Bringing Dynamism to European Defense: a new report

The state of European defense procurement today, what's working and not working, and where we should be heading.

We believe that Europe’s current financial, political, and cultural climate does not enable or reward mission-driven entrepreneurship.

As the world becomes more uncertain, we are waking up to how innovation in defense has been left to wither on the vine. This stems from capture by incumbents, wishful thinking, and a dire lack of investment.

We’ve laid out our thinking on why investors have a responsibility to act, but this is only part of the picture.

The success of all investment is in part determined by wider context - whether it’s political, institutional, or regulatory. Innovation doesn’t speak for itself. These effects are particularly strong in a highly regulated setting, where governments are the only customer.

Unfortunately, defense acquisition in much of Europe is fundamentally broken.

It relies on slow-moving systems designed for the peacetime purchase of hardware. It’s starved of funding by governments, who view defense as a painless source of savings. Meanwhile, the system has been captured by a handful of incumbents who lag the cutting edge.

We believe that openness is the best way to drive change. That’s why we’re sharing our internal assessment of where the system has gone wrong in Europe, based on our research, as well as conversations with former military officers and officials, executives at leading defense technology companies and investors. It dives into:

• How Western Europe is still approaching defense as if we are operating in peacetime;

• Our analysis of UK government defense purchasing data, revealing that despite public assurances to the contrary, our dependence on the primes has only deepened;

• How UK government attempts to engage startups have amounted to innovation theater, with little meaningful pull-through;

• The lessons we can learn from elsewhere in Europe;

• An initial sketch of some principles for reform.

We’re in the early stages of this work and we will continue to gather more examples of good and bad practice across Europe. We hope with time that the good to bad ratio will improve.

If this resonates with you, or you have feedback or stories you want to share, please get in touch with us. Similarly, if you are a founder working in defense or a related field, whichever stage of your journey you’re on - we always want to hear from you.