Four strategies could accelerate Europe’s progress.
The first is adopting multi-speed procurement. Software-driven systems like drones improve rapidly and require procurement that matches this pace. Israel’s Iron Dome began with limited capabilities and continuously improved. European defense ministries have established high-speed procurement units with dedicated teams and higher risk tolerance, which should become standard practice.
The second strategy is enhancing military collaboration to reduce fragmentation. Joint procurement, maintenance, and training lower costs and speed up delivery. The Tempest project exemplifies this model, where the U.K., Italy, and Japan collaborate to develop a next-generation fighter, sharing costs that would be burdensome for a single country. Bilateral maritime agreements and Romania’s use of EU funding to purchase European products while growing domestic production illustrate the spread of this approach.
The third is industrial consolidation, which is gaining momentum and needs to accelerate. Companies like Airbus, Leonardo, and Thales have agreed to combine their space divisions into a joint venture with approximately €6.5 billion in revenue and 25,000 employees. European defense mergers rose by 35% in early 2025. McKinsey’s analysis shows consolidation in key supply chain segments could unlock about €9 billion in annual synergies, exceeding the equipment budgets of 24 of Europe’s 30 NATO members. Opportunities lie with tier two, three, and four suppliers who share similar work. Europe can expedite this by harmonizing requirements, reducing national limits, and allowing industries to merge. Besides consolidation, Europe must increase capacity — more shipyards, assembly lines, and plants, along with the capital to support it. Europe needs more facilities for production in several areas.
The fourth strategy involves regulatory unlocking. Scaling up requires skilled workers to be retrained, accredited, and security-cleared; production sites with preapproved permits; and alignment of export controls among European allies. Such regulatory enhancements require the same focus as discussions on funding commitments.
Real deterrence involves tough choices and a public that understands security’s importance and cost. This conversation is just starting in many European regions. It must address potential “gray zone” cyberattacks on hospitals, industrial arson, drones at ports, and cutting undersea cables — incidents that have occurred yet are not widely seen as malicious.
The benefit of getting it right is substantial. McKinsey and GLOBSEC estimate every euro invested in European-made equipment generates two euros of revenue in the European supply chain, and an additional €165 billion annually in equipment spending could create up to 1.2 million jobs. The future will show how well Europe scales up to protect its territory and citizens, and how much of the planned investment leads to lasting deterrence and jobs. Success relies on the collective effort of governments, industry, and investors. Increased spending is vital; spending efficiently is crucial.
Jonathan Dimson is a senior partner in McKinsey’s London office. Mikael Robertson is a senior partner in the Stockholm office.
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