How Dual-Use Technologies Can Turn Europe’s Potential into Power
The new Atomico State of European Tech report has just been released, and it offers a picture of Europe that is far more complex and far more hopeful than the usual conversation suggests. Europe now employs around 4.6 million people in tech, a workforce that has been growing faster than the American one for several years. It also produces more STEM graduates than the United States, which gives the continent a depth of technical and engineering talent that many countries would envy. Close to a third of all new global founders now emerge from Europe, and deep tech has become one of the continent’s strongest areas of investment. These are not small achievements. They reflect a continent that has the intellectual and scientific capacity to define the next technological decade.
Yet Atomico also captures something that Europe still has difficulty acknowledging. The continent struggles to convert this strength into economic transformation. Many of Europe’s most promising companies grow to a point and then stall, often for reasons that have little to do with technology itself. Late-stage capital remains limited, scaling across borders is more complicated than it should be and public institutions are often slow to adopt or test new tools. Europe invests a modest fraction of its GDP into venture capital, far below what is needed to sustain global leaders. The result is a pattern that has become familiar. Europe generates extraordinary talent and impressive ideas, but these assets do not consistently become sources of industrial or economic power.
This gap is precisely where dual-use innovation becomes important. The term often evokes narrow discussions about defence or security, but in practice it describes how modern technologies genuinely function. Artificial intelligence improves factory floors and also supports crisis response. Robotics enable logistics networks and also support remote operations. Secure communications, advanced sensors and next generation materials strengthen entire industries while also contributing to national resilience. These technologies do not belong exclusively to any single sector, and their relevance grows when different communities are willing to adopt them.
Europe begins this moment in a stronger position than it might realise. Its universities are still among the world’s leaders in robotics, photonics, materials science and AI. The engineering and scientific talent is deep and diverse. Many founders across the continent already build with an international mindset and are comfortable working on complex technologies that require years of development. The challenge, as Atomico shows with clarity, lies not in imagination but in scale. Europe reaches the prototype stage with confidence, then faces an abrupt narrowing of opportunity. Funding becomes scarce, procurement processes slow down innovation and cross-border regulations interfere at precisely the moment when companies need speed.
The recent United Kingdom Parliamentary assessment of defence readiness reveals what this structural weakness looks like in practice. Although the report focuses on military preparedness, the deeper message concerns industrial capacity. Even a country with a long-standing defence industry struggles to produce the surge capabilities, advanced manufacturing and technological integration that modern security environments require. This problem is broader than defence. It reflects the difficulty of converting scientific excellence into industrial strength, a difficulty that Europe faces across multiple sectors.
Dual-use innovation offers one of the most realistic ways to bridge this gap. It links research communities, startups and industrial partners with markets that already exist. A company working on autonomy, secure data fusion or advanced sensing does not operate in isolation. Civilian sectors need these technologies for productivity and resilience, while public institutions need them for safety, efficiency and strategic preparedness. This duality shortens the path from idea to adoption. It gives companies a more predictable early market and creates a stronger incentive for investors to remain engaged. It also anchors innovation in Europe, because the relevant customers are here.
To make use of this opportunity, however, Europe needs a clearer strategy. The first element is capital. Deep-tech companies cannot grow without substantial and sustained investment, especially in the later stages. Europe’s financial system still does not provide this at the necessary scale. If institutional investors had a greater role in supporting strategic technologies, more European companies could grow into global leaders without relocating elsewhere.
Public procurement is the second area where change is essential. Governments and public agencies are some of Europe’s largest buyers, yet they rarely act early enough to shape markets or accelerate innovation. If public institutions worked more closely with developers of promising dual-use technologies, they could reduce risk for private investors and strengthen entire industrial ecosystems. Adoption, not just funding, is one of the most powerful forms of support a government can offer.
The third area is the ease of scaling across borders. A young company that wishes to expand within Europe still faces a surprisingly uneven regulatory landscape. Differences in certification, procurement rules and approval processes slow growth at the very moment when momentum is essential. A more coherent European environment would allow technologies to move more freely, build supply chains more efficiently and reach customers who may not otherwise engage with innovation.
None of these steps require Europe to become something it is not. It already holds the scientific, technical and industrial foundations needed for leadership. What Europe lacks is the connective tissue that lets ideas grow into outcomes. Dual-use innovation can provide that link. It connects talent to industry, creativity to demand and research to production. It gives Europe a strategy that is both pragmatic and forward-looking, capable of strengthening its economy as well as its security.
The Atomico report shows the potential. The UK assessment shows the stakes. Dual-use technologies show the path. Europe can choose whether it becomes a continent where talent and ideas find their full expression, or one where they continue to shine briefly before moving elsewhere. If Europe chooses well, it will gain not only greater resilience, but also an economic base worthy of its talent and ambition.
Katarína Cséfalvayová