Transforming Defense for a New Era: NATO’s Vision for a Stronger, Smarter Europe

As geopolitical tensions intensify and security priorities evolve, Europe’s defense landscape is entering a pivotal era. The North Atlantic Treaty Organization (NATO) is undergoing its most significant transformation in decades, driven by rising defense budgets, accelerated modernization, and growing industrial collaboration aimed at strengthening European and transatlantic security.

To explore the forces reshaping this transformation, Frost & Sullivan hosted a webinar on

Unlocking Europe’s Defense Growth Potential: From NATO Budgets to Homegrown Technology Leadership

Featured Experts

In this discussion, Frost & Sullivan’s Aerospace & Defense growth leaders and industry experts listed below analyzed NATO’s new defense priorities, technology accelerators, and the future of European defense industrial resilience:

• Wayne Shaw, Growth Expert, Director & Practice Area Leader – Aerospace & Defense Practice, Frost & Sullivan
• Meir Avidan, Vice President of Strategy & Business Development, Sentrycs
• Avi Kalo, Growth Expert & Director – Aerospace & Defense Practice, Frost & Sullivan

Transformative Viewpoints Discussed in This Session:

1. NATO Defense Growth Through Strategic Investment

NATO’s 31 active member nations are on track to meet the 2% GDP defense spending target for the first time in the NATO alliance’s history. Eastern European nations are leading the surge, channeling over 4.5% of GDP into defense as part of a broader strategic pivot.

This renewed NATO’s defense budget reflects a clear transition from traditional, legacy-heavy postures to agile, technology-forward, and collaborative defense strategies. Funding is increasingly directed toward modernizing capabilities, rebuilding stockpiles, and strengthening cross-border interoperability.

How is your organization preparing to align with NATO’s evolving defense investment priorities?

2. Core Defense Technologies Powering NATO’s Next Generation of Capabilities

• Unmanned Aerial Vehicles (UAVs): Tactical drones and loitering munitions are now central to modern combat operations, enabling enhanced situational awareness, and real-time adaptability on the battlefield
• Missile Defense Systems: Directed energy weapons (DEWs), high-power microwaves (HPMs), and multi-layered interception architectures are transforming NATO’s deterrence capabilities and accelerating the shift toward energy-based air and missile defense.
• Main Battle Tanks (MBTs): Programs like Leopard 2A8 and Abrams upgrades are integrating AI-driven sensors with digital command systems for next-generation mobility and protection and advanced protection suites to deliver next-generation mobility, survivability, and tactical dominance.
• Airborne Munitions: Precision-guided, long-range, and hypersonic munitions are expanding the reach and efficiency of allied forces.
• Counter-drone Solutions: NATO’s eastern flank is becoming a testing ground for layered defense systems designed to detect, track, and neutralize low-cost aerial threats.

How is your organization positioning itself to capture growth opportunities within NATO’s modernization agenda?

3. Accelerating NATO’s Defense Innovation Through Collaborative Ecosystems

Innovation has become the cornerstone of NATO’s modernization drive. The Alliance has launched new initiatives to accelerate dual-use and defense technologies:

• DIANA (Defense Innovation Accelerator for the North Atlantic): Supporting startups developing dual-use innovations in AI, autonomy, quantum computing, and cyber resilience.
• NATO Innovation Fund (NIF): A €1 billion multi-sovereign venture fund investing in deep-tech companies across allied nations.
• National Programs: Germany’s Defense Equity Facility and other country-level co-investment models are fueling early-stage defense innovation and supply chain localization.

These programs signal a move toward a collaborative innovation framework, where alliances between startups, SMEs, and primes are enabling faster capability development and technology transition.

How are you planning to leverage NATO’s innovation accelerators and funding programs to scale your defense technology strategy?

How can your organization build local partnerships and offset programs to become part of the European defense supply chain?

5. Counter-drone and Infrastructure Protection: The New Frontline

The Russia and Ukraine conflict has expanded the definition of modern warfare. Attacks on ports, power grids, and logistics hubs have highlighted how drones and cyber tools can disrupt civilian and military assets alike.

As a result, NATO is intensifying its focus on counter-UAS systems, electromagnetic spectrum management, and electronic warfare (EW) capabilities. Balancing regulatory compliance with operational flexibility will be key to enabling effective airspace protection without compromising communications integrity.

Is your organization ready to deliver or adopt the next generation of counter-drone and electronic warfare solutions to secure critical infrastructure?

Looking Forward: Growth Opportunities in European Defense Renaissance

The future will see NATO nations double down on localized innovation, joint procurement, and resilient manufacturing. For defense suppliers, technology startups, and governments alike, the opportunities are immense, from AI-enabled defense systems and electronic warfare to next-gen ISR platforms and industrial collaboration.

Organizations that align early with NATO’s innovation and localization priorities will be best positioned to shape and benefit from this next phase of European defense growth.

What steps your organization is planning to take to capture emerging growth opportunities in Europe’s defense transformation?

Connect with Frost & Sullivan’s Aerospace & Defense growth experts at [email protected]  to explore tailored strategies that can help your organization capitalize on Europe’s evolving defense landscape. Or, schedule a Growth Pipeline Dialog with our experts to accelerate your defense innovation and growth roadmap.