Europe is rearming. Defence budgets are rising, factories are expanding, and new EU instruments are pouring money into ammunition production and joint procurement. But money is only part of Europe’s defence problems. The main constraint is that its systems remain slow, fragmented and poorly suited to an age when military technology can change in months rather than decades.

Three transformations are hitting the continent at once. Russia’s invasion of Ukraine has brought back large-scale war to European soil. Washington’s growing focus on the Indo-Pacific, its renewed interest in Greenland and its push to move NATO from “burden sharing” towards what might be called “burden shifting” mean that Europe will have to provide not only more money for the alliance but also a larger share of its combat power. At the same time, technology is changing warfare faster than traditional procurement systems can keep up.

At present, procurement systems work as follows: a military identifies a requirement; officials draw up specifications; companies compete for a contract and, years later, a system enters service. The problem is that, by then, the technologies shaping the battlefield may have changed dramatically. Promising technologies can become obsolete or fall by the wayside before they ever reach soldiers.

Ukraine has demonstrated a different model. Operational problems generate ideas; engineers turn them into prototypes; soldiers test them; manufacturers improve and scale them; battlefield experience feeds into the next iteration. Technology can also work in the other direction: new capabilities, such as cheap drones, can create tactics that planners had not previously considered.

The real measure of defence-industrial success should not be how many platforms roll off the line, but how fast capability can be imagined, built, tested, industrialised, fielded and adapted again

Europe needs to make this cycle permanent. I propose a model called Adaptive Defence Industrial Ecosystem Management, or ADIEM. The principle is for governments to move from being regulators and buyers to orchestrators of a defence ecosystem that links governments, armed forces, defence and tech companies, start-ups, universities and investors in a continuous loop. The real measure of defence-industrial success should not be how many platforms roll off the line, but how fast capability can be imagined, built, tested, industrialised, fielded and adapted again.

Industrial resilience and human capital are central to this model. Ukraine has shown that sustained operations depend on raw materials, reliable energy, resilient logistics and skilled labour quite as much as on the platforms themselves. And because digital capability now depends as much on software and data engineering as on heavy manufacturing, Europe’s defence sector competes directly with the commercial tech industry for the same scarce talent. This makes the appeal of a defence career a strategic question.

How to make ADIEM work

Reform defence governance. Create permanent structures that bring together military planning, industrial policy, innovation and procurement around shared capability goals. Give them room to depart from standard rules where those rules are the obstacle.

Start with battlefield problems. Build capabilities around what armed forces need to achieve. It works in reverse too: a new system needs a concept of operations written for it before it is bought at scale. Treat these as living documents that evolve with experimentation and real-world lessons.

Make procurement faster and more flexible. Use a hybrid procurement method. While central procurement agencies buy major systems, individual units are allowed to meet certain urgent combat needs. Alongside that, break large procurements into smaller contracts with incremental delivery, allow continuous software updates, use open architecture and speed up certification.

Build a genuine innovation ecosystem. Give start-ups, universities and public labs clear routes to deployment. Reward experimentation and operational relevance over novelty for its own sake.

Achieve affordable mass. Create dedicated programmes for weapon systems that are effective enough, cheap enough to buy in large numbers and simple enough to replace quickly. These include drones, autonomous vehicles, loitering munitions, low-cost intelligence, surveillance and reconnaissance (ISR) systems and electronic warfare.

Invest in human capital. Build a long-term pipeline of software engineers, AI specialists, systems engineers and skilled production workers, and change how the sector is perceived—presenting it as a high-technology field, not just a traditional military one.

Institutionalise experimentation. Set up permanent centres where soldiers, engineers, researchers and industry jointly evaluate new operational concepts and technologies. Test continuously rather than only in the run-up to a procurement decision.

Develop digital defence infrastructure. Invest in a sovereign defence cloud, secure data architecture, digital twins and common digital standards.

Governments also need to reform the institutions through which capability is developed, not just the funding lines that feed them. And while Europe has much of what it needs­—sophisticated armed forces, world-class manufacturers, strong universities and a growing defence-tech sector—it still lacks a system capable of connecting them quickly enough. That is the purpose of ADIEM: to connect these actors in a continuously adapting ecosystem, with governments acting as orchestrators rather than simply regulators and buyers.

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What happens if your economy is suddenly in crisis, Brussels offers help with strings attached—and Turkey, China or Russia can move faster? What if your country delivers every reform the EU asks for, only for a member state to block the next step anyway? And after years of waiting, would voters still choose to join?

In this special bonus episode, The Neighbourhood goes live from Lisbon for an EU enlargement game. Jessica Hendrick brings together RE-ENGAGE experts representing six EU candidate countries and throws a series of fictional—but very plausible—political and economic shocks at them inspired by real headlines: Russia’s intensified attacks on Ukrainian infrastructure, Ireland’s EU presidency push on enlargement, Iceland’s referendum, Germany’s regional elections and the upcoming 2026 Enlargement Package. Drawing on three years of surveys, interviews and crisis simulations, each expert has to answer for their country.

Playing for each country:

• Albania: Morten Bøås, research professor at the Norwegian Institute of International Affairs (NUPI), representing RE-ENGAGE’s Albanian partners at the European University of Tirana
• Bosnia and Herzegovina: Damir Kapidžić, director of the Institute for Social Science Research at the University of Sarajevo
• Georgia: Ketevan Bolkvadze, senior lecturer in the department of political science at Lund University, originally from Georgia
• Moldova: Mathilde T. E. Giske, research fellow at the Norwegian Institute of International Affairs (NUPI), representing RE-ENGAGE’s Moldovan partners at Moldova State University
• Serbia: Luka Filipović, research associate at the Institute for Contemporary History in Serbia
• Ukraine: Roman Petrov, president of the Ukrainian European Studies Association

The result is part enlargement simulation, part policy conversation and part game night. The experts bargain over a fictional €100 million EU cheque, decide whether the EU can compete with faster offers from other powers, test how easily disinformation could exploit frustration with enlargement, and imagine what would happen if EU membership was finally put to a public vote. Along the way, Serbia proposes keeping its relationship with Brussels “casual”, Bosnia finds a creative use for €100 million, and Ukraine calls for Hungarian “Varangians” when backsliding strikes.

When a crisis hits, does speed matter more than values? Can “Europe never wanted you anyway” become a winning political message? And if a country finally joins the EU, what stops democracy from sliding backwards once the prize of membership is secured?

Further reading:
RE-ENGAGE research overview
RE-ENGAGE research on Albania
RE-ENGAGE research on Bosnia and Herzegovina
RE-ENGAGE research on Georgia
RE-ENGAGE research on Moldova
RE-ENGAGE research on Serbia
RE-ENGAGE research on Ukraine

This podcast was recorded live in Lisbon on September 3rd, 2026.

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This week, Mark Leonard is joined by Ellie Geranmayeh, deputy director of ECFR’s Middle East and North Africa programme, to unpack a volatile new chapter in the confrontation between the United States and Iran. After months of managed escalation, military strikes have resumed and President Donald Trump has launched an ambitious new sanctions package, dubbed an economic “D-Day”, aimed at squeezing Tehran into submission.

Ellie argues that Washington has returned to a familiar strategy of maximum pressure, betting that unprecedented economic isolation and a blockade of Iranian exports will either force the regime to make major concessions or trigger domestic unrest. But Tehran appears determined to hold out, relying on sanctions-evasion networks, regional diplomacy and the belief that the US will struggle to sustain its campaign over the long term. As both sides continue limited military operations while keeping channels for negotiation open, the prospect of a comprehensive deal remains elusive.

The conversation also explores the domestic pressures facing Iran’s leadership, from a shrinking economy and growing public dissatisfaction to the threat of renewed nationwide protests. Mark and Ellie examine whether economic hardship could destabilise the regime, why Iranian leaders remain sceptical of American commitments and how internal politics in both Washington and Tehran are shaping the path ahead.

Finally, they discuss the wider regional and European implications of the conflict. How are Gulf states positioning themselves between the US and Iran? What risks does the confrontation pose to global shipping through the Strait of Hormuz? And can European governments still play a meaningful diplomatic role as tensions rise and fears grow that the Iran conflict could become increasingly entangled with the war in Ukraine?

This podcast episode was recorded on September 3rd 2026.

Bookshelf

Hillbilly Elegy, by J.D. Vance.

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