Emerging Defence and Dual-Use Technology Trends in Europe
The European defence and dual-use technology landscape is undergoing a fundamental transformation driven by urgent geopolitical pressures, renewed strategic commitments, and unprecedented levels of public investment. NATO and the European Union have identified a core set of emerging and disruptive technologies—AI, autonomy, quantum, advanced materials, space systems, and cyber capabilities—as critical to both deterrence and long-term strategic autonomy. Recent initiatives such as the NATO Innovation Fund (€1B), the European Defence Fund (€8B), and industrial support mechanisms like ASAP and EDIRPA are not only reshaping defence procurement but also unlocking new market opportunities for high-growth technology ventures. For investors, this signals a paradigm shift: defence is no longer a restricted sector dominated by legacy contractors, but a dynamic, innovation-driven market increasingly open to dual-use startups, scaleups, and tech-intensive SMEs.
This new investment landscape is characterised by structural demand, public co-financing, and clearly articulated strategic roadmaps, reducing risk and expanding exit pathways. Startups developing AI-enabled decision systems, advanced robotics, resilient space infrastructure, or quantum-secure communications are already securing public funding and attracting strategic acquisition interest from established primes. Moreover, NATO and EU procurement priorities offer long-term visibility: investors can align capital with defined capability gaps in unmanned systems, energy resilience, next-gen communications, and cyber-EW solutions. As defence spending becomes a growth engine for European technology sovereignty, early entrants with domain knowledge and the right partnerships will be well positioned to build outsized returns while shaping the future security architecture of the continent.