Innovation and industrial cooperation, the challenges of European defence

High-intensity conflicts - such as the current ones in Ukraine and the Middle East - have highlighted the need for European countries to prepare for scenarios of strategic competition. The White Paper on Defence presented by the European Commission in the first part of 2025 emphasises the importance of developing capabilities that enable the EU to act autonomously in crisis situations, reducing its dependence on the United States for high-level military operations. From around EUR 180 billion in total expenditure in 2014, the year of the Russian annexation of Crimea, EU countries in 2024 saw their military expenditure rise to over EUR 320 billion.

At the same time, spending on science, technology and research has also grown, driven by the need to develop advanced technologies for multi-domain conflicts: in 2024, EU countries allocated around EUR 13 billion to defence research and development, compared to EUR 11 billion in 2023. In the current framework of land operations, in fact, alongside the traditional dimension, which is reflected in the massive use of means such as tanks and artillery, a technological and innovative dimension is emerging, determined by the extensive use of new weapon systems. Alongside this is a hybrid dimension, with increasing recourse to activities below the threshold of armed conflict such as sabotage actions or strategies of influence and disinformation.

In questo quadro, la Germania ha già aumentato più degli altri le spese per la difesa, sia in termini assoluti sia rispetto al passato più recente, tanto che nel 2024 le spese per la difesa tedesche hanno superato gli 88 miliardi di dollari, un livello record se confrontati con i 67 miliardi di dollari del 2023 o i circa 50 miliardi del 2020. Nel giro di pochi anni, la Germania disporrà verosimilmente delle forze terrestri e aeree più consistenti in Europa. Per quanto riguarda la dimensione marittima e le flotte, invece, Francia, Regno Unito e Italia continueranno ad avere le marine più consistenti per numero di unità, tonnellaggio, armamenti e capacità di operare oltre i confini europei. L’incremento della spesa militare tedesca avrà, inoltre, conseguenze rilevanti anche sul piano industriale. Con un mercato domestico in espansione, le industrie tedesche del settore beneficeranno di maggiori investimenti in ricerca e sviluppo e di maggiori economie di scala. Avranno così l’opportunità di avvia

Over the last five years, there has been a growth in industrial consolidation in the defence sector. A process conducted through new mergers and acquisitions: significant M& A transactions in the European defence sector have increased significantly, with a steady growth in the first six months of 2025 that exceeded the previous year's total. The current transformation aims at creating 'champions' capable of competing with their global counterparts in terms of scale and innovation capacity. This process is reshaping the industrial landscape, concentrating development and production capabilities in fewer, larger and more integrated players.

Despite this growth, the future outlook is still characterised by significant uncertainties and challenges. Recent trade tensions are making access to critical raw materials and technological components more difficult. New trade wars may damage key defence production chains, e.g. in aeronautics or radar, which depend on transatlantic industrial partnerships. Similarly, Chinese restrictions on the export of rare earths have affected the production of magnets for drones and missiles, increasing their costs by 15%. These trade tensions require diversification of supply chains, which in turn require substantial investment, thus opening up a new challenge for Europe.