The European Union’s Push for Rapid Defence Innovation
Facing increasing vulnerability, the European Union is making a concerted effort to keep up with the rapidly evolving landscape of war technology. Brussels is aiming to accelerate the transition from research labs to real-world deployment, emphasizing faster and more flexible innovation to address new security challenges.
The latest initiative, the Programme for Agile and Rapid Defence Innovation (AGILE), seeks to invest €115 million in disruptive defence technologies such as artificial intelligence (AI), quantum technologies, and drones. If approved, this programme would represent a significant shift from the EU’s traditional slow defence funding model by prioritizing speed, risk-taking, and rapid deployment of new technologies.
Understanding AGILE
Proposed in March 2026 by the European Commission, AGILE is a fast-track funding tool designed to move defence technologies from development to deployment much faster than existing EU programs. Under its current structure, it will finance projects that are already relatively advanced, focusing on technologies that can be tested, validated, and used by armed forces within one to three years. Examples include mission-driven AI systems for military decision-making, situational awareness, or autonomous systems, as well as projects involving quantum computing and advanced robotics and drones.
AGILE aims to fund both the technical development phase and the transition to real-world use, including prototyping, field testing, and initial production. It introduces shorter application and evaluation timelines, with funding decisions expected within months rather than years. Unlike traditional EU schemes, AGILE allows single companies to apply, removing the need to form large multinational consortia. Funding can cover up to 100% of eligible costs, reducing financial risk for companies. It also allows retroactive funding, meaning companies can be reimbursed for work already carried out.
Key Features of AGILE
- Funding Allocation: AGILE is expected to allocate at least €115 million in its initial pilot phase, for around 20 to 30 projects. Individual projects are likely to receive between €1 million and €5 million, depending on their scope and maturity.
- Target Beneficiaries: The primary targets are startups, SMEs, and scale-ups working on dual-use or defence technologies. These companies will benefit from faster funding cycles, reduced administrative burden, and a clearer path from product to market.
- Support for Larger Companies: Larger defence companies may also benefit indirectly by integrating these innovations into their systems or partnering with smaller firms.
- Benefits for Armed Forces: Armed forces in EU member states are expected to gain earlier access to new capabilities, improving operational readiness.
For EU citizens, the impact is indirect; it includes stronger security, increased technological sovereignty, and new economic opportunities in high-tech sectors such as AI, robotics, and space.
Approval and Implementation
AGILE still requires approval by the European Parliament and the Council before it can be formally launched. If adopted, the initial proposal calls are expected to begin around 2027, with funded projects starting shortly after.
Context: Previous Initiatives
AGILE joins previous initiatives like the European Defence Fund and the EU Defence Innovation Scheme to support innovation. These programmes helped fund research and collaborative projects across member states. However, they were largely focused on long-term development and large consortia and have been criticized for being too slow and complex to support rapid, high-risk innovation.
Urgent Need for Agile SMEs
There is a mismatch between the speed of technological change and the pace of EU defence systems. In conflicts such as the war between Iran and the US, low-cost drones are redesigned and redeployed in a matter of weeks. Meanwhile, AI-driven targeting and cyber tools are updated continuously on the battlefield. By contrast, traditional European procurement and funding processes can take several years from approval to deployment, creating a gap where technologies exist but are not delivered in time to be operationally relevant.
Many of these innovations come from startups and SMEs, which often lack the resources or administrative capacity to navigate complex EU funding schemes. As a result, solutions stall, are commercialized elsewhere, or fail to reach defence users altogether.
How Has the EU Boosted Defence Innovation So Far?
ReArm Europe and the EU Defence Industry Transformation Roadmap are the bloc’s 2025 flagships towards defence innovation and autonomy by 2030. Over €800 billion will accelerate time-to-market, boost scale-ups, and empower new defence innovators for a borderless, more responsive EU defence market.
The European Defence Fund (EDF) is the EU’s primary innovation plan. It supports companies with €7.3 billion in funding for 2021-2027 to develop disruptive defence technologies. €2.7 billion is allocated to research and development (R&D) for defence capabilities, while €5.3 billion is allocated to skills development.
Grants target critical future military domains, such as AI, cyber, space defence, and drone systems. For 2026, the Commission mobilised €1 billion for R&D in specific defence equipment: endo-atmospheric interceptors, battle tanks, multiple rocket launchers, and semi-autonomous vessels.
With €1.5 billion for 2025-2027, the 2025 European Defence Innovation Scheme (EUDIS) lowers entry barriers into the defence market for smaller innovators and SMEs. It finances a new generation of defence companies, supporting them throughout their life cycle until they become key players in defence innovation.
Between 2026 and 2027, the European Defence Industry Programme (EDIP) allocates €1.5 billion to member states’ defence procurement cooperation, manufacturing skills, and production gaps. EDIP also supports Ukraine’s defence industry with an additional €300 million.
The Defence Equity Facility (DEF) allocates €500 million to the private fund ecosystem investing in European companies developing defence innovations. It targets venture capital, private equity funds, and private debt funds.
The 2025 Security Action for Europe (SAFE) mobilises €150 billion in loans to boost member states’ defence readiness. By scaling up joint procurement capability, the plan acts as a temporary emergency financial support for the national defence bases.
The European Defence Agency (EDA) supports the Commission’s goals through the Hub for European Defence Innovation (HEDI). It translates defence innovation from the lab to the field, accelerating cooperation among member states.
Investments Are Growing, But the EU Is Still Lagging
Member states’ defence R&D rose from 6 per cent in 2023 to 20 per cent in 2024, reaching €13 billion. Investments increased by an additional €4 billion in 2025, according to ongoing EDA estimates.
Likewise, defence research and technology (R&T) investments hit €5 billion in 2024, up from €3 billion in 2023.
Latest EU Commission data show that between 2021 and 2024, the EDF has funded an average of around 60 research and development defence projects per year, with a record of 62 in 2024.
Among the fund’s categories covering key defence domains, “Innovation and SMEs” has received the most investment since 2021. Member states with the largest defence base markets dominated EDF projects.
Leading European research institutes, universities, government bodies, and major national defence industries benefited the most from EDF investments. France was the frontrunner with 167 eligible entities, followed by 144 German, 139 Italian, and 130 Spanish entities. Slovakia and Croatia registered only 9 entities. France, Spain, Greece, and Italy coordinated most of the projects.
Despite the growing trend in member states’ defence R&D, the US and China still outpace Europe.
Research, Development, Test, and Evaluation (RDT&E) represent 16% of the US defence budget, compared to 4% in the EU. In 2024, US RDT&E hit €138 billion, registering a 2 per cent decrease in nominal terms in 2025. Between 2023 and 2024, China’s estimated defence R&D spending reached $44 billion, with a focus on AI, hypersonic, and quantum tech.
