National and pan-European collaboration, clearer operational needs, faster procurement and aligned financing are essential to enable rapid innovation and scalable deployment. Only through coordinated action and continuous adaptation can Europe out-innovate its adversaries, according to Roland Berger’s Strength Through Innovation report.
At the beginning of 2025, Roland Berger published “The defence imperative: Driving innovation and resilience on Europe’s path to strategic autonomy”. It defined a “deterrence threshold” – the industrial output needed to discourage potential aggressors – that is essential for the future security of Europe.
This study, “Strength Through Innovation: A vision for a new innovation ecosystem for European defence”, builds on that foundation, based on findings from a series of in-depth interviews with experts across the military, traditional defence industry, startups, industry associations and research institutions, and combined with independent research from the Roland Berger Institute.
Battling a sluggish European defence innovation ecosystem, significant reform is needed for Europe to become – and remain – an effective deterrent. According to Roland Berger’s study, limited coordination between stakeholders, both domestically and internationally, is fragmenting defence innovation.
“Europe cannot out-innovate its adversaries with a fragmented system. Clear priorities, coordinated funding and faster pathways to deployment are key to shaping a future-ready defence innovation landscape.” says Kai Balder, Senior Partner at Roland Berger.
A vision for a new European ecosystem
Analysing structural challenges and existing strengths, the study uncovers how Europe’s ability to deter relies on a resilient, innovation-driven defence ecosystem built around three pillars: an agile regulatory and procurement framework that tolerates managed risk and accelerates capability delivery; predictable and strategically aligned financing; and importantly closer collaboration between armed forces, industry, startups and research.
The United Kingdom’s emerging 40–40–20 force-mix logic – a blend of autonomous or uncrewed systems, hybrid or optionally crewed systems, and big-ticket, high-end systems such as advanced fighter aircraft – is cited as a model for the distribution of future combat capability, unveiled in 2025 and based on Ukraine’s experience.
Pan-European inspiration and coordination is most essential to ensure that knowledge, capabilities and resources flow seamlessly to create a resilient and scalable ecosystem. As outlined in the European Union’s Defence Industrial Strategy, deeper collaboration has the potential to generate annual cost savings of EUR 24.5-75.5 billion.
Civil and defense R&D spending in Europe and the US
Coupled with historically limited defense spending, Roland Berger’s survey argues there has been a chronic underinvestment in both R&D and operational experimentation in Europe – in particular compared to the US, with the amount of capital invested significantly lower. In 2025, Europe made 295 deals (3,273m EUR capital invested) versus the US’ 444 deals (14,405m EUR capital invested).
As a result, many European defense startups are undercapitalised, limiting their ability to survive the scale-up phase and reinforcing the structural funding gap that prevents promising technologies from reaching operational relevance – ultimately slowing the development of a functioning, integrated innovation ecosystem.
Roland Berger’s analysis reveals that there is no single path to defence innovation at speed and scale. For Europe, the key lesson for deterrence is to master both logics: strengthen military-driven innovation structures while simultaneously opening the ecosystem to civilian tech talent, startups and non-traditional players.
“Europe does not lack innovation, it lacks integration at scale. Fragmented funding and limited operational experimentation are slowing the path from breakthrough technology to deployment, and Europe must act now if it wants to futureproof itself. The priority now is to combine robust innovation structures with open access for startups, tech talent and non-traditional players,” says Rachel Hugo, Senior Partner at Roland Berger.
Roland Berger experts set out key actions for each European stakeholder in the defence innovation ecosystem, demonstrating how to turn fragmented initiatives into a sustainable deterrent:
- Armed forces: Clearer requirements and direct engagement with innovators
- Procurement: Flexible, fast and innovation-friendly procurement
- Defence primes: Act as innovation integrators
- Startups: Access to funding, testing and operational feedback
- Civil industries: Dual-use collaboration and knowledge transfer
- Research bodies: Focused, mission-oriented defence R&D
The full report, with advice and insights from experts across the military, traditional defence industry, startups, industry associations and research institutions can be found here: A vision for a new European defense ecosystem | Roland Berger
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Post written by: Vicky Maggiani
Vicky has worked in media for over 25 years and has a wealth of experience in editing and creating copy for a variety of sectors.
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