EU funds for innovation opening the door to military technologies

Behind the debates on missiles, drones, and industrial capabilities, a shift with profound implications is underway: European innovation funding is opening up to military technologies, and security considerations are playing an increasingly significant role in the selection of publicly funded projects, according to an article published yesterday by the Austrian daily Der Standard. The report notes that the issue goes beyond merely funding the European defense industry; it concerns the direction set for research, scientific freedom, and control over how future discoveries are utilized.

Journalists at • Der Standard• point out that approximately 20% of the companies in the European Innovation Council (EIC) fund's portfolio are already developing technologies with both civil and military applications; for new investments starting in 2026, this share is expected to reach around 35%. These figures, attributed to a fund representative, suggest that defense is becoming an increasingly prominent component of the European innovation ecosystem.

This shift has a specific timeline. On June 17, 2026, the European Commission announced that the European Innovation Council (EIC) would open up to investments in defense and dual-use technologies. Artificial intelligence, robotics, quantum technologies, and advanced materials are all part of this new equation. For eligible companies, the relevant instruments can provide grants of up to euro2.5 million and equity investments of up to euro30 million, subject to the terms of the respective programs. Brussels justifies this direction by citing vulnerabilities exposed by Russia's war against Ukraine, reliance on non-EU technologies, and the fragmentation of European investments.

The most concrete step is the launch of the EIC STEP Scale Up Defence initiative, with a budget of euro100 million for 2026. This instrument targets companies whose products, technologies, or services have predominantly military applications. Planned investments range from euro10 million to euro30 million per selected company, with documentation projecting funding for between three and ten firms, depending on the quality of the proposals. Targeted areas include air and missile defense, drones and anti-drone systems, electronic warfare, and cyber technologies. The funds are invested as equity stakes in companies, with the aim of attracting private capital in much larger funding rounds.

This framework could alter the economic incentives for innovation. For a firm attempting to turn a prototype into a product, access to capital can determine whether the technology reaches the market or remains in the laboratory. As defense becomes an explicit target for European investment, the commercial appeal of projects meeting military demand increases. This leads to a potential shift in priorities: researchers, entrepreneurs, and investors will have added reasons to pursue applications for which funding and customers exist.

Far larger sums lie on the horizon. For the 2028-2034 period, the European Commission has proposed a budget of euro175 billion for Horizon Europe, the framework programme for research and innovation. This is a proposal for the Union's future multiannual budget, not an amount that has already been allocated. The stated ambition is to strengthen European competitiveness through research and to transform scientific results into innovation. In parallel, the proposed European Competitiveness Fund includes approximately euro130.7 billion for resilience and security, as well as the defense and space industries. This figure covers a range of areas and cannot be presented entirely as a budget for military research. However, its scale illustrates the significant weight that security and defense are set to carry within European investments. If the proposal materializes, companies and research institutions will operate in a financial landscape where these priorities exert considerable pull.

The cited source also indicates that universities have reason to monitor this development closely. The League of European Research Universities (LERU) has-since April 2025-criticized the Commission's approach to opening Horizon Europe to dual-use and defense funding. The organization objected to the lack of further consultation with the academic community and warned that redirecting funds risks undermining the programme's core purpose. It advocates for protecting a dedicated research budget to ensure it does not become a financial reserve tapped into whenever a new political priority emerges.

This objection touches upon a fundamental question: who determines the value of a discovery? Basic research may take years to yield an application, and its immediate utility may be impossible to foresee. Defense-oriented funding, by contrast, targets concrete needs and strategic capabilities. The two can coexist, but the balance depends on rules and resource allocation. If military urgency comes to dominate the competition for funds, fields lacking an obvious strategic application may lose ground.

The relationship between security and the flow of knowledge is equally sensitive. • Der Standard• highlights the difficulties that confidentiality, export controls, and restrictions on publishing results can create for international teams. For researchers, the issue becomes very concrete: what data can they share, with whom can they collaborate, and under what conditions can they publish their work? The publication also raises the question of whether a young researcher can refuse to participate in a military project without jeopardizing their career.

At the same time, the documentation for the new defense instrument includes explicit safeguards. The EIC requires adherence to international humanitarian law and specifies that AI-based functions associated with weapons systems must allow for meaningful human control. These requirements demonstrate that the funding body acknowledges the ethical implications of the technologies it supports. Their actual effectiveness will depend on how they are applied during project evaluation and the use of the resulting products.