Geopolitical instability is everywhere and Europe, too, is beginning to recognize and respond to these shifts. Approximately a month ago, European Commission President Ursula von der Leyen proposed the “ReArm Europe Plan”, now referred to as “Readiness 2030”, aiming to mobilize up to €800 billion to enhance the European Union’s defense capabilities. Basically, it became crucial to streamline more resources for security — a matter that has become prevalent in recent months.
As reported today, EU finance ministers will discuss creating a joint defense fund this week to purchase and manage defense equipment, with member states paying a fee for its use. The proposal, commissioned by Poland, aims to raise defense funding without increasing national debt, a concern for high-debt countries.
In our neck of the wood, CEE nations are ramping up defense spending and modernizing military forces. Militarization is also a key priority at the national level. Romania’s Supreme Defence Council approved plans to acquire new small warships to strengthen its naval presence in the Black Sea and bolster NATO’s eastern flank.
The Polish government has allocated $750 million to the Polish Armaments Group (PGZ) to increase ammunition production, in response to heightened demand due to the conflict in Ukraine.
Undoubtedly, there will be more initiatives like this, as startups and governments are urged to invest in technologies that are transforming modern warfare. To shed more light on the topic, The Recursive has collected key trends relevant to the defense sector in CEE.
Surge in defense tech investments
According to Dealroom.co and the NATO Innovation Fund inaugural report, in 2024, European defense startups achieved a record $5.2 billion in venture capital funding, marking a 30% increase over the past two years. Overall, investing is up nearly 5x in the last six years.
Notably, the NATO Innovation Fund, a €1 billion venture capital initiative backed by 24 NATO allies, has been actively investing in deep tech startups.
AI-powered decision making & cyber warfare
AI-driven battlefield analytics, deepfake detection for counter-disinformation, and predictive cyber defense systems are gaining traction across CEE.
Slovakia-based CulturePulse is leveraging AI for conflict prevention and social cohesion, working with the UN in the Balkans and the Middle East. The company’s AI models create “digital societies” to test policies before implementation, helping prevent escalations.
Another CEE example is Romanian Orbotix Technologies, founded in 2023. Based in Brasov, the company is dedicated to improving operator protection and performance.
Quantum technologies
Quantum computing holds the potential to revolutionize defense applications, particularly in encryption and secure communications. In 2024, a proposal was made to establish a Defense Department Center of Excellence focused on quantum computing.
The Polish Ministry of National Defense has recognized the strategic importance of quantum technologies. In March 2025, research findings on quantum key distribution (QKD) were presented.
“If we want to be secure, we must protect the databases we have. Data confidentiality, personal data protection, and their application in all areas of our lives are crucial today,” said Deputy Prime Minister Władysław Kosiniak-Kamysz during a meeting at the Military University of Technology.
Unmanned systems (Drones and UAVs)
The application of unmanned aerial (UAVs), ground (UGVs), and underwater vehicles (UUVs) is also expanding. Ukrainian drone operators have collaborated directly with domestic manufacturers, in order to facilitate further development and deployment of more effective drones tailored for the ongoing conflict with Russia.
The Ukrainian defense tech cluster BRAVE1 has provided grants to startups like Frontline. In August 2024, Frontline received $48,450 to develop its Linza drone, a multi-tasking bomber equipped with digital video communication and electronic warfare-resistant control channels.
The growing use of UGVs in military operations and disaster management underscores their potential, with the market valued at $1.5 billion in 2024 and projected to reach $2.5 billion by 2029, reflecting a CAGR of 9.72% over the forecast period. Several startups in the region are making contributions to this sector.
In February 2023, the UAE-based defense conglomerate EDGE Group made the largest foreign investment in Estonia’s defense sector by acquiring a majority stake in Milrem Robotics, developing unmanned ground vehicles and autonomous systems. The company operates internationally, with offices in Finland, Sweden, the Netherlands, Poland, the United States, and the UAE.
Additive manufacturing (3D Printing) for military logistics
In CEE, the Czech Republic and Poland are among the leading examples of countries where defense firms are exploring the use of 3D-printed components for armored vehicles and aircraft maintenance.
Czech EXCALIBUR ARMY has integrated 3D printing into its operations over the past three years. They use 3D printing for prototyping, making parts for new equipment, and replacing older components. Notable projects include controls for ballistic doors on the Patriot combat vehicle and durable door handle covers for extreme temperatures.
Space-based intelligence & surveillance
Countries are developing technologies to safeguard their satellites and deter potential threats. For example, Ukraine’s People’s Satellite, purchased via crowdfunding, has been crucial in tracking Russian troop movements using SAR (Synthetic Aperture Radar) technology that works in all weather conditions.
Real-time data analysis for defense operations can be enabled through space-based technologies. Polish KP Labs, a NewSpace company founded in 2016 and based in Gliwice, is specializing in autonomous spacecraft and robotic technologies. The company develops their DPUs (Data Processing Units) and AI algorithms for satellites, which can be used in military surveillance and reconnaissance. These satellites can collect and analyze imagery and other data from space in real-time, allowing for faster and more accurate decision-making in defense operations.
Strategic collaborations and defense modernization
Companies from Germany, South Korea, Turkey, and France are competing to establish an ammunition manufacturing joint venture with Poland. This move aims to enhance production capacity for critical munitions. The partnership is expected to be finalized within the next 3-4 months and could lead to deeper strategic cooperation between the involved nations.
Another recent cooperation agreement was sealed in March 2025. Defense ministers from Albania, Croatia, and Kosovo signed a joint declaration in Tirana to enhance defense capabilities, industrial cooperation, and military interoperability. The agreement also focuses on combating hybrid threats and supporting Euro-Atlantic integration, particularly Kosovo’s integration into NATO’s Partnership for Peace.
It was also mentioned that the declaration “welcomes the participation of other countries,” with Bulgaria being invited to join the initiative.
Securing critical infrastructure
Critical infrastructure includes key assets like energy, water, transportation, and communication systems that are essential for the smooth operation of society and the economy.
Military organizations are significantly increasing investments in cybersecurity to protect critical infrastructure and defense systems, with spending reaching $36.9 billion in 2023 and projections of $49.4 billion by 2028. Estonia leads in digital security, collaborating with neighboring countries to enhance cybersecurity across the region.
CEE nations are also modernizing transportation networks, with projects like the EU’s Trans-European Transport Network (TEN-T) improving rail and road connections
