The European Union and the United Kingdom must approach technological innovation with the goal of building shared defense capabilities. Developing a collaborative framework that channels capital from across Europe to the most promising ventures could help the region meet the security challenges ahead.
COPENHAGEN/BOSTON – Following Donald Trump’s victory in the US presidential election, Europe has recognized the need to strengthen its security and bolster its economic resilience. European defense industry leaders have called for more investment in the sector, and defense ministries are spending more on science and technology to ensure their countries’ readiness for the wars of today and tomorrow.
But it is not enough for each country to act alone. The European Union and the United Kingdom must approach technological innovation with the goal of building shared defense capabilities. Recent moves in this direction are promising: the German defense company Rheinmetall announced that it would open a new factory in the UK in 2027, as part of a landmark defense agreement between the two countries. The UK’s BAE Systems, Italy’s Leonardo, and Japan’s Mitsubishi Heavy Industries are collaborating to develop a next-generation fighter aircraft. Germany’s Helsing, which specializes in AI-based defense software, is working closely with Swedish defense giant Saab and plans to expanded its presence in the UK.
Focusing on collective, rather than national, interests would enable large economies of scale. Each country could build on its comparative advantages – both in technological innovation and military capabilities – and thus strengthen European resilience for decades to come. This would also ensure that Europe serves as a strong partner to the US, contributing its unique defense expertise and industrial base.
Advanced European technological capabilities also form the foundation of economic prosperity, as reflected in Mario Draghi’s recent report on the future of European competitiveness and the European Commission’spolicy agenda. But national policies continue to focus on technological sovereignty, with the goal of strengthening and protecting domestic industry, at the expense of sharing resources and information with allies.
This is the wrong approach. The proliferation of critical technologies means that even the strongest European economies cannot build an advantage on their own. Moreover, each country going it alone would stifle growth opportunities by inadvertently limiting exports and reducing market size below what is economically efficient or desirable.
Gaining a technological edge requires building European alliances that promote and protect shared capabilities. This collective statecraft would allow smaller economies such as Denmark, Norway, and Estonia, which are home to innovative entrepreneurs working in quantum, space, and cyber technologies, to contribute to Europe’s sovereignty. These countries are too small to support a broad-based tech sector, and working more closely with European allies would help them build their industrial base and boost domestic economic growth.
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The idea is far from new. During World War II, the Britishshared extraordinary advances in radar with the United States under the auspices of the Tizard Mission. Today, NATO allies are developing drones with Ukraine. But to adopt a more consistent approach to pursuing collective sovereignty over tech outside of wartime, European governments must consider two factors: dependency and vulnerability.
Becoming a leader in critical technologies requires mutual dependence in terms of expertise, geographic advantage, and cumulative production. For example, quantum-computing systems rely on expertise in a wide range of areas, from superconducting materials to cryogenic engineering, which is usually spread across countries, highlighting the importance of alliances. Other innovations, such as space-launch technology, are largely dependent on geography: Norway’sAndøya spaceport, inside the Arctic Circle, will be essential for European space sovereignty. Lastly, some countries, after years of investment, have a cumulative advantage in production, such as Taiwan with semiconductors. Here, well-established manufacturing operations in Germany and the UK could be complementary.
Equally important is the question of vulnerability, which can stem from dependence. The war in Ukraine, for example, has highlighted Europe’s vulnerability to Russia’s control over natural gas (as well as supply-chain vulnerabilities in drone components). As the energy transition accelerates, the region will need to ensure that it can access critical material inputs and technology – which requires a shared effort.
Multilateral institutions can facilitate such collaboration. For example, the AUKUS security alliance, established in 2021 by Australia, the UK, and the US, is committed to delivering advanced capabilities and ensuring license-free defense trade. Likewise, NATO should enable the sharing of non-military technologies.
Fortunately, some progress is already being made on this front. Last year, NATO established an innovation fund to invest in technologies that advance security goals. More recently, the European Commission launched a Trusted Investors Network to remove barriers to co-investing in breakthrough technologies with the European Innovation Council Fund.
At its core, collective economic statecraft means recognizing that one country might be better served by supporting industry in another. Only by developing a collaborative framework that enables capital from across Europe (and the US) to be channeled to the most promising ventures can Europe gain the technological advantages that will help it meet important military challenges.
Such bold action would resolve a fundamental tension that has beset discussions of national security and economic competitiveness in Europe. Shifting the conversation from defending the homeland or strengthening its competitiveness to a discussion of how to advance collective interests would lead to measures that both promote and protect Europe’s sovereignty and economy. But first, each European country must be clear about its technological, geographic, and production advantages, and how it can best contribute to collective peace and prosperity.
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Donald Trump's return to the White House will almost certainly trigger an unmanaged decoupling of the world’s most important geopolitical relationship, increasing the risk of global economic disruption and crisis. After all, Chinese leaders will be far less conciliatory than they were during his first term.
thinks Xi Jinping's government will be less accommodative of the “Tariff Man's” demands this time around.
No matter how committed Donald Trump and his oligarch cronies are to a tax cut, the laws of arithmetic cannot be repealed. If only a handful of Republican lawmakers keep their promise not to increase the US budget deficit, there is no way that the incoming administration can enact its economic agenda and keep the government running.
points out that no amount of bluster or strong-arming can overcome the laws of arithmetic.
COPENHAGEN/BOSTON – Following Donald Trump’s victory in the US presidential election, Europe has recognized the need to strengthen its security and bolster its economic resilience. European defense industry leaders have called for more investment in the sector, and defense ministries are spending more on science and technology to ensure their countries’ readiness for the wars of today and tomorrow.
But it is not enough for each country to act alone. The European Union and the United Kingdom must approach technological innovation with the goal of building shared defense capabilities. Recent moves in this direction are promising: the German defense company Rheinmetall announced that it would open a new factory in the UK in 2027, as part of a landmark defense agreement between the two countries. The UK’s BAE Systems, Italy’s Leonardo, and Japan’s Mitsubishi Heavy Industries are collaborating to develop a next-generation fighter aircraft. Germany’s Helsing, which specializes in AI-based defense software, is working closely with Swedish defense giant Saab and plans to expanded its presence in the UK.
Focusing on collective, rather than national, interests would enable large economies of scale. Each country could build on its comparative advantages – both in technological innovation and military capabilities – and thus strengthen European resilience for decades to come. This would also ensure that Europe serves as a strong partner to the US, contributing its unique defense expertise and industrial base.
Advanced European technological capabilities also form the foundation of economic prosperity, as reflected in Mario Draghi’s recent report on the future of European competitiveness and the European Commission’s policy agenda. But national policies continue to focus on technological sovereignty, with the goal of strengthening and protecting domestic industry, at the expense of sharing resources and information with allies.
This is the wrong approach. The proliferation of critical technologies means that even the strongest European economies cannot build an advantage on their own. Moreover, each country going it alone would stifle growth opportunities by inadvertently limiting exports and reducing market size below what is economically efficient or desirable.
Gaining a technological edge requires building European alliances that promote and protect shared capabilities. This collective statecraft would allow smaller economies such as Denmark, Norway, and Estonia, which are home to innovative entrepreneurs working in quantum, space, and cyber technologies, to contribute to Europe’s sovereignty. These countries are too small to support a broad-based tech sector, and working more closely with European allies would help them build their industrial base and boost domestic economic growth.
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At a time when democracy is under threat, there is an urgent need for incisive, informed analysis of the issues and questions driving the news – just what PS has always provided. Subscribe now and save $50 on a new subscription.
Subscribe Now
The idea is far from new. During World War II, the British shared extraordinary advances in radar with the United States under the auspices of the Tizard Mission. Today, NATO allies are developing drones with Ukraine. But to adopt a more consistent approach to pursuing collective sovereignty over tech outside of wartime, European governments must consider two factors: dependency and vulnerability.
Becoming a leader in critical technologies requires mutual dependence in terms of expertise, geographic advantage, and cumulative production. For example, quantum-computing systems rely on expertise in a wide range of areas, from superconducting materials to cryogenic engineering, which is usually spread across countries, highlighting the importance of alliances. Other innovations, such as space-launch technology, are largely dependent on geography: Norway’s Andøya spaceport, inside the Arctic Circle, will be essential for European space sovereignty. Lastly, some countries, after years of investment, have a cumulative advantage in production, such as Taiwan with semiconductors. Here, well-established manufacturing operations in Germany and the UK could be complementary.
Equally important is the question of vulnerability, which can stem from dependence. The war in Ukraine, for example, has highlighted Europe’s vulnerability to Russia’s control over natural gas (as well as supply-chain vulnerabilities in drone components). As the energy transition accelerates, the region will need to ensure that it can access critical material inputs and technology – which requires a shared effort.
Multilateral institutions can facilitate such collaboration. For example, the AUKUS security alliance, established in 2021 by Australia, the UK, and the US, is committed to delivering advanced capabilities and ensuring license-free defense trade. Likewise, NATO should enable the sharing of non-military technologies.
Fortunately, some progress is already being made on this front. Last year, NATO established an innovation fund to invest in technologies that advance security goals. More recently, the European Commission launched a Trusted Investors Network to remove barriers to co-investing in breakthrough technologies with the European Innovation Council Fund.
At its core, collective economic statecraft means recognizing that one country might be better served by supporting industry in another. Only by developing a collaborative framework that enables capital from across Europe (and the US) to be channeled to the most promising ventures can Europe gain the technological advantages that will help it meet important military challenges.
Such bold action would resolve a fundamental tension that has beset discussions of national security and economic competitiveness in Europe. Shifting the conversation from defending the homeland or strengthening its competitiveness to a discussion of how to advance collective interests would lead to measures that both promote and protect Europe’s sovereignty and economy. But first, each European country must be clear about its technological, geographic, and production advantages, and how it can best contribute to collective peace and prosperity.