Against the backdrop of Russia’s war against Ukraine, and the rapid battlefield adaptation that it has led to, defence innovation and small and medium-sized enterprises (SMEs) are being seen as key contributors to Europe’s industrial preparedness, production scalability and security of supply. To this end, recent European Union (EU) policy and financial initiatives have specifically targeted SMEs in the defence sector, to address the financial, regulatory and industrial bottlenecks facing SMEs in Europe. However, SMEs still face considerable challenges and barriers. This Study examines the evolving role of SMEs within the European Defence Technological and Industrial Base (EDTIB). It specifically analyses the persistent barriers preventing SMEs from entering the defence market in Europe, and, once present, from scaling their innovation, services and products. The Study argues that, despite the growing political recognition of SMEs as sources of technological and disruptive innovation, SMEs still face considerable financial, regulatory and political barriers to access the EDTIB.
European Parliament study, 2026
Daniel Fiott 