This outlook consists of two parts: a recurring section providing a global defence industrial outlook, and a thematic section studying the integration of the European defence industry over the last two decades. Within the global defence industry, the United States holds a nearly unparalled position in terms of industrial size, scope, and sophistication. China has not yet caught up, but has significantly narrowed the capability gap. Russia has retained a broad scope, but achieves a lower level of sophistication. The combined European defence industries are highly advanced and broad in scope, but lack sufficient scale. The European Defence Technological and Industrial Base (EDTIB) remains deeply shaped by national preferences and a reluctance towards large-scale integration, leading to duplicated efforts. Policies aimed at increasing EDTIB integration have yielded mixed results. The level of integration among military equipment used by European nations is similarly uneven. There is a wide range of equipment in use across all market segments, but European systems represent significant shares in many of them. In terms of distinct systems, and distinct systems per operator country, there is a modest trend towards integration. However, a more holistic measure, such as the Herfindahl-Hirschman Index, provides a slight trend away from integration.