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While CEOs often get the credit, engineers are the lifeblood of aerospace and defense companies. Aerospace programs are incredibly complex, and engineers tackle some of the world’s toughest problems. They are involved in every stage of a program’s life cycle, from design and certification to production, aftermarket support and upgrades.
In a rapidly changing world where speed to market matters, aerospace companies need their brightest engineers more than ever. But traditional market leaders might need to rethink how they compensate and incentivize their top engineers. Companies that are successful at retaining tech talent will have a competitive advantage over their peers. Those that do not will be vulnerable to disruption.
And that disruption is coming fast. For decades, large primes such as Boeing, Airbus and Lockheed Martin were the employers of choice for talented young engineers. Experienced engineers at large, publicly traded aerospace companies still earn six-figure salaries, receive excellent benefits and have opportunities to work on cutting-edge technologies that are critical to national security. But without pensions, there is little financial incentive to remain at the same company for an entire career. Workers often can secure a better deal by moving to a competitor.
Ambitious aerospace engineers now have more career options than ever, thanks to new defense tech and space companies that are becoming an increasingly attractive destination. While newer companies often offer lower cash compensation than their more established peers, they provide the opportunity to build generational wealth through stock compensation.In that regard, SpaceX serves as a powerful example.
The cover of the March 29, 2004, edition of AW&ST read: “David and Goliath: Can Tiny SpaceX Rock Boeing?” The answer has been a resounding “yes.” SpaceX’s success in the orbital launch market against United Launch Alliance paved the way for today’s defense tech companies.
Over the past decade, there has been a seismic shift in Silicon Valley’s attitude toward the defense industry. Although SpaceX was founded less than 25 years ago, its $1.5 trillion valuation makes it the most valuable aerospace company in the world. Reports indicate that SpaceX’s initial public offering resulted in more than 4,000 employees becoming millionaires overnight, while CEO Elon Musk briefly became the world’s first trillionaire.
Similar to SpaceX, valuations at defense tech companies such as Anduril, Shield AI, Saronic and Castelion have increased rapidly. In June 2025, Anduril raised $2.5 billion at a $30.5 billion valuation. Following a subsequent fundraising round in May at $61 billion, the company is reportedly looking to raise additional capital at a $100 billion valuation. To put that into perspective, Lockheed Martin, which is projected to generate $80 billion in revenue this year, has a market capitalization of $131 billion. Beyond Anduril, Shield AI’s valuation grew 140% over the past year to $12.7 billion, and uncrewed shipbuilder Saronic Technologies completed a $1.75 billion fundraising round at a $9.25 billion valuation—not far below naval shipbuilder Huntington Ingalls Industries’ $11 billion market capitalization.
Are those defense tech valuations bubble-ish? Time will tell. Still, the opportunity to participate in the upside through stock-based compensation will inevitably attract some of the best and brightest talent currently working at traditional aerospace and defense companies. If legacy players do not find creative ways to attract and retain engineers, they could see an exodus of talent.
If you are a young engineer who has yet to settle down and start a family, why not grind it out at a defense tech startup and accumulate equity while these companies remain private? If and when they go public, that equity could translate into a lot of wealth.
In the financial world, engineering costs appear as an expense on the income statement as part of research and development. In reality, high-quality aerospace engineers are an investment that creates valuable intellectual property and competitive advantages for companies. Attracting and retaining experienced engineers is no easy task. In the U.S., the labor market is already tight, with the unemployment rate slightly above 4%. For engineers, the labor market is even tighter, with an unemployment rate below 2%. Given this and the cyclical tailwinds across the industry, aerospace companies are in a war for talent.
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