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CONTRIBUTORS

Kim Catechis

Investment Strategist, 
Franklin Templeton Institute

Karolina Kosinska, CIPM

Analyst
Franklin Templeton Institute

Preview

This is one of five papers from the full report—Consider This: The weaponisation of supply chains—exploring how key supply chains are evolving – and what it means for long-term investment strategy.

Industrial supply chains are being re-engineered—not just for efficiency, but for resilience, security, and strategic control. In this paper, we explore how geoeconomic pressures are accelerating the shift from globalisation to regionalisation – and what that means for sectors like automotive and defence.

From rising costs to inventory pressures to the growing role of digital logistics and circularity, companies are rethinking how and where they operate. In defence, the stakes are even higher: national security, demand certainty, and critical mineral access are reshaping industrial capacity. 

The willingness of Germany and the rest of Europe to increase military spending to between 3.5% and 5% over the coming decades will lead to a rebuild of the European military industrial complex, which has been hollowed out over the past several decades. Armaments will now need to be built in Europe and therefore should boost economic growth as the industry resurges.”
David Zahn, Head of European Fixed Income, Franklin Templeton Fixed Income

Investment takeaway

The main developments for this supply chain are increased digitisation and deployment of logistics software to gather and parse real time data to better model potential risks and their possible solutions. This gathering of huge quantities of data across multiple domains, and the need to process all of it in “real time” to quickly interpret risks and potential solutions, is exactly what the next industry is fast approaching: defence.

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