2026 Predictions for Aerospace & Defense: AI, Sustainability, and the Digital Transformation Frontier
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2026 Predictions for Aerospace & Defense: AI, Sustainability, and the Digital Transformation Frontier
As we approach 2026, the aerospace and defense (A&D) industry stands at the crossroads of innovation and transformation. With rising geopolitical tensions, increased defense spending, and technological advancements, the sector is navigating a complex landscape of opportunities and challenges.
From the integration of AI and digital twins to the push for sustainable aviation and the modernization of legacy systems, A&D organizations are embracing cutting-edge technologies to enhance efficiency, safety, and mission readiness. At the same time, they face critical hurdles, including supply chain disruptions, evolving regulatory frameworks, and the need to attract a future-ready workforce.
In this year’s predictions series, we’ve gathered insights from leading industry expert professionals from Jama Software:
- Cary Bryczek – Director, Solutions & Consulting
- Matt Macias – General Manager, Aerospace & Defense
- Karl Mulcahy – EMEA Sales Manager, A&D
Together, they explore the trends and technologies shaping the future of aerospace and defense. From AI-driven design optimization and autonomous systems to the rise of sustainable aviation fuels and the challenges of digital engineering, this piece highlights the innovations and strategies that will define 2026 and beyond.
Curious about what’s happening in other fields? Read part one on consumer electronics, part two on medical device & life sciences, and stay tuned for our upcoming predictions on Automotive, Semiconductors, and more.
Please note: This blog features content from writers in the UK and the US. Spelling variations (e.g., ‘defense’ vs. ‘defence’) may appear due to regional differences.
Emerging Technologies
Q: What emerging technologies (e.g., digital twins, advanced materials, AI-driven design optimization, autonomous systems) do you believe will have the most transformative impact on the aerospace and defense industry in the next five years? How can organizations prepare to integrate these technologies effectively into existing programs?
Matt Macias: Dramatic product transformations are already underway, and we will see increasing fielding of cyber-physical systems that take advantage of software-based intelligence and features combined from the beginning to fully capitalize on extensive use of sensors and electronic systems, as well as the physical aspects of the system. I am very excited to see this next round of intelligent/cyber-physical systems in operation. Should processing capability and AI enable further breakthroughs in model performance, the opportunity to see live or near-live digital twins of craft used to monitor health or guide optimized operations/missions is a tantalizing possibility with enormous potential to decrease costs, increase availability, and mission success.
Karl Mulcahy: With increases in Defence spending occurring worldwide, I’m seeing a move towards Digital Transformation to help in all manners of A&D business. Whether this is for a larger Defence contractor or a new Space Innovator ‘Start Up,’ there’s much more of a focus on moving away from legacy methods and more towards adopting modern technology such as AI to help automate more in operations.
With larger organisations wanting to pivot to being more agile, competitive, and delivering innovation quicker, there’s more of a challenge to modernize legacy systems and to connect data sources, whereas I’m hearing that startups want to learn from time in industry to help define good processes now to aid scalability and drive efficiency.
The need to create digital twins to reduce risks, undertake cheaper / continuous improvement, and helping to innovate faster is a big driver for the customers I’m working with. Also, the need to strategically reuse items from previous projects for modernization programs, or even new variants/products, is a focus to help get to market faster and meet ever-changing market demands.
Cary Bryczek: One tangible example that nearly anyone who travels will benefit from is the modernization of the air traffic controller (ATC) to pilot communications system. Today, controllers unbelievably still use Very High Frequency (VHF) and Ultra High Frequency (UHF) radio signals technology developed in the 40s to communicate with pilots. While new technology aids decision-making, human error remains a significant factor in ATC operations. Voice commands spoken at a rapid pace due to air traffic congestion, received by pilots who may not have English as their native language, over VHF/UHF where signals can be interfered with or stepped on, increases the number of mishaps in aircraft flight takeoffs and landings. Mishaps are on the rise. As of December 2025, there have been 1,097 aviation accidents or incidents in the United States in 2025, according to the National Transportation Safety Board—not including the most recent crash by the UPS cargo jet in Kentucky. Many point the finger at poor ATC technology, policies, and failure to act on the numerous alerts at this location over the past decade as significant contributing factors to the deadly collision of the Army Blackhawk helicopter with the Bombardier CRJ7000 passenger airliner in Washington DC.
My prediction is that AI-assisted technology will dramatically improve the safety in our airspace. Navigation signals will be intelligently generated by the AI based on data and presented to air traffic control operators to be sent as a text message directly to the pilot. Pilots receive it and can even have the navigation message tell the aircraft to change course.
Sustainability and Green Aviation
Q: As the industry pushes toward decarbonization, how do you see advancements in sustainable aviation fuels (SAF), electrified propulsion, and hydrogen-powered systems shaping the future of aerospace? What strategies will be key for scaling these solutions globally?
Macias: While we have not seen the focus on these technologies recently due to a series of financial headwinds, we are just waiting for the next breakthrough in affordable power density solutions in batteries and alternative fuels. These alternatives could also become more viable as new craft become viable with more limited/focused missions that could benefit. In short, while this area may not be making the progress desired as of late, I am optimistic of surprises around the corner that might bring this back to the forefront.
Mulcahy: Despite challenges in this part of the industry, we’re starting to work more with companies retrofitting older aircraft with modern technology i.e. SAF (Sustainable Aviation Fuels), and whilst sustainable to reuse existing products out there and help to make them greener, this is arguably the fastest, lowest risk route to immediate CO2 reductions due to compliance with regulations and existing infrastructure around it.
Whilst we can all see innovation occurring within the eVTOL, UAV, AAM markets due to market needs and also to develop new compelling product lines, I’m curious to see how regulations will continue to emerge in these fields in line with new infrastructure being molded too, i.e., VertiPorts, charging bays.
But with more companies choosing not to develop everything in-house, there are emerging challenges of systems integration and ensuring that all parties are aligned to be fit for purpose and align with higher-level requirements to ensure risks are mitigated, and for example, range/weight calculations are verified correctly.
Bryczek: As much as I personally wish for technologies like hydrogen propulsion and battery propulsion to make our airspace cleaner, this is getting pushed farther out. The technology for batteries is not expanding rapidly enough to make this approach viable at a large scale. Many of the eVTOL startups have already changed their designs from pure electric to now hybrid-electric aircraft. For major manufacturers Airbus and Boeing, finance challenges are plaguing them in different ways. Boeing is still recovering from loss in sales and design/manufacturing problems with its jets and has less ability to focus on the necessary R&D for hydrogen propulsion. Airbus too has slowed its development in hydrogen, citing both infrastructure technology and regulatory difficulties. Interestingly, there have been press releases indicating Airbus shareholders are reaping sizable dividends, yet R&D budgets remain flat. Many in Europe argue that tax exemptions for delivery of aircraft using fossil fuels be eliminated, which does sound like a healthy step in the right direction. So, my answer to this question is that the industry is going the route of evolution rather than innovation.
Digital Transformation
Q: How is digital engineering transforming design, verification, and lifecycle management in aerospace and defense? What are the biggest opportunities and challenges in achieving a fully integrated digital thread?
Macias: In product development transformation, we are now seeing the true impact of model-based product development fully realized, where all disciplines across the enterprise can now both benefit from their own dedicated models, and perhaps even more importantly, the synergistic collaboration around holistic models that bring together all aspects of product, production, operation, and mission. This emerging success will be dramatically accelerated in the near future as Model-Based Systems Engineering (MBSE) and AI/ML concepts get more fully deploye,d with special benefit coming from the democratization of these iterative and collaborative data/model constructs, helping all understand how their work fits into the whole and how they can optimize all aspects of the product.
Mulcahy: The need for a digital thread is emerging more than ever to ensure interconnectivity between systems, reduce siloed working, and ensure the overall single source of truth. Whether companies are looking to deliver projects on time or reduce costs, there is a clear business case to establishing digital engineering practices. However, to get there a large challenge companies are facing is to embrace open technologies that can communicate to each other and allow data exchange. Furthermore, there’s a need to shift from document driven approach to model-based, data-centric workflows to connect teams and empower them with data to make better decisions.
Bryczek: The Department of War certainly is trying as hard as it can to get its workforce to change in step with newer digital engineering methods. It issued its new Digital Acquisition Strategy in November, which directly calls for leveraging digital engineering approaches and data over documents vs. traditional approaches. Requirements will be defined and validated in the context of a model and integrated with software and mechanical models. This vision is sound, but it is not happening across the board overnight. There are opportunities, but the biggest barrier remains the government personnel and their will to change the status quo and invest in the available technologies to make it happen.
We will continue to see increasing development converging around product families and feature-based development. Those who are smartly designing their products to follow Modular Open Systems Architecture (MOSA), which provides a higher degree of interoperability and vendor choice by the customer, will continue to have more success in the government market.
RELATED: CIMdata: Digital Thread in Aerospace and Defense
AI and Automation
Q: What role will AI and machine learning play in enabling autonomous flight, predictive maintenance, and mission readiness? What impact will AI have on design and manufacturing processes? What challenges might arise in ensuring safety, reliability, and certification?
Macias: I would like to see AI applied in three areas: 1) easing, broadening and acceleration of multi-disciplinary optimization of the product development process; 2) assistance and assurance of quality, comprehensively and consistency of development team work, preventing surprises and moving engineering further and further up-front opening up an order of magnitude of more possibilities; 3) combined with digital twins, AI could assist greatly in ensuring that all operational products are safe, healthy and operating effectively. All 3 of these effects would have a dramatic impact on safety, effectiveness, and cost/sustainability (not to be overlooked as a major driver of ecological concerns itself).
Bryczek: This question is endlessly broad, so I’d like to focus on the less glamorous segment of aircraft maintenance. I described already how there is a rise in air traffic control mishaps, some even leading to deaths. 2025 has been the most vivid year for aircraft accidents in my own personal memory. As more aircraft remain in service such as the aging MD11 that crashed in Kentucky killing all aboard and many on the ground due to a maintenance problem, and aging fleets being sold from one airline to the next often to younger international companies lacking the decades of the culture of safety that enable the processes and procedures for strict maintenance, we see evidence of aircraft slow to catch up to service bulletins and in some cases ignoring warning alerts leading to crashes and mishaps. Machine Learning will be able to use data to predict maintenance needs. It will analyze sensor data, as well as part requirements and testing data tracked even after part delivery, to predict part failures, preventing costly downtime and improving safety by alerting aircraft operators
Responsible AI Adoption
Q: As defense organizations expand their use of AI, how can they balance innovation with ethical and regulatory considerations? What frameworks should guide responsible AI adoption in mission-critical systems?
Mulcahy: There has to be a combination of human education/accountability, transparent governance, with security being a large part of this. With challenges like export control/data restrictions being a large consideration in defence projects, it’s important to test AI’s output and work before rolling out on a wider scale.
It will be interesting to see if organizations like the DOD and NATO release any guidance and/or frameworks for responsible & secure AI use in projects and/or missions.
Bryczek: In my observation, the US Government has taken a more responsible posture to AI than the commercial world. The Department of Defense has already published its Responsible AI (RAI) Toolkit, which is both a practical and public resource providing guidance to align AI projects with best practices and ethical principles as well as concrete activities that need to be taken when implementing AI. One of the five principles that jumps out to me is the “Traceable Principle: AI capabilities should be developed with transparent, auditable methodologies and data sources so personnel understand the technology and its operational methods.”
Traceability is Jama Connect’s core competency spanning engineering disciplines, bringing together the collaboration of both traceable decision-making and data. I predict we will see more use of Jama Connect in AI projects.
Macias: Karl and Cary’s answers are excellent and capture this topic well.
Supply Chain Resilience
Q: How do you see aerospace and defense companies adapting to ongoing supply chain disruptions? What technologies or practices will strengthen resilience and reduce risk in global production networks?
Mulcahy: Having worked with both sides of the supply chain here, with larger System Integrators / Consortium managing lots of parts/players, or with lower-tier suppliers who are changing their business model to become more diverse or enter into new markets, it’s clear how they want to adapt and streamline – by becoming digital.
By embracing technology to become more efficient, more collaborative, and robust, companies are able to differentiate by identifying gaps earlier with connected datasets and make decisions to take action quicker. With remote/international working still forming a large part of the Aerospace & Defence supply chain, it’s important to utilize secure communication to ensure continuous alignment. Furthermore, we’ve seen supply chains being strengthened due to mutual transparency and predictability, leading to more longer-term agreements and better future forecasting for future projects.
Macias: We believe strongly that the Aerospace and Defense supply chain can greatly benefit from increased model and digital data-based collaboration and traceability. As this becomes more adopted, we should see opportunities arise for more resilience and also avoidance of surprises and other quality impacts. At Jama Software, we are working hard to enable this.
Cybersecurity and Data Protection
Q: As aircraft and defense systems become increasingly digital and connected, what are the top cybersecurity challenges facing the industry? How can organizations safeguard sensitive data and critical assets?
Bryczek: We will see continued security mandates for Defense agencies as well as all contractors developing systems under contract, to be scrutinized heavily. Cybersecurity is no longer just an IT issue; it is a core element of national security. Threats have grown far beyond the days of old, with just malware and social engineering. Organizations will be putting more focus on Software bill of materials (SBOM) programs, which are driven by: Executive Order 14028. SBOMs provide full transparency into software components used in defense systems, helping mitigate supply chain compromise, hidden dependencies, and embedded malware and backdoors. This is especially important for weapons systems, avionics, and mission-critical software.
For example, U.S. departments of Defense, Homeland Security and Transportation all have launched cybersecurity initiatives affecting aviation. The Federal Aviation Administration mandated that airlines establish and maintain cybersecurity programs. The European Union Aviation Safety Agency developed a cybersecurity roadmap to address threats to the air traffic management system and operators. In addition, industry groups like the Aerospace Industries Association and National Business Aviation Association rank cybersecurity among key issues facing the aerospace industry.
Workforce and Skills Transformation
Q: With new technologies reshaping engineering and manufacturing, what skills will be most in demand in the aerospace and defense workforce of the future? How can organizations attract and retain this talent?
Mulcahy: There’s a growing need for skills around MBSE / Digital Engineering methods, of course, knowledge about AI / M,L with more technology being developed and introduced into manufacturing today and, no doubt, in the near future. Further skills around cybersecurity and overall secure systems engineering are proving to be in demand. With more software now being embedded into products, both system safety and security are becoming more important to focus on, with companies looking to streamline more to various regulations such as DO-326.
Organisations can attract this talent by helping to innovate quickly by adopting modern tools/workflows, but also empowering employees to make decisions and be able to get on with the task at hand. There are cultural/financial aspects too, which I’m sure are important, but I feel a big thing is to provide opportunities for continuous learning. This will prove to be important to employees to understand new technologies, advance their skills, and also, in turn bring more benefits to their business by applying their learning to continuously enhance workflows and inspire future generations.
Macias: I couldn’t agree more with Karl! The workforce of the future will need the ability to work both in their area of specialization as well as appreciate the total system’s effects, hence the rise in importance of systems/requirements engineering and optimization competencies.
Bryczek: Modern aerospace projects are massive in scale and complexity, involving interdisciplinary teams and subsystems. Systems engineering is the glue that holds everything together, ensuring that avionics, propulsion, structural components, and software work seamlessly. Proficiency in systems thinking, risk management, and integration processes used to be vital but now the new systems engineer is an AI Engineer. AI engineers blend systems engineering, software development, computer science, and user-focused design. This mix helps them build smart systems that can tackle specific tasks or achieve set goals. The skills of an AI engineer are typically: building algorithms, model training, data preprocessing, and model deployment.
RELATED: Buyer’s Guide: Selecting a Requirements Management and Traceability Solution for Aerospace
Regulatory and Policy Evolution
Q: How do you see evolving regulations and policies, including new cybersecurity frameworks—impacting innovation and program timelines? How can organizations stay ahead?
Macias: The industry is demanding agility and rapid innovation to react to new technologies and new mission needs. We see this coming from government defense organizations across the globe, where acquisition reforms and digital engineering strategies are coming to the forefront to acknowledge the need to accelerate product to market/field at cost and on schedule. We can expect this to dominate focus going forward, with all product development organizations needing to leave behind legacy tools and processes and move to highly agile, innovative digital model-based approaches to keep up.
Bryczek: There are many moving pieces to the evolving regulatory and policy landscape, which include everything from revamping and rebranding AS9100 to the IA9100 series quality standards, acquisition reform acts such as SPEED and FoRGED that are supposed to stimulate faster technology adoption, and significant cybersecurity rules for AI and Zero Trust, all driven by the FY2026 National Defense Authorization Act. These policy and regulatory changes drive the key changes in what we will see is more open collaboration between government agencies to ensure systems being built do not overlap, and that systems are being developed using interoperable technology. The FACE and MOSA standards will become more important than ever. Commercial organizations need to prepare for the new international quality requirements, embrace digital transformation (AI, cyber), and adapt to faster, more agile defense acquisition processes to remain compliant and competitive.
Long-Term Trends
Q: What trends or technologies will continue to shape aerospace and defense over the next decade? How can organizations ensure sustained innovation while managing cost, risk, and compliance?
Mulcahy: We’ve seen a big theme of reuse and sustainability in industry recently. Reusable satellites, rockets, and even technologies in use such as autophage. No doubt innovation will continue to happen across the wider industry, to help solve global challenges, aid to defence efforts, and contribute to electronic warfare. I think AI will continue to be introduced to more areas of businesses and continue to aid moves towards Digital Engineering and overall efficiencies. I think as research continues and more innovation is created from academia for example, there may be closer links formed between Industries, academia, and potentially even governments to co-invest and accelerate technology development.
Organisations should continue to invest in education on these new technologies to protect themselves, but also to introduce better workflows, attract new talent, and help to deliver projects on time. But an important factor will be to use modern tools fit for today’s project needs that are open and facilitate a digital engineering way of working.
Macias: Sustained/accelerated innovation with improved efficiency, quality, and compliance will be the goal over the next decade, and those who capitalize on current digital engineering practices will be best positioned to both capitalize on emerging AI/ML technologies and improvements in modeling/processing capabilities. The key to this will be the establishment of traceable, agile, model-based environments that bring everyone together in a common view of the total system, giving all the ability to contribute to the total success of the product, production, and mission. This can only be accomplished if organizations focus on democratization of the digital thread and common (MBSE & RM) models by avoiding deepening or perpetuating silos.
Bryczek: Long-term trends in the defense industry are driven by rising geopolitical tensions, increased defense spending—particularly in Europe—and rapid advances in emerging technologies. Global military expenditure continues to grow as nations respond to a worsening security environment and pursue modernization, with NATO members increasingly meeting higher spending targets. The industry is shifting toward autonomous and unmanned systems, including UAVs, USVs, and ground platforms, to reduce human risk, with swarm technology becoming a major focus. Investment is also accelerating in hypersonic missiles and directed-energy weapons to counter evolving threats. Additionally, space is emerging as a critical military domain, with growing emphasis on autonomous spacecraft, satellite-based surveillance and communications, and managing the risks of space militarization and debris.
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Cary is the Director of Solutions Architecture for Aerospace and Defense with a focus on the specialized business and technical needs unique to this market. She helps lead the company in Systems Engineering and Model Based Systems Engineering (MBSE) domain. She has over 25 years of experience leading Systems Engineering in the A&D industry with roles at the US Government, Lockheed Martin, PTC, and Jama Software. She is a member of the International Counsel on Systems Engineering and member of the Women in Aerospace organization. Outside of work she enjoys playing jazz guitar and gardening around her farm which sometimes requires the operation of tractors and UAVs.
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