The Age of Sovereign Defence
In today’s more violent and fragmented world, governments are increasingly prioritising sovereign defence production to guarantee some form of autonomy in times of conflict
Across the world, from Brazil to Estonia, Saudi Arabia and Malaysia, governments are demanding and building sovereign defence capabilities. This is a significant change in direction from the past 30 years and it is driving manufacturers to alter the way they do business. As with any societal shift, the factors underpinning this new paradigm are varied and complex. But there are three main elements presenting themselves as core concerns.
We live in a more dangerous world: In 2025, the Peace Research Institute Oslo published its Conflict Trends report. “The world is now far more violent and fragmented than it was 10 years ago,” Siri Aas Rustad, lead researcher at the institute, wrote. Her team had tracked conflicts around the world since 1946; their research indicated a structural shift. 2024 was the most violent year on record.
There were 61 conflicts in 36 countries, in addition to 74 non-state conflicts. The trend continued throughout 2025 with conflict between India and Pakistan as well as Cambodia and Thailand, amongst others. In Europe, the Russia-Ukraine war remodelled the security architecture. Many European states realised on the morning of 24 February 2022 that they would need to invest more in defence. A good portion of those states are now taking steps to ensure that domestic production and sovereign capability return as much value for the taxpayer as possible.
Tehran has long contributed to this chaotic trend in the Middle East through its proxies and allies. But the US and Israeli operations against the Iranian regime recently forced a new level of violence upon the region.
Without a decisive outcome in the war, it is probable that the turmoil will continue. Moreover, as many states in the region consider life after the last barrel of oil, they are turning their attention to sovereign capabilities as a guard against the future in more ways than one.
In the Indo-Pacific, China is eager to take on a more prominent role in regional security; a position the US is fighting to maintain. With both sides set on dominance, this leaves countries in the region with a difficult choice: become reliant upon one of the two superpowers and face being on the wrong side of a major war; or develop as much equipment as domestically possible.
In Latin America, where gangs and non-state armed groups are growing more confident in the use of drones and novel weapons, governments are trying to make sure their limited defence budgets return some social benefit as well as the day-to-day security these countries need.
However, all but Brazil are nursing ancient vehicle fleets, with some even retaining tanks from the second world war. This has led many to demand sovereign production or at least local participation in their recent defence procurements.
The changing of the guard: The current US presidency is unpredictable, that much is clear. But Washington has been turning away from acting as the world’s security guarantor for some time. What we now know as the Indo-Pacific tilt started in 2011 under President Barack Obama.
That year marked the start of the diversion of resources and focus to the area. The Asia-Pacific region was the future of politics, Hillary Clinton, US Secretary of State, wrote in Foreign Policy magazine.
Consequently, the US approach to different regions around the world has varied. Some presidencies were noticeably unwilling to enforce red lines in Syria and Iraq, for example. Most have urged Europe to shoulder more of the burden for its own defence. And, as states rushed to procure weapons and platforms in the wake of the Russia-Ukraine war, many found themselves at the bottom of a long waiting list. Not only that, but the cost of US equipment was increasing.
In Europe and the Middle East, governments turned to Turkey, Israel and South Korea for vehicles, air defence and long-range rocket artillery. Some, like Poland, have secured very favourable technology transfers in the process.
Defence as a driver of growth: Poland’s procurement of American M1A2 SEP v3 Abrams main battle tanks (MBTs) indicates a unit price of $19 million. While this does include logistics, training and ammunition, when Saudi Arabia first indicated its intent to procure 315 M1A2s in 1989, the unit price was expected to be around $2.3 million. That would be the equivalent of around $6 million per tank today and highlights the dramatic increase in the cost of defence equipment.
Furthermore, procuring at considerable scale appears to have little effect on platform price. Poland’s anticipated order for 1,000 K2 Black Panther MBTs still returns a unit price similar to its M1A2s. And that price is much higher when Poland’s investment to set up a domestic factory for the K2 is factored in.
However, for many European states with limited budgets, the prospect of awarding billion-dollar contracts that almost entirely benefit a foreign corporation has lost its appeal. It is hoped sovereign industry and capability will make increased defence spending more palatable.
There is also the question of sovereignty and independence. Israel’s procurement of munitions from its domestic industry ahead of its attack on Iran has bought the country’s armed forces valuable flexibility. Conversely, Ukraine’s inability to produce much of what its forces needed led to severe difficulties in the first years of the war. The country routinely appeared on the edge of defeat as US weapons and aid were held up in Congress, and as Europe struggled to organise itself to provide meaningful assistance.
So, sovereign production capabilities can help increase the economic benefit of defence, but more importantly it is about building capabilities that guarantee some form of autonomy in times of conflict.
The convergence of increasing violence and instability with the US’ withdrawal from the role of security guarantor for many analysts stands as the primary geopolitical driver of sovereign production and capabilities.
But at the same time, the rising costs of defence procurement mean that few states are willing to continue to watch foreign corporations and their shareholders benefit alone.
On this basis, we can expect at least a decade more of focused effort on building sovereign capabilities. Beyond that, the defence ecosystem may look very different.
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