Bogdan Gogulan is the CEO and Managing Partner of NewSpace Capital, a private equity firm working in the space technology sector. He has held business development and strategy positions at AT Communication, American Express, and Deutsche Bank, and managed projects for security and defence agencies.
The headlines out of the latest NATO summit sounded reassuring: more defence spending, firmer commitments, louder rhetoric. By 2035, member states have pledged to invest 5% of GDP annually on military and security needs.
The intent is good. But the outcome will depend not just on how much is spent – but how.
Let’s be blunt: the money matters. Europe’s peace, once taken for granted, now feels contingent on events elsewhere, or even the whims of foreign powers. Russia’s full-scale invasion of Ukraine has made obvious what many hoped to ignore – that the ability to defend yourself still underpins sovereignty. In that context, European rearmament isn’t an extravagance. It’s a necessity.
But money will only take you so far. What shape will European spending take? There’s an omission in the final NATO communiqué that is potentially a cause for concern. Why nothing about innovation?
Like ‘disruptive’, ‘synergy’, ‘pivot’, or ‘agile’, innovation is one of those words almost emptied of meaning by overuse. But it’s an important word in this context. Because innovation has always played an outsize role in conflict: knocking down castle walls, unseating knights from their horses, mowing down charging heavy infantry.
The conflicts of today are already largely dependent on technology. The conflicts of tomorrow will be even more so. Europe will only be serious about its defence when it’s supporting the companies pushing the boundaries of what’s possible with data, cyber, AI, quantum, optical comms and more.
Don’t believe me? Consider Ukraine. Russia is vastly bigger than Ukraine in terms of land, population, GDP, income per capita, and PPP. No wonder the Russian generals thought Ukraine would collapse within days. But it didn’t collapse. It fought back. And it has held back the Russian forces in a way very few people predicted. Technology, as much as courage and training, is the reason why. Ukraine’s military is lean, mean and wired up. It’s a striking example of how important innovation is.
Across Europe, from London to Luxembourg, from Tallinn to Toulouse, entrepreneurs and innovators are hard at work creating tech that wouldn’t look out of place in a sci-fi film. With the right support, Europe will emerge from this period of rapid rearmament with one of the most sophisticated militaries in the world. But the continent is holding itself back through bureaucracy, bottlenecks and processes defined and refined during the long period of peace on the continent. It’s time for a rethink.
There is a watertight commercial case to be made for this. When defence spending is smart, it results in cutting-edge infrastructure and rapid R&D. Civilian sectors adapt what’s created and mass-produce it – for the benefit of all. When you ask Siri or ChatGPT to find you a decent local restaurant, you’re using civilian tech layered on decades of military-funded R&D in AI, speech, and computing.
Voice recognition goes back to Cold War-era projects led by the Defense Advanced Research Projects Agency (DARPA); natural language processing was funded heavily by the US for intelligence and surveillance purposes; machine learning was driven and accelerated by military-backed research bodies.
Europe needs to think like a good investor. Do your due diligence, but recognise that calculated risks yield big rewards. Government agencies don’t want to be seen to be wasting public money, but the bets on innovation that pay off will more than compensate for those that don’t – and ensure European resilience and autonomy at the same time. It would be a far bigger risk to take an approach to defence best suited for peacetime, leaning on the mega-contractors that have slowly churned out platforms in the past.
So let’s wake up and get moving. We need money to flow liberally in the direction of young, clever engineers and entrepreneurs who can push the limits of possibility in critical fields. We need to learn the lesson of Ukraine: that innovation is more crucial than ever, and that the right technology lets a military force punch well above its weight.
More than anything, we have to recognise that what’s at risk here isn’t misspending public cash, but failing to protect the conditions of peace and prosperity that we across Europe have done so well to create.
The clock is ticking.
