Navigating Defence Procurement in Europe

Introducing European Defence Business Tool

Working in close collaboration with European Union institutions and engaging actively in DG DEFIS-backed initiatives, Starburst serves as the leader of the consortium for the EUDIS Business Accelerator & Matchmaking [1] programme, delivered together with Ignity, Civitta, and VTT, with the objective of strengthening pathways between innovative defence companies and national defence procurement authorities.

Despite the growing number of EU-level initiatives, there is no single harmonised pathway to defence procurement in Europe. Instead, procurement remains governed by 28 distinct national frameworks across EU Member States and Norway, each with its own governance structures, innovation entry points, and market access mechanisms.

This paper, together with the accompanying European Defence Business Tool, proposes a high-level, comparative view of national defence procurement systems across Europe. The tool takes the form of an interactive map, enabling users to select countries and gain an understanding of defence procurement governance, innovation interfaces, and practical routes to market access. Through this outreach, Starburst managed to establish contact with 21 countries and to prepare one pagers for each of them.

Designed for innovative companies in the defence sector, the European Defence Business Tool aims to support business strategies by providing clarity on the institutional and operational realities of defence procurement across Europe.

Introduction

European defence is operating in an environment defined by a significant increase in defence expenditure, which is expected to reach approximately €381 billion [2] in 2025, equivalent to around 2.1% of EU GDP [2]. This surge is driven by a push for strategic autonomy and the integration of emerging technologies into military capabilities. However, structural fragmentation persists because procurement remains a national competence. Each Member State maintains its own legal, institutional, and operational frameworks, leading to varied market access and reduced competition. This creates significant barriers for start-ups and SMEs, who struggle with a lack of consolidated guidance and a widening gap between high-level European initiatives and actual national acquisition pathways. This fragmentation is also reflected in the wide disparities in national defence procurement budgets across Europe, as illustrated in Figure 1 below.

Figure 1: Defence procurement budgets by EU country in 2025

Values obtained through interviews, expressed in range

National sovereignty remains the foundational principle of European defence procurement, primarily anchored in Article 346 [3] of the Treaty on the Functioning of the European Union, which allows Member States to exempt certain contracts from EU competition rules in order to protect essential security interests. EU level instruments such as the European Defence Agency and the European Defence Fund seek to promote cooperation in defence research and technology development. While the EDA operates as an intergovernmental framework under Member State authority, the EDF functions as a supranational EU funding instrument managed by the European Commission, with national authorities retaining control over capability development and procurement decisions.
Multinational organisations such as OCCAR (Organisation for Joint Armament Cooperation) and the NATO Support and Procurement Agency support the management of complex cooperative programmes and through-life support. However, their effectiveness is often limited by divergent national requirements and industrial policy priorities. Initiatives such as EU INC [4] aim to reduce fragmentation by proposing an EU-wide corporate regime with a single legal form, central register, and harmonised rules. Nevertheless, this framework primarily facilitates cross-border establishment, capital raising, and early stage business activity. Defence procurement remains outside its scope, with acquisition decisions and budgetary authority continuing to reside at national level, sustaining a structurally fragmented European defence market.

Research Objectives and Scope

The primary objective of this research is to examine how innovative companies can access national defence procurement markets across the EU and Norway. The analysis addresses several supporting questions, including national control over procurement, the transparency of budgets and planning processes, the availability of SME focused instruments, and variations in pathways to market entry across countries. The scope is limited to Ministries of Defence and their associated agencies. For a detailed exploration of national pathways, readers are invited to use the accompanying interactive tool above, which provides country specific information.

Research Methodology

To identify national acquisition pathways and common barriers, Starburst conducted an outreach to national defence focal points across the EU and Norway. The information gathered was transcribed, structured, and formalised by Starburst into a consistent format, resulting in 21 country specific one pagers covering EU Member States and Norway. The collected inputs were organised around four core themes:

• Procurement governance: identifying the national defence procurement organisation, its leadership, and the institutional setup responsible for acquisition decisions
• Budget and acquisition outlook: presenting indicative defence procurement budgets, relative scale, and visibility on main acquisition programmes through 2030
• Innovation and SME support mechanisms: outlining dedicated programmes, innovation centres, and structures supporting start-ups and SMEs, including joint innovation initiatives
• Practical market access routes: highlighting defence procurement portals, relevant industry associations, seminars, and guidance that enable companies to engage with the national defence market

Key Findings

• Governance models vary between countries from centralised agencies such as Sweden’s FMV [5], Estonia’s RKIK [6], and France’s Direction générale de l’armement (DGA) [7], to hybrid structures where the MoD coordinates with specialised divisions such as Lithuania’s Defense and Security Innovation Center [8] or Italy’s National Armaments Directorate [9]
• Most countries use national portals like Base.gov.pt [10] in Portugal or Doffin.no [11] in Norway, but detailed planning differ. Some nations provide specific long-term views, such as France’s Loi de programmation militaire (LPM) [12],the Czech KVAČR 2035 [13], Denmark’s Anskaffelsesplan [14] or Belgium’s Strategische Visie Defensie [15] while others keep detailed plans restricted
• Many MoDs have established dedicated entry points for innovators, such as Germany’s Innovationszentrum Bundeswehr [16], Norway’s ICE worx [17], Greece’s Hellenic Centre for Defence Innovation (HCDI) [18], or France’s Agence de l’innovation de défense (AID) [19]
• There are targeted SME instruments including the Austrian Defence Innovation Challenge (ADIC) [20], which offers prize money and testing playing grounds, the Estonian SmartCap Defence Fund [21], which co-invests in domestic defence start-ups, the Spanish defence industry support ecosystem AESMIDE [22] which facilitates access to national defence programmes, and the Croatian Defence Industry Competitiveness Cluster [23], which supports collaboration, innovation, and internationalisation of defence start-ups and SMEs
• Success often requires satisfying national logic. For example, entering the Danish market through national incubators requires incorporation in Denmark [25], while foreign start-ups in the Czech Republic are encouraged to collaborate with local companies or use the Defense Hub [25] as an entry point
• Space is becoming an integral part of defence acquisition, with major programs such as Finland’s €158M SAR satellite acquisition from ICEYE [26] and Luxembourg’s Directorate of Defence €101M capital increase in LuxGovSat [27]
• National defence priorities are shaped by geographic context, including proximity to active conflict zones, maritime exposure, and border characteristics. This results in differentiated capability focus areas: land warfare and air defence in Eastern Europe, maritime surveillance in coastal states or space and ISR capabilities in countries with global situational awareness requirements
• The air domain is emerging as the dominant focus, particularly for smaller countries, driven by the rise of air defence, counter-UAV systems, and the need for cost-effective deterrence. (e.g., Slovakia’s air defence modernisation projects [28] and Slovenia’s IRIS-T SL procurement [29] strengthening medium-range defence capabilities, Netherlands’ acquisition of NASAMS/NOMADS and Skyranger 30 systems [30] to reinforce layered air defence, and Romania’s focus on layered air defence through Patriot [31] and very short range systems such as Rheinmetall Skynex to strengthen national airspace protection [32]). Cyber and space remain more niche due to higher complexity, scale requirements, and reliance on multinational or allied frameworks

Pathways to Market Entry for Start-ups and SMEs

Three primary modes of market entry have been identified for innovative companies:

• Direct access to procurement calls
• Participation through defence innovation programmes
• Partnerships with established incumbents, including corporates and large SMEs

Successful market entry typically follows a five-step approach synthesised from interviews with national defence focal points:

1. Identifying capability gaps and aligning technologies with national planning
2. Engaging with national defence innovation units or accelerators
3. Undertaking technical validation and operational testing
4. Navigating security clearance, certification, and trust requirements
5. Securing a contract through direct award or participation in a consortium

Cross border challenges, including language barriers, divergent security standards, and strong national preference cultures, remain significant obstacles to market access.

Discussion and Conclusion

For innovative companies, success depends on strategic positioning and the importance of capability alignment with national priorities. Defence institutions must focus on improving their innovation absorption capacity and making procurement systems more adaptable to rapid tech cycles. Policy implications suggest a need to bridge the gap between innovation funding and actual acquisition while improving coordination across the European administrative system.

The evolution of European procurement is expected to trend toward greater cooperation, though national control is likely to persist. The 2014 reform of the public procurement directives [33] has not yet demonstrated a significant impact on increasing competition or simplifying procedures. While spending has increased, single bidding is rising, and direct cross-border procurement remains a niche. For start-ups and policymakers, the focus must shift from simple compliance to performance and innovation absorption. Accessing this market requires a strategic understanding of national pathways.

Appendix

Sources