European Aerospace, Defense Firms Adopt AI to Compete

Enterprises advance defense capabilities with new technologies to stay on leading edge of global developments, ISG Provider Lens™ report says

LONDON--(BUSINESS WIRE)-- Aerospace and technology enterprises in Europe are rapidly integrating AI and other advanced technologies into next-generation systems, driven partly by European Union (EU) initiatives to foster defense innovation, according to a new research report published today by Information Services Group (ISG) (Nasdaq: III), a global AI-centered technology research and advisory firm.

The 2025 ISG Provider Lens™ Aerospace and Defense Services and Solutions reports for Europe find that companies are utilizing advancements in electronic warfare, missile systems, cybersecurity and other areas to meet European defense demands. In response to the ongoing war in Ukraine, the EU is taking steps to consolidate and strengthen the region’s defense sector. The commercial aerospace industry is also growing, driven by recovering air travel demand and sustainability initiatives.

“Europe’s aerospace and defense industry is undergoing rapid digital transformation,” said Andreas Fahr, partner and manufacturing industry lead for ISG in EMEA. “This transformation is driven by competitive pressures and customer demands in both commercial aviation and defense.”

Enterprises’ accelerating digitalization efforts include integrating AI, cloud platforms and digital twins across their operations, the report says. These investments enhance efficiency, transparency and data-driven decision-making, empowering organizations to increase their agility and speed.

AI innovations by European firms are already improving military systems, ISG says. AI-enabled predictive analytics and decision-making tools increase the efficiency of battlefield management systems. Using AI, enterprises are developing autonomous systems, such as drones, for use in military reconnaissance missions and combat operations. Autonomous systems also have applications for enhanced operations in commercial aviation.

European companies are increasing investments in space systems as that sector expands, the report says. Growing investments in satellite technology, commercial space services and space exploration missions are bringing new momentum to this area.

Many enterprises are partnering with agile mid-sized and specialist providers to plan, design and implement advanced digital solutions, ISG says. These providers are facilitating the swift adoption of emerging technologies such as AI, blockchain and digital twins for many clients, helping them meet evolving operational and strategic needs. They lead the adoption of automation, cloud platforms and secure communications infrastructure and build customized solutions for regulatory compliance and integration with legacy systems.

“Aerospace and defense innovation in Europe will have measurable impacts on military and commercial applications,” said Harish B, manager and principal analyst, ISG Provider Lens. “Providers empower European manufacturers to accelerate advancements.”

The report also explores other trends affecting European aerospace and defense enterprises, including the restructuring of regional supply chains and the effects of consolidation among service providers.

For more insights into the challenges faced by aerospace and defense enterprises in Europe, along with ISG’s advice for addressing them, see the ISG Provider Lens™ Focal Points briefing here.

For 2025, ISG Provider Lens™ has published two Aerospace and Defense Services and Solutions reports for Europe: one examining the overall aerospace and defense ecosystem and a second that exclusively assesses mid-sized and specialist providers.

The 2025 ISG Provider Lens™ Aerospace and Defense Services and Solutions report for Europe evaluates the capabilities of 41 providers across four quadrants: Engineering, Design and Innovation — Overall Ecosystem, Maintenance, Repairs and Overhaul (MRO) and Aftermarket — Overall Ecosystem, Supply Chain Operations and Logistics Management — Overall Ecosystem and Technology Transformation and Consulting — Overall Ecosystem.

The report names Accenture, Capgemini, HCLTech, IBM, Infosys and TCS as Leaders in all four quadrants. Akkodis and Cognizant are named as Leaders in three quadrants each. Atos, Cyient, Deloitte, DXC Technology, EY, PwC, Randstad Digital and Tech Mahindra are named as Leaders in two quadrants each. Expleo, Genpact, LTTS and Thales S.A. are named as Leaders in one quadrant each.

In addition, Genpact, LTTS, PwC and Randstad Digital are named as Rising Stars — companies with a “promising portfolio” and “high future potential” by ISG’s definition — in one quadrant each.

A customized version of the report is available from Akkodis.

The 2025 ISG Provider Lens™ Aerospace and Defense Services and Solutions (Mid-Sized and Specialists) report evaluates the capabilities of 19 providers across three quadrants: Aerospace and Defense Services — Mid-Sized and Specialists, Engineering, Design and Innovation — Mid-Sized and Specialists and Technology Transformation and Consulting — Mid-Sized and Specialists.

The report names Cyient, LTTS and Tata Elxsi as Leaders in all three quadrants. AXISCADES, Bertrandt, Microland and Quest Global are named as Leaders in two quadrants each. Centum Electronics and ITC Infotech are named as Leaders in one quadrant each.

In addition, eInfochips is named a Rising Star in one quadrant.

A customized version of the report is available from LTTS.

The 2025 ISG Provider Lens™ Aerospace and Defense Services and Solutions report for Europe is available to subscribers or for one-time purchase on this webpage for the overall ecosystem report and this webpage for the mid-sized and specialists report.

About ISG Provider Lens™ Research

The ISG Provider Lens™ Quadrant research series is the only service provider evaluation of its kind to combine empirical, data-driven research and market analysis with the real-world experience and observations of ISG's global advisory team. Enterprises will find a wealth of detailed data and market analysis to help guide their selection of appropriate sourcing partners, while ISG advisors use the reports to validate their own market knowledge and make recommendations to ISG's enterprise clients. The research currently covers providers offering their services globally, across Europe, as well as in the U.S., Canada, Mexico, Brazil, the U.K., France, Benelux, Germany, Switzerland, the Nordics, Australia and Singapore/Malaysia, with additional markets to be added in the future. For more information about ISG Provider Lens research, please visit this webpage.

About ISG

ISG (Nasdaq: III) is a global AI-centered technology research and advisory firm. A trusted partner to more than 900 clients, including 75 of the world’s top 100 enterprises, ISG is a long-time leader in technology and business services that is now at the forefront of leveraging AI to help organizations achieve operational excellence and faster growth. The firm, founded in 2006, is known for its proprietary market data, in-depth knowledge of provider ecosystems, and the expertise of its 1,600 professionals worldwide working together to help clients maximize the value of their technology investments.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250612330785/en/

Laura Hupprich, ISG

+1 203 517 3132

laura.hupprich@isg-one.com



Philipp Jaensch, ISG

+49 151 730 365 76

philipp.jaensch@isg-one.com

Source: Information Services Group, Inc.