Digital Transformation of European Armed Forces: Interoperability, Command and Cyber Resilience
Executive summary
The digital transformation of Europe’s armed forces represents a structural shift in defence capability development, with profound implications for industrial investment and technological sovereignty. From battlefield cloud computing to secure multi-domain command architectures, the convergence of cybersecurity, AI, and software-defined communications is reshaping procurement priorities and long-term military planning. EU and NATO member states are accelerating national and joint programmes—such as France’s ARTEMIS.IA, Germany’s D-LBO, Italy’s MILSCA, and Poland’s C4ISR upgrade—with increasing reliance on private-sector innovation and advanced dual-use technologies. These developments are supported by large-scale funding instruments, including the European Defence Fund, PESCO initiatives, and NATO’s DIANA and Innovation Fund, positioning the digital defence sector as a strategically protected and expanding market.
For institutional investors and defence-focused funds, this transformation opens new opportunities in sovereign technologies, cloud infrastructure, tactical 5G, encrypted communications, and secure software ecosystems. The push toward interoperability and resilience is generating consistent demand for integrable systems, cyber-secure platforms, and modular architectures adaptable to coalition operations. Moreover, the integration of commercial technologies—particularly in AI, edge computing, and data analytics—offers scalable entry points into defence value chains traditionally dominated by prime contractors. The combination of public co-investment, regulatory prioritisation, and geopolitical urgency suggests that digital defence capabilities will remain a growth area within Europe's strategic industrial base over the next decade.