The European Commission has published an ambitious roadmap to modernise the EU’s defence industry. Its goal is to build a new kind of European defence ecosystem, where traditional industry and emerging New Defence companies operate side by side.
The EU Defence Industry Transformation Roadmap is guiding Europe towards a new operational model where defence innovations emerge faster, more flexibly and in closer alignment with operational needs.
The roadmap sets out three main objectives:
- Strengthen collaboration between traditional defence industry players and deep tech focused, so-called New Defence companies. This will accelerate the development and deployment of new innovations.
- Speed up the integration of advanced technologies into EU member states’ defence systems. Key areas include artificial intelligence, quantum technology, cyber solutions and space systems.
- Boost European production capacity and industrial agility. This will help improve supply chain resilience and production cost-efficiency.
The roadmap promises both significant funding and reforms, opening new pathways for the commercialisation of technology. It recommends that member states allocate at least 10% of their defence procurement budgets to new, disruptive technologies. The aim is to strengthen Europe’s technological sovereignty at a time when old partnerships are being reshaped.
Funding, infrastructure, expertise and European technology
Transforming Europe’s defence industry is not only a technological challenge but a wide-ranging change process that requires fresh thinking, courage and collaboration.
The roadmap emphasises that increasing funding or developing individual technologies alone is not enough. We need a holistic ecosystem, where innovations can move quickly from research labs to practical applications and the market. This requires not only substantial financial investment but also flexible infrastructure, continuous skills development and close cooperation between traditional industry, startups and research institutions.
European technological sovereignty requires an ability to combine these elements into a seamless whole, where new ideas, expertise and resources meet rapidly evolving defence needs. The roadmap’s actions are designed to create exactly this kind of environment, enabling European defence technology to grow, renew and increase security.
Key actions to achieve the roadmap’s goals include:
- Increased funding
A new billion-euro fund is being set up to provide growth capital for defence startups and SMEs through the European Investment Bank. In addition, they will have access to funding from the InvestEU programme and new financial instruments. - Rapid innovation pilots and use of test infrastructure
EU testing and development environments will be opened to new players more widely, to shorten development cycles to 6–12 months from innovation to final product. - Procurement reform
Technology alliances will be established to link defence tech companies with end users. Procurement rules will also be revised and a new marketplace created to help innovative companies involved in EU projects access defence procurement more quickly. - Skills development
European expertise in the defence industry will be enhanced through the creation of the EU Defence Industry Talent Platform and other training programmes. The goal is to reach 600,000 reskilled workers by 2030.
European New Defence is built on collaboration
New Defence refers to a transformation in defence innovation, driven by technological advancement, the use of civil and dual-use technologies, software-based warfare and agile innovation cycles. The roadmap aims to embed this approach across the European defence industry.
Russia’s war of aggression in Ukraine has brutally demonstrated that Europe cannot rely on slow peacetime processes. Technologies must be tested, deployed and updated continuously. This is why Europe’s defence industry is being renewed.
The new ecosystem will be built through close collaboration between traditional industry, research institutes, startups and SMEs. The traditional industry must be complemented with a fast-moving, innovative layer. In fact, since 2022, more than 230 defence startups have emerged across Europe. Modular solutions, deployable in just months, are replacing lengthy development cycles that previously spanned decades.
Finnish companies and VTT at the forefront
Finland holds a unique position in this development. Space technology company Iceye and quantum computing firm IQM have received a lion’s share of defence and dual-use tech venture capital investments in the Nordic region. Since 2019, 80% of such investments have gone into space and quantum technologies – areas where Finland is among the global leaders.
VTT is at the heart of this new ecosystem, acting as a bridge between research and industry. We help companies turn innovations into safe, tested and market-ready products.
Our world-class expertise in quantum technology, AI, cybersecurity, space technology and next-generation communications networks is available to companies of all sizes. In addition, VTT’s pilot environments and cleanroom facilities across Finland provide a high-quality infrastructure for testing and development.
Challenging times bring new opportunities for businesses
For Europe, strengthening defence is an existential issue – but at the same time, it offers growth opportunities for companies. The roadmap’s message is clear: Europe is investing in defence technology on an entirely new scale.
Now is the time for companies to grow their role in securing Europe. This requires them to accelerate innovation, build partnerships and tap into available funding. VTT’s role is to ensure that the best solutions are developed into finished products that strengthen European security.
Read more: EU Defence Industry Transformation Roadmap
Meet our team
Sauli Eloranta leads VTT’s activities related to defence technologies and is an expert in defence technology development. Under Eloranta’s leadership, VTT’s expertise in areas such as cybersecurity, space technologies, Arctic environments, situational awareness and surveillance applications, as well as materials engineering, can also be applied to the defence industry. He has played a key role in advancing the New Defence thinking, bringing the NATO DIANA innovation accelerator to Finland and promoting access for Finnish companies to defence markets. In addition, he serves as the head of the Digital Defence Ecosystem network, which fosters collaboration among industry stakeholders. Before joining VTT, Eloranta had a long career in the marine industry. He worked at Rolls-Royce and later at Kongsberg Maritime as Technology Director, where he led technological development in maritime transport during the transition to autonomous shipping.
