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Gen Z’s Defense Disruption: New Threat Vectors & Workforce Gaps Exposed · Defense B2B podcast news daily - for industry professionals subscribe to develop your skillsets

• 0:00
  Welcome to Copilot Podcasts. Nearly half of Gen
• 0:03
  Z is running a side hustle right now, more than
• 0:05
  any other generation in history. And somewhere
• 0:07
  in that statistic is a national security problem
• 0:09
  that nobody is talking about loudly enough. Today,
• 0:12
  we're getting into the defense sector implications
• 0:14
  of the Gen Z hustle economy. Specifically, the
• 0:17
  cybersecurity risks it's quietly creating inside
• 0:20
  defense adjacent workplaces, the recession -forged
• 0:22
  entrepreneurial talent it's producing, and what
• 0:24
  the Department of Defense is actually doing to
• 0:26
  compete for this generation's attention. By the
• 0:29
  end of this episode, you'll understand why the
• 0:31
  same generation grinding 16 -hour days across
• 0:33
  multiple gigs might also be the one that fundamentally
• 0:36
  changes how America wages war. My co -host has
• 0:39
  been deep in the research on this, and I want
• 0:41
  to start with something that genuinely surprised
• 0:43
  me, so walk me in. So let's start with the number
• 0:45
  that anchors everything. According to research
• 0:48
  from Kaspersky, reported by Security Magazine
• 0:51
  in August 2025, almost half of Gen Z, 48%, has
• 0:56
  a side hustle. That is the highest percentage
• 0:59
  of any generation. Full stop. 48%. That's not
• 1:03
  a niche trend. That's basically the defining
• 1:06
  economic behavior of an entire generation. Exactly.
• 1:09
  And when you zoom out and look at the defense
• 1:10
  sector at the same time, you get this really
• 1:12
  striking collision. On one side, you have a generation
• 1:16
  that is economically pressured, digitally hyperactive
• 1:19
  and juggling multiple jobs and apps and clients
• 1:21
  all at once. On the other side, you have a defense
• 1:25
  industry that is desperately trying to recruit
• 1:27
  that exact generation and largely failing. Failing
• 1:30
  how? Like, are we talking about actual numbers
• 1:34
  here? Yeah, concrete numbers. The GEO released
• 1:37
  a report in November 2024, report number GAO
• 1:41
  25106719, and it found that in fiscal year 2023,
• 1:46
  several military services missed their recruiting
• 1:49
  goals by tens of thousands of people. Tens of
• 1:52
  thousands. And the report specifically called
• 1:54
  out that Gen Z's views about the military have
• 1:57
  been steadily declining. That's a significant
• 1:59
  gap. And this is happening at the same time that
• 2:02
  the defense industry is, what, booming? Massively
• 2:06
  booming. According to the StartUS Insights Military
• 2:09
  Market Report from January 2026, global military
• 2:13
  spending reached $2 .718 trillion in 2024. That's
• 2:18
  a 9 .4 % increase year over year. The money is
• 2:22
  there. The demand is there. The talent pipeline
• 2:25
  is the problem. So you've got this trillion dollar
• 2:28
  industry that can't fill its seats and a generation
• 2:31
  that is out here running three income streams
• 2:33
  before noon. That's the tension at the heart
• 2:35
  of this whole conversation. And to really feel
• 2:38
  it, I think you need to understand what the hustle
• 2:40
  economy actually looks like from the inside for
• 2:42
  people in or adjacent to defense. Right, because
• 2:45
  it's not abstract. There are real people navigating
• 2:48
  this. There's a Reddit thread on ARA passive
• 2:51
  income where a lower enlisted service member
• 2:53
  posted asking for side hustle ideas. They had
• 2:56
  a thousand dollars to start with and said, quote,
• 2:59
  sitting in the barracks watching paint dry is
• 3:00
  not productive. The responses ranged from pizza
• 3:04
  delivery on base to Twitch streaming to parachute
• 3:06
  packing at a local drop zone. Apparently you
• 3:08
  can make seven to ten dollars per pack job in
• 3:11
  cash in about 15 minutes. Wait, parachute packing?
• 3:14
  That's a side hustle? Apparently a pretty good
• 3:16
  one. Someone in the thread said they've known
• 3:18
  people pulling in an extra thousand dollars on
• 3:20
  a good weekend. But what that thread really shows
• 3:23
  is the financial pressure that exists even inside
• 3:25
  the military. These are people who already have
• 3:28
  a job serving their country, and they still need
• 3:30
  more income. And there are actual rules around
• 3:33
  this, right? It's not like you can just pick
• 3:35
  up a shift at Domino's without telling anyone.
• 3:38
  Exactly. And this is where it gets interesting
• 3:39
  from a policy standpoint. According to the Military
• 3:43
  Wallet, published in June 2026, Active duty members
• 3:47
  are allowed to have side hustles, but they have
• 3:49
  to comply with DOD rules, installation restrictions,
• 3:52
  and host nation laws. Denis Shershikov, a professor
• 3:56
  of finance and economics at City University of
• 3:59
  New York, told the military wallet that members
• 4:01
  should treat side hustles as, quote, permissioned
• 4:04
  activity, not purely private activity. So you
• 4:07
  have to get your commander's sign off. Literally.
• 4:10
  There's a story in that same piece about Teresa
• 4:12
  Irving, a retired Air Force veteran. She took
• 4:15
  a second job as a restaurant server while stationed
• 4:17
  at Misawa Air Base in Japan to help cover childcare
• 4:20
  costs, and she said, quote, I had to go through
• 4:23
  the proper process, which meant requesting approval
• 4:25
  and ultimately getting my commander's signature.
• 4:27
  It wasn't just about permission. It was about
• 4:29
  ensuring the job wouldn't interfere with my duties
• 4:31
  or readiness. That's such a human story. She's
• 4:35
  serving overseas, trying to cover childcare,
• 4:37
  and she has to file paperwork to waitress on
• 4:39
  the side. And it illustrates the bind. The financial
• 4:42
  pressure is real. The hustle instinct is real,
• 4:45
  but the institutional structure of defense creates
• 4:48
  friction that the civilian gig economy just doesn't
• 4:51
  have. Okay, so that's the human side of it. But
• 4:54
  you mentioned earlier that the hustle economy
• 4:56
  is also creating a security problem. That's the
• 4:58
  part I really want to dig into. Yeah, this is
• 5:01
  where it gets genuinely alarming. The same Kaspersky
• 5:04
  research that flagged the 14 .8 % side hustle
• 5:06
  stat also found something that should be keeping
• 5:09
  defense cybersecurity teams up at night. From
• 5:12
  the second half of 2024 through the first half
• 5:15
  of 2025, researchers identified more than six
• 5:18
  million attacks mimicking platforms or content
• 5:21
  associated with 20 commonly used work tools.
• 5:24
  Six million attacks on work tools. The platforms
• 5:28
  most often impersonated were Zoom, Microsoft
• 5:31
  Excel, and Outlook. And the reason Gen Z is specifically
• 5:34
  vulnerable here is the lifestyle. David Matalon,
• 5:38
  CEO at Venn, put it really well in Security Magazine.
• 5:41
  He said Gen Z is, quote, juggling multiple gigs,
• 5:45
  often working remotely and doing it all from
• 5:47
  personal devices. That lifestyle creates a massive
• 5:50
  attack surface. So it's not that they're less
• 5:52
  tech savvy, it's that they're more exposed. That's
• 5:55
  exactly the distinction. Anne Cutler, a cybersecurity
• 5:59
  evangelist at Keeper Security, made the same
• 6:01
  point. Gen Z's fluency with digital tools can
• 6:04
  actually lead to riskier behaviors. Faster click
• 6:07
  habits, password reuse, using personal devices
• 6:10
  for professional work. And when you're switching
• 6:12
  between five different apps for five different
• 6:15
  income streams, the lines between personal and
• 6:17
  professional completely blur. And if one of those
• 6:20
  gigs is adjacent to defense, like a contractor
• 6:22
  or a DoD civilian, that blurred line becomes
• 6:25
  a national security issue. Precisely. Matalon
• 6:28
  said it directly. One phishing email or fake
• 6:31
  software update doesn't just put them at risk,
• 6:33
  it can expose their employer too. And in a defense
• 6:36
  context, that employer might be handling classified
• 6:39
  systems or sensitive procurement data. So the
• 6:42
  hustle economy is essentially widening the attack
• 6:44
  surface of the defense industrial base. That's
• 6:47
  a sentence I did not expect to say today. It's
• 6:50
  a real tension. But here's where the story flips,
• 6:52
  because the same hustle culture that creates
• 6:54
  these vulnerabilities is also producing something
• 6:56
  the defense sector desperately needs. Entrepreneurial
• 7:00
  founders who are building the next generation
• 7:01
  of defense technology. Okay, I want to hear this
• 7:04
  side of it. Because the defense tech boom is
• 7:07
  real. I've seen the numbers. It is very real.
• 7:10
  Forbes reported in August 2026 that the AI powered
• 7:13
  defense tech revolution is backed by a record
• 7:15
  $32 billion in venture funding since 2022. And
• 7:20
  the founders leading this charge are often people
• 7:22
  who came out of the military with a problem they
• 7:24
  couldn't stop thinking about. Like who? The clearest
• 7:28
  example in the Forbes piece is Brandon Seng.
• 7:30
  He was a Navy SEAL deployed to Afghanistan twice.
• 7:33
  During a training exercise, he was simulating
• 7:36
  clearing a building and got shot in the face
• 7:37
  with a paintball, even though he'd followed his
• 7:40
  training exactly. And he said, quote, If that
• 7:43
  was real life combat, I would have been killed.
• 7:45
  That moment stuck with him. That's a visceral
• 7:48
  way to find your startup idea. When he left the
• 7:50
  military in 2015, he co -founded Shield AI, a
• 7:53
  drone company whose first product was a small
• 7:56
  quadcropper that could scout and map buildings
• 7:58
  while sending live video back to soldiers. Today,
• 8:01
  according to Forbes, SHIELD -AI is worth $12
• 8:03
  .7 billion. Israelis use their drones to survey
• 8:08
  Hamas tunnels in Gaza. Ukrainians are using their
• 8:11
  V -Bot drone to identify targets inside Russian
• 8:13
  -held territory. From a paintball exercise to
• 8:16
  a $12 .7 billion company that's active in two
• 8:19
  active conflict zones. That's an extraordinary
• 8:22
  arc. And it's not an isolated story. According
• 8:25
  to Bessemer Venture Partners' Defense Tech Roadmap
• 8:28
  published in January 2026, defense technology
• 8:31
  has advanced more in the past 24 months than
• 8:34
  in the previous three decades. They attribute
• 8:36
  it to the convergence of AI breakthroughs, procurement
• 8:39
  reform, and intensifying geopolitical tensions.
• 8:42
  More in 24 months than in 30 years. That's a
• 8:45
  staggering claim. And Bessemer backs it up with
• 8:48
  specifics. OpenAI and Anthropic both secured
• 8:51
  major defense contracts in 2025, and now have
• 8:55
  dedicated offerings for federal stakeholders.
• 8:58
  The executive order on unleashing American drone
• 9:00
  dominance created new opportunities for startups.
• 9:03
  European defense spending is projected to grow
• 9:06
  3 .4 times over the next six years, making it
• 9:09
  Europe's fastest growing sector. So the market
• 9:11
  is exploding. The founders are coming from military
• 9:14
  backgrounds and Gen Z entrepreneurs are being
• 9:17
  described as digital natives who are fluent in
• 9:19
  AI, cybersecurity and agile development. That's
• 9:23
  a pretty Pretty compelling pitch. It is. And
• 9:26
  the Ainvest analysis from July 2025 put it well,
• 9:30
  Gen Z entrepreneurs are redefining defense innovation
• 9:32
  by prioritizing speed, ethics, and cross -sector
• 9:35
  collaboration. Unlike previous generations, they
• 9:38
  seek work that blends meaningful impact with
• 9:40
  cutting edge technology. The DoD has taken notice.
• 9:44
  Right, because the DoD has a massive talent problem
• 9:47
  on the civilian side, too. This isn't just about
• 9:50
  founders and startups. Correct. And this is where
• 9:52
  the institutional response gets really interesting.
• 9:55
  Brint Parmiter, the Defence Department's Chief
• 9:57
  Talent Management Officer, said at a panel in
• 10:00
  January 2025, and I'm quoting directly here,
• 10:03
  If we don't get more Gen Z members into this
• 10:05
  workforce, we are not going to be able to accomplish
• 10:07
  our mission. That's a pretty stark statement
• 10:10
  from someone inside the DoD. It is. And the context
• 10:13
  matters. The DoD encompasses 60 % of the federal
• 10:17
  civilian workforce. A large portion of that workforce
• 10:20
  is approaching retirement age. And the existing
• 10:23
  hiring process, this is the part that blew my
• 10:25
  mind, involves 43 distinct steps, 34 of which
• 10:29
  are mandated by congressional statute. 43 steps
• 10:32
  to get hired. 43 steps. And the traditional timeline
• 10:37
  from application to hire was 300 days. For a
• 10:40
  generation that can spin up a freelance business
• 10:43
  in a weekend, that's basically a deal breaker.
• 10:45
  So what are they actually doing about it? They
• 10:47
  launched a fast -track hiring initiative to compress
• 10:50
  that 300 -day timeline down to 90 days or less.
• 10:54
  And they ran a pilot program specifically targeting
• 10:57
  cybersecurity professionals. According to Jobe's
• 11:00
  with Dodd, that pilot opened 300 positions and
• 11:03
  attracted 6 ,000 qualified applicants. 6 ,000
• 11:06
  applicants for 300 spots. That's a 20 to 1 ratio.
• 11:11
  And here's the detail that really stands out.
• 11:13
  80 % of those applicants had never previously
• 11:16
  applied to the DoD, and 88 % expressed strong
• 11:20
  interest in defense sector opportunities. So
• 11:23
  the demand is there, the awareness just wasn't.
• 11:26
  That's actually kind of hopeful. Like, Gen Z
• 11:28
  isn't anti -defense, they just didn't know the
• 11:31
  door was open. That's exactly what Palmiter said.
• 11:34
  He noted that many young professionals didn't
• 11:36
  know about civilian roles within the DoD, and
• 11:39
  often equated careers in defense with military
• 11:41
  service. Valerie Capers -Workman, an industry
• 11:44
  expert on the same panel, said, quote, For the
• 11:48
  Gen Z cohort, there is no more attractive space
• 11:50
  right now than the federal government. Which
• 11:53
  is interesting because that cuts against the
• 11:55
  narrative that Gen Z is all about the gig economy
• 11:58
  and hates institutions. It does. And I think
• 12:01
  that's the nuance worth sitting with. Gen Z values
• 12:04
  job stability, meaningful work and comprehensive
• 12:07
  benefits. That's what Workman said. The hustle
• 12:10
  isn't the dream. The hustle is the response to
• 12:13
  economic pressure. Given a real alternative that
• 12:16
  offers stability and purpose, a lot of them will
• 12:18
  take it. But the DoD also has to meet them where
• 12:21
  they are, because Gen Z isn't going to wait 300
• 12:24
  days to hear back from anyone. Right. And the
• 12:27
  jobs with DoDoD analysis pointed out something
• 12:30
  that I think is really telling about the cultural
• 12:32
  gap. Many DoD hiring managers still anticipate
• 12:35
  30 -year commitments from Gen Z applicants. And
• 12:38
  in response, the department has had to adopt
• 12:40
  a more fluid approach, allowing employees to
• 12:43
  gain expertise in private sector roles before
• 12:45
  returning to federal service. So they're basically
• 12:48
  building a revolving door between startups and
• 12:50
  the DOD, which honestly is how Silicon Valley
• 12:54
  has operated for years. And Bessemer's roadmap
• 12:56
  made exactly that point. They said Silicon Valley's
• 13:00
  relationship with defense has fundamentally shifted.
• 13:03
  The Valley now recognizes that AI leadership
• 13:05
  and national security are inseparable. Companies
• 13:08
  like OpenAI and Anthropic didn't used to touch
• 13:11
  defense contracts. Now they're building dedicated
• 13:13
  federal offerings. So the walls between tech
• 13:16
  culture and defense culture are coming down.
• 13:19
  And Gen Z is kind of the generation that straddles
• 13:21
  both. That's a really good way to frame it. They
• 13:24
  grew up digital. They're economically pressured
• 13:26
  into entrepreneurship and they're now entering
• 13:28
  a defense sector that is actively trying to operate
• 13:31
  at startup speed. The Deloitte 2026 aerospace
• 13:36
  and defense outlook literally uses the phrase
• 13:39
  speed to field as the unifying metric across
• 13:42
  defense portfolios. Speed to field. That sounds
• 13:45
  like something a startup founder would say, not
• 13:47
  a defense contractor. That's the point. Deloitte's
• 13:50
  outlook identifies AI -driven workforce transformation
• 13:53
  as one of the five key trends shaping the industry
• 13:56
  in 2026, specifically the shift from big data
• 13:59
  expertise to multidisciplinary skill sets. And
• 14:02
  they estimate that 36 % of tasks across industrial
• 14:06
  products manufacturing could benefit from augmenting
• 14:09
  human capabilities with agentic AI. So the defense
• 14:12
  sector needs people who can work across disciplines,
• 14:14
  move fast, and build with AI. Which is basically
• 14:18
  the job description of every Gen Z side hustler
• 14:20
  who's been cobbling together income streams for
• 14:23
  the past three years. That's the irony at the
• 14:26
  center of this whole thing. The hustle economy
• 14:28
  that the DoD sees as a cybersecurity liability
• 14:31
  is also the training ground for the exact talent
• 14:34
  profile it needs. The question is whether the
• 14:36
  institution can adapt fast enough to capture
• 14:39
  it. And there's a real cost if it doesn't, right?
• 14:42
  Because the Stardust Insights report said the
• 14:43
  defense startup ecosystem already includes 2
• 14:46
  ,514 startups. That talent is going somewhere.
• 14:50
  It is. And the average funding round in the military
• 14:52
  industry is $57 .7 million, according to that
• 14:56
  same report. With more than 5 ,200 funding rounds
• 15:00
  active and investors like Founders Fund and General
• 15:02
  Catalyst leading by invested value, this is not
• 15:05
  a niche corner of the market anymore. General
• 15:07
  Catalyst. Founders Fund. These are not defense
• 15:10
  -specific investors. These are the people who
• 15:12
  funded Airbnb and Stripe. Exactly. And that tells
• 15:15
  you something important about where the money
• 15:17
  thinks the opportunity is. Defense tech is no
• 15:20
  longer a niche vertical for specialized investors.
• 15:23
  It's a mainstream bet. So when you step back
• 15:26
  from all of this, the hustle stats, the cybersecurity
• 15:28
  risks, the recruiting crisis, the startup boom,
• 15:32
  what does it actually add up to? Here's what
• 15:34
  I think this really comes down to. Gen Z is the
• 15:37
  first generation to be economically pressured
• 15:39
  into entrepreneurship at scale. 48 % running
• 15:43
  side hustles isn't a lifestyle choice, it's a
• 15:46
  survival response. And that pressure has produced
• 15:49
  a generation that is faster, more adaptable,
• 15:51
  and more comfortable with ambiguity than any
• 15:54
  workforce the defense sector has ever tried to
• 15:56
  recruit. But the same traits that make them valuable
• 15:59
  also make them a risk if the institutions don't
• 16:01
  build the right guardrails. Right. The multi
• 16:04
  -app, multi -gig lifestyle that Kaspersky flagged
• 16:06
  as a cybersecurity vulnerability is the same
• 16:09
  lifestyle that produces the cross -disciplinary,
• 16:11
  fast -moving founders that Bessemer and Deloitte
• 16:14
  say defense needs. You can't separate those two
• 16:17
  things. You have to manage both. And the DoD
• 16:20
  is at least trying. The 90 -day hiring pipeline,
• 16:23
  the pilot program that pulled 6 ,000 applicants,
• 16:26
  the shift toward fellowships and rotational assignments,
• 16:29
  these are real moves. They are. But the 43 -step
• 16:32
  hiring process with 34 congressionally mandated
• 16:35
  steps is still there. The cultural expectation
• 16:38
  of 30 -year commitments is still there. The gap
• 16:41
  between what Gen Z expects from work and what
• 16:44
  the DoD has historically offered, that gap is
• 16:47
  closing. But it's not closed. And in the meantime,
• 16:51
  the Brandon Tsengs of the world are building
• 16:53
  $12 .7 billion companies outside the institutional
• 16:56
  structure entirely. which is actually fine and
• 16:59
  maybe even better for national security in some
• 17:01
  ways because those companies are building things
• 17:04
  the DoD couldn't build internally. Shield AI's
• 17:07
  drones are being used in active conflict zones
• 17:09
  right now. That's the outcome. The path to it
• 17:11
  just looks very different from the traditional
• 17:14
  defense contractor model. So the defense sector
• 17:16
  is essentially being disrupted from the outside
• 17:19
  by the same generation it's struggling to recruit
• 17:22
  from the inside. That's the most accurate one
• 17:24
  sentence summary of this whole situation. And
• 17:27
  the sectors that figure out how to work with
• 17:29
  that disruption rather than against it, whether
• 17:31
  that's through fast track hiring, startup partnerships
• 17:35
  or procurement reform, those are the ones that
• 17:38
  will define what defense looks like in the next
• 17:41
  decade. And for anyone listening who is in that
• 17:44
  Gen Z cohort, whether you're a DOD civilian,
• 17:47
  a service member with a side hustle or someone
• 17:49
  building a startup, the stakes of this conversation
• 17:51
  are pretty direct. Very direct. If you're working
• 17:54
  multiple gigs and any of them touch defense -adjacent
• 17:57
  work, the cybersecurity hygiene piece is not
• 17:59
  optional. The Kaspersky research is clear. More
• 18:02
  apps, more exposure points, more risk. That's
• 18:05
  not a scare tactic. It's just math. And if you're
• 18:07
  on the entrepreneurial side, the door into defense
• 18:09
  tech has never been more open. $32 billion in
• 18:13
  venture funding since 2022, procurement reform
• 18:16
  actively trying to bring in startups, and a Pentagon
• 18:18
  that says it wants to operate at startup speed.
• 18:21
  The Bessemer Roadmap put it well, the executive
• 18:23
  order on modernizing defense acquisitions is
• 18:26
  prioritizing speed and outcomes over process.
• 18:29
  They're literally slashing regulatory red tape
• 18:31
  to work with founders faster. That's a different
• 18:34
  world from five years ago. Okay, here's the thing
• 18:37
  that I keep coming back to. We started this episode
• 18:39
  with a stat. 48 % of Gen Z has a side hustle.
• 18:43
  And I think most people hear that and think hustle
• 18:45
  culture, burnout, economic anxiety, all of which
• 18:48
  is real. All of which is real. But what this
• 18:51
  conversation has shown is that the same grind
• 18:53
  that's exhausting an entire generation is also
• 18:56
  forging something. The founders who survive that
• 18:59
  pressure, who build real skills across multiple
• 19:01
  domains, who learn to move fast and adapt, some
• 19:04
  of them are going to end up building the systems
• 19:06
  that protect the country. That's not a side hustle.
• 19:09
  That's a mission. And the defense sector's job
• 19:11
  right now is to make sure the door is actually
• 19:13
  open when those people come knocking and that
• 19:15
  the institution is ready to move at the speed
• 19:18
  they expect. Well said. Thanks for being in this
• 19:21
  with me today, and thanks to everyone listening
• 19:23
  to Copilot Podcasts. The next time you see a
• 19:26
  Gen Z founder pitching a defense tech startup,
• 19:28
  remember, they probably built their first product
• 19:31
  between their day job and their third gig, and
• 19:33
  that might be exactly why it works.