The Case for a European DARPA
By Dr. Ionela Maria Ciolan. Originally published in the compendium 7Ds-Defence Extended (announced 12 July 2024) by the Wilfried Martens Centre for European Studies.
Summary
In a rapidly evolving technological landscape where national security is intertwined with economic security, being at the forefront of technological progress is becoming a crucial component of geopolitical power. In this respect Europe faces considerable difficulties as it lags behind the US and China. The work undertaken by the EU in the field of defence innovation is a fragmented puzzle. Brussels has typically funded innovation by investing predominantly in research and startups through various frameworks linked to the European Commission, together with inconsistent efforts by individual member states. If the EU wants to be a geopolitical actor with global influence in the medium to long term, it needs to adopt the American model and build its European DARPA.
Keywords Defence – Innovation – Emerging and disruptive technologies – EU – DARPA
Introduction
One of the key lessons of the past two years of war in Ukraine is the important role of defence innovation and technological advances on the battlefield. The use of satellites, drones, cyberspace, data and digitalisation on the battleground has proven to be a vital element in the fight against a larger and more powerful opponent. Ukraine’s incorporation of emerging and disruptive technologies (EDTs) provides a glimpse into how upcoming wars will be fought and their critical role in future capabilities and warfare.[1] In the future, wars will have a strong technological defence component as military capabilities are transformed by disruptive innovations and technological progress.
These technological innovations will revolutionise the ability to wage war and pose numerous threats to the security and defence of the EU. Moreover, the progress made in new materials and human enhancement will increase the effectiveness and survival rate of military personnel, while new disruptive innovations such as directed energy and hypersonic weapons will create new dynamics on the battlefield. In addition, developments in space technologies, artificial intelligence, nanomaterials, quantum technologies and additive manufacturing will transform the entire process of planning and conducting military missions and other external components (intelligence gathering, communications, force and logistics capabilities).[2]
As such, in a fast-evolving technological landscape, where national security is intertwined with economic security, being at the forefront of technological progress is becoming a crucial component of geopolitical power. Being part of the technological race does not just mean technological and innovative superiority; it also has crucial implications for political order, economic competitiveness and national security.
In this respect, Europe faces considerable difficulties as it lags behind the US and China in its quest for technological and industrial supremacy. Currently, the EU is straining to preserve its techno-industrial innovative edge.[3] The European Commission’s ‘de-risking’ strategy is seen as insufficient to address the fierce global race for technological leadership and its myriad implications for European security. Beijing’s ambitions to become a technological powerhouse, countered by Washington’s efforts to circumvent it, are changing the global economic outlook and directly threatening European security.[4]
Moreover, the swift development of new and often disruptive technologies and their rapid weaponisation highlight the key role of innovation as a vital geostrategic element influencing the global distribution of power and the international security landscape. Maintaining the effectiveness, readiness and credibility of its members’ combined armed forces is important to the EU for preserving its leading role in security and defence. The EU’s ambition to become a credible global security actor is thus inextricably linked to the need to innovate in defence in Europe.
The EU’s work on defence innovation
Defence innovation is that area of research and development targeting the advancement of EDTs. In Europe EDTs are defined by the European Defence Agency (EDA) as those technologies that ‘significantly alter the rules or conduct of conflict within one or two generations’, requiring military organisations to upgrade their planning and long-term objectives. From all the EDTs identified by the EDA, six are particularly noteworthy for their strategic implications for the near future: artificial intelligence (AI), big data analytics, robotics and autonomous systems, hypersonic weapon systems and space, new advanced materials and quantum-based technologies.[5]
In recent years, European leaders have committed to growing the defence spending, highlighting investments in critical and emerging technologies for defence and security and boosting the coordination between civil, defence and space innovation, and research. The EU Strategic Compass for Security and Defence, adopted in March 2022, emphasises the importance of fostering defence innovation in emerging technologies. As such, the Compass proposed the creation of new policy tools such as the Hub for European Defence Innovation within the EDA and the European Commission’s Roadmap on Critical Technologies for Security and Defence. It also recommends strengthening existing instruments, such as the European Defence Fund and the Action Plan on Synergies between Civilian, Space and Defence Industries.[6] Nevertheless, the changes proposed by the Strategic Compass in defence innovation are more gradual than revolutionary, showcasing a low level of ambition and lack of consensus among European decision-makers in advancing with the European defence innovation sector.
This low level of ambition on defence or technological innovation is nothing new for the EU. Its member states have been reluctant to adopt dual-use technological innovations for defence/military purposes due to the perceived impression that defence is a national prerogative. Over the past two decades, European countries have collectively spent less on scientific research and development for defence than the US and China. Instead, priority has been given to personnel, operational expenditure and the procurement of off-the-shelf equipment rather than investment in the creation of new defence platforms. In addition, due to European cultural and political mindsets, the private sector and European academic institutions have shown a lack of interest in collaborating with government initiatives to integrate EDTs into defence strategies.[7]
On top of this, the regulatory architecture in the EU’s security and defence policy is defined by a division of tasks between member states, specialised EU agencies and various EU actors. This fragmentation points to numerous conflicting perspectives and outcomes in addressing security, defence and civil matters, which are even more contentious regarding military applications of emerging technologies such as AI.
Hence, the EU’s work on defence innovation is a fragmented puzzle. Brussels has always funded innovation by mainly investing in research and startup companies through various frameworks associated with the European Commission, together with incoherent efforts made by individual member states. Unlike the US, the EU is challenged when it comes to gathering coherent support for a comprehensive body such as the Defense Advanced Research Projects Agency (DARPA) which is similarly focused on breakthrough advances in defence technologies.
Two of the key pieces of the fragmented puzzle are the EDA (where member states override the processes) and the European Commission’s Directorate-General for Defence Industry and Space. At the European Commission level, defence innovation is carried out through the European Defence Fund, which allocates 4–8% of its annual budget to emerging defence technologies, and the EU Defence Innovation Scheme; this scheme supports innovation and entrepreneurship in critical defence technologies and proposes initiatives such as a dual-use incubator and a defence equity facility.[8]
On the other side, the EDA has an important role in defence innovation at the European level, more specifically in the development of EDTs. In coordination with the member states, the EDA’s Strategic Research Agenda administers the evaluation of EDTs, promotes common projects through the EDT Action Plan and encourages innovation via the EDA Defence Innovation Prize. The agency is also overseeing the implementation of PESCO projects on EDTs, for example, the Integrated Unmanned Ground Systems 2 and TWISTER hypersonic missile defence projects.[9] In addition, the agency launched the Hub for European Defence Innovation in 2022 to act as the main platform for innovation-related joint activities and cooperation among the member states and other stakeholders, as indicated in the objectives of the Strategic Compass.
To blur the picture even further, other EU instruments, bodies and agencies are also working on defence innovation, research and technology development and EDTs. For example, the European Commission is currently proposing to expand the interoperability between various European initiatives, such as the European Defence Fund and Horizon Europe, and to advocate for dual-use research and development to advance cutting-edge technologies at the intersection of defence, space and civil applications.
While the EU has so far lacked a formal competence in defence issues, the previous years have seen the birth of several projects from the European Commission’s side, which tries to promote more coherence in projects related to the civil, defence and space industries and to overcome their current isolation from one another. For example, the Commission’s Action Plan on Synergies underscores the disruptive potential of technologies such as AI in various sectors.[10] This trend of bridging the various silos is more than welcome, but it should also be carried out in parallel with an ambitious, coherent strategy that utilises European potential and resources at their best.
Financing defence innovation
A comparison of investment in defence innovation among the world’s major powers shows that Europeans still have a long way to go to match others. According to the EDA, the EU member states spent only €3.5 billion on research and technology in 2022, which is only 1.4% of their total defence spending.[11] The amounts allocated to defence innovation at the EU level (at the EDA, Directorate-General for Defence Industry and Space or other Directorate-Generals) are in the hundreds of millions of euros, which also reflects a lack of cooperation on this issue at the European level between member states.
On the other hand, the U.S. Department of Defense spent $34 billion on defence technology innovation in 2022, or 4% of its defence budget.[12] The US agency responsible for defence innovation, DARPA, alone had a budget of $3.8 billion in 2022,[13] more than all the funds spent by EU member states combined. As for China, a lack of transparency makes it difficult to find concrete reliable data for the country, but it is known that China has a defence budget of $229 billion. Moreover, China’s military developments over the past few decades show that Beijing is determined to dominate the EDTs landscape, which includes AI, quantum technologies and hypersonic weapons systems, in order to become an innovation superpower.[14]
Thus, it is imperative for the EU to take part in the emerging technology race. On top of increasing the defence spending, policymakers should focus on increasing efficiency and coordination at the European level by limiting current disparities and building a coherent approach to defence investment planning and resource allocation across the EU.
To become an indispensable actor in future technologies and industries and to maintain the ability to influence the global community, the EU will have to promote a culture of risk tolerance and innovation. Hence, European stakeholders will have to redefine economic security through the interdependent links between the economy and defence. For this step, the European Commission and member states will need to identify those critical technological advantages in research, production capacity and innovation that would give Europe a cutting edge.
The American model of DARPA
The European defence innovation ecosystem is currently hampered by inertia and caution at both national and European levels. But there is an urgent need for a change of mindset and approach to move the EU forward in the technology race. To do so, European leaders must have the courage to adopt the methods of the American DARPA for vital ‘disruptive’ projects, which have produced real breakthroughs and numerous success stories in dual-use defence technologies in the US since DARPA was created in 1958 in response to the Soviet Union’s Sputnik.
Over the past six decades, the Pentagon’s DARPA has achieved an unprecedented degree of breakthrough innovation. DARPA’s projects have been transformative for the field of technological innovation, and it is widely acknowledged to have the highest and most consistent track record for cutting-edge technologies in history. Its revolutionary inventions include global positioning satellites, the Internet, micro-electromechanical systems, drones or unmanned aerial vehicles, and RISC computing and stealth technology. Although originally created for military purposes, DARPA’s applications have had a significant impact on the civilian sector, helping to launch numerous multi-billion-dollar industries.[15]
DARPA is guided by five important organisational principles:[16]
1. Independence. The agency operates independently of the military, allowing it to pursue disruptive projects beyond traditional military considerations.
2. Agile organisation. It maintains a flat hierarchical structure and minimal bureaucratic processes, thus facilitating faster decision-making and project execution.
3. Sponsorship. It seeks high-level sponsors within the Department of Defense and other federal agencies to monitor and promote funded projects.
4. Building communities of innovation. DARPA brings together diverse communities of individuals with unique capabilities to break down silos and create collective strategies within innovation ecosystems.
5. Diverse hiring. DARPA hires project managers from a variety of backgrounds, with an emphasis on technological competence, leadership in managing complex projects and the ability to translate dreams into reality.
What makes DARPA a successful model also relates to four factors that are manifested in the agency’s approach to projects. Trust and autonomy, a sense of mission, limited tenure and the urgency it creates, and risk-taking and tolerance for failure are key to the agency’s organisational culture.[17] All of these elements are central to the way the agency pursues pioneering, disruptive ideas that can lead to game-changing technology products that can transform the defence sector. DARPA also plays an important role in integrating dual-use technologies and fostering synergies between military and civilian applications.
Prospects for building a European DARPA
The process of creating a European DARPA is twofold. On the one hand, European decision-makers will have to plan and structure all the practical aspects of creating a new European agency. At the same time, the European Commission and, especially, its member states will have to find the political will to reassess the viability of current European institutional frameworks and public policy paradigms for the speed and disruption demanded by the technological race.
Europe’s institutional and political culture is dominated by a highly bureaucratic, over-regulated and ‘play it safe’ mentality. The creation of a European DARPA would require out-of-the-box thinking that takes into account the urgency with which the EU must overcome both cultural and policy-related differences and find space in its complicated internal architecture for the disruptive mechanisms needed to adopt this American model.
Moreover, certain characteristics need to be carefully considered. First, a European DARPA would have to be a high-risk, high-reward agency. It would need a culture that tolerates project failure while recognising the potential for breakthrough success. Second, a culture that tolerates risk is not enough; an EU DARPA would also require a culture characterised by high ambition, minimal bureaucracy and a cohesive structure unified by thematic challenges.[18] In addition, the agency would need a distinct positioning within the European innovation landscape to avoid being overshadowed by existing European initiatives.
To differentiate the agency from other European programmes, its operational activity would revolve around disruptive innovation projects which are too pioneering to be financed by other EU initiatives. In contrast to conventional initiatives, a European DARPA would prioritise projects that address existing challenges with novel solutions but keep in mind a market applicability for those potential solutions and discoveries.
Furthermore, a European DARPA would give programme managers significant autonomy in project scope and direction as in the successful example of the American agency. This approach would ensure that experts in the field are responsible for risk analysis, allowing for agility and innovation within the agency. While governance oversight remains essential, it should not stifle the creative freedom necessary for breakthrough advances in disruptive technologies.[19]
As part of the EU Strategic Agenda for 2024–2029, the EU needs to start laying the foundations for a European DARPA. Initially, the European decision-makers should focus on developing the main three pillars: governance and legislation, funding, and cooperation and oversight.
On governance and legislation, the EU will need to do the following:
Create a dedicated legal framework to establish the European DARPA, ensuring its autonomy and independence from traditional bureaucratic structures within the EU. Clearly define the agency’s mandate, scope and decision-making powers in order to promote agility in responding to emerging challenges.
Establish a comprehensive strategic roadmap outlining the goals, milestones and expected impact of the European DARPA yet maintain the flexibility and agility to adapt to changing technological environments or unforeseen challenges.
Adopt a risk-tolerant approach: Encourage high-risk, high-reward research initiatives to explore disruptive ideas that may not attract traditional funding sources, especially in deep tech.
On funding, the European decision-makers must do the following:
Allocate a substantial budget to the European DARPA to enable ambitious research projects and attract top-tier scientists, engineers and innovators. Consider a multi-year funding commitment to provide stability and continuity for long-term research initiatives.
Invest in science, technology, engineering and mathematics education programmes to cultivate a skilled workforce capable of contributing to the European DARPA’s research objectives. Implement initiatives to attract and retain top-tier talent within the European innovation ecosystem.
Establish a flexible funding architecture. Provide adaptable funding mechanisms that can support projects at different stages of development, from early exploration to pilot testing and commercialisation.
On cooperation and oversight, the EU should do the following:
Encourage open innovation. Foster collaboration between universities, research institutions, industry partners and startups to accelerate the development and commercialisation of new technologies at the European level.
Develop a partnership with NATO’s Defence Innovation Accelerator for the North Atlantic to foster collaboration on EDTs for defence and security. This collaboration would allow the European DARPA to access NATO’s expertise and resources while providing NATO with access to the European DARPA innovation ecosystem.
Institute a robust monitoring and evaluation framework to assess the impact and effectiveness of European DARPA-funded research projects. Regularly review and adjust strategies based on performance metrics and lessons learned.
Conclusion
If the EU wants to be a geopolitical actor with global influence in the medium to long term, it must prioritise a comprehensive strategy for technology and defence innovation. Developing the ‘next best thing’ in technology and defence will depend on making the European innovation ecosystem more flexible, agile and open to risk-taking. To truly compete in the global technology race, the EU needs unwavering political commitment, a long-term vision and a high level of ambition. Failure to cultivate its defence innovation ecosystem will diminish the EU’s ability to make an impact on the world stage. It is therefore time for European decision-makers to have the courage to apply the American DARPA model to critical ‘disruptive’ projects in the European ecosystem.
Notes
[1] N. T. Friðbertsson, Technological Innovation for Future Wars, NATO Parliamentary Assembly, Report no. 025 STCTTS 22 E rev.1 fin (Brussels, 2022), 4.
[2] European Defence Agency, Enhancing EU Military Capabilities Beyond 2040, Main Findings From the 2023 Long-Term Assessment of the Capability Development Plan (Brussels, 2023), 12.
[3] K. Sahin and B. Tyson, Europe’s Capacity to Act in the Global Tech Race, German Council on Foreign Relations, Report No. 6 (Berlin, 2021), 2.
[4] T. Gehrke, ‘The EU Isn’t Even Running the Race for Techno-Industrial Leadership’, European Council on Foreign Relations, 20 June 2023.
[5] European Defence Agency, ‘Driven by Global Threats, Shaped by Civil High-Tech’, European Defence Matters 22 (2021), 6–11.
[6] Council of the European Union, A Strategic Compass for Security and Defence – For a European Union That Protects Its Citizens, Values and Interests and Contributes to International Peace and Security, 7371/22 (21 March 2022).
[7] The International Institute for Strategic Studies, ‘Defence Innovation and the European Union’s Strategic Compass’, Strategic Comments 28/3 (2022).
[8] S. Clapp, European Capability Development Planning, European Parliamentary Research Service, PE 759.619 (Brussels, 2024).
[9] See the PESCO, or Permanent Structured Cooperation, website, Projects, (May 2024).
[10] R. Csernatoni, The EU’s Defense Ambitions: Understanding the Emergence of a European Defense Technological and Industrial Complex, Carnegie Europe, Working Paper (December 2021).
[11] European Defence Agency, Defence Data 2022, Key Findings and Analysis (Brussels, 2023), 3.
[12] E. Chewning et al., How Will US Funding for Defense Technology Innovation Evolve?, McKinsey & Company (New York, 2022).
[13] Defense Advanced Research Projects Agency, DARPA Agency Financial Report FY 2023 (Arlington, VA, 2023), 29.
[14] U.S. Department of Defense, Military and Security Developments Involving the People’s Republic of China 2023: Annual Report to Congress (Arlington County, VA, 2023), 164–168.
[15] R. E. Dugan and K. J. Gabriel, ‘“Special Forces” Innovation: How DARPA Attacks Problems’, Harvard Business Review, October 2013.
[16] V. Mérindol and D. W. Versailles, ‘Une « Darpa européenne » pour favoriser l’innovation de rupture, un modèle transposable à l’UE ?’ [‘A “European DARPA” to Promote Disruptive Innovation, a Model That Can Be Transposed to the EU?’], The Conversation, 28 April 2021.
[17] Congressional Research Service, Defense Advanced Research Projects Agency: Overview and Issues for Congress, R45088 (Washington, DC, 2021).
[18] W. Bonvillian and R. Van Atta, ‘ARPA-E and DARPA: Applying the DARPA Model to Energy Innovation’, The Journal of Technology Transfer 36/5, (2011).
[19] A. Waibel, What Is DARPA? How to Design Successful Technology Disruption (Karlsruhe and Pittsburgh, PA, 2019), 14–16.
