The Evolving Security Landscape in the Northern Flank and Baltic Sea

European Frontline nations, such as Estonia, Poland, and Finland, are responding to Russian aggression through increased defence spending, military modernisation, and deeper cooperation with NATO allies. These countries are not only adapting to a more complex threat environment, but are also positioning themselves as testbeds for modern defence capabilities.

However, a clear theme from the discussion was that European responses remain both fragmented and slow. National strategies often lean toward self-sufficiency with countries attempting to cover all capability gaps independently. This “go-it-alone” mentality is inefficient, particularly for smaller nations. The consensus was that Europe must move faster and more collaboratively to stay ahead of adversaries.
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Defence Innovation as a Strategic Imperative

Participants broadly agreed that Europe must shift from reactive procurement, focused on replenishing legacy systems, toward strategic investment in future-facing technologies. While traditional platforms will remain relevant, a new generation of cost-effective, rapidly deployable solutions, autonomous systems, AI-enabled decision tools, resilient cyber defences, are increasingly critical, especially for smaller states with limited resources and no time to waste.

Yet despite the urgency, structural barriers to innovation adoption persist:
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• Defence institutions often lack the internal talent and technological fluency to identify, test, and champion emerging capabilities.
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• Procurement frameworks are still geared toward large, long-cycle programmes and established primes.
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• Bureaucratic complexity slows the translation of operational needs into tech deployment.

A system built for the industrial age of defence must be modernised for the digital age.
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Bridging the Gap: Startups, Government, and Private Capital

A major focus of the roundtable was how governments can better harness the strengths of startups, such as agility and speed without being held back by outdated structures. 

Despite growing interest in startup collaboration, barriers remain high across defence agencies: startups face unclear requirements, long procurement timelines, and limited pathways to scale.

There was broad frustration with the disconnect between fast-moving innovation cycles and slow-moving military procurement. Importantly, this isn’t just a procurement problem, but also about budget planning, legal frameworks, and the lack of clear ownership for capability integration.

NATO’s DIANA initiative offers one welcome model to support defence innovation, providing both funding and access to end-users across the alliance. Still, more must be done to institutionalise startup engagement at the national level and in more meaningful commercial terms.

Participants also pointed to a structural weakness of a lack of private capital in the European defence innovation ecosystem. Unlike in the US, where venture investment plays a key role in capability development, many European funds remain hesitant to invest in defence and almost all lack any hands on experience in the military or civil service. Regulations and political discomfort around defence technologies continue to deter funding for emerging venture funds and defence tech startups.
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Recommendations for the Future

The roundtable concluded with a series of concrete recommendations for enhancing resilience and deterrence in the region over the next 3–5 years.
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1. Foster Specialisation and Collaboration

Instead of each country trying to do everything on its own, nations (particularly smaller ones) should specialise in specific capabilities and rely on regional partners to supplement their needs. This requires greater collaboration and coordination, as demonstrated by successful international projects like the Typhoon aircraft.
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2. Overhaul Procurement and Funding

Governments must streamline procurement processes to get money directly to innovative companies, moving beyond simply creating more hubs or initiatives. This includes rethinking funding models to support R&D without the immediate promise of a platform-level contract.
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3. Attract Private Capital

Participants agreed that the private capital ecosystem in Europe is lagging behind the US. Europe must find ways to attract more risk capital into defence companies by proving that this sector can generate significant returns. This means moving away from overly-restrictive investment mandates, limiting investment to “dual-use," and enabling direct investment in the best companies. At the same time, national and international government backed entities must move faster in backing defence funds and companies, accounting for both new capability development and financial returns, rather than each individually.
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4. Improve Strategic Communication

The defence innovation sector needs to be marketed more effectively to attract founders, universities, and private investors. As one participant noted, the more people who are invested in the region, the more they are incentivised to help defend it.

The roundtable served as a crucial step toward creating a more integrated and dynamic defence ecosystem on Europe's frontier. The path forward requires reforming outdated processes and embracing a more collaborative and entrepreneurial approach to security.
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For more information on the roundtable discussion or to connect with one of our team members, please reach out to adam@public.io or nicholas@archangel.eu.

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