COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL EU Defence Industry Transformation Roadmap: Unleashing Disruptive Innovation for Defence Readiness
Date: 2025-11-19
Institutions: Directorate-General for Defence Industry and Space, European Commission
Subjects: EU investment, European arms policy, European defence policy, European security, arms industry, common security and defence policy, defence expenditure, defence industry, dual-use technology, military equipment

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  EN 

   EUROPEAN COMMISSION  Brussels, 19.11.2025  COM(2025) 845 final  COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL EU Defence Industry Transformation Roadmap:        Unleashing Disruptive Innovation for Defence Readiness          
 
 
1. 

INTRODUCTION – THE IMPERATIVE OF SPEED, AGILITY AND RISK-TAKING FOR DEFENCE 

Innovation  is  a  critical  component  of  Europe’s  defence  readiness  (1).  Disruptive 
technologies  and  their  fast  development,  testing  and  embedding  in  defence  capabilities  are 
essentials of modern warfare. To build credible deterrence and be ready for the unthinkable, the 
EU  should  accelerate  its  defence  industrial  transformation  and  fully  unlock  the  potential  of 
innovation.  

The war in Ukraine  is  demonstrating how rapidly defence technologies evolve and can 
alter  battlefield  dynamics (2).  SMEs,  small  mid-caps,  startups,  and  scaleups,  often  with  a 
civilian deep-tech background, are central to Ukraine’s defence by swiftly delivering critical 
capabilities to the armed forces. Innovation and adaptation cycles are becoming increasingly 
shorter.  High  tech  and  complex  systems  are  combined  with  low-cost  and  mass-
manufactured products. Disruptive technologies such as AI, quantum, cyber, and space-based 
systems are providing rapid tactical change on the battlefield.  

More  than  230  defence  tech  startups  were  founded  in  Europe  since  Russia’s  invasion  of 
Ukraine in February 2022, and private investment in defence startups reached an all-time high 
in 2024 (3). These “New Defence” players, some coming from civilian and dual-use markets, 
are transforming the defence sector (4). They broaden the European Defence Technological and 
Industrial Base (EDTIB), accelerate the development and deployment of disruptive innovation, 
and introduce a new operating model based on rapid iteration, agility, cutting-edge innovation, 
software-first architectures, and greater risk-taking. Private financing enables their fast growth 
(5). These companies are bringing a new approach to defence. Bringing together the strengths 
of New Defence players and established defence industry actors can drive the transformation 
of  the  defence  industrial  sector,  foster  more  agile  and  adaptive  approaches,  and  challenge 
existing procedures to deliver faster, more effective capability development and deployment. 

Europe excels in the development of complex defence systems and cutting-edge technologies. 
Yet, as Ukraine's battlefield experience shows, this is no longer enough in a rapidly evolving 
threat landscape, where military edge depends not only on advanced technologies but also on 
the  capacity  to  quickly  adapt,  iterate,  deploy  and  mass-manufacture  cost-efficient  solutions. 
The EU needs a fundamental change of mindset and procedures inherited from peace time 
at all levels: Member States, industry and EU institutions. Agility, speed, collaboration and 
risk-taking should become the new normal in defence capability development in Europe.  

1 Readiness Roadmap 2030 - European Commission, 16 October 2025. 
2  For  example,  according  to  a  Center  for  Strategic  &  International  Studies  report,  in  Ukraine,  drones  equipped  with  AI-enabled 
autonomous navigation have transformed battlefield effectiveness, increasing hit probability from just 10-20% to 70-80%. This leap in 
accuracy not only enhances military effectiveness but also leads to significant cost reduction. 
3 Dealroom. 
4 ‘New Defence’ refers to a new  paradigm in defence innovation, driven by technological trends such as the leveraging of 
civilian-dual use technologies, software-defined warfare, and agile innovation cycles, as well as new business models, leading 
to increased efficiency, reduced costs, and accelerated delivery of defence solutions, with a greater emphasis on risk-taking.   

5 Private investment into European deep tech defence and security startups and scaleups hit a record high of over €5 billion in 2024, 
marking a fivefold surge compared to 2019. In 2024, these startups received 10% of all venture capital funding in Europe  - NATO 
Innovation Fund and Dealroom Report Defence, Security, and Resilience in Europe (February 2025). 

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This  requires  systematically  leveraging  Europe’s  wider  civilian  research  and  deep-tech 
innovation  ecosystem,  ensuring  that  dual-use  solutions  emerging  from  the  civil  side  can  be 
rapidly sourced, tested and integrated into defence capability development. EU Member States 
are  responsible  for  defining  and  communicating  demand  signals  to  industry.  Achieving  a 
genuine  transformation  of  Europe’s  industrial  base  will  depend  not  only  on  supply-side 
measures,  but  equally  on  a  bold  transformation  of  demand  that  steers  industry  toward 
innovation  and  readiness  to  respond  to  those  demand  signals.  Member  States  should  be 
equipped to conduct defence procurement in a faster manner, conducive to more openness to 
new  entrants  and  to  rapid  integration  of  disruptive  technologies  in  capabilities  across  all 
domains, to face the rapidly evolving threat landscape. 

This Roadmap presents clear steps to accelerate the transformation of the EU defence industry 
and support New Defence  players.  It  focuses on three key objectives: i) better connect the 
defence and deep tech communities to accelerate the development of disruptive solutions and 
the emergence of New Defence actors, attract skills and talent, and accelerate spin-in benefits; 
ii)  accelerate  the  integration  of  advanced  technologies  into  military  capabilities  of  EU 
Member  States  to  achieve  EU  defence  readiness  and  effective  deterrence;  iii)    enhance 
industrial  advanced 
Europe’s  defence  production  capacity 
manufacturing solutions to deliver capabilities at speed, scale and in a cost-effective manner. 
It complements the Preserving Peace - Defence Readiness Roadmap 2030 of 16 October (6)  

through  disruptive 

The first part of the EU Defence Industry Transformation Roadmap provides an analysis of the 
lessons learnt from Ukraine for a new, more agile approach to defence in the EU, including 
by  supporting  the  emergence  and  growth  of  New  Defence  players.  It  also  underscores  how 
emerging  disruptive  technologies  profoundly  reshape  modern  warfare  by  integrating 
technologies such as AI, autonomous systems, and quantum technologies into capabilities that 
are  changing  the  way  military  operations  are  conducted.  This  transformation  enables  more 
adaptive, data-driven and resilient defence systems, re-defining modern warfare and deterrence.  

The  second  part  focuses  on  the  key  challenges  to  be  addressed,  and  the  corresponding 
actions  proposed.  It  identifies  four  main  areas  for  action:  supporting  the  full  investment 
journey of New Defence companies; accelerating the time to market of defence technologies; 
improving access to contracts and broadening the pipeline of innovative defence solutions; and 
fostering the skills and talent needed to sustain Europe’s defence technological edge. The swift 
implementation of the actions outlined in this Roadmap will create the conditions for the rapid 
emergence  of  a  new  defence  industrial  ecosystem  in  Europe,  fit  for  European  defence 
readiness. 

6 The Preserving Peace -  Defence Readiness Roadmap 2030 sets out clear objectives and milestones to achieve defence 
readiness by 2030, as outlined in the White Paper for European Defence: Readiness Roadmap 2030 - European Commission 

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2.  ADAPTING TO MODERN WARFARE: LESSONS FROM UKRAINE AND EUROPE’S EVOLVING 

DEFENCE PARADIGM 

2.1.  Learning from Ukraine: agility, innovation and rapid adaptation on the battlefield 

The  full-scale  Russian  war  of  aggression  against  Ukraine  has  underscored  the  centrality  of 
agility, responsiveness, and technological adaptation in modern warfare, alongside the need for 
ramped-up production and availability of sufficient mass. The EU and its Member States should 
embrace these lessons for their own defence readiness. 

Leveraging dual-use innovation 

Dual-use innovation and speedy integration of civilian technologies into military capabilities 
have  been  a  key  factor  of  success  in  Ukraine's  defence.  In  this  context,  building  stronger 
synergies  between  traditional  defence  industry  actors  and  the  civilian  tech  sector  across  the 
entire research and innovation ecosystem is of strategic importance.  

Faced with a numerically superior adversary, which had an advantage in artillery fire power on 
the battlefield,  Ukraine  successfully  leveraged its innovation  ecosystem to  rapidly and  cost-
effectively scale military drone and counter-drone systems, particularly First Person View 
(FPV)  drones,  and  apply  them  to  defence  purposes. These  inexpensive  yet  highly  effective 
short-range drones  enable Ukraine to inflict serious damage on Russian forces and maintain 
defensive  lines,  offsetting  persisting  shortages  in  traditional  defence  capabilities  such  as 
artillery.  At  the  same  time,  cyber  capabilities  have  been  critical  in  disrupting  adversary 
command-and-control systems and protecting Ukraine’s own communications and intelligence 
networks. 

Prioritising scalable and adjustable systems 

Software-defined weapon systems are a defining feature of the Ukrainian response. From real-
time data fusion and digital targeting tools to adaptive electronic warfare systems,  adaptable 
software solutions have become the engine of battlefield effectiveness.  

Modularity  and  open  architectures  are  key  to  rapidly  reconfigure,  upgrade,  or  integrate 
defence systems, drawing on commercially available interoperable technologies. Ukraine has 
been facing the challenge of adapting received weapon systems with limited interoperability to 
platforms  in  their  inventory.  This  experience  highlights  the  importance  of  embedding 
interoperability and modularity by design, embracing more flexible, scalable, faster and future-
proof  approaches  that  ensure  weapon  systems  can  rapidly  adapt  to  changing  needs.  It  also 
underlines the importance of maintaining control over the design authority of defence systems, 
enabling rapid adaptation and use free of foreign restrictions.  

Nurturing an agile ecosystem able to quickly provide operational solutions 

The Ukrainian defence industrial ecosystem, comprising both established industrial actors and 
a  growing  cohort  of  startups  and  SMEs,  can  integrate  operational  feedback  in  real  time,  to 
rapidly  develop  tailored  solutions,  and  deliver  them  at  remarkable  speed.  New  Defence 
companies have demonstrated an exceptional ability to deliver drones, secure communication 

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systems, and other software solutions in a matter of weeks. They can rapidly mobilise teams, 
software and hardware to maintain and regain military superiority on the battlefield.  

Organisational  and technological  agility  is the direct  consequence of procurement  models 
based  on  bottom-up,  decentralised  decision-making  approaches,  quick  testing  in  battlefield 
conditions,  end-user  feedback  integration  into  industrial  processes,  and  structured  local 
collaboration between innovators, end-users, and investors.  

The BRAVE1(7) platform has been central to this process.  This is why the Commission has put 
in place a partnership with Ukraine through BraveTech EU (8) – to support Ukraine with game-
changing  solutions  while  accelerating  the  transfer  of  battlefield-driven  knowledge  and 
innovation into Europe. This initiative will accelerate the development, testing, and deployment 
of  advanced  defence  solutions,  fostering  direct  collaboration  between  Ukrainian  and  EU 
companies. 

Ukraine shows that innovation also depends on reliable access to materials - both raw and 
processed, including advanced materials, and to components. Scalability depends on timely 
access to critical components (9). While Ukraine is partially yet successfully filling capability 
gaps  by  developing  indigenous  solutions  (10),  it  keeps  facing  structural  challenges,  such  as 
difficulties to mass-produce, in part due to limited availability of key components. 

Accelerating knowledge-transfer from Ukraine 

To further leverage the lessons from Ukraine’s war-time experiences and new management of 
defence, the Commission and the High Representative (HR), will strengthen the role of the 
EU Defence Innovation Office in Kyiv (EUDIO) to become an EU Defence Industry Office, 
monitoring  military  technological  developments  and  frontline  defence  innovation,  in  close 
cooperation  with  the  Ukrainian  authorities.  It  will  support  the  implementation  of  industrial 
ramp-up programmes, be a point of contact for Ukrainian authorities and EU stakeholders on 
funding and cooperation opportunities at EU level  related to defence, joint procurement and 
production  initiatives,  and  provide  EU  stakeholders  with  insights  into  the  most  recent 
technological developments on the battlefield. Furthermore, the EUDIO will monitor priority 
technology areas for joint development, such as drones, electronic warfare, cyber and battlefield 
medical technologies, as well as liaise with international partners. 

Following  the  provisional  agreement  reached  by  the  Parliament  and  the  Council  on  the 
Regulation to incentivise defence-related investments in the EU Budget, the Commission will 
start the process to associate Ukraine to the European Defence Fund (EDF). In addition, the 

7 BRAVE1 is Ukraine’s defence technology platform created to accelerate innovation and support the development of advanced 
military solutions. Launched in 2023 by the Government of Ukraine, it brings together government institutions, industry, and 
innovators  by  providing  organisational,  informational,  and  financial  support  to  defence  tech  projects  to  turn  battlefield 
experience into cutting-edge defence technologies. Brave1 - Ukrainian Defense Innovations. 
8BraveTech EU aims to boost resilience, reinforce security, and drive strategic investment in Europe’s defence industrial base. 
It brings together the European Defence Fund (EDF), the EU Defence Innovation Scheme (EUDIS), and Ukraine’s BRAVE1 
defence tech platform to create a unified framework for joint development, testing, and deployment of cutting-edge defence 
solutions. BraveTech EU - Defence Industry and Space - European Commission.   
9 The Critical Raw Materials Act is a key step in this direction, aiming to ensure the EU's secure and sustainable access to 
critical raw materials and reduce dependence on third-country suppliers. Critical Raw Materials Act - Internal Market, Industry, 
Entrepreneurship and SMEs. 
10 Key examples include the Sapsan ballistic missile and the FP-5 Flamingo cruise missile. 

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Commission,  in  close  cooperation  with  the  European  Defence  Agency  (EDA),  will  swiftly 
implement  BraveTech  EU  to  accelerate  the  development  and  deployment  of  technologies 
aligned with Ukraine’s defence needs, fostering close cooperation between EU and Ukrainian 
defence innovation ecosystems.  

2.2.  A European defence revolution in the making  

The  defence  investment  surge  in  Europe  creates  the  conditions  for  the  rapid  evolution  and 
uptake disruptive technologies and the emergence of New Defence players in the EDTIB. These 
two trends are driving a revolution in the European defence industry. 

Technological  innovations  transform  defence  capabilities  and  the  way  modern  warfare  is 
conducted  

Many of the critical technologies that are reshaping defence are inherently dual use in nature. 
Leveraging  the  EU’s  civilian  innovation  ecosystem  will  be  essential  to  integrate  these 
technologies  at  the  speed  and  scale  required  to  achieve  EU  defence  readiness.  Taken 
individually,  these  technologies  have  the  potential  to  bring  concrete  solution  to  operational 
issues  on  the  battlefield.  At  the  same  time,  it  is  paramount  that  the  potential  of  these 
technologies is integrated into more traditional defence capabilities and defence sub systems.  

AI is a strategic driver of military innovation. The future battlefield will be marked as 
much by algorithms and data as  by kinetic capabilities. AI applications  reshape  military 
strategy, accelerate decision-making, and enable precision operations. They enable automation, 
enhance command-and-control functions, and improve situational awareness through rapid data 
fusion and analysis, within a human-centric approach. They reduce human exposure to high-
risk environments, contribute to fewer casualties by limiting human combat interactions, 
and  support  real-time  operational  decisions.  Whether  it  is  on  drones  (air,  subsea,  ground), 
counter-drone  systems,  air  defence,  precision  striking,  Command  &  Control,  logistics,  and 
combat ready virtual reality, AI integrated solutions are central to defence superiority. 

Quantum is a key emerging technology for defence capabilities. Quantum sensors provide 
unparalleled precision in navigation and target detection, operating even in Global Navigation 
Satellite  System  (GNSS)-denied  environments.  Quantum  communications,  particularly 
quantum  key  distribution,  enable  ultra-secure  data  transmission,  safeguarding  military  and 
intelligence information from interception or future quantum-enabled cyber threats. Quantum 
computing will revolutionise operational planning by enabling the rapid processing of complex 
scenarios,  optimising  logistics  chains,  and  supporting  advanced  simulations  for  materials 
discovery  or  battlefield  dynamics.  With  approximately  32%  of  the  world’s  quantum-
specialised  companies  located  within  the  EU (11),  Europe  has  a  robust  technological  and 
industrial base supported by a vibrant ecosystem of research organisations, innovative startups, 
and established industry players. (12)  

11 The Joint Research Centre: EU Science Hub. 
12  The  Quantum  Europe Strategy further underlines  the  strategic  value  of  quantum  for  defence, highlighting  its  dual-use 
nature  and  transformative  potential.  The  EU  has  already  taken  measures  to  ensure  that  quantum  developments  are  both 
accessible and aligned with European defence and security priorities. 

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Space-based  technologies  increasingly  underpin  multidomain  operations  by  providing  the 
data  backbone  for  decision  superiority  and  operational  coordination  (13).  Space-based 
technologies provide advanced solutions for geo-spatial intelligence and situational awareness, 
secure communication on the battlefield as well as enhanced prevision for defence capabilities. 
Initiatives such as IRIS², Galileo’s Public Regulated Service, and the planned Earth Observation 
Governmental Service, together with the growing number of new space actors in the EU, will 
lead to further integration of space-based solutions in defence capabilities while de-risking and 
reducing dependencies. Moreover, secure and resilient connectivity technologies, including 
for quantum and AI-powered defence systems, where Europe has a strong competitive edge, 
are an essential enabler for defence.  

Cyber, as the fifth domain of warfare (14), is a central element of European and national defence 
and security strategy. Dual by nature, cybersecurity and cyber defence capacities are already 
defining the military might in the battlefield but are also central for the protection of critical 
infrastructures such as the communication network (terrestrial or space-based ones), the energy 
infrastructure or transport and the financial sectors. Cyber is a key component in any hybrid 
warfare campaign, designed to sow division and destabilise Europe. As outlined in the White 
Paper (15),  developing  and  deploying  cyber  defence  and  cyber  offensive  capabilities  is 
paramount. 

Over the recent years, the EDF has funded the development of numerous defence technologies 
and products leading to innovative solutions in AI, robotics, hypersonic weapon systems, cloud, 
new advanced materials, space-based technologies and quantum-based technologies. The EDF 
dedicates 4–8% of its annual budget to disruptive technologies.  

To further boost their development and enhance technological sovereignty, the Commission 
will  further  simplify  and  accelerate  the  EDF’s  R&D  grant  application  and  evaluation 
procedures  for  disruptive  technologies  (16).  The  Commission  will  also  reinforce  its  defence 
tech-watch  capacity  with  its  own  Joint  Research Centre (JRC) (17) and in  close cooperation 
with the EDA and Member States, to enhance EU-wide information-knowledge on emerging 
defence technologies, including with EU defence industry. In addition, the Commission will 
strive  to  ensure  the  maximum  support  possible  from  EU  defence  instruments  to  capability 
development within the Capability Coalitions. 

The rise of new actors drives changes in industrial practices and operational approaches, 
introducing greater agility and responsiveness  

The  emergence  of  New  Defence  actors,  such  as  innovative  SMEs,  small  mid-caps  and 
startups, is transforming how defence capabilities are developed, produced and deployed. 
By complementing established industry players, these companies are driving agile development 
processes, faster iteration cycles, and novel approaches to capability delivery, helping Europe’s 
defence sector respond more rapidly to changing operational needs.  

13 The EU Space Strategy for Security and Defence, adopted on 10 March 2023, underlines the growing strategic importance 
of  space  as  a  contested  and  competitive  domain,  calling  for  enhanced  protection  of  European  space  assets  and  the 
development of dual-use technologies supporting defence missions. 
14 Along with land, sea, air and space. 
15 White paper for European defence - Readiness 2030 - Defence Industry and Space 
16 Defence Readiness Omnibus - Defence Industry and Space. 
(17) Within the mandate given by the programme funding it 

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Several initiatives have been launched at national, EU and NATO level to support new entrants 
to  the  defence  industry  ecosystem,  their  integration  into  defence  supply  chains,  and  their 
collaboration with established players.  

The European Defence Industry Programme (EDIP) (18) aims to strengthen Europe’s defence 
industrial  base, 
their 
the  emergence  of 
competitiveness and resilience including through industrial reinforcement actions.  

innovative  SMEs,  and  enhance 

including 

The European Defence Innovation Scheme – EUDIS (19) - is the first EU initiative to provide 
targeted  support  to  new  entities  in  the  sector.  Launched  in  2022,  EUDIS  empowers  and 
accelerates a new generation of defence companies across Europe. It is set to  dedicate up to 
€1.5  billion  until  2027  to  foster  game-changing  technologies  and  strengthen  connections 
between  emerging  innovators  and  established  industry  players  through  regular  defence 
hackathons, a defence business acceleration programme, matchmaking, targeted R&D calls and 
access to equity financing. In addition, the Hub for EU Defence Innovation (HEDI), launched 
by the EDA in 2022, acts as a platform fostering close collaboration among Member States and 
EU  stakeholders  on  defence  innovation  matters.  The  NATO’s  DIANA  programme  (20),  the 
NATO Innovation Fund (21) and the recently launched Rapid Adoption Action Plan (22) also aim 
to accelerate the adoption of new defence technologies and support new defence actors. (23) 

To  leverage  the  transformative  potential  of  New  Defence  actors  in  support  of  EU  Defence 
Readiness, the Commission should provide substantial support to innovative SMEs as part 
of  the  defence-related  activities  of  the  European  Competitiveness  Fund  and  include 
measures facilitating their access to defence supply chains.  

3.  TURNING THE EU INTO A NEW DEFENCE POWERHOUSE 

Transforming the EU defence industry by incorporating lessons from Ukraine’s experience and 
harnessing  the  potential  of  both  disruptive  technologies  and  New  Defence  players  requires 
addressing a set of structural challenges. 

3.1. 

Supporting the full investment journey of defence companies 

The new generation of  European defence  players  is  attracting  growing  interest  from  private 
investors.  

The  EU’s  role  should  go  beyond  nurturing  early-stage  New  Defence  companies.  These 
innovators are a key pillar of the EU’s strategic autonomy and therefore should be able to find 

18 EDIP | A Dedicated Programme for Defence. 
19 Launched and funded under the European Defence Fund. 
20 DIANA | Home - The Defence Innovation Accelerator for the North Atlantic supports startups and researchers developing 
dual-use technologies for defence and security. 
21 The Nato Innovation Fund | NIF - A €1 billion venture capital fund investing in early-stage companies working on emerging 
and disruptive technologies with defence and security applications. 
22 The Rapid Adoption Action Plan aims to significantly accelerate the pace at which the Alliance adopts new technological 
products, in general to within a maximum of 24 months. 
23 The NIF is a multi-sovereign venture capital fund of EUR 1bn, backed by 24 Allies, investing in defence and deep tech 
startups. 

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in Europe the investment they need to scale and compete globally. Without such opportunities, 
they risk turning to foreign investors, undermining the EU’s security and defence interests. 

Ensuring both early-stage and late-stage funding for defence companies in Europe is an urgent 
priority. While the EU is already home to several defence unicorns, the growing number of new 
defence companies calls for greater investment efforts and access to capital. The EU should 
mobilise its entire financial ecosystem, including private equity, venture capital, pension funds, 
investment funds and asset managers, to support defence innovation from early-stage research 
to large-scale industrial production as needed for defence readiness 2030. 

The Commission has taken significant steps aimed at improving access to finance for defence 
companies, including small mid-caps, startups, scaleups and SMEs. Central to these efforts is 
the Defence Equity Facility, a Fund-of-Funds co-financed by the Commission and the EIF, 
expected to channel over €500 million in equities into EU defence companies by 2026 (24). The 
European Investment Bank (EIB) is increasing its support to defence companies, including a 
dedicated envelope to support access to debt for SMEs in defence industry supply chains. 

Additionally,  changes proposed in  the  Defence Readiness Omnibus will  enable  InvestEU to 
increase its financial support for the defence sector. The Commission is also building stronger 
synergies between defence and civilian focused funding programmes at EU level.  Horizon 
Europe  and  its  European  Innovation  Council  (EIC)  play  an  important  role  in  supporting 
companies  for  the  development  of  disruptive  innovations  such  as  quantum  technologies, 
biotechnologies, robotics and AI. From 2026, the EIC Accelerator will be able to support dual-
use  projects,  while  the  STEP  Scale-up  Scheme  will  support  innovation  in  critical  defence 
technologies.  The Commission’s proposal for the next Horizon Europe Framework Programme 
(2028–2034) aims to build on these efforts to further strengthen Europe’s integrated innovation 
ecosystem.  Moreover,  the  mid-term  review  of  Cohesion  Policy  enables  Member  States  to 
voluntarily  use  cohesion  funds  to  support  defence  and  dual-use  industrial  capacities  and 
technologies. 

Yet, the lack of growth capital is a persistent gap in the European defence innovation journey. 
This reflects a broader structural shortcoming in European capital markets, but it is particularly 
concerning  in  the  field  of  defence,  given  its  strategic  nature  and  implications  for  European 
security. 

Proposed action 

Together with EIB/EIF, the Commission will support the launch of an up to €1 billion Fund 
of Funds to provide growth capital to defence-related innovative SMEs and scale-ups and 
consolidate defence supply chains, with the support of private funds (venture capital, private 
equity, private credit, infrastructure), by Q1 2026.  

24  The  Defence  Equity  Facility  (DEF),  launched  in  January  2024,  combines  €175  million  in  funding  co-financed  by  the 
European Commission and the European Investment Fund (EIF) under InvestEU.  

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3.2.  Turbo-boosting the time-to-market of defence products, technologies and systems  

Testing and validation are essential steps in the journey to commercialisation of defence 
systems  and  technologies.  Research  and  technology  infrastructures  provide  the  essential 
capacity  to  accelerate  this  process,  enabling  disruptive  technologies  to  reach  operational 
readiness more quickly.  Yet, the defence innovation cycle from ideation to capability remains 
very slow and cumbersome, falling short to meet the defence readiness Europe needs to achieve 
by  2030.  Europe  needs  a  fundamental  shift  to  rapidly  turn  ideas  into  game-changing 
solutions for armed forces. 

Manufacturing capacity is also crucial to bring defence technology to market. However, 
it is expensive and requires major upfront investments. New Defence companies are often 
hesitant to commit such resources without clear commercial prospects, which slows time-to-
market  and  erodes  their  competitive  edge.  Such  companies  would  benefit  from  agile  and 
flexible approaches to manufacturing, such as manufacturing-as-a-service, including through 
the temporary repurposing of the manufacturing capacities of non-defence industry. In practice, 
larger  companies  from  any  sector  could  make  available  their  manufacturing  capacity  and 
secured facilities available to the EU defence industry, providing ready-to-use, scalable, and 
secure resources. The development of manufacturing capacity also requires secure access to a 
resilient,  sustainable  and  competitive  supply  of  downstream  products,  materials  and 
technologies. The ability of the defence industry to scale up is closely linked to a secure, circular 
and resilient supply of critical raw materials (25). 

The operational testing of technologies in a relevant environment is essential for defence 
companies. However, access to testing infrastructure is often limited. Capacity constraints 
and  lack  of  cross-border  mobility  across  the  EU  create  significant  obstacles  for  new 
entrants,  particularly  SMEs,  startups,  scaleups  and  small  midcaps.  This  significantly 
delays time to  market  for defence technologies.  Moreover, the EU defence market  is  highly 
fragmented,  with  different  regimes  for  certification  and  validation  of  technologies  across 
Member States. Evaluation and implementation processes are already lengthy and burdensome, 
and fragmentated certification procedures further slowdown the adoption of innovative defence 
solutions.  Limited  access  to  shared  data  for  defence  also  constrains  the  development  of 
advanced software-based capabilities, such as cutting-edge AI solutions for defence. 

With recent regulatory proposals, the Commission has taken significant steps aimed to further 
strengthen the integration of SMEs, small mid-caps, startups and scaleups into major defence 
projects by introducing more agile and accessible funding mechanisms in the EDF (26). This 
includes  the  use  of  Financial  Support  to  Third  parties  (cascade  funding)  in  R&D  projects, 
shorter  project  durations,  and  simplified  application  and  evaluation  procedures  tailored  to 
disruptive  technologies  and  SMEs.  A  more  innovation-friendly  regulatory  and  investment 
environment,  as  foreseen  under  the  forthcoming  European  Innovation  Act,  will  help  bring 

25It will be facilitated through the implementation of the Critical Raw Materials Act and the forthcoming Advanced Materials 
Act. The REsourceEU initiative will also contribute to this effort and frontload some of the deliverables of the Critical Raw 
Materials Act, such as the Critical Raw Materials Centre, and ensure that strategic projects within EU and around the world 
speedily transform into operational reality.  

26 European Commission proposes Regulation to incentivise defence-related investments in the EU budget - Defence Industry 
and Space; Defence Readiness Omnibus - Defence Industry and Space. 

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innovations  to  market  faster  and  enable  more  streamlined  procurement  processes.  The 
Commission will complement these efforts by proposing new measures that would accelerate 
the  time-to-market  for  new  entrants  and  offset  part  of  the  risks  that  they  encounter  when 
crossing the ‘valley of death (27).  

Proposed actions  

The Commission will: 

Propose a pilot instrument for agile rapid defence innovation [AGILE] , driven by speed, 
responsiveness and greater risk-taking. It will propose a set of activities, including challenges, 
with time-to-result not exceeding 6-12 months. The pilot will enable the testing and refinement 
of targeted actions to better facilitate the entry of innovative companies into the defence sector 
and the deployment of game-changing solutions for armed forces. It will accelerate the time-
to-market. It should also catalyse the development of innovative solutions, featuring low-cost 
advanced  technologies  and  products,  in  support  of  European  readiness  flagships.  The  pilot 
instrument should test new ways of engaging with new defence entrants and enable to draw 
lessons ahead of the next MFF. The Commission will table a proposal in Q1 2026.  

Facilitate access  to EU infrastructures, such  as the  Commission’s JRC’s facilities and AI 
Factories/Gigafactories, chips pilot lines, quantum facilities and infrastructures, and Member 
State owned operational testing environments, including regulatory sandboxes, to New Defence 
players, to facilitate the rapid validation and development of defence technologies, increasing 
fast-track and cross-border access. This will complement the EU network of testing facilities, 
building on EDA’s existing defence test and evaluation support [starting in 2026].  

Support responsive and flexible manufacturing capacity by proposing a Manufacturing-as-
a-Service  and  Security-as-a-Service  initiative.  These  approaches  would  allow  defence 
companies (particularly SMEs) to leverage existing industrial and security capacities, reducing 
upfront investment needs and accelerating production scale-up. This model would enable faster 
deployment  of  innovative  solutions,  help  companies  scale  production  efficiently,  and 
strengthen the resilience and responsiveness of the EDTIB [Q2 2026]. 

Reinforce  and  leverage  the  potential  of  the  28th  regime  concepts  to  support  defence 
companies in overcoming barriers to setting up, accessing finance, scaling, and operating 
across  the  Single  Market,  building  on  ongoing  work  in  this  area.  The  Commission  will 
propose  mutual  recognition  schemes  to  align  certification  and  validation  of  defence 
technologies  across  the  EU.  It  will  develop,  in  close  cooperation  with  HEDI  (EDA),  policy 
guidance and best practices for Member States, to foster coherent regulatory frameworks for 
the  acceleration  of  operational  testing  and  experimentation  and  support  the  rapid 
development and adoption of emerging technologies [by end 2026]. 

In  line  with  Data  Union  Strategy,  propose  the  establishment  of  a  trusted,  secure,  and 
interoperable  data  environment  with  the  creation  of  a  European  Defence  Data  Space  [by 

27  European  startups  often  encounter  two  ‘valleys  of  death’.  The  first  occurs  when  innovations  fail  to  become  marketable 
products, while the second, particularly challenging in Europe, happens when companies struggle to scale. EU Startup and 
Scaleup Strategy. 

10 

 
 
2028],  in  close  coordination  with  industry,  Member  States,  and  EDA,  to  facilitate  the 
development of game-changing capabilities for defence such as AI models, digital twins, and 
predictive  maintenance (28).  The  Commission  will  launch  a  reflection  process  with  Member 
States and industry.  

3.3.  Enhancing access to new defence capabilities 

Access to contracts, whether from public authorities or from private companies, is the holy 
grail of any startup. It generates significant positive spill-over effects, helping companies to 
attract new investors and customers. Recent EU initiatives such as Security Action for Europe 
(SAFE)  and  EDIP  are  significantly  increasing  funding  for  defence  and  promoting  joint 
procurement across Member States. Yet, SMEs, small mid-caps, startups and scaleups still face 
barriers to access defence contracts and fully benefit from this surge in defence investments.  

Firstly, most new entrants often face a knowledge and information gap when trying to 
venture into the defence sector. Many of them do not have direct access to end users, such as 
armed forces, prime contractors, or system integrators. They often lack basic information, for 
example on operational needs, that would enable them to adjust their solutions effectively to 
meet Member States’ defence capability requirements. 

Secondly,  defence  procurement  processes  remain  lengthy  and  complex  to  navigate, 
particularly  for  new  entrants.  They  were  designed  in  peace  time  and  for  large  system 
integrators. Defence procurement processes are also very often fragmented along national silos. 
Achieving a genuine EU defence single market is key for creating an environment in which 
startups, SMES and small-mid caps can develop, thrive and ultimately remain in Europe. New 
entrants  lack  the  specialised  knowledge,  resources,  and  experience  that  larger  established 
players  possess  to  effectively  manage  procurement  demands,  often  resulting  in  an  uneven 
playing field. This also limits their ability to scale their solutions widely across the EU.  

To fundamentally resolve these challenges, the EU must pivot from viewing procurement as a 
transactional process of buying products to a strategic act of investing in industrial capacity 
and resilience. Public procurement, accounting for approximately 15% of the EU's GDP (29), 
is  the  most  powerful,  underutilised  lever  for  building  the  resilient,  innovative,  and  scalable 
industrial base required for EU Defence Readiness by 2030. This strategic shift requires not 
only faster processes, but also a complete redefinition of “value” in defence contracting, moving 
beyond lowest cost to prioritise long-term industrial strength, technological sovereignty, and 
workforce development. 

Finally,  there  is  a  notable  disconnect  between  defence  R&D  efforts,  including  many 
collaborative projects supported by the EDF, and procurement processes.  Improving the link 
between  defence  R&D  and  procurement,  particularly  for  EDF-backed  projects,  brings  a 

28 The European Defence Data Space could build on the feasibility study conducted by EDA on the establishment of an EU 
Data Space for Defence use cases, to be published by end 2025. 

29 Register of Commission Documents - SWD(2025)332. 

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significant opportunity to accelerate the uptake of these promising technologies and strengthen 
EU defence readiness. 

The Commission has launched several initiatives to improve access to contracts for the defence 
industry,  in  particular  SMEs,  small  mid-caps,  startups  and  scaleups,  such  as  EUDIS 
Matchmaking and Business Accelerator. At national level, dedicated innovation units or hubs 
within Ministries of Defence have been set up to act as intermediaries between armed forces 
and the New Defence ecosystem (30). 

Proposed actions 

The Commission will:  

Launch EUDIS Tech Alliances, setting up a network of defence startup/scaleups and end-users 
(armed  forces)  around  priority  capability  areas,  aligning  with  SAFE’s  investment  priorities. 
Alliances will enhance transparency on needs of armed forces, facilitate closer collaboration 
between  innovative  companies  (including  from  Ukraine)  and  end-users  to  enable  direct 
feedback. This will help companies to better address Member States’ needs, with an initial focus 
on European readiness flagship projects [pilot launch by Q4 2025].  

Create a marketplace for EU backed defence technologies and products that would facilitate 
a fast-track procurement for EDF-backed projects and companies (with a particular focus on 
SMEs, small mid-caps, startups and scaleups) allowing Member States to procure directly from 
these  companies.  This  will  enhance  more  rapid  procurement  processes  and  increase  the 
visibility and adoption of EU-supported projects and innovative defence technology solutions 
[by Q4 2026]. 

Leverage its role as a potential customer of new dual-use companies, initially focusing on 
companies in the field of space [by Q4 2026], for example by purchasing services or products 
such as geospatial data from commercial suppliers. This will send a strong signal to the market, 
demonstrating demand for innovative capabilities, while attracting further contracts and private 
investment, thereby accelerating the growth of those companies in the EU.  

Encourage  Member  States  to  allocate  at  least  10%  of  armament  procurement  budgets  to 
emerging and disruptive technologies. To achieve this, it will work closely with the EDA to 
provide Member States with targeted advisory support to enhance the procurement of disruptive 
technologies  and  innovative  defence  solutions  (e.g.  via  EDA’s  Defence  Acquisition  Expert 
Network and HEDI) [by Q2 2026]. 

Support the transformation of defence procurement by revising the Directive 2009/81/EC 
Defence and Sensitive Security Procurement.  The revision will contain measures to facilitate 
Member States investments in defence through faster, more streamlined and more transparent 

30 For instance, some countries have created dedicated innovation units or hubs within their defence ministries, which focus on 
rapidly  prototyping  emerging  technologies  and  streamlining  contracting  procedures.  These  initiatives  are  supported  by 
substantial, ringfenced budgets and procurement strategies that allocate a significant share of resources to novel technologies 
such  as  AI,  quantum  computing,  and  autonomous  systems.  Examples  include  the  United  States’  Defense  Innovation  Unit 
established in 2015, recent initiatives in the United Kingdom, and similar structures established in EU Member States such as 
Greece, France and Germany, all aimed at accelerating the integration of cutting-edge solutions into defence capabilities and 
better connecting with the broader innovation ecosystem. 

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procurement  procedures.  The  revision  should  propose  measures  towards  user-friendly  and 
faster  procurement  for  innovative  SMEs,  fast-track  procurement  for  low-cost  products,  fast 
onboarding of innovative disruptive technologies and products and rapid adaptation of defence 
capabilities.  Emphasis  will  be  placed  on  engaging  with  startups,  scaleups,  and  SMEs  in  the 
defence sector to ensure their perspectives and interests are adequately represented.  

3.4.  Generating the defence skills and talents  

Defence  is  a  booming  industry  that  is  currently  experiencing  unprecedented  growth  and 
undergoing a profound transformation. The defence sector faces labour and skills gaps and a 
critical  talent  challenge  that  threatens  its  operational  capabilities  and  hence  impacts  EU’s 
security. In this context, a shortage of skills risk is a major bottleneck. Both established defence 
companies and new entrants compete to attract and retain talent, while the defence sector faces 
competition from other industries.   

On the supply side, the sector faces difficulties attracting and retaining professionals with the 
advanced skills needed for developing disruptive technologies for defence, including artificial 
intelligence,  quantum  computing  and  autonomous  systems,  as  well  as  for  production  and 
maintenance.  Competition  for  skilled  professionals  is  intense.  High-quality  jobs  with 
competitive wages and good working conditions as well as support to workers through ongoing 
transitions will strengthen the supply side.  

Security clearance requirements, including citizenship requirements, limit the mobility within 
EU,  as  well  as  access  to  global  talent  pools.  Women  are  also  under-represented  in  the 
workforce.  The  Commission  will  support  stakeholders  engaged  in  the  Large-scale  Skills 
Partnership in Aerospace and Defence under the Pact for Skills to pursue their work on skills 
forecasting,  upskilling  and  reskilling  programmes,  and  talent  engagement,  with  the  aim  to 
support  Member  States  and  industry  actors  in  upskilling  of  around  12%  of  the  existing 
aerospace and defence workforce each year and in reskilling 600,000 people for the defence 
industry by 2030.  

On the demand side, shortages arise within armed forces and procurement bodies that require 
sufficient expertise to specify, acquire and integrate complex and innovative defence systems 
effectively, as well as for innovative and fast procurement. Without these skills, technological 
advancements risk not being fully operationalised. To address this, the EDA is planning to offer 
targeted training programmes aimed at building the necessary expertise within armed forces 
and procurement bodies. 

Proposed actions 

The Commission will: 

In the framework of the Union of Skills, set up a Skills Guarantee pilot, that will help workers 
at risk of unemployment or in professional transition from the automotive sector and its related 
supply chains move into jobs in strategic and growing sectors such as defence [as of Q4 2025].  

Set up a sector-specific EU Defence Industry Talent Platform to support traineeships in dual-
use  and  defence  SMEs,  small  mid-caps,  startups  and  scaleups,  through  vouchers,  with  the 

13 

 
purpose  of  increasing  visibility  of  employment  opportunities  for  young  professionals  in  the 
defence sector and improving cross-European access to talent for defence SMEs, small mid-
caps startups and scaleups (31). [by Q4 2026].  

Leverage  existing  EU  online  academies  (such  as  the  EUSPA  Space  Academy  and  Digital 
Skills Academies) to foster defence-related skills in line with EU industry needs and strategic 
priorities  [starting  Q2  2026].  Building  on  this  foundation,  explore  the  establishment  of  a 
standalone EU Defence Industry Skills Academy [from 2028 onward]. (32) 

4.  CONCLUSION – THE IMPORTANCE OF A NEW DEFENCE INDUSTRIAL ECOSYSTEM 

The European defence industry is a strategic resource to achieve the objectives of the Defence 
Readiness Roadmap. Yet, it needs to go through a profound transformation process, and shift 
of mindset from peacetime to defence readiness.  

Ukraine has managed to put in place a “state-of-the-art” defence industrial ecosystem. The 
Ukrainian  defence  industry  is  pushed  to  continuously  innovate,  not  only  to  develop  new  or 
complex systems, but also to develop low-cost solutions and to enhance the military edge of 
existing  defence  capabilities.  Ukraine  has  transformed  its  defence  industry  and  created  the 
conditions for game-changing solutions to be quickly delivered to its armed forces, and for new 
defence entrants to play a central role in this effort, alongside established players. 

Europe must learn from Ukraine. Development and adoption of disruptive innovation should 
no longer be a nice-to-have policy. It must become instrumental to push agility, speed and scale 
in  the  defence  industry  that  Europe  needs.  The  role  of  EU  Member  States  in  transforming 
capability demand signals is unique and crucial, guiding industry toward greater innovation, 
competitiveness,  resilience,  and  readiness.  The  Commission  is  committed  to  providing  the 
necessary support to incentivise and accelerate this transformation. 

New Defence players can accelerate this trend, due to their appetite for disruptive solutions, 
new  approaches,  and  risk-taking.  It  is  imperative  to  create  the  conditions  for  their  rapid 
emergence  and  their  collaboration  with  established  players.  Europe  needs  a  transformed 
defence  industrial  ecosystem  that  brings  together  established  industry  leaders,  New 
Defence players, and the broader tech community. This transformed ecosystem should be 
able  to  fully  unleash  its  industrial  strength  and  innovation  power,  and  deliver  defence 
capabilities with unmatched speed, scale, and efficiency. 

The Defence  Industry Transformation  Roadmap  proposes  clear steps  towards achieving that 
goal. It is therefore a key enabler for Europe’s defence readiness 2030, including in supporting 
defence flagships. The Commission will immediately launch the proposed actions outlined in 
this Roadmap to initiate the transformation of Europe’s defence industrial ecosystem, and scale 
them up as of 2028. To monitor its implementation, foster the sharing of best-practices between 
Member  States  and  incentivise  the  rapid  development  of  measures  at  national  level,  the 

31 Supported by existing EU instruments, including ESF. 
32 Taking into account the ongoing EU Skills Academies review.   

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Commission will organise an Annual Strategic Dialogue on Defence Industrial Transformation, 
bringing together Member States, the defence industry and the EDA.  

15