Facing growing vulnerability, the European Union wants to step up efforts to keep pace with the evolving landscape of war technology. Brussels is pushing to accelerate the leap from research labs to real-world deployment, demanding faster, more flexible innovation to confront a new era of security threats.
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The newest proposal, the Programme for Agile and Rapid Defence Innovation (AGILE), would invest €115 million in disruptive defence technologies like AI, quantum technologies, and drones. If adopted, it would mark a clear break from the EU’s slow defence funding model by prioritising speed, risk-taking and rapid deployment of new technologies.
The EU has poured resources into the European Defence Fund and satellite systems for secure communications and Earth observation. Yet these efforts have fallen short, dismissed as too slow and too rigid for the demands of modern warfare.
What is AGILE?
Proposed in March 2026 by the European Commission, AGILE is a fast-track funding tool to move defence technologies from development to deployment way faster than existing EU programs.
Under its current form, 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. For example, mission-driven AI systems for military decision-making, situational awareness, or autonomous systems, or projects involving quantum computing. It will also support projects dealing with advanced robotics and drones.
The program promises to finance both the technical development phase and the transition to real-world use, including prototyping, field testing and initial production. It will introduce shorter application and evaluation timelines, with funding decisions expected within months rather than years.
Unlike traditional EU schemes, it allows single companies to apply, removing the requirement 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.
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. The funding will come directly from the EU budget.
The primary targets are startups, SMEs and scale-ups working on dual-use or defence technologies. These companies will have faster funding cycles, reduced administrative burden and a clearer path from product to market. But larger defence companies may also benefit indirectly, by integrating these innovations into their systems or partnering with smaller firms. Meanwhile, 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.
The programme 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.
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 criticised 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 the war between Iran and the US, for example, 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 (like Iran’s drone swarms at Kuwait International Airport, or the US’ AI-focused ‘Project Maven’).
By contrast, traditional European procurement and funding processes can take several years from approval to deployment. This creates 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 commercialised elsewhere, or fail to reach defence users altogether.
One case was the Eurodrone (MALE RPAS) project, a joint effort by Germany, France, Italy, and Spain. Originally conceived in 2014, it was a twin-turboprop, medium-altitude, long-endurance drone intended to revolutionise the military sector. However, it faced so many delays that it is now scheduled for a 2031 release.
The Chief of Staff of the French Air and Space Force recently described it as “yesterday’s drone that we can get tomorrow”. Subsequently, France formally notified partners of its intent to withdraw from the programme in October 2025.
Because of these delays, European nations must rely on American MQ-9 Reapers and Israeli Herons, remaining dependent on outdated technologies while adversaries move forward with faster innovation cycles. This allows other global powers, like China and the US, to set the pace in key areas, including AI, cyber, and autonomous systems.
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 behind
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.
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