The United States has long understood a simple truth: war is won not by size alone, but by speed and creativity. Indeed, innovation has always been crucial in conflict. Armour made knights safe until the crossbow came along. High walls protected cities until cannons emerged. Trenches were made obsolete by fast-moving mechanised forces. The lesson: a military that cannot innovate is one that falls behind.

Yet Europe remains stuck with an outdated model of defence procurement – one that favours a handful of bloated contractors doing the same old thing over the fresh ideas of startups and entrepreneurs. Against a backdrop of serious geopolitical unrest and diplomatic realignment, this must change.

The gap between the US and Europe in defence innovation is striking. At least 25% of US defence contracts go to small firms – startups and specialist companies that are building the future technology of conflict. This is not an accident. The US government has deliberately nurtured an environment where defence innovation thrives.

The key to its success is the Defense Advanced Research Projects Agency (DARPA), an institution that backs risky but potentially transformative projects, and the Defense Innovation Unit (DIU), which helps the military adopt emerging innovations. Their projects have also had enormous impacts on civilian technologies. It was DARPA funding, for instance, that led to the first self-driving cars. Many engineers participated in a DARPA challenge offering prize money to teams that could develop autonomous vehicles capable of navigating difficult terrains without human intervention. This led to the launch of Waymo, an autonomous vehicle company now worth £35bn.

Europe, in contrast, remains wedded to an antiquated system. In the UK, a handful of defence contractors dominate government procurement, leaving little space for disruptive newcomers in critical fields like advanced materials. Across the continent, defence startups are treated as speculative ventures rather than essential contributors to national security. The result is an industry that moves too slowly, costs too much, and lacks the dynamism required for modern warfare. Add to this a regional cultural reluctance among private investors to put money into defence, and you have a problem.

It’s ironic that this culture, deliberately fostered after two World Wars to avoid inter-European conflict, is now becoming a barrier to protecting Europe from harm. In other words, the world’s greatest peace project is now threatened by its failure to take the steps needed to become conflict-ready.

Europe needs a new ecosystem for defence tech

Nowhere is the cost of our complacency clearer than in Ukraine. There, war has been reshaped by innovation. Small, nimble startups have built the inexpensive drones that are taking out enemy tanks worth millions. Engineers fresh out of university are programming weapons that would have been unthinkable a decade ago. This is the nature of modern warfare: high-tech, decentralised, and led by those who can iterate and adapt the fastest.

I have personally stressed to policymakers in my native Germany that failing to support new technology risks not just stagnation but also a very dangerous dependency on a few suppliers. Those suppliers could dictate terms or withhold critical resources in times of crisis.

Europe needs to rethink its defence industrial strategy from the ground up – and then get moving. The first step is joint procurement. A fragmented defence market, in which every country insists on having its own suppliers and favours its own national champions only weakens Europe as a whole. We have a multitude of incompatible weapon systems because of this. By putting in place a baseline standard for joint procurement, Europe could create a defence ecosystem that is more competitive, more cost-effective, and more resilient.

Secondly, supply chains must be diversified and scrutinised. The war in Ukraine has exposed just how vulnerable Europe’s supply networks are to disruption; a continent that cannot reliably produce and distribute the materials it needs in wartime is a continent that has already lost the fight. Ensuring a steady and secure flow of critical resources should be a priority, not an afterthought. There are serious gaps in our supply chains. These must be closed — fast.

We must back entrepreneurs

European governments must also change the way they think about procurement. Startups cannot flourish if they are locked out of big contracts from the outset. Governments must follow the US model: fund bold ideas, take calculated risks, and support innovators before they prove themselves at scale.

Defence innovation does not happen in boardrooms of established firms. It happens in the labs and workshops of those willing to challenge the status quo. The financial risk of backing these young, hungry entrepreneurs is dwarfed by the threats to security that can arise from neglecting them.

European investments in defence startups are absolutely vital, and I choose that word deliberately. Nowadays, a single drone can cripple a convoy. A well-placed electronic warfare tool can render an air-defence system useless. A targeted electromagnetic pulse (EMP) detonated over the continent could blackout Europe overnight. AI-driven jamming can blind enemy satellites. These technologies are shaping the future of warfare. They exist now, and they are increasingly accessible.

In short, the conflicts of the future will not be won 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 behind the competition. If they do not act now, they may find themselves permanently so.

It is time for Europe to recognise what the US has understood for decades: innovation wins wars. And innovation starts with those who dare to disrupt.