets, financing and innovation programs, this organization has for several years defended a more important place for SMEs in the French defense ecosystem.
We probably never thought we would write one day about arms production chains, defense order books or France’s rearmament capabilities. But the successive crises, the war on the European continent and the rise in international tensions are forcing us to look these questions head on. Because behind military strategies there is also an industrial, technological and economic battle on which part of our sovereignty depends. The first investigation of theDefense Observatory offers a rare on-the-ground look at this ecosystem. His observation is straightforward: businesses are ready to ramp up, but the rearmament effort announced by the public authorities is still struggling to translate concretely into their daily lives.
The survey, carried out among 287 startups, SMEs and ETIs operating in dual sectors, civil and military, therefore does not claim academic neutrality. Above all, it constitutes feedback from the field carried by actors who wish to influence the debates on rearmament and industrial sovereignty. As such, it offers an interesting insight into the way in which companies concretely live out the public policies announced since the start of the war in Ukraine.
The timing chosen is not insignificant. While the government seeks to demonstrate that the rearmament effort irrigates the entire national industrial fabric, this survey offers feedback from the field making it possible to measure the real perception of the companies concerned. Its main lesson is clear: manufacturers believe in the potential of the sector but are still struggling to see the benefits of the announcements materialize in their order books.
A solid ecosystem but still waiting
The most striking lesson from the survey undoubtedly lies in the contrast between the prospects displayed by companies and their immediate situation. Because the leaders interviewed show neither pessimism nor discouragement. On the contrary, a large majority are preparing for a rise in the sector’s power: almost three-quarters plan to invest more in defense programs and more than 76% plan to increase their production capacities. The problem is therefore not the absence of confidence in the future, but the difficulty in transforming the country’s strategic ambitions into tangible economic activity in the short term.
However, this confidence is accompanied by persistent fragility. Nearly half of respondents have commercial visibility of less than six months. A paradoxical situation in a sector known to operate on long cycles and which makes any investment or recruitment decision difficult.
This situation appears all the more paradoxical as most of the companies interviewed describe currently stable activity. However, almost one in two does not have visibility beyond six months. In a sector where industrial investments are planned over several years, this low depth of order books limits recruitment, slows down equipment spending and complicates growth strategies.
An overall positive relationship with the State
The study also sheds interesting light on the relations between companies and the public defense apparatus. Contrary to certain criticisms regularly made against the French administration, the Directorate General of Armaments (DGA) and the Defense Innovation Agency (AID) benefit from a rather favorable image.
The actors particularly welcome the quality of the dialogue with regional interlocutors and the AID, the driving force behind defense innovation. Created in 2018 within the Ministry of the Armed Forces, this structure has become the preferred entry point for startups and SMEs wishing to offer innovations of defense interest. It manages several support and financing schemes, including the Defense Innovation Fund (FID), endowed with 200 million euros and managed by Bpifrance, which invests in companies developing dual technologies likely to find both civil and military markets.
This result testifies to the evolution of the defense innovation policy initiated for several years. The structures created to bring the State closer to innovative SMEs now seem to be recognized by those in the field, even if there remains room for improvement.
Large groups remain essential but dominant
The survey also confirms the central position of the major industrial prime contractors – Thales, Dassault Aviation, Naval Group, Safran or Airbus Defense & Space – in the organization of the sector.
More than 60% of companies describe their relationships with these large groups as good or very good. Technological cooperation, research and development projects and even industrial partnerships are widely welcomed.
But this positive observation masks structural imbalances. A majority of SMEs believe they are experiencing an unfavorable balance of power. Payment deadlines, contractual requirements and the lack of visibility on future programs remain recurring topics. These difficulties are not specific to the defense sector: they reflect more broadly the traditional relationship between major contractors and subcontractors.
Defense Europe becomes an economic argument
One of the most striking results of the study concerns European sovereignty. While this concept was still recently part of the political or strategic debate, it now seems integrated into the commercial logic of companies. International development constitutes a major axis of growth.
Nearly 78% of respondents now consider that European sovereignty constitutes a competitive advantage. In other words, producing in Europe and controlling supply chains increasingly appears to be a selling point on the continent’s defense markets. Nearly 70% of companies already have an export activity, mainly in Europe. The German, Indian, South Korean and Gulf markets are identified as strategic. The obstacles remain real: administrative complexity, export controls, rise in protectionism…
This development reflects the geopolitical upheavals caused by the war in Ukraine, Sino-American tensions and the awareness of European industrial vulnerabilities. The discourse carried out for several years by European and French institutions now finds a concrete echo in business strategies.
Financing remains the weak link
The investigation highlights a persistent contradiction. Even though financing needs are increasing with ambitions for rearmament and industrial ramp-up, existing systems remain largely underused. Only 5.3% of respondents say they have benefited from the European Defense Fund (EDF) and barely 1.8% from the Definvest fund, although it is specifically designed to support strategic SMEs from the defense industrial and technological base (BITD).
Created in 2018 by the Ministry of the Armed Forces and managed by Bpifrance, Definvest’s mission is precisely to provide equity capital to SMEs deemed strategic for French defense. The fund generally intervenes to the tune of 500,000 to 5 million euros and aims to support the development of companies considered critical for military supply chains. However, its use remains marginal on the scale of the entire industrial fabric concerned.
On the European side, the observation is even more marked. More than 84% of the companies questioned consider European mechanisms difficult to access. The procedures of the European Defense Fund, which finances collaborative research and development projects between European industrialists, are often perceived as complex, long and demanding in terms of international partnerships. For many SMEs, the administrative cost of a file sometimes appears disproportionate to the real chances of obtaining financing.
Aware of these difficulties, the French government tried to further mobilize financial players. In March 2025, Bercy organized a conference dedicated to the financing of the defense industry bringing together banks, insurers, investors and industrialists. On this occasion, several measures were announced, in particular the launch by Bpifrance of a fund intended to direct the savings of individuals towards defense and technological sovereignty companies, with a collection objective of 450 million euros and an entry ticket set at 500 euros. The authorities also encouraged Caisse des Dépôts and financial institutions to increase their support for the sector, which has long been viewed with caution for reasons linked to ESG (environmental, social and governance) criteria.
But between the announcements and their translation into the life of companies, the gap remains. More than 83% of respondents say they have observed no tangible effect of this conference on their activity. This skepticism does not necessarily reflect a rejection of government initiatives. Rather, it reflects the very concrete constraints faced by SMEs: need for cash to finance recruitment, investments in industrial equipment, advances on orders or constitution of strategic stocks.
Several sector observers also point out that the debate on defense financing has so far focused on equity and major investment announcements, while many companies above all need more immediate solutions to finance their operating cycle and support their ramp-up in production. In a war economy, having an order book is one thing; having the financial means to quickly transform it into industrial capabilities is another.
The message addressed to the public authorities by the companies questioned seems less to be a criticism of existing systems than a call for their simplification and acceleration. Because if funding multiplies on paper, access to it often remains perceived as an obstacle course by the actors who should be the first beneficiaries.
The battle of skills is on
As in the French industry as a whole, recruitment difficulties appear to be one of the main obstacles to the sector’s growth.
Nearly one in two companies are already experiencing difficulty recruiting in production or engineering professions (43.5% in production, 45.7% in engineering). Difficulty attracting talent, competition from large groups, lack of technical training and constraints specific to the defense sector are fueling concerns. Companies are thus expressing a growing need to strengthen the bridges between industry, schools and training organizations in order to sustainably support their growth. Competition from large groups, the lack of technical profiles and the specific constraints linked to defense activities complicate hiring.
This problem is particularly strategic. An industry can have financing and orders; without engineers, technicians and qualified operators, the increase in production capacity remains theoretical.
Why this investigation now?
The publication of this observatory meets several objectives. First, give visibility to SMEs and ETIs in a debate often dominated by large defense groups. Then, provide the public authorities with independent feedback on the implementation of the rearmament effort. Finally, remember that the success of an industrial sovereignty policy also depends on the financial health of the thousands of companies that make up the supply chains.
The basic message is ultimately quite simple: the ecosystem is ready to follow the strategic acceleration desired by the State, but it is now awaiting more concrete economic signals.
This investigation has the merit of shifting the perspective. She reminds us that sovereignty is not only a matter of military doctrines, budgets or major arms programs. It is also measured by the capacity of a country to sustain a network of innovative companies, to train the necessary skills and to give visibility to those who produce. Behind the speeches on rearmament, it is ultimately thousands of SMEs, engineers, technicians and entrepreneurs who constitute the real infrastructure of power. It is still necessary that strategic ambitions find their translation into the real economy.
Survey methodology :
The survey was carried out by electronic questionnaire distributed from March 3 to April 30, 2026 among a panel of startups, SMEs and ETIs in the defense sector, among which 287 companies responded. This first edition of the Defense Observatory aims to better understand the economic, industrial and operational realities of companies in the French defense ecosystem: start-ups, SMEs and ETIs as well as their relationships with the main institutional, industrial and financial players in the sector.
The study covers several structuring themes: relations with the DGA and industrial prime contractors, financing, international development, economic visibility, recruitment, skills and increasing industrial power in the context of rearmament and the war economy. The panel is mainly composed of dual industrial SMEs established throughout the national territory, operating in particular in the sectors of defense and security, aeronautics and space, energy, nuclear, electronics, cyber security and digital technologies.
The results were analyzed based on quantitative responses as well as numerous verbatim statements collected from participating companies, providing essentially qualitative insight into current French defense issues.
