My visit to the Munich Security Conference made one point unmistakably clear. Europe is entering a decade of accelerated defense investment, while the battlefield itself is undergoing a deep structural transformation toward distributed, connected, and autonomy-rich systems.
Across the conference halls, closed meetings, and professional briefings, the discussion was not only about rising budgets. The harder question was whether Europe would succeed in converting funding into operational capability at the speed demanded by emerging threats. That is where the real gap becomes visible.
One of the clearest signals of change came from the strategic level. NATO allies have aligned around a new long-term benchmark of five percent of GDP by 2035. At least 3.5% is intended for core military spending, with up to 1.5% directed toward infrastructure, resilience, innovation, and the defense industrial base. This represents a dramatic shift from the previous 2% benchmark and reflects a deep reassessment of the threat environment.
The scale behind the policy shift is significant. NATO members in Europe are already on an upward trajectory, and current projections suggest that European defense spending could approach roughly €800 billion annually by the end of the decade, if the new commitments are fully implemented.
The current baseline already shows strong momentum. In 2024, EU member states spent approximately €343 billion on defense. Forecasts for 2025 place the figure between €381 billion and €392 billion, representing about 2.1% of GDP on average across the European Union.
For comparison, the United States spent roughly €845 billion on defense in 2024, equivalent to about 3.1% of GDP. This persistent gap continues to drive political and strategic pressure within the Alliance for Europe to assume a larger share of the defense burden.
The implication is clear. Europe is no longer in a declarative phase. It has entered a multi-year, budget-backed trajectory aimed at rebuilding military mass, industrial capacity, and deterrence credibility.
Israel in Munich
Within this broader context, the composition of the Israeli delegation in Munich stood out. Alongside established, traditional defense companies were first-line start-ups operating in artificial intelligence (AI), autonomy, and advanced digital systems. This combination reflects a mature Israeli ecosystem where deep industrial capability meets rapid innovation. Each layer contributes differently. Traditional firms bring engineering depth, manufacturing scale, and integration experience. Start-ups bring speed, creativity, and technological agility.
It is equally important to recognize the strong governmental envelope that supported the delegation. Israeli government representatives operated in a focused and highly professional manner, creating excellent conditions for engagement with European counterparts. The alignment between government, established defense industry, and the start-up sector remains one of Israel’s core structural advantages in the global arena.
Beyond the delegation itself, Munich reflected a clear conceptual shift. The center of gravity is moving away from heavy, expensive, centralized platforms toward numerous, interoperable, software-defined systems with strong onboard processing on the edge. Unmanned systems and counter-UxS capabilities are no longer peripheral. They are becoming foundational elements of modern force design.
In parallel, Multi Domain Operations is emerging as the organizing framework for future warfare. Military superiority will increasingly not depend on the performance of a single platform but on the ability to connect air, land, sea, space, and cyber effects in real time. Actors that fail to achieve rapid cross-domain integration will struggle to generate meaningful operational impact.
Yet a structural challenge remains. Europe does not suffer from a shortage of technology or engineering talent. The primary constraint is the ability to translate investment into deployable capability at the required pace. A meaningful gap still exists between advanced algorithms and the capacity to run them effectively at the tactical edge under real-world conditions.
This gap concentrates in three critical areas: edge computing, resilient data transport, and interoperability layers that connect heterogeneous systems. This is both the opportunity and the challenge for Israel.
Israel has a proven advantage in several key areas, and the start-ups that attended the conference can help fill these gaps with continuous operational experience, a tightly coupled defense, academic, and technology ecosystem, and the ability to move rapidly from operational need to working capability. Some of the Israeli startups that attended included Kela, Strix drones, Xtend, Orca Ai, Dream and G2. McKinsey and NEX42 also hosted unique events with Israeli startups and main European actors in technology and requirements.
Throughout Munich, international stakeholders repeatedly pointed to Israel as a source of fast, relevant innovation for the modern battlefield.
However, relative advantage alone is not a strategy.
The European environment is evolving. The EU is increasingly emphasizing local industrial capacity, joint procurement, and strengthened European supply chains. The direction is clear. A model based purely on direct sales will face growing political and industrial constraints.
To succeed in the coming decade, Israeli companies will need to move toward deeper partnership models. Joint production, structured consortia, and integration into broader European ecosystems will become essential. The objective is no longer only to sell products but also to participate in shaping the architecture.
Another powerful theme in Munich was the accelerating attrition dynamic in modern warfare. Evidence from Ukraine and the Middle East reinforces the shift toward scalable, expendable mass. Relatively low-cost systems deployed in large numbers are generating disproportionate operational effects against fewer high-value platforms. This trend further elevates the importance of edge AI and localized decision capability.
From an Israeli perspective, three clear priorities emerge.
First, the need to focus on the layers where Europe’s capability gap is most pronounced, especially in edge computing, multi-sensor fusion, and cross-platform interoperability.
Second, the requirement to develop a Europe-adapted market-entry strategy based on long-term industrial partnerships rather than one-off transactions.
Third, at the national level, the necessity to further tighten the linkage between export policy, regulation, and structured technological cooperation with Europe and the United States.
On a personal note, Munich sharpened one central conclusion. The window of opportunity is open, but it will not remain so indefinitely. Europe is moving faster than before, operational standards are rising, and the defense market is entering a period of deep technological acceleration.
Israel starts from a position of strength. The task now is to translate that advantage into precise, fast, and coordinated strategic action. Those who execute correctly will not only capture market share but also help shape the character of the next decade’s battlefield.