In diesem Jahr haben die Atlantik-Brücke und der Atlantic Council das 4. Transatlantic Forum on Geoeconomics in Brüssel – im Zentrum der europäischen Politik – ausgerichtet. Die Gespräche konzentrierten sich auf die transatlantische Partnerschaft, die eskalierenden geopolitischen Spannungen und die wachsende wirtschaftliche Volatilität. Die Agenda basierte maßgeblich auf hochkarätigen Gesprächen, insbesondere mit dem US-Botschafter bei der NATO, Matthew Whitaker, und dem EU-Handelskommissar Maroš Šefčovič, die beide mit Offenheit und differenziertem Blick auf ihre Fachgebiete beeindruckten.

„Amerika wird jeden Zentimeter des Territoriums der Allianz schützen.“

Botschafter Matthew Whitaker sendete ein deutliches Signal des anhaltenden amerikanischen Engagements für die kollektive Verteidigung der NATO und bestand darauf, dass „jeder Zentimeter“ des NATO-Gebiets geschützt werde. Er schilderte, wie eine nachhaltige diplomatische Einbindung Präsident Trump zu einer starken Unterstützung der ukrainischen Souveränität bewegt habe. Ein einheitliches Auftreten sei nötig, um Moskau echte Kosten aufzuerlegen. Jüngste russische Drohnenvorstöße in den NATO-Luftraum über Polen und die baltischen Staaten zeigten einerseits die anhaltenden Bedrohungen, andererseits aber auch die Reaktionsfähigkeit und Abschreckungskapazität der Allianz. Whitaker äußerte jedoch Frustration darüber, dass einige europäische Verbündete mit den Verteidigungsausgaben „hinterherhinken“ und warnte, dass das Verfehlen der neu gesetzten 5-Prozent-BIP-Marke Glaubwürdigkeit und Abschreckung schwächen könnte. Für Whitaker ist eine sichere Allianz untrennbar mit einer ausgewogenen Lastenverteilung verbunden – ein Ziel, das im „Haager Verteidigungsversprechen“ verankert ist, aber Wachsamkeit erfordert, um jährlich substanzielle Steigerungen sicherzustellen.

„Ein Innovationsklima zu fördern ist der Schlüssel sowohl für wirtschaftliche als auch für sicherheitspolitische Resilienz.“

Auf europäischer Seite reflektierte EU-Handelskommissar Maroš Šefčovič über eine grundlegende Transformation: Europa, so argumentierte er, sei als Friedensprojekt gestartet, müsse nun aber seine Sicherheits- und Verteidigungspolitik angesichts rasanter geopolitischer Veränderungen neu bewerten. Er betonte die Bedeutung der USA als strategischen Partner, nicht nur durch erhöhte Verteidigungsinvestitionen, sondern auch durch Attraktivitätssteigerung des europäischen Verteidigungssektors für Investoren. Šefčovič stimmte Whitakers Einschätzung zu, dass ohne nachhaltiges Wirtschaftswachstum ein Staat nicht 5 Prozent seines BIP in Verteidigung investieren könne – und dass die Förderung eines Klimas für Innovation wesentlich für wirtschaftliche und sicherheitspolitische Widerstandskraft sei.

Des Weiteren drehte sich die Diskussion beim Transatlantic Forum um Handel und Zölle. Die Diskutanten waren sich einig, dass der gegenwärtige Moment der Beginn eines „neuen Handelskapitels“ sei, geprägt von anhaltender Unsicherheit und drastischen Verschiebungen im globalen Warenverkehr. Neue US-Zölle würden Europa zwingen, seine Lieferketten zu überdenken. Außerdem müsse Europa sich gut überlegen, wieviel von seiner Stahlindustrie nach China abwandern dürfe. Anahita Thoms, Partner, Head of Germany’s International Trade Practice, Baker McKenzie, stellte klar, dass „Zölle schmerzen, aber Unsicherheit zerstört“ und dass eine Rückkehr zur alten globalen Handelsordnung nicht zu erwarten sei. Stattdessen müsse Europa seine Handelsbeziehungen diversifizieren, etwa durch neue Abkommen mit Mercosur, und zugleich die transatlantische Wirtschaftsbeziehung stabilisieren und vertiefen, betonten die Panelist*innen.

„Die tiefe parteipolitische Spaltung ist eine reale innere Bedrohung für die Stellung des US-Dollars.“

Eine andere lebhafte Diskussion beleuchtete die globale Stellung des US-Dollars. Sowohl amerikanische als auch europäische Speaker betonten, dass die Vorherrschaft des US-Dollars durch interne ideologische Grabenkämpfe in den USA bedroht sei. „Wir wissen nicht genau, wann der Niedergang des US-Dollars begann“, sagte Selesha Mohsin, leitende Washington-Korrespondentin bei Bloomberg. Die „tiefe parteipolitische Spaltung“ stelle eine reale interne Bedrohung für die Position des US-Dollars dar. Dies habe eine umfassendere europäische Neubewertung von Zahlungssystemen und eine Suche nach größerer finanzieller Souveränität ausgelöst, mit Forderungen nach neuen Plattformen, die weniger anfällig für externe Schocks seien.

„Europa ist die einzige Weltregion, in der die Energienachfrage gesunken ist – ein Zeichen der Deindustrialisierung.“

Das Transatlantic Forum diskutierte auch über Europas sinkende Energienachfrage. Andrew Puzder, der neue US-Botschafter bei der EU, erklärte: „Europa ist die einzige Weltregion, in der die Energienachfrage gesunken ist – ein Zeichen der Deindustrialisierung.“ Dieses Phänomen müsse angegangen werden, um eine langfristige Erosion der industriellen Basis Europas zu verhindern und die Energiesicherheit zu gewährleisten.

„Das Rennen um die KI wird durch Kapital und Talent entschieden.“

Anschließend wurde auf der Konferenz über künstliche Intelligenz und digitale Wettbewerbsfähigkeit gesprochen. Europas immer größer werdender Rückstand bei der Einführung generativer KI wurde als Herausforderung und Aufforderung zum Handeln betrachtet. „Nur 37 Prozent der deutschen Unternehmen nutzen generative KI“, sagte Michael Hüther, Direktor und Mitglied des Präsidiums am Institut der deutschen Wirtschaft (IW). „KI ist wichtig für Deutschlands Rückkehr zu mittlerem Wirtschaftswachstum“, betonte er. Jens Wiese, geschäftsführender Gesellschafter bei Leitmotif, ergänzte: „Das Rennen um KI wird durch Kapital und Talent entschieden. Europäische Unternehmen täten gut daran, ihre transatlantischen Beziehungen nicht zu gefährden, indem sie verstärkt nach KI-Chancen in China suchen.“

Die Redner*innen des Forums waren sich einig, dass das Schließen dieser Lücke pragmatische Regulierung, Kapitalinvestitionen und vor allem das Festhalten an der transatlantischen Partnerschaft erfordert. Abkürzungen durch Zusammenarbeit mit anderen Akteuren wie etwa China sei nicht der richtige Weg. Gegenwärtig verfüge nur die USA über die Größenordnung und Dynamik, die es braucht, um im Bereich KI führend zu sein – ein deutlicher Hinweis auf die Grenzen Europas aufgrund fragmentierter Finanzmärkte.

Das Fazit des vierten Transatlantic Forum war eindeutig: Die Herausforderungen von Sicherheit, wirtschaftlicher Wettbewerbsfähigkeit, Innovation und Resilienz können nur durch eine erneuerte transatlantische Solidarität bewältigt werden – verankert in gemeinsamen Werten und konkreten Investitionen auf beiden Seiten des Atlantiks.

Briefings zu den Themen der Konferenz

Die folgenden Policy Briefs bieten einen Deep Dive in die Themen der Konferenz:

„Points of Vulnerability in the Battery Cell Industry“ – Kai Müller, Chief Financial Officer von PowerCo SE. und Sören Pippart, Senior Expert for Public Affairs at PowerCo SE., skizzieren Deutschlands Schwächen und Handlungsmöglichkeiten in der Batteriebranche.

„Waiting for the Big Bang: Executing the European Defense Build-Up in Germany“ – Robin Fehrenbach, Leiter Analyse und Dokumentation der Atlantik-Brücke, Jakob Flemming, Senior Programm- und Research Manager der Atlantik-Brücke und Julia Friedlander, Geschäftsführerin der Atlantik-Brücke, umreißen, wie Deutschland versucht, in Rekordzeit verteidigungsfähig zu werden.

„The dollar in the fight for US primacy“ –  Martin Mühleisen, ehemaliger Beamter des Internationalen Währungsfonds (IWF) und Nonresident Senior Fellow des Atlantic Council’s GeoEconomics Center, analysiert, wie die USA unter Präsident Trump Wirtschaftpolitik als Werkzeug zur Durchsetzung außenpolitischer Prioritäten nutzen.

„How to dismantle a reserve currency“ – Daniel McDowell, Nonresident Senior Fellow im GeoEconomics Center des Atlantic Council, sinniert darüber, ob die Tage des Dollars als Reservewährung gezählt sind, und ob der Euro das Zeug zu seinem Nachfolger hat.

„The Road to Turnberry“ – Elizabeth Baltzan, Senior Fellow am Atlantic Council GeoEconomics Center und ehemalige Beraterin des US Trade Representative, bewertet den letzten Handelsdeal der Europäischen Union mit den USA.

„The summer of AI action plans“  – Alisha Chhangani, Assistant Director des Atlantic Council GeoEconomics Center und Ananya Kuma, Deputy Director, Future of Money, des Atlantic Council GeoEconomics Center, analysieren die sich vergrößernde Kluft zwischen den USA, China und Europa beim Thema KI.

Sehen Sie hier eine kurze Rückschau auf das Forum:

https://www.youtube.com/watch?v=S4V9GEKiu74

Sehen Sie hier die Aufzeichnung des Forums:

Hier finden Sie exklusive Interviews mit den Panelisten:

Der Beitrag Reagieren auf globale Veränderungen erschien zuerst auf Atlantik-Brücke e.V..

Diese Policy Briefs sollen sowohl den Teilnehmer*innen des Forums als auch der interessierten Öffentlichkeit als Vorbereitung dienen und einen kurzen Deep Dive in die Themen der Konferenz ermöglichen.

„Points of Vulnerability in the Battery Cell Industry“ – Kai Müller, Chief Financial Officer von PowerCo SE. und Sören Pippart, Senior Expert for Public Affairs at PowerCo SE., skizzieren Deutschlands Schwächen und Handlungsmöglichkeiten in der Batteriebranche.

„Waiting for the Big Bang: Executing the European Defense Build-Up in Germany“ – Robin Fehrenbach, Leiter Analyse und Dokumentation der Atlantik-Brücke, Jakob Flemming, Senior Programm- und Research Manager der Atlantik-Brücke and Julia Friedlander, Geschäftsführerin der Atlantik-Brücke, umreißen, wie Deutschland versucht, in Rekordzeit verteidigungsfähig zu werden.

„The dollar in the fight for US primacy“ –  Martin Mühleisen, ehemaliger Beamter des Internationalen Währungsfonds (IWF) und Nonresident Senior Fellow des Atlantic Council’s GeoEconomics Center, analysiert wie die USA unter Präsident Trump Wirtschaftpolitik zur als Werkzeug zur Durchsetzung außenpolitischer Prioritäten nutzt.

„How to dismantle a reserve currency“ – Daniel McDowell, Nonresident Senior fellow beim Atlantic Council’s GeoEconomics Center, sinniert darüber, ob die Tage des Dollars als Reservewährung gezählt sind, und ob der Euro das Zeug zu seinem Nachfolger hat.

„The Road to Turnberry“ – Elizabeth Baltzan, Senior Fellow am Atlantic Council GeoEconomics Center und ehemalige Beraterin des US Trade Representative bewertet den letzten Handelsdeal der Europäischen Union mit den USA.

„The summer of AI action plans“  – Alisha Chhangani, Assistant Director des Atlantic Council GeoEconomics Center und Ananya Kuma, Deputy Director, Future of Money, des Atlantic Council GeoEconomics Center, analysieren die sich vergrößernde Kluft zwischen den USA, China und Europa beim Thema KI.

Mehr Informationen über das Transatlantic Forum on GeoEconomics, Transkripte der Panels und Bilder der Veranstaltung finden Sie hier.

Oder schauen Sie selbst in die Aufzeichnung des Forums:

Der Beitrag „Waiting for the Big Bang“ erschien zuerst auf Atlantik-Brücke e.V..

Wann?     30. September 2025, 08:00 – 17:00 Uhr

Wo?        Hotel Le Plaza Brussels, Adolphe Maxlaan 118/126, 1000 Brüssel, Belgien

Themengebiete der Konferenz:

► Handelskonflikte zwischen den USA, Europa und China
► Die Rolle künstlicher Intelligenz für die transatlantische Wettbewerbsfähigkeit
► Finanzierung der europäischen Verteidigung
► Die Zukunft des Dollars als Weltleitwährung und die Auswirkungen auf den Euro

Diskussionsteilnehmer*innen unter anderen:

• Matthew Whitaker, US-Botschafter bei der NATO
• Valdis Dombrovskis, Kommissar für Wirtschaft und Produktivität, Europäische Kommission
• Maroš Šefčovič, Kommissar für Handel und Wirtschaftliche Sicherheit, Europäische Kommission
• David O’Sullivan, EU-Beauftragter für Sanktionen, Europäische Kommission
• Nils Schmid, Parlamentarischer Staatssekretär, Bundesministerium für Verteidigung
• Teresa Ribera, Vizepräsidentin der Europäischen Kommission für einen sauberen, gerechten und wettbewerbsfähigen Übergang
• Jonathan Black, Stellvertretender Nationaler Sicherheitsberater und G7- und G20-Sherpa des Premierministers, Regierung des Vereinigten Königreichs
• Jens Bodo Koch, CEO, Heckler & Koch AG
• Sigmar Gabriel, Vorsitzender, Atlantik-Brücke
• Michael Hüther, Direktor und Mitglied des Präsidiums, Institut der deutschen Wirtschaft (IW) Köln e.V.
• Anahita Thoms, Partner, Head of Germany’s International Trade Practice, Baker McKenzie

Eine vollständige Liste der Redner*innen und das Programm finden Sie hier.  

Und den Livestream finden Sie auf YouTube oder direkt hier.

Der Beitrag Transatlantic Forum on GeoEconomics 2025 erschien zuerst auf Atlantik-Brücke e.V..

[related]On the issue of immobilized Russian assets, Singh underscored that “political will” should ensure the G7 follows through on its commitment to bring the interest revenue forward into a $50 billion aid package for Ukraine by year’s end. “We are going to get to the finish line on Russia’s reserves.” He highlighted the historical significance of this multilateral effort, stating that “never before in history has a multilateral coalition frozen the assets of an aggressor country… and found a way to harness the value of those frozen assets to fund the aggrieved party.”

He acknowledged technical challenges but, when referring to Russian President Vladimir Putin, emphasized that “the choice is ours, not his.” Singh named Hungary’s Prime Minister, Viktor Orban, as the only European Union leader obstructing the legal changes the United States is asking for to unlock its participation – but suggested that Orban “doesn’t have as much leverage as he may perceive.”

Regarding economic statecraft, Singh advocated for a balanced approach, warning that restrictive tools like “sanctions, export controls, [and] tariffs” don’t “win hearts and minds.” He emphasized the need for positive tools that promote “supply chain resilience,” “technological preeminence,” and “energy security.”

He also expressed concern over the lack of financial firepower for large-scale investments, arguing that the private sector lacks the incentive to invest in long-term, high-risk projects. Singh called for initiatives like a “strategic resilience reserve” or public authorities with more flexibility and scope to fill this gap. More highlights from his conversation with Atlantik-Brücke CEO Julia Friedlander are below.

Industrial policy and global competition

• Singh argued that industrial policy is crucial because the private sector alone cannot address major challenges like the “loss of supply chain resilience,” “fading technological preeminence,” and the “hollowing out of our industrial base.”
• He highlighted the positive results from recent government interventions, such as tax incentives and research and development investments, which have driven “sustained above-trend growth” and a resurgence in “innovation and productivity.”
• Singh noted that the delay in adopting a more active government role was due to policy muscles which had “atrophied” over the past forty years. It has taken time to “course correct” from a laissez-faire approach.
• On global competition, Singh stressed the need for a “multiplayer, multistage game theory” approach, especially regarding China, which “floods the market” with state-backed overcapacity in key sectors like steel, solar, and semiconductors.
• He outlined the US strategy to strengthen domestic capacity, form alliances with countries that “play by the same rules,” and use “restrictive measures” like tariffs to prevent unfair competition and safeguard national security.

China’s role in Russia’s war machine

• Singh emphasized that Russia has turned its economy into a “war machine” and is now relying on rogue states like Iran and North Korea, which have become “witting cogs in this arsenal of autocracy” to sustain its military capabilities.
• Singh found China’s actions over the last years particularly baffling, questioning why a country that claims to seek “better relations with Europe” and wants to be seen as a “responsible stakeholder” is now supporting the biggest threat to European security and aiding Pyongyang’s nuclear program.
• Singh noted China’s deflationary slump and reliance on external demand but questioned why it continues to “antagonize all the major sources of external demand,” calling Beijing’s role in the war a “strategic wedge” rather than a win.
• Singh stated that sanctions aren’t about shock and awe but about “stamina,” pointing out that there are signs of China pulling back from financing Russian military inputs.
• He suggested that China has the power to “pull the plug tomorrow on the factory to the war machine” and warned that failure to act would result in “profound reputational damage” for Beijing.

Humility, creativity, and structural reform

• Singh emphasized the importance of humility in addressing global challenges, especially in light of “the uncertainties of our domestic political climate, geopolitical backdrop, and global macroeconomic regime,” which are all intensifying and feeding on one another.
• He called for a cultural shift in national security, advocating for “bottom-up creativity” and less top-down hierarchy. Singh stressed the need for individuals to “speak up, take risks, admit when you’re wrong,” and challenge assumptions to avoid risk management failures.
• Singh underscored the importance of historical perspective, drawing parallels between the current era and the early twentieth century. He cited examples including the first US-led wave of globalization (1870–1913), emphasizing structural reforms like the creation of the Federal Reserve and income tax to address inequality, as relevant lessons today.
• Singh highlighted the need for modern structural change, pointing to recent legislation like the Inflation Reduction Act, CHIPS and Science Act, and infrastructure bills as good steps, while also urging policymakers to focus on repairing the social contract at home and rebalancing global leadership.

Burns on China: “We’re systemic rivals”

In the first session of the conference US Ambassador to China Nicholas Burns joined the Transatlantic Forum virtually from Beijing for a keynote address and discussion with Atlantic Council GeoEconomics Center Senior Director Josh Lipsky. The ambassador opened his remarks with “good news” and “bad news” about the US-China relationship today.

“We’ve got to be careful about how we handle this relationship,” Burns said on Thursday about US-China relations. “We’re systemic rivals,” he continued, “And I think we’ll be systemic rivals well into the next decade, perhaps even beyond.”

The good news, he said, is that the US-China relationship has stabilized over the past year, especially after US President Joe Biden’s meeting with Chinese leader Xi Jinping in California in November 2023. Since then, both sides have worked to reopen and strengthen military-to-military and other cabinet-level channels as well as slow the flow of precursor chemicals used to make fentanyl.

But the other side of the coin, Burns continued, is that the US-China relationship remains “extremely competitive” and will be for the foreseeable future. This competition plays out in the security realm, along with US allies and partners in the Indo-Pacific, but also – and increasingly – on issues of technology and economics.

2024 Transatlantic Forum on GeoEconomics: Opening Remarks

Keynote remarks and discussion with U.S. Ambassador Nicholas Burns

Spotlight conversation: Adena Friedman on navigating financial complexity

Session I: The role of financial regulation in curbing illicit financial flows

Session II: The roles and responsibilities of governments, industry, and the financial sector

Session III: Technology regulation and the future of artificial intelligence

Spotlight conversation with Deputy Attorney General Lisa Monaco

Session IV: Vulnerabilities and opportunities in the electric vehicles supply chain

Spotlight conversation with Deputy National Security Advisor for International Economics Daleep Singh

Session V: Transatlantic Strategy for enhancing critical mineral supply chain resilience

Session VI: Transatlantic strategy to enable stronger cyber resilience within the financial system

Spotlight conversation with Mastercard Vice Chairman and President Jon Huntsman

Session VII: The geopolitics of payments and the role of the US Dollar in a changing world

2024 Transatlantic Forum on GeoEconomics: Closing Remarks

Der Beitrag Daleep Singh: „We are going to get to the finish line on Russia’s reserves“ erschien zuerst auf Atlantik-Brücke e.V..

Following two successful editions of the Forum in Frankfurt 2022 and Berlin 2023, the Transatlantic Forum on GeoEconomics goes to the United States for the first time. Taking place on the sidelines of the United Nations General Assembly in New York City, this third iteration of the Forum will gather top political and financial decision-makers from around the world and executives from across the private sector. We will be tasking these leaders to increase alignment and collaboration between Western allies and the private sector – and to identify multilateral solutions for securing the global financial system, boosting technological innovation, and advancing energy transition.

We cordially invite you to join us virtually for dynamic conversations and meaningful insights at the forefront of transatlantic economic cooperation.

Der Beitrag Rewatch the livestream: Transatlantic Forum on GeoEconomics erschien zuerst auf Atlantik-Brücke e.V..

Introduction

Innovation in defense technology is a cornerstone of national security and military superiority. For Germany, a country with a complex historical and geopolitical backdrop, the impetus to innovate within its armed forces has never been more pressing. Today’s security environment, characterized by rapid technological advancements and asymmetric threats, necessitates a robust and agile approach to defense innovation.

As the demands on German foreign and security policy rise amidst a Europe plagued by multiple crises, so too do the demands on the German Armed Forces. To enhance the Bundeswehr’s assertiveness and effectiveness as a deterrent, despite constraints such as personnel and equipment shortages, it must rapidly and extensively adopt new technologies. The quicker and more effectively these technologies are utilized, the greater the advantages they will provide on the battlefield.

The current political drive for change, spurred by Russia’s war of aggression against Ukraine and its threat to NATO allies, along with the pressure to adapt to the new security landscape and the increase in financial resources, is creating an unprecedented momentum.

How effective this momentum will play out depends on how general obstacles, such as government funding gaps, a risk averse procurement bureaucracy and legal frameworks, can be tackled.

This paper explores the critical aspects of defense technology and innovation within the German Armed Forces, detailing the necessity for innovation, the role of defense innovation hubs (specifically the Bundeswehr Cyber Innovation Hub CIHBw), the significance of software-defined defense, the contribution of venture capitalists, and the importance of a supportive legal framework.

1. Armed Forces’ Need for Innovation

The need for innovation in the armed forces arises from several critical factors: the evolving nature of warfare, the rise of new and advanced technologies, and the necessity to maintain a strategic advantage. In today’s interconnected world, conventional methods of warfare are increasingly supplemented by cyber warfare, unmanned systems, and artificial intelligence (AI).

Evolving Nature of Warfare

In the public eye and within decision-making processes regarding the armament of the Bundeswehr, the focus tends to be on large, expensive weapons systems such as fighter aircraft, frigates, and tanks. As a result, smaller armament projects that lack sufficient funding or personnel, are often neglected. However, these smaller systems are essential for integrating reconnaissance, command, and control resources, thereby establishing uniform situational awareness. While tanks and ships remain important on the battlefield, recent acquisitions of these “monolithic systems” represent only a small fraction of the necessary changes within the German Armed Forces. The decisive factor in the outcome of a war is not a single weapon system, but the coordinated and effective use of all available resources in a network. Achieving this requires a balance between spending on monolithic systems and on interfaces, decision accelerators, and coordination elements in the operation and deployment of the armed forces [1].

Modern conflicts often involve state and non-state actors employing unconventional tactics. For instance, cyber-attacks can cripple national infrastructure without a single shot being fired. The German Armed Forces, or Bundeswehr, must adapt to such hybrid threats by integrating cutting-edge technologies into their operational framework [2].

Traditional battlefields have been supplanted by digital landscapes where cyber warfare, electronic warfare, and information operations play a pivotal role.

Germany has witnessed the growing importance of cyber capabilities in both offensive and defensive operations. The establishment of the Cyber and Information Domain Service (CIR) in 2017 and its launch as a new military branch within the Bundeswehr in 2024 underscores this shift, emphasizing the need to safeguard critical infrastructure and ensure operational integrity in the face of cyber threats [3].

Rise of New and Advanced Technologies

Technological advancements such as AI, machine learning, autonomous systems, unmanned teaming, laser light modules (LLM), responsive space, LEO, AR, VR, XR, data fusion and loitering munition offer transformative potential for military operations [4]. The Bundeswehr’s adoption of these technologies is vital for enhancing decision-making, improving situational awareness, and increasing operational efficiency.

AI and machine learning, for instance, have revolutionized data analysis, enabling real-time processing of vast amounts of information to support tactical and strategic decisions [5].

Autonomous systems, such as unmanned aerial vehicles (UAVs) and ground robots, enhance reconnaissance, surveillance, and logistical support, reducing risks to personnel and increasing operational reach, as seen in Ukraine. The Ukrainian battlespace features the most intensive use of drones in a military conflict in history, marking a shift in warfare tactics and technology and reaching unprecedented levels. According to the Royal United Services Institute, Ukraine is losing approximately 10,000 drones each month, highlighting the extensive deployment of these devices. With aerial defense systems significantly diminishing the effectiveness of manned aviation, unmanned systems have become especially crucial [6].

In many ways, the war in Ukraine reflects the critical importance of innovation in building resilience in military conflicts, and how urgency can fast-track innovations and their procurement. The Ukrainian government and its military have adapted quickly to the Russian onslaught by incorporating various innovations in their troops. Their approach should serve as an example for Germany and NATO partners.

Maintaining a Strategic Advantage

To remain competitive on the global stage, Germany must invest in innovative defense technologies – now. This includes the development of next-generation weapon systems, advanced communication networks, and sophisticated surveillance and reconnaissance capabilities.

Maintaining a technological edge is crucial in an era in which geopolitical tensions and military advancements by other nations pose significant challenges.

2. Defense Innovation Hubs: Crucial Collaboration Points

Defense innovation hubs serve as critical nodes for collaboration between the military, academia, and industry. These hubs are instrumental in fostering a culture of innovation and ensuring that cutting-edge technology is seamlessly integrated into military applications.

Role and Importance

Innovation hubs act as drivers for new ideas, facilitating the rapid prototyping and testing of novel technologies. They provide a collaborative environment where military needs can be directly addressed by technological solutions developed by startups and industry experts [7].

The importance of innovation hubs lies in their ability to bridge the gap between theoretical research and practical application. By bringing together diverse stakeholders, including defense personnel, scientists, engineers, and entrepreneurs, these hubs create a dynamic ecosystem that accelerates the development of innovative solutions.

Bundeswehr Cyber Innovation Hub

In Germany, the Bundeswehr Cyber Innovation Hub (CIHBw) is a prime example of such a key player. Established to drive digital transformation and innovation within the armed forces, the CIHBw focuses on mostly software-defined emerging technologies, developing defense systems to bolster the Bundeswehr’s resilience. It collaborates with startups, venture capitalists and established companies to accelerate the development and deployment of innovative solutions [8].

User centered solutions – defined by impact

The determining factor of innovation is time. A high pace of innovation is therefore critical for the CIHBw – and the Bundeswehr. For this reason, the CIHBw follows a Minimum Viable4 Product (MVP) approach. These prototype software solutions are continuously improved and expanded by the CIHBw. In its projects, the CIHBw focuses primarily on solutions that can be implemented quickly. The defining matter is impact. This also includes dual-use solutions – civilian software or startup products already available on the market which the CIHBw identifies, adapts, and makes usable for military systems. This approach is particularly cost-efficient, and by focusing on market availability, the CIHBw ensures short innovation cycles and a high pace of innovation, as lengthy procurement processes can be avoided. The triad of MVP, market availability, and impact is the key to a modern procurement process.

The goal is to bring innovation projects from the initial idea into the hands of soldiers within 180 days. The determining factor for every innovation project developed by the CIHBw is the user’s need. The solutions developed by the CIHBw always address specific problems faced by the troops. Therefore, the users are always involved in the innovation projects from the very beginning.

It is not left to chance whether a mere idea becomes a real solution. The process of the innovation project does not function like a linear assembly line but is iterative. This process allows for flexible responses to changes and feedback. Instead of a rigid process, it is important to quickly test existing solutions that are useful to the Bundeswehr. This is why it is crucial that the users of the solution – that is, soldiers or other members of the Bundeswehr – are involved in the innovation development from the very beginning.

Benefits of Collaboration

Collaboration within the CIHBw leads to a more agile and responsive defense ecosystem. It enables the military to leverage the latest technological advancements and ensures that defense projects remain at the forefront of innovation. Furthermore, the hub helps mitigate the risk of obsolescence and reduce the time required to bring new technologies from the laboratory to the battlefield.

The collaborative approach also encourages cross-disciplinary research and development, resulting in holistic solutions that address complex defense challenges. By engaging with a wide range of stakeholders, including international partners, Germany can tap into a global pool of knowledge and expertise, enhancing its defense capabilities and strategic resilience.

3. Software-Defined Defense: Key to Success

Software-defined defense refers to the use of software to manage and control military systems and operations. This paradigm shift from hardware-centric to software-centric approaches offers significant advantages in terms of flexibility, scalability, and cost-effectiveness.

Flexibility and Adaptability

Software-defined systems can be easily updated and reconfigured to meet evolving operational requirements. This flexibility is crucial in responding to new threats and incorporating emerging technologies without the need for extensive hardware modifications. The ability to rapidly update and deploy software patches ensures that military systems remain resilient against evolving cyber threats. This adaptability extends to mission planning and execution, where software-defined platforms can be reprogrammed to address specific operational needs, enhancing impact and overall mission effectiveness [9].

Enhanced Capabilities

Software-defined solutions enable the integration of AI and machine learning algorithms, enhancing the capabilities of military systems. For example, autonomous vehicles and drones can be equipped with AI-based navigation and targeting systems, improving their effectiveness in complex environments [10].

Moreover, software-defined networks (SDNs) provide enhanced communication and data-sharing capabilities, facilitating seamless interoperability between different military units and platforms. This interconnectedness enables real-time situational awareness and coordinated responses which are critical in modern warfare.

Cost-Effectiveness

Germany is facing major budgetary challenges in restoring its military capabilities. The German Economic Institute (IW) estimates that the historic underfunding of the Bundeswehr relative to NATO standards is at least €394 billion [11]. It is inevitable that government spending on the Bundeswehr will have to increase. At the same time even more funding is needed to update Bundeswehr’s technological infrastructure.

By transitioning to software-defined systems and thereby reducing the dependency on specialized hardware, the Bundeswehr can allocate resources more efficiently and ensure that its technological infrastructure remains up-to-date. Simultaneously, it frees up financial resources for further investments.

The cost-effectiveness of software-defined defense is particularly evident in the context of lifecycle management. Unlike hardware-centric systems that require costly upgrades and replacements, software-defined platforms can be continuously improved through software updates, extending their operational lifespan and reducing maintenance costs [12].

4. Venture Capitalists: Working Capital to bridge the “Valley of Death”

Worldwide, more money is flowing into defense than ever before. This is the result of regular surveys conducted by the Stockholm International Peace Research Institute (SIPRI). The largest increase in spending is in Europe [13]. However, large corporations and startups benefit from this in different ways: While the DAX-listed company Rheinmetall experienced a record number of orders last year due to increased demand for tanks and ammunition, investments in defense startups stagnated. So far, the significantly increased government spending on the military sector has not trickled down to young companies.

In 2023, investors in Europe put only around $300 million in venture capital into defense startups. That was no more than in the previous year. By comparison, Rheinmetall alone invested €370 million in research and development. In total, about $45 billion was invested in startups in Europe last year [14].

The main reason for the lack of investments in defense startups in Europe and especially in Germany are the venture capitalists’ LP agreements, due to regulations of the European Investment Bank (EIB). So far, the EIB mandate currently prohibits investment in the manufacture of weapons or ammunition only, and instead requires that dual-use projects derive more than 50% of their expected revenues from civilian use. And even the one-billion-euro NATO Innovation Fund has only been allowed to invest in “dual-use” technologies.

In addition, there is a limited number of LPs from which Venture Capitalists investing in defense can raise capital – primarily family offices and high net-worth individuals.

The “Valley of Death”

The “valley of death” refers to the challenging period between technological development and commercialization, where many promising innovations fail due to a lack of funding [15]. Especially in defense, where procurement processes can take years, a robust funding is crucial.

Lack of funding is a major reason why defense tech startups fall short.

Venture capitalists could play a crucial role in bridging this gap by providing the necessary financial support to bring innovative defense technologies to market. But, as noted above, so far investment regulations prevent venture capitalists from investing.

Importance of Venture Capital

Venture capital funding is essential for early-stage startups that may struggle to secure traditional financing due to the high-risk nature of their projects. By investing in these startups, venture capitalists help to de-risk the innovation process and foster the growth of a vibrant defense technology ecosystem.

The Bundeswehr Cyber Innovation Hub provides essential knowledge and assistance for venture capitalists and startups, to determine the product-market fit of defense innovations. Defense tech requires highly specific knowledge of users’ needs and demands. The CIHBw expertise and close ties to the armed forces provide unprecedented value to venture capitalists to evaluate investment targets and to startups to develop market-fit solutions.

Venture capitalists can accelerate the development and deployment of new technologies, ensuring that the Bundeswehr remains at the cutting edge of innovation.

Successful Collaborations

In Germany, Project A is one of the few German VC firms that is loud and proud about investing in dual-use. Its portfolio includes drone companies Quantum Systems (UAV) and ARX Robotics (UGV) – both startups have worked closely with the CIHBw on multiple projects. ARX’ founding was encouraged by the CIHBw. Other prominent dual-use tech investors include Vilnius-based ScaleWolf and Germany’s HV Capital and Deutsche Telekom Capital Partners (DTCP).

However, the only German unicorn in defense tech, AI-company Helsing, is mainly backed by US VC giant General Catalyst. In May it secured a €450 million in Series C funding [16].

Overcoming Challenges

Despite the benefits, venture capital investment in defense technology faces challenges such as regulatory hurdles and the inherently high-risk nature of the sector. Addressing these challenges requires a supportive legal and policy framework that encourages investment while ensuring national security interests are safeguarded.

To overcome these challenges, Germany must further implement policies that streamline regulatory processes and provide incentives for venture capital investment in defense technology. Initiatives such as the European Defense Fund and the German Federal Government’s High-Tech Strategy can play a crucial role in creating an environment conducive for innovation and investment.

5. Setting the Legal Framework

A robust legal framework is essential for fostering innovation in defense technology. It provides the necessary guidelines and regulations to ensure that technological advancements are developed and deployed in a manner that aligns with national security priorities.

Regulatory Environment

Germany’s regulatory environment for defense innovation includes laws and policies that govern research and development, procurement, and the use of emerging technologies. These regulations are designed to balance the need for innovation with the imperative to protect sensitive information and maintain operational security [17].

The German Federal Office of Bundeswehr Equipment, Information Technology, and In-Service Support (BAAINBw) plays a key role in overseeing defense procurement and ensuring compliance with regulatory standards. The BAAINBw works closely with industry partners to streamline procurement processes [18].

Yet, procurement needs to be modified and streamlined to meet the urgent threat Germany and NATO allies face in light of Russia’s war of aggression. Current procurement regulations are fit for times of peace, but not for today.

International Collaboration and Compliance

In Germany’s defense innovation efforts, there is a need for collaboration with international partners. Ensuring compliance with international agreements and standards is vital for maintaining trust and cooperation with allies. This includes adhering to export control regulations and participating in multinational research initiatives.

In Germany, however, international collaboration in defense innovation is mainly facilitated through private organizations, such as VC events, hackathons, meetups and conferences, and the CIHBw. NATO and the European Union provide platforms for joint research projects, but these are not being used sufficiently. By participating in these initiatives, Germany could leverage the expertise and resources of its allies, enhancing its own defense capabilities and contributing to collective security efforts.

Conclusion

Innovation in defense technology is paramount for the German Armed Forces to address today’s security challenges and maintain a strategic edge. The need for innovation is driven by the evolving nature of warfare and the rapid pace of technological advancements. The Bundeswehr Cyber Innovation Hub plays a critical role in fostering collaboration and accelerating the development of new technologies. The shift towards software-defined defense offers numerous benefits in terms of flexibility, capability enhancement, and cost-effectiveness. Venture capital investment is crucial for bringing innovative solutions to market and bridging the “valley of death”. A supportive legal framework ensures that these innovations are developed and deployed in a secure and effective manner.

By embracing these elements, Germany can ensure that its armed forces are well equipped to meet the demands of modern warfare and protect national security in an increasingly complex and dynamic global environment.

Furthermore: When discussing startup promotion in the defense sector in Germany it must be clear, that procurement acceleration and financing are inextricably linked. One will not work without the other:

If there are no opportunities for accelerated procurement – or if such opportunities are not sufficiently utilized – this directly impacts the willingness of venture capital funds to invest. No private fund can afford to wait the statistical seven years for its portfolio company to achieve significant revenues. Under these conditions, private funds are forced to prefer investment opportunities outside the defense sector.

Conversely, rapidly developed innovative solutions by startups will not be available if there is insufficient investment willingness on the part of VC funds.

Additionally, in the current German debate on defense innovation there is an attempt to reinvent the wheel. A pronounced insular mentality is evident. But in fact, all the key points of the discussion are not new and have been known for decades, thoroughly empirically and scientifically studied, and widely tested in practice.

Best practices are most significant in the US. In the USA for example, in response to the increasing pressure for innovation during the emerging Cold War, DARPA (Defense Advanced Research Projects Agency) was established in 1958 – 66 years ago. This led to the development of a broad and successful defense innovation system, which also has significant positive spillover effects on the civilian innovation capacity and economic performance of the USA. It includes, among other things, the creation of attractive conditions for private VC funds in defense-related startups, government defense VC funds, government involvement in the strategic allocation of private capital (the Pentagon’s Office of Strategic Capital), and a strong network of innovation units located directly within the military to ensure the direct military relevance and implementation of innovative solutions, including Defense Innovation Unit (DIU), National Security Innovation Network (NSIN), AFWERX (Air Force innovation arm), XVIII Airborne, etc.

Of course, the situation in the USA cannot directly be applied to Germany, but core elements sure can and must.

The CIHBw is already well-positioned in its mission and structure to quickly make innovative solutions available to our armed forces. Its innovation capability has been demonstrated in more than 170 innovation projects over the past years. It is now important to integrate the topic of financing for startups in line with internationally long tested and recognized best practices, so that it swiftly contributes to Germany’s modern defense readiness.

Sources

1. Arnold, Torben. “New Technologies for the Bundeswehr: Need for Action due to Technical Innovations,” Stiftung Wissenschaft und Politik, March 20, 2024. https://www.swp-berlin.org/10.18449/2024C11/
2. Portugall, Gerd. “The bygone future of war,” Dimensions, February 13, 2024. https://dimensions-magazin.de/en/the-bygone-future-of-war/
3. Bundeswehr. Cyber and Information Domain Service, accessed July 10, 2024. https://www.bundeswehr.de/en/organization/the-cyber-and-information-domain-service
4. Wilson, David. “Operating at the Speed of Trust on the Battlefield of 2030 and Beyond,” National Defense Magazine, February 6, 2024. https://www.nationaldefensemagazine.org/articles/2024/2/6/viewpoint-operating-at-the-speed-of-trust-on-the-battlefield-of-2030-and-beyond
5. Ministry of Defence UK. Policy paper “Defence Artificial Intelligence Strategy,” June 15, 2022. https://www.gov.uk/government/publications/defence-artificial-intelligence-strategy/defence-artificial-intelligence-strategy
6. Franke, Ulrike. “Drones in Ukraine and beyond: Everything you need to know,” European Council on Foreign Relations, August 23, 2023. https://ecfr.eu/article/drones-in-ukraine-and-beyond-everything-you-need-to-know/
7. Schlueter, Matthew, Giesener, Marc, Mayer, Lauren, and Plummer, Morgan. “Closing the Defense Innovation Readiness Gap,” Boston Consulting Group & Munich Security Conference, February 2022. https://securityconference.org/assets/02_Dokumente/01_Publikationen/222014_-_MSC_-_Defense_Innovation_Report_-_Single_-_vonline.pdf#
8. Bundeswehr Cyber Innovation Hub, accessed July 10, 2024. https://www.cyberinnovationhub.de/en10
9. Soare, Simona, Snigh, Pavneet, and Nouwens, Meia. “Software-defined Defence: Algorithms at War,” The International Institute for Strategic Studies, February 2023. https://www.iiss.org/globalassets/media-library—content–migration/files/research-papers/iiss_software-defined-defence_17022023.pdf
10. Rashid, Adib, Kausik, Ashfakul, Sunny, Ahamed, and Bappy, Mehedy. “Artificial Intelligence in the Military: An Overview of the Capabilities, Applications, and Challenges,” International Journal of Intelligent Systems, November 6, 2023. https://www.researchgate.net/publication/375437930_Artificial_Intelligence_in_the_Military_An_Overview_of_the_Capabilities_Applications_and_Challenges
11. Mölling, Christian, Schütz, Torben, and Hellmonds, Sören. “German Defense Spending: A Repeat of the Past Instead of a New Era,” German Council on Foreign Relations Policy Briefing, June 2023. https://dgap.org/system/files/article_pdfs/dgap-policy%20brief-2023-19-en.pdf
12. Mulchandani, Nand, and Shanahan, John. “Software-Defined Warfare,” CSIS Center for Strategic & International Studies, September 2022. 220907-Mulchandani-SoftwareDefined-Warfare.pdf (csis-website-prod.s3.amazonaws.com)
13. Stockholm International Peace Research Institute Database. Accessed July 3, 2024. https://milex.sipri.org/sipri
14. Schimroszik, Nadine, „Rekordausgaben für Verteidigung kommen bei Jungfirmen nicht an,“ Handelsblatt, March 28, 2024. https://www.handelsblatt.com/technik/it-internet/ruestung-rekordausgaben-fuer-verteidigung-kommen-bei-jungfirmen-nicht-an-01/100025558.html
15. Gbadegeshin, Saheed A., Al Natsheh, Anas, Ghafel, Kawtar, Mohammed, Omar, Koskela, Ashten, Rimpilainen, Antti, Tikkanen, Joonas, and Kuoppala, Antti. „Overcoming the Valley of Death: A New Model for High Technology Startups,” Sustainable Futures, 2022. https://www.sciencedirect.com/science/article/pii/S2666188822000119
16. Helsing. July 11, 2024. https://helsing.ai/de/newsroom/helsing-further-strengthens-european-defence-capabilities-with-funding-round
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18. Bundeswehr (BAAINBw). Accessed July 12, 2024. https://www.bundeswehr.de/de/organisation/ausruestung-baainbw/organisation/baainbw

Sven Weizenegger is Head of the German Armed Forces’ Cyber Innovation Hub.

Der Beitrag Defense Technology and Innovation in Germany erschien zuerst auf Atlantik-Brücke e.V..

Among the high-level speakers were Vice Chancellor and Federal Minister for Economic Affairs and Climate Action Robert Habeck, the Netherland’s Deputy Prime Minister and Minister of Finance Sigrid Kaag, and the United States Trade Representative Katherine Tai. Their keynotes as well as the panel discussions at the Transatlantic Forum made it clear: We live in a new era of geoeconomics. That is why we are looking forward to the Transatlantic Forum on GeoEconomics 2024 to continue the transatlantic dialogue on crucial issues at the nexus of economic and foreign policy.

DZ BANK generously hosted this year’s conference. Bloomberg was the media partner of the Transatlantic Forum.

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[toggle title=”Welcoming Remarks”]

Souâd Benkredda, Member of the Board of Managing Directors, DZ BANK

Sigmar Gabriel, Chairman, Atlantik-Brücke

Fred Kempe, President and Chief Executive Officer, Atlantic Council

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[toggle title=”Session I – Building common ground: Transatlantic approaches to economic statecraft”]

Michael Lieberman, Assistant Director for Enforcement, Office of Foreign Asset Control, US Department of the Treasury

David Lim, Co-Director, Task Force KleptoCapture, US Department of Justice

David Reed, Director, Sanctions Directorate, UK Foreign, Commonwealth & Development Office

Darta Tentere, Policy Advisor to the EU Sanctions Envoy David O’Sullivan, European Commission

Moderated by Kim Donovan, Director, Economic Statecraft Initiative, GeoEconomics Center, Atlantic Council

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[toggle title=”Keynote I – Navigating the geoeconomic era with an open approach”]

Sigrid Kaag, First Deputy Prime Minister and Minister of Finance, Government of the Netherlands 

In conversation with Fred Kempe, President and Chief Executive Officer, Atlantic Council

You can read the full transcript of Minister Kaag’s keynote remarks here

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[toggle title=”Session II – G20, BRICS, and the future of multilateralism”]

Jörg Kukies, State Secretary; Economic, Financial, and Energy Policy Advisor, German Federal Chancellery 

Daleep Singh, Chief Global Economist and Head of Global Macroeconomic Research, PGIM Fixed Income

 Moderated by Stephanie Flanders, Senior Executive Editor for Economics | Head, Bloomberg News | Bloomberg Economics

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[toggle title=”Keynote II – GeoEconomic deepening of transatlantic cooperation”]

Dr. Robert Habeck, Federal Minister for Economic Affairs and Climate Action, German Federal Government

In conversation with Julia Friedlander, Chief Executive Officer, Atlantik-Brücke

You can read the full transcript of Minister Habeck’s keynote remarks here

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[toggle title=”Session III – Adapting at speed: The private sector and geopolitics”]

Nils Aldag, Chief Executive Officer, SunFire

Candace Kelly, Chief Legal Officer, Stellar Development Foundation

Christian Sewing, Chief Executive Officer, Deutsche Bank

Michael Schoellhorn, Chief Executive Officer, Airbus Defence and Space

Moderated by Josh Lipsky, Senior Director, GeoEconomics Center, Atlantic Council

[/toggle]

[toggle title=”Session IV – The clash of economics and national security Trade, industrial policy, and supply chains”]

Elizabeth Baltzan, Senior Advisor to the United States Trade Representative, Office of the United States Trade Representative

Denis Redonnet, Deputy Director-General, Chief Trade Enforcement Officer, EU Commission

Anahita Thoms, Board Member, Atlantik-Bruecke and Partner, Baker & Mckenzie International

Moderated by Sarah Bauerle Danzman, Senior Fellow | Associate Professor, Atlantic Council | Hamilton Lugar School of Global and International Studies

[/toggle]

[toggle title=”Keynote III – A Conversation with US Trade Representative Ambassador Katherine Tai”]

Katherine Tai, United States Trade Representative, Office of the United States Trade Representative

 In conversation with Stephanie Flanders, Senior Executive Editor for Economics | Head, Bloomberg News | Bloomberg Economics

You can read the full transcript of US Trade Representative Tai’s keynote remarks here.

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[toggle title=”Closing remarks”]

Julia Friedlander, Chief Executive Officer, Atlantik-Brücke

Josh Lipsky, Senior Director, GeoEconomics Center, Atlantic Council

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Der Beitrag Transatlantic Forum on GeoEconomics 2023 erschien zuerst auf Atlantik-Brücke e.V..

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