The United States has long understood a fundamental truth: victory in war is not solely determined by size, but by speed and creativity. Innovation has always been a critical factor in conflict. Armor protected knights until the advent of the crossbow. High walls fortified cities until cannons emerged. Trenches became obsolete with the rise of fast-moving mechanized forces. The lesson is clear: a military that fails to innovate risks falling behind.
Yet, Europe remains entrenched in an outdated defense procurement model, favoring a handful of large contractors over the fresh ideas of startups and entrepreneurs. Amidst significant geopolitical unrest and shifts in international diplomacy, this must change. The disparity in defense innovation between the US and Europe is striking. A significant portion of US defense contracts, approximately 25%, are awarded to small firms – startups and specialized companies that are developing the future technologies of warfare. This is not accidental; the US government has deliberately cultivated an environment where defense innovation thrives.
The Defense Advanced Research Projects Agency (DARPA), which funds risky, but potentially transformative projects, and the Defense Innovation Unit (DIU), which assists the military in adopting emerging innovations, are central to the nation’s success. These organizations have had enormous impacts on civilian technologies as well. For example, DARPA funding helped launch the first self-driving cars. Many engineers participated in a DARPA challenge, offering prize money to teams that could develop autonomous vehicles designed to navigate challenging terrains without human intervention. This led to the launch of Waymo, a company in the autonomous vehicle sector now valued at £35 billion.
In contrast, Europe clings to an antiquated system. In the UK, a few major defense contractors dominate government procurement, severely limiting opportunities for innovative newcomers in critical fields like advanced materials. Throughout the continent, defense startups are often treated as speculative ventures rather than essential contributors to national security. The result is an industry that moves slowly, incurs excessive costs, and lacks the dynamism necessary for modern warfare. This is further exacerbated by a regional cultural disinclination among private investors to invest in defense, creating a significant problem. It is ironic that this culture, originally encouraged after two World Wars to prevent inter-European conflict, is now becoming a barrier to protecting Europe.
Europe needs a new defense technology ecosystem, and the situation in Ukraine serves as a stark illustration of the cost of complacency. There, innovation has fundamentally reshaped warfare. Small, agile startups have developed inexpensive drones capable of neutralizing enemy tanks worth millions. Engineers fresh out of university are programming weapons that would have been unimaginable a decade ago. This highlights the nature of modern warfare: high-tech, decentralized, and led by those who can iterate and adapt the fastest.
Failing to support new technology risks not only stagnation but also a very dangerous reliance on a few suppliers, who could dictate terms or withhold critical resources during a crisis. Europe needs to fundamentally rethink its defense industrial strategy and act swiftly. The first step is joint procurement. A fragmented defense market, where each country insists on its own suppliers and champions its national companies, weakens Europe as a whole. This results in a multitude of incompatible weapon systems. Establishing baseline standards for joint procurement would enable Europe to generate a defense ecosystem that is more competitive, cost-effective, and resilient.
Secondly, supply chains must be diversified and scrutinized. The war in Ukraine has revealed the vulnerabilities of Europe’s supply networks to disruption. A continent incapable of reliably producing and distributing vital materials in wartime has already lost the fight. Securing a consistent and secure flow of essential resources should be a top priority, not an afterthought. Serious gaps exist in our supply chains that must be closed quickly.
European governments must also change their approach to procurement. Startups cannot thrive if they are excluded from major contracts from the start. Governments need to adopt the US model: fund bold ideas, take calculated risks, and support innovators before they prove themselves at scale. Defense innovation does not occur in the boardrooms of established firms. Instead, innovation happens in the labs and workshops of those willing to challenge the status quo. The financial risks associated with backing these young entrepreneurs are far outweighed by the security threats that can arise from neglecting them. European investment in defense startups is absolutely vital.
In the modern era, a single drone can cripple a military convoy. A well-placed electronic warfare tool can render an air-defense system inoperative. A targeted electromagnetic pulse (EMP) detonated over the continent could plunge Europe into darkness. AI-driven jamming can blind enemy satellites. These technologies are shaping the future of warfare. They exist now and are progressively accessible. In short, future conflicts will be won not by those with the largest armies, but by those with the best technology, the quickest decision-making, and the most adaptable systems. European governments are already lagging behind the competition. If they fail to act immediately, they may find themselves permanently disadvantaged. It is time for Europe to recognize what the US has understood for decades: innovation wins wars. And innovation begins with those who dare to disrupt.
